Revelations of illegal practices on Rupert Murdoch's newspapers show one aspect of a media empire built on deceit. Ian Taylor considers News Corporation, New Labour and the move that made Murdoch's fortunes.
Rupert Murdoch's News Group newspapers paid out more than £1 million to stop evidence of phone bugging, hacking and other law-breaking by journalists coming to light.
The Guardian journalist Nick Davies uncovered evidence, published in July, that such activity was routine - directed at ministers, MPs, actors and sports stars. Former Sunday Times editor Andrew Neil hailed the story as among "the most significant of modern times".
That is quite something from the man who, 23 years ago, was at the centre of the move from Fleet Street to Wapping that broke the power of the newspaper unions. Murdoch's victory led directly to the practices we now see exposed - a process documented in Davies's book, Flat Earth News, which describes "the relentless pressure to deliver stories even if that did mean distorting the truth, inventing a quote or inventing a whole story or breaking the law".
However, the consequences extend beyond the lies, smears and tittle-tattle of Murdoch's papers, going to the heart of his empire and the government collusion without which Murdoch could not be where he is.
The bare facts of the struggle are that Murdoch summarily dismissed more than 5,000 workers in January 1986, having recruited a scab workforce with the help of leaders of the then electricians' union, the EETPU. The sacked printers, and clerical and support workers spent a year on picket lines battered by police - suffering a higher rate of arrests than during the Miners' Strike - before their union leaders abandoned them in February 1987.
The Guardian summarised the strike - in reality, a lockout - on the 20th anniversary: "Murdoch secretly moved his newspaper business overnight, sparking a bitter and doomed year-long strike."
It was certainly bitter. Former print union official Barry Fitzpatrick recalled, "There were suicides, marriage break ups; people lost their homes." The policing was brutal, with the streets around Wapping sealed to ensure the papers got out, and on at least two occasions police went on the rampage.
But while Murdoch's move was secretive, it was neither secret nor was resistance futile. On the contrary, the unions had plenty of prior warning and Murdoch was on a financial precipice at the point he provoked the strike, having borrowed $2.6 billion for acquisitions that would establish his Fox Network in the US. Increasing profits from his British newspapers were crucial to keep him afloat. At the same time Murdoch's greatest ally, Margaret Thatcher, was embroiled in a political crisis - the Westland affair - that threatened to bring her down.
For their part, the Fleet Street unions had unparalleled sectional strength - built on the fact that any delay in production of a daily paper jeopardised profits - and had repeatedly shown solidarity with other workers, notably raising more than £1 million for striking miners in 1984 and halting production of the Sun for four days when the editor declared miners "the scum of the earth".
Murdoch might easily have lost at Wapping and defeat could have ruined him. Victory saw his empire grow so profitable and him so powerful that Lance Price, a member of the press office in Blair's first government, described the media magnate as "the 24th member of the cabinet".
How did it happen? Murdoch did have factors in his favour. The Tory government backed him to the hilt with policing and had passed tough anti-union laws that circumscribed strikes, limited picketing, prohibited solidarity and allowed judges to seize union funds. Murdoch used the law to the maximum, firing off two dozen legal actions in the first three weeks of the strike. But he had done that before - when Sun printers struck in support of union members fighting a non-union proprietor in 1983 - and backed off.
What proved crucial was the behaviour of the union leaders. The heads of the TUC and of the print unions SOGAT and the NGA reacted to the anti-union laws by looking to curtail strikes, police members' activity and pursue public opinion rather than confront the courts and the government. They justified their behaviour in a doctrine described as "new realism" that was embraced by Labour leaders and would become the ethos of New Labour.
This led the print unions to waste a full year while Murdoch prepared the move to Wapping, a period when he could not have resisted a strike, and then to conduct the fight in ways to make defeat inevitable - refusing to call out other Fleet Street printers, limiting picket lines and handing control to the police.
