Maxwell, The Outsider

by Tom Bower

  A deadline, 28 March 1975, had been set for the workers to raise the £475,(XX) needed to qualify for the government loan. By that date, the Action Committee had collected £350,000 in addition to Maxwell's £100,000. Just hours before the cut-off, Mackie and the committee were collected inside a stuffy hut, adjacent to Albion Street, awaiting Maxwell's arrival from London desperate for £25,000 to meet their target. They all, including Mackie, who was inimicably suspicious of Maxwell, acknowledged that he was their only hope if their dream were to be realised. Exuding confidence and wealth in his camelhair coat, Maxwell quickly removed their qualms and promised the extra money but only if some new conditions were accepted. He wanted a twenty-four-hour paper, a commitment by the workforce to unlimited overtime and an assurance that he would be appointed publisher of the newspaper and co-chairman of the co-operative. With expert brinkmanship, he eventually won the committee's acceptance although a last-minute contribution from two journalists reduced Maxwell's extra payment to £14,000. In unison, the Action Committee and Maxwell marched to the City Hall where the workers gave their saviour a thunderous reception. When the cheering died down, Maxwell repeated the three conditions on which he was giving his money. 'For 5 per cent of the finance,' says Briston, 'Maxwell won disproportionate influence. The DTI pushed the workers into Maxwell's arms.'

  Neither then nor in the aftermath would anyone take responsibility for the irony that, within just one year, the same government department which had published the unprecedented condemnation of the businessman had also officially committed taxpayers' money to a venture whose vury birth was dependent upon his participation. Some suspected the DTI officials of a devious plot to use Maxwell's presence to destroy future co-operative schemes. But Tony Benn, who harboured serious misgivings that his officials were sabotaging his socialistic policies, was more intent on realising his political ambitions than listening to any conspiracy theories. By all accounts, Benn could also be counted among those in the Labour Party who were sceptical of the inspectors' conclusions about his colleague. The Minister publicly told the members of the co-operative that they were fortunate to have Maxwell's help.

  Once the Action Committee had bought Albion Street, tremendous efforts were made to organise the newspaper's launch, commercially and editorially. Maxwell volunteered his help and, without formally consulting the co-operative, negotiated during the first days for telephones, newsprint, the supply of news agency wire services and the hire of an advertising executive. Briston, Mackie and the renamed Workers' Council were irate. Maxwell, they felt, did not understand that he was not the boss but just one member of a team. Among his negotiations was a reduced rate for the use of the Press Association's wire services. But when he informed the council of his coup, it was instantly disavowed. The council wanted to pay an additional £16,000, nearly double Maxwell's deal, to prove that the workers would pay the 'going commercial rate'.

  To outsiders it seemed to be a question of ethics. They were viewed as intent on ridding themselves of employers, profiteers and the purveyors of capitalist abuses. Although some members of the Action Committee believed that they were commercially minded. Consequently, two weeks alter his welcome, Mackie sensed that he could count on substantial support for a coup against Maxwell.

  On 17 April, at a meeting of the works council, Mackie proposed that Maxwell should lose his executive powers. In a heated session, Maxwell recited his commercial achievements on the co-operative's behalf. Briston, who by then half-regretted his original defence of Maxwell, had become strongly critical and cited a deal for newsprint negotiated by Maxwell which he described as excessively expensive. Maxwell fumed while Briston read out the damning conclusions of the DTI's report before commending Mackie's motion for the removal of a self-styled boss. 'There'll be a writ in the post!' shouted Maxwell as his erstwhile defender left the hall and the workers voted on his removal from the council. Ostensibly, Maxwell accepted his demise in good heart and returned to Oxford, sharing the doubts of others who were not politically committed that a newspaper whose raison d'Stre was not to make profits but to keep five hundred people at work was doomed.

