Belfast Telegraph

Cable must tread carefully as he ponders Sky retribution

By David Prosser

Vince Cable is widely respected in Westminster for his intellect and, as far as we know, does not suffer from any short-term memory problems.

He is likely, therefore, to recall the way in which large sections of the press, including several of Rupert Murdoch's titles, turned on Nick Clegg when it looked as if the Liberal Democrat leader's performance in the party leaders' debates would translate into electoral gains at the expense of the Tories — and to have understood their motivation for doing so.

Fast forward a month and who should suddenly find himself in a position to cause a few problems for the Murdoch empire? Only Mr Cable, now happily installed in the coalition Government as Secretary of State for Business. On paper at least, it will fall to him to decide whether the Government should get involved in a News Corporation bid for full ownership of BSkyB.

The early indications yesterday were that the Business Secretary may not take this opportunity to pay back the Liberal Democrats' tormentors. There is no official word yet — nor even an agreed bid for Sky from News Corp, though one assumes that's just a matter of time — but the off-the-record briefings emerging from those in the know at Westminster were that the Government would not feel obliged to intervene.

Well, one can see its point. Would full ownership of Sky by News Corp really represent an unacceptable concentration of power in a single media company's hands, given the Murdochs' existing 39 per cent ownership of the business? That may not be a controlling stake, but News Corp is hardly just a passive investor.

Most of the obvious ways in which News Corp and Sky might work together are already being explored. You won't see print journalists from beyond the News International stable being used as pundits on Sky News, for example, and it can't be long before Sky subscribers are offered special deals on the newspapers' internet operations, now they are being moved behind the paywall.

Still, a decision by Mr Cable not to at least examine this deal would raise some eyebrows.

Appearances are important and the Business Secretary must be acutely aware of two widely held perceptions (whether or not they are fair): that the Conservatives feel they owe a debt to Murdoch (right) and his business for the political support of its newspapers, and that the Liberal Democrats are junior partners in the coalition with little room to make their own decisions.

If he is seen to have ducked a robust inquiry into a News Corp takeover of Sky, Mr Cable will fuel both those suspicions.

n The Office of Fair Trading's decision not to impose a maximum interest rate on lenders such as pawnbrokers, payday loan providers and other high-cost lenders is a sensible case of the head ruling the heart.

Some of the headline rates charged by these lenders do look exorbitant and a cap must have been a tempting way to tackle the racket. But the result would have been more people being denied credit from companies that are at least within the orbit of the regulatory authorities.

Many of them would have ended up going to illegal loan sharks instead, where high interest rates are often the least of their worries.

There is no doubt that some of the lenders operating in this sector are profiteering. But rates are high for a reason: the people to whom they lend do not have credit ratings that enable them to borrow from more affordable sources. The price of the loan reflects the enhanced risk of a default.

It's not just that borrowers would have nowhere else to turn without these lenders. Often, taking out these loans, and then making repayments on schedule, is their first step towards building the sort of credit history that gives them access to mainstream sources of finance in the future. Better advice for the financially excluded is important and lenders should be policed carefully to ensure they are not exploiting their customers. But the OFT is right not to pretend this industry does not serve a need.

Belfast Telegraph