Murdoch had bought the Wapping site in 1978 and begun building work in 1980. But lengthy talks with unions on staffing were abruptly terminated in December 1984 as Murdoch saw the miners close to defeat and embracing the "new realism".
By January 1985 Wapping was a fortress ringed by steel fences and television cameras, with razor wire to come. In February, Murdoch flew senior executives to New York to outline plans to replace his Fleet Street workers with a scab workforce of hundreds at the new plant. In March he announced production of a new paper, The London Post, at Wapping - a cover story that should have fooled no one. At the same time he hired a notorious union-basher, Christopher Pole Carew, to set up the scab operation.
From April, Pole Carew met regularly with EETPU officials, including the union's national secretary - with whom he toured print plants in the US. Murdoch had a replica plant assembled in Woolwich to assemble the computer technology he required to eliminate so many jobs and engaged Australian transport firm TNT, with which he had multiple links, to distribute his newspapers so he could bypass the rail unions and SOGAT members involved in distribution.
The EETPU began recruiting through an office in Southampton - an operation exposed by Socialist Worker in September. By then print union leaders knew the Wapping presses were producing dummy papers. In fact, the unions had a 102-page report listing the specifications of every machine in Wapping produced by two members who had contacts inside the plant.
The union leaders did nothing. SOGAT general secretary Brenda Dean went so far as to declare a meeting with Pole Carew in August "helpful in clearing the speculation concerning Wapping". In October, Murdoch gave notice he would print the Sun and News of the World at the plant. Only in December did the unions even lodge a formal complaint about the EETPU to the TUC. That same month Murdoch's lawyers were advising him on the cheapest way to dismiss the printers - by triggering a strike at a weekend.
With increasing desperation, Socialist Worker warned, "Two shifts of 500 workers are now operating [at Wapping]. The warehouse is full and the machines ready to print. [But] no preparation for strike action has been made. Until recently each union was holding separate talks with management."
When, in early January 1986, Murdoch gave notice that he was terminating the agreements of everyone but the journalists, print union leaders "had to plead with FoCs [workplace reps] not to walk out", journalist Linda Melvern recorded in her book, The End of the Street.
At a final meeting with Murdoch on 23 January the union leaders offered surrender - promising no walkouts, binding arbitration and flexible working. Murdoch replied by insisting on wholesale compulsory redundancies, minimum compensation and no union recognition. At that point Dean appeared finally to understand, saying, "I rather got the feeling the company did not want a settlement."
Faced with no other choice, the printers voted to strike and Murdoch - now ready - set the Wapping presses rolling and sacked the lot. Socialist Worker called for mass picketing, for solidarity strikes across Fleet Street and for delegations to approach rail workers and the TNT drivers taking out scab newspapers. Instead SOGAT issued instructions that pickets submit to police control, with no more than six on the line. NGA leader Tony Dubbins said, "We are in this dispute to get the sympathy of the public."
Some journalists refused to make the move, but a majority took a £2,000 payment - having heard Sun editor Kelvin MacKenzie insist, "Brenda Dean has given an assurance picketing will be peaceful" - and lay on the floor of buses taking them to Wapping.
Interviewed in New York barely five weeks later, Murdoch himself expressed incredulity at the union leaders' inaction. "[Wapping] had hundreds of construction workers and people there all the time," he said. "Anyone could have worked it out."
He pocketed the soaring profits from paying a few hundred scabs as little as one third of the wages the Fleet Street printers had earned, which refinanced his business and allowing him to go on a buying spree.
Murdoch repaid his debt to Margaret Thatcher and the police through his papers - whether that involved the Sunday Times smearing witnesses to an SAS assassination of IRA members in Gibraltar or the Sun smearing Liverpool supporters after police caused the Hillsborough disaster. Neil later wrote, "Thatcher's battles were our battles."
Yet in doing so, Murdoch was only following his established model of giving favourable coverage in return for favours to his business. In the words of former Sunday Times journalist Bruce Page, "Most of the critical steps in the transformation of [his] business were dependent on such things." So he could happily switch allegiance when it became clear New Labour would replace the Tories in government.