  By definition, in a co-operative no single person becomes a leader to inspire the remainder. In a collective, there is either communal inspiration or nothing at all. But many would regard that idealism as incompatible with the realities of establishing the firm editorial leadership which a newspaper requires. The News's editor was Fred Sillitto, a sixty-year-old former deputy editor of the defunct Express who was a compromise choice. Under his guidance, the paper lurched towards its unveiling without agreeing its strategy, its political point of view, its editorial style, how to attract sufficient advertising or even a purpose. Neither Sillitto nor the council had targeted who would buy the paper nor had they decided what type of stories they would want to read. A similar malaise affected the advertising and circulation departments who were organising a launch during the traditionally lean summer months in the depths of an economic recession without an adequate brief to present to potential customers. Only the production section was well manned, and the printers were already anticipating the journalists' failures.

  But there was only a passing hint of those shortcomings when the first edition of the newspaper came off the presses at midnight on Sunday 4 May. On the production floor, there was genuine euphoria as television cameras, journalists from other newspapers and well-wishers jostled Tony Benn and Maxwell, who stood reading the lead story about a successful model who, after 'dying' in a car crash, had been resuscitated. If the headline, 'It's Great to be Alive' was pedestrian or cli-ch6d, that was not reflected in the first week's sales, which zoomed from 260,000 to 330,000 copies. As the novelty disappeared, a partial decline was inevitable. Every new newspaper suffers a jolting curve of expectation and sales at its birth but professionals can distinguish between the struggle for life and the inexorable decline to extinction. In the case of the Scottish Daily News, the circulation, in the second week, began to free-fall down towards 200,000 copies and the awful reality dawned. Even the most favourably prejudiced agreed that the newspaper was confused and dull. There was still a chance of survival if the Workers' Council would take swift remedial action but, to one outsider, they seemed fixated and paralysed.

  On 19 May, Maxwell struck. In a telex to Mackie, Maxwell appealed to him to 'sink our differences and work together' by lifting the ban on Maxwell selling advertising as the only way to 'save the Scottish Daily News'. Mackie did not reply and the following day Maxwell sent another much longer telex to the council predicting that the News would collapse by 31 October if its editorial and commercial policies were not changed. The paper, he reminded his readers, had started its life with £950,000 cash in the bank. Sixteen days after its first publication, £500,000 remained and the losses, assuming circulation fell no further, were accumulating at £30,000 per week. On the existing pattern, there was, he said, no chance of redemption. ‘I know that your immediate reaction will be to accuse me of panic-mongering. The accusation would be as untrue as it is undeserved. ... In view of the grave danger which our enterprise finds itself in, I hope that you will cease your stubborn refusal to comply with the letter and spirit of the workforce [sic] . . . and save 500 jobs.' Considering the criticism which he would later attract for his role in the newspaper, his message is a model of moderation and sanity.

  Over a long period I gave you a considerable amount of my time free and unstintingly and many of my suggestions which the Action Committee followed were certainly instrumental as you yourself have admitted in getting the project off the ground. I was therefore surprised, to say the least, by your attempting to remove me from the co-chairmanship so soon after I had been instrumental in helping you raise the necessary money to get the project launched.

  However, I decided that this was your show and that you should be allowed to run things the way you liked. Several times I pointed out that without me or somebody like me you would find it difficult to launch the paper successf
ully, to maintain its high circulation and get quickly the necessary advertising. You insisted that you could do all this by yourself and in any case you should be allowed to make your own mistakes'. As unanimously desired by our workforce I agreed to keep my peace and not rock the boat and I have adhered to this decision.

  Maxwell then pointed out that, with falling circulation and low advertising, 'our workers' co-operative is literally heading for the rocks.' The political and human cost, he warned, would be 'ghastly' and offered the council some 'concrete proposals which may just save the situation'; these involved 'improving the journalism, increasing circulation and selling more advertising'.

  The following day, the Workers' Council rebutted Maxwell's accounts and seemed to Maxwell, albeit erroneously, to be shrugging off their responsibility. Instead of losing £30,000 per week, the meeting agreed, the paper was at worst breaking even, but that was optimistic. When the riposte reached Maxwell, he was outraged. Albion Street suddenly represented everything he hated most: inefficiency, blinkered trade unionism and, worst of all, insubordination. The philanthropist launched a bid to take control of the newspaper's commercial transactions. The annual elections to the Workers' Council were due on 4 June. By then, according to Maxwell, the circulation had fallen to 80,000, but according to some others 120,000, and the paper was attracting less than half the required advertising. Maxwell was proposed as a candidate by the journalists and, in an emotional speech which prophesied imminent ruin, he recommended himself, the socialist entrepreneur, as the redeemer. Mackie opposed his election but nevertheless, by seven votes, Maxwell was elected to the council which by then had become disillusioned and divided. His return brought a new, if controversial spirit.

