1 Thursday, 31 May 2012 2 (10.00 am) 3 LORD JUSTICE LEVESON: Yes, Mr Jay. 4 MR JAY: Today's witness is the Right Honourable 5 Jeremy Hunt, please. 6 MR JEREMY RICHARD STREYNSHAM HUNT (sworn) 7 Questions by MR JAY 8 MR JAY: Your full name, please? 9 A. Jeremy Richard Streynsham Hunt. 10 Q. Thank you. You provided us with a witness statement 11 dated 4 May this year. It has three annexes, the 12 standard statement of truth. Is this your formal 13 evidence to the Inquiry? 14 A. Yes, it is. 15 Q. In terms of your career, Mr Hunt, you have been a Member 16 of Parliament since 2005, Shadow CMS and then, since 17 11 May 2010, Secretary of State for Culture, Olympics, 18 Media and Sport; is that correct? 19 A. That's correct. 20 LORD JUSTICE LEVESON: Mr Hunt, as I've said to everybody 21 else, thank you very much for the effort that has 22 clearly been put into the statement and all the 23 exhibits. I'm grateful to you, and of course the 24 assistance you've received from your staff. 25 A. Thank you, sir. 1 1 MR JAY: Your approach generally to media ownership, you 2 cover these in paragraphs 3 and 4 of your statement at 3 05597. Is there anything you wish to add to that? 4 A. No. 5 Q. You helpfully explain your reserve functions under the 6 relevant legislation in relation to media plurality. 7 This is paragraphs 8 to 14. Dr Cable gave us a similar 8 explanation, and there are no specific points which 9 arise. You draw attention to the relevant guidance and 10 the public interest test, which is under section 58 of 11 the Act. When did you first become acquainted with 12 that, Mr Hunt? 13 A. I think I only really became acquainted with it when the 14 powers were transferred to me from the Department of 15 Business on 21 December. 16 Q. Thank you. Can I deal with your period in opposition, 17 first of all. Your personal website said at one stage: 18 "Like all good Conservatives, Hunt is a cheerleader 19 for Rupert Murdoch's contribution to the health of 20 British television." 21 So that presumably represented and perhaps still 22 represents your view; is that correct? 23 A. I would say it's not correct, and perhaps I could also 24 correct the impression that that statement gave, which 25 Mr Smith also corrected in his evidence. I have 2 1 a section on my website which is really there for the 2 benefit of my constituents, where I put up press 3 articles that have been about me, so that people can see 4 what I'm up to. That was a comment by a journalist from 5 Broadcast magazine, but it's not how I would describe 6 myself. 7 Q. So why did you put it up on your website then, if it 8 didn't represent your view? 9 A. Well, I think it's helpful to my constituents to put up 10 all the comments about me, positive or negative. There 11 are comment sections on my website where constituents 12 themselves put up comments, positive or negative. 13 Q. Okay. We know from material which Mr Rupert Murdoch 14 provided to us -- this is his exhibit KRM 40, it's in 15 the PROP file at page 01962 -- that you had two meetings 16 with Mr James Murdoch in opposition, on 12 October 2009 17 and 12 February 2010. Hopefully that will come up on 18 your screen. It's not available in the various files 19 you have. 20 One of the agenda items, according to 21 Mr James Murdoch, was reform of Ofcom. Can you remember 22 what, if at all, was discussed on that occasion? 23 A. Not particularly. I think James Murdoch has a general 24 hostility to Ofcom and the BBC, and he may have said 25 that the burden of regulation from Ofcom was too 3 1 onerous, that sort of general tenor. My focus in both 2 those meetings were my two policy priorities, which were 3 superfast broadband and local TV, and I was unable to 4 excite much interest in him in those two areas. 5 Q. But did he try and excite interest in you on the issue 6 of reform of Ofcom? 7 A. I think, apart from sort of generally expressing a view 8 that the broadcasting market was too heavily regulated, 9 I don't think we got into much more substantive 10 discussions than that. 11 Q. Had you read by that stage his MacTaggart lecture, which 12 was delivered on 28 August 2009? 13 A. Yes, I had. 14 Q. Did you share the views and opinions expressed in that 15 lecture? 16 A. There were some things that he talked about which 17 I thought were very important. He talked about the 18 importance of having independent commercially viable 19 media operators as a very important element of plurality 20 of news provision, and I completely agree with that. 21 There were other things that I disagree with. 22 I disagree with the general thrust of his views on the 23 BBC, in particular his description of the BBC as 24 state-sponsored journalism, and the suggestion that the 25 BBC is an arm of the state, whereas my experience of the 4 1 BBC has always been and is that it operates very 2 effectively at arm's length from the government, even 3 though its funding mechanism comes through my 4 department. 5 Q. Did you share his views as to the licence fee, in 6 particular at one stage I think it may have been 7 Conservative Party policy to top slice the licence fee? 8 A. Generally speaking, I didn't share his view on the 9 licence fee. I think James Murdoch thinks the licence 10 fee is wrong full stop. He describes it as an 11 intervention in the market, whereas I believe that the 12 BBC is a benchmark for quality in broadcasting in this 13 country and indeed all over the word, and the licence 14 fee is a critical part in making that possible. 