Friday, July 8, 2011

Cameron Hit by Ex-Aide’s Arrest Over Phone-Hacking Scandal

July 8 (Bloomberg) -- The arrest of Andy Coulson, David Cameron's head of communications until January, risks tainting the prime minister's government, already facing mounting opposition over the deepest budget cuts since World War II.

Police in London arrested Coulson today, a person familiar with the matter said, a day after the newspaper he once ran was closed by News Corp. following allegations of widespread phone- hacking in the pursuit of stories. Coulson, who was News of the World editor from 2003 to 2007, has said he knew nothing of illegal activities during his tenure and that wrongdoing was confined to one rogue reporter.

Trailing in the opinion polls, Cameron is being forced to defend his 2007 decision to hire Coulson just as labor unions threaten to derail his austerity agenda with a wave of strikes. The prime minister also faced questions today about his ties to James Murdoch, deputy chief operating officer of News Corp., and his father, Rupert, whose newspapers have shaped the British media landscape for four decades.

"It's a Cameron issue. This is now about him," Steven Fielding, director of the Centre for British Politics at Nottingham University, said in an interview. "The danger is that this comes to define him in the public mind. Then it becomes the characteristic through which everything he does is viewed."

Takeover Review

A looming hurdle for Cameron is his government's decision on whether to allow News Corp. to buy the 61 percent of British Sky Broadcasting Group Plc that it doesn't already own.

He and Culture Secretary Jeremy Hunt have said that a decision can only be made on the 7.8 billion-pound ($12.5 billion) takeover bid on the grounds of media plurality,

The Department for Culture, Media and Sport said today it anticipates it will take "some time" to consider all the 156,000 submissions it received on the takeover bid. The Department for Business said last month it usually receives between 10 and 15 interventions in such cases.

Cameron's Conservative Party trailed the opposition Labour Party by 37 percent to 43 percent in a YouGov Plc poll conducted July 6 and 7. YouGov questioned 2,759 people in its regular poll for The Sun, another News Corp. newspaper. No margin of error was given. If replicated in an election, that would give Labour a majority in the House of Commons, according to standard calculations.

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