  Maxwell pledged himself to work exclusively for the News for three months and appealed to everyone not to be 'cavalier . . . when dealing with public funds. . . and save our paper from extinction'. But he did not hide his frustration that he controlled only the advertising and circulation departments. He wanted to be the newspaper's publisher, manager and editor and to thrust himself boisterously forward as the incomparable saviour of the whole enterprise. In anticipation of victory, a Glasgow public relations company, Donald and Partner Ltd, was asked to conceive a campaign which would identify the newspapers under Maxwell's command. Their proposal was revealing of his intentions: 'Since Maxwell is pivotal to all the changes taking place, he must unequivocally be seen to be taking the helm and setting the pace.' Again Mackie opposed Maxwell's bid but on 30 July, as the newspaper veered towards total collapse, Maxwell was granted full executive powers, although his control was subject to the votes of the council and the workforce. The collective had a boss.

  In classic style, as 'chief executive', Maxwell moved a bed into an office, fried his food in the canteen and walked around the building exhorting everyone to work harder. The next stage was a survival plan. Most were by then agreed that the paper should be relaunched as a tabloid, but Maxwell also argued that the cover price should be reduced by one penny. Mackie disputed the economics and asked him to prove that the newspaper's circulation would increase sufficiently to cover the fall in revenue. Maxwell brushed the detractor aside as someone ignorant about business and with a mixture of ultimatums and exhortations won the committee's support. The relaunched tabloid, published on

  17 August, was an immense improvement and sales soared. Had Maxwell patiently allowed his creation to develop gradually and not insisted on the counter-productive price cut, he might have reaped enormous praise. Instead, unwilling to suffer further the chaos of democracy, he sought to remove those who challenged his decisions, especially Allister Mackie, and he adopted controversial methods.

  Mackie was anathema to Maxwell. His idealism had fertilised the concept of the News but he wanted to prove a principle and in Maxwell's view, not to make a profit. For Mackie, Maxwell represented the archetypal press baron and everything which was wrong in the industry. Mackie believed that he did understand commercial priorities but they were clearly different from Maxwell's. The new tabloid even contained a daily column written by Maxwell containing his thoughts, which Mackie noted was not blessed by sparkling prose or pithy insight. A showdown was inevitable and came in late August. It centred on a demand from Beaverbrook for a final payment of £59,000.

  Maxwell had astutely discovered that Beaverbrook's negotiators had carelessly omitted to define the price for Albion Street as 'exclusive of VAT'. Accordingly, the price was inclusive and Beaverbrook would be expected to pay the £59,000 tax from the money already received. For Maxwell it was natural that Beaverbrook should suffer its own folly but for Mackie the notion was outrageous. Integrity was important to him, and on legal advice he signed a cheque and sent it to London. To Maxwell, who believes that survival in business depends upon extolling virtues, even those which are non-existent, and concealing glaring inadequacies, Mackie's behaviour was inexplicable. Only a fool, he felt, would be charitable on his way to oblivion, and he ordered the bank to stop payment.

  That confrontation confirmed Mackie's sentiment that the co-operative was dead. His view was shared by William Wolfe, the chairman of the Scottish Nationalist Party who was also the News's company secretary. On about 1 September, Wolfe handed the DTI a summary of the accounts which were compiled as if the paper were going into liquidation. 'It was bankrupt, so what else could I do?' says Wolfe. Maxwell was irate and condemned both men as 'irresponsible elements'. To Wolfe in particular, he wrote describing his 'disgust at your unprofessional conduct' because the company, he said, was definitely solvent. Hitherto, their dispute had been contained within the Workers' Council, but Maxwell decided to gather support among the workforce and began regularly using the tannoy system to denounce Mackie and his supporters as 'fools', 'knaves', 'the enemy in our midst' and 'terrible people'. Ironically, it was the type of language which, when used by critics to describe Maxwell, would be answered with an avalanche of writs.