Tony Blair topped and tailed his premiership with visits to King Rupert's court, flying round the world in 1995 and 2006 to address conferences of News Corporation executives. The Observer reported "the extraordinary efforts Blair and Murdoch make to conceal their relationship, even arranging clandestine meetings abroad". Lance Price recorded, "No big decision can be made inside Number 10 without taking account of Murdoch."
When Blair was not dealing directly with Murdoch, he met lieutenants such as economist Irwin Stelzer, a Murdoch adviser who appears frequently on BBC's Newsnight, or News International chairman Les Hinton. It was Hinton who assured a parliamentary committee that a case of phone-hacking by a News of the World reporter exposed in 2007 was a one-off.
The relationship involved direct favours such as lifting restrictions on cross-media ownership or, as the Financial Times reported of Blair, "speaking to [Italian premier] Romano Prodi about [Murdoch's] attempt to acquire an Italian television network". It involved presenting Murdoch's newspapers with exclusives - such as the date of the 2001 election - or coordinating announcements on asylum policy with shocking pieces in the Sun.
Neil wrote of the ties between New Labour and News Corp in 1997: "In addition to regular meetings between the two top men, a network of contacts has been established between senior company executives and Labour front benchers." Gordon Brown is no less enamoured of Murdoch than Blair. A former News International executive told the Observer, "Gordon had more of an obsession [with Murdoch] than Tony." When Blair appeared close to quitting due to his unpopularity over Iraq, Brown met Murdoch twice in a week.
Labour's problems mean Murdoch transferring his affection once more. So he provided free flights last year for David Cameron to attend talks and a private party on his yacht. Indeed, the phone-hacking exposé is reported to have clinched his support for Cameron at the next election.
Murdoch may now be contemplating a move from Wapping, but the legacy of his fortress looms large - in the fortune it provided to finance his satellite television, movie and online empires, in the role it played in entrenching "new realism", in the lives it has blighted and in the blow it dealt mainstream journalism.
One reporter described Wapping as "a journalistic penitentiary". Another Times journalist, Ian Griffiths - who refused to cross the picket line in 1986 - said it gave Murdoch the chance "to put journalists in their place".
He told the Guardian, "Through Wapping, Murdoch set the tone for a compliant and non-confrontational press. He dealt a body blow to journalism." It is how his newspapers went from Fleet Street to phone hacking.
Full-time Fleet Street printers were well paid by the standards of the day, although many were casual. But the printers were a minority among a workforce mostly on lower wages - proofreaders, messengers, copy takers, cleaners, librarians.
Those on good money earned it. The Sun boasted the most productive newspaper plant in the world, having raised production fourfold in the 1970s. But conditions in the machine room were appalling. In 1985 it housed 22 presses where there had been seven in 1969 - two dating from 1936 and others 40 years old.
There were eight showers - some over the road - and no changing rooms for the hundreds of printers who came off shift covered in ink and grease. The room was boiling in summer, and ink spray and dust when the presses ran made it hard to see across the room. The noise exceeded safety limits. Printers could wake the next morning with ears ringing and ink on their pillows.
The union sections - chapels - mitigated the conditions by insisting on two staff per job. In the words of father of the chapel Ray James, "No one could have stood that machine room from 7pm until 4.45am. We produced a miracle every night."
Murdoch and tax
Murdoch's tax record threatens to make a mockery of government claims of a crackdown on tax havens following the bailout of the banking system.
Between 1985 and 1995, for example, Murdoch's British newspaper business paid 1.2 percent tax on profits close to £1 billion.
From 1995 to 1998 News Corp and its subsidiaries worldwide paid tax at a rate of 6 percent, against corporate tax rates in its major markets of 30 percent to 36 percent.
Subsidiaries in the tax havens of the Bahamas, Cayman Islands, Virgin Islands and Channel Islands keep the tax bill low.