  On 3 September, just after 6 p.m., Maxwell's message over the tannoy presaged the climax: 'Attention. This is Robert Maxwell speaking. We have doubled our circulation. What a time to pick by these terrible people, the enemy in our midst, to destroy our courage and reputation. I want you to reflect carefully on what I have said. Now is the time when you have got to stand up and make up your mind - either you want the management and leadership I have provided, or else you can take the situation which Mackie and Russell and their ilk have brought about.' After outlining their disagreement about the cheque and suggesting that Mackie and Wolfe wanted to call in the liquidators, Maxwell delivered his ultimatum: 'Now is the time to let your feelings be known ... I want to hear from your chapel representatives what you want to do to save your jobs. Thank you and goodnight.' The following week, he apologised. But the demoralisation had spread rapidly and, after more confrontations, Maxwell appealed again to the workers.

  On 14 September at a mass meeting, Maxwell promised to arrange new finance to stave off bankruptcy if a vote of no confidence was passed on Mackie and Wolfe. In Mackie's absence, Maxwell won, and both Wolfe and Mackie resigned the following day to be joined by the company's lawyers and accountants, including Boston. The newspaper's future now depended entirely upon Maxwell. At a press conference called soon after, which was filmed by BBC Television, Maxwell impatiently but authoritatively asserted, 'We are very solvent; we have no financial problems ... if every business in the United Kingdom was as well off for cash and paid its bills as promptly as this company, there would be no crisis.' It is the very enigma of Maxwell: whether he believed that assurance to be accurate or whether, unwilling to accept defeat, he was putting on a brave face to buy time for a rescue.

  The same week, on 19 September, Maxwell informed the council that the newspaper would be bankrupt within one week but he showed no signs of panic. With a circulation of 150,000 and a revaluation of the assets by a new firm of accountants, he was optimistic that he could raise more loans from the major banks. Goldberg and Sillitto supported Maxwell and got do
wn to improving the paper in a period of calm. Six days later their hopes were completely dashed. Mackie's departure had aroused curiosity in Fleet Street. The industry's trade paper, Campaign, quoted him as saying that the News was 'finished' and then the Sunday Times decided to investigate Mr Maxwell's latest enterprise.

  The mastermind of the Sunday Times's new venture was Bruce Page, who six years earlier had been one of the executive editors responsible for the Insight profiles. In the intervening years, he had observed that the DTI's reports had exposed Maxwell's commercial reputation as worse than the paper had imagined. Yet by 1975 the DTI's investigation had been practically forgotten and Maxwell had emerged apparently unscathed. The news of Mackie's resignation and the troubles in Glasgow were therefore a good 'peg' to summarise the DTI's devastating reports and query just why the same department had committed taxpayers' money to that individual. Prior to embarking upon the story, Page naturally consulted Harold Evans, the editor, and won the assurance that under no circumstances would the Sunday Times capitulate to Maxwell's inevitable barrage of writs as on the previous encounter. Two journalists were dispatched to Scotland while Page remained in London. The result was a major article which appeared on 21 September under the sensational headline 'How Maxwell Sabotaged the Workers' Dream'. Breathless and blistering, it opened by alleging that Maxwell, 'having cut a unique swathe through British capitalism, has now succeeded in turning the latest manifestation of British socialism - the workers' control movement - into an instrument of his own ambitions'. The article's style lacked any pretence of neutrality in its summary of Maxwell's past. But in putting all the blame for the News's collapse upon Maxwell's stewardship, its bias was evident: 'Without Maxwell, the socio-economic experiment would have been carried through to the end, the results observed, the lessons learned . . . For the lack of the last £114,000 that dream of the co-operative was sacrificed.' The newspaper's editorial blamed the collapse on Maxwell's 'insatiable appetite for control' although he had wielded complete power for a mere week and it omitted even to hint at the contribution made to the collapse by any additional factors. If the condemnation was harsh, it nevertheless reflected the feeling that Maxwell's past and personality made him an unacceptable recipient of public funds.