15 With respect to top slicing, that's the sort of 16 principle that other broadcasters should be able to bid 17 for a share of the licence fee, that was a policy option 18 that we floated in opposition. I think I floated it as 19 a particular option in the spring of 2008, but we never 20 adopted it as a policy. 21 Q. Okay. I think in July 2009 you travelled to New York to 22 see executives of News Corporation; is that correct? 23 A. I believe it was September 2009, but yes, and I didn't 24 travel to New York to see executives of News 25 Corporation. I went to New York because I wanted to do 5 1 some research into local television and America has the 2 most developed local television market in the world, but 3 I was offered to meet executives at News Corporation, 4 and I thought that was a good thing to do while I was 5 there. 6 Q. Did those include Mr James Murdoch or not, can you 7 recall? 8 A. No, they didn't. 9 Q. We know he was working in London at the time. Can I ask 10 you this, though: did you discuss anything else, other 11 than local television? 12 A. We had more general discussions about broadcasting. 13 News Corporation have never been particularly interested 14 in local television in the UK, so they weren't 15 particularly interested in talking about that to me, 16 although they were happy to talk about their experience 17 of local television in the US. That was my primary 18 purpose. They talked about -- I think one of the things 19 we talked about was the impartiality rules, which we 20 have here under the Broadcasting Code, which they don't 21 have in the US, so we had some discussion about that. 22 Q. Okay. In May 2010 there was another meeting -- it's 23 more accurately described, I think, as you say in 24 annex B, 05624, as an evening reception and dinner, 25 James Murdoch and others from News Corporation. 6 1 Rupert Murdoch was also present for part of the event. 2 Can you remember the date? 3 A. I can't remember the date off the top of my head, but 4 I think it was after I'd become Culture Secretary. 5 Q. I think that was the occasion where it was said you were 6 hiding behind a tree to avoid being spotted by a Wall 7 Street journalist. Is that correct or not? 8 A. No. What actually happened was I went to a dinner which 9 I think was hosted by the master of UCL, it wasn't 10 a private dinner with James Murdoch, and on my way to 11 the dinner, I spotted a large group of media journalists 12 and I thought this is not the time to have an impromptu 13 interview, so I moved to a different part of the 14 quadrangle. 15 Q. There may or may not have been trees; is that right? 16 A. There may or may not have been trees. 17 LORD JUSTICE LEVESON: All right, I think we've moved on. 18 MR JAY: Yes, I am. 19 15 June 2010, which was the day the bid was 20 announced, Mr Hunt. When did you first learn that the 21 bid was in the offing, as it were? 22 A. I don't think I knew about the bid until getting a call 23 from Mr Murdoch on the day that it was announced. 24 Q. You don't think so or you're sure you didn't know about 25 the bid before? 7 1 A. Well, I'm -- yes, I'm -- I'll say I'm sure, because 2 I don't recall any conversation or knowledge about it, 3 and I think it was complete news to me, so I am sure. 4 I can't be, you know, completely certain that at no 5 stage ever was it ever mentioned to me that one day they 6 might buy the rest of it, but for the avoidance of 7 doubt, I don't believe I was ever told at any stage that 8 they had any concrete plans. 9 Q. Because presumably it was your judgment, knowing the 10 company, that that was one of their aspirations in due 11 course to acquire the remaining publicly owned shares in 12 BSkyB; is that correct? 13 A. No. I would have thought they had lots of different 14 aspirations and commercial ambitions, and I would have 15 thought they would be focusing on the growth of BSkyB. 16 I wouldn't have particularly thought that the purchase 17 of those shares was a corporate objective. 18 Q. But on the occasion that Mr Murdoch called you, you deal 19 with it in paragraph 29 of your statement, are we to 20 deduce that you indicated broad sympathy to the proposed 21 acquisition at that stage? 22 A. I don't remember exactly what I said, but I would 23 imagine that I did. I also made a comment to the 24 Financial Times. My view was that the Murdochs 25 controlled BSkyB, they only had a 39 per cent 8 1 shareholding, but I think most people felt that they 2 controlled the company. James Murdoch was the chairman 3 of BSkyB. And so I didn't think that there was 4 a significant change in plurality represented by them 5 purchasing the shares that they didn't own. 6 Q. Do you think he phoned you to ascertain your view or for 7 some other reason? 8 A. I think he phoned me as a courtesy. I do remember him 9 saying that he was calling me and Vince Cable. 10 Vince Cable, obviously, is the person who had 11 responsibility for the decision, and me as the Secretary 12 of State responsible for the media sector. 13 Q. Did he say to you that he'd already spoken to Dr Cable 14 or not? 15 A. I think he did, yes. 16 Q. So he had spoken to Dr Cable before speaking to you, is 17 that the sequence of events? 18 A. He definitely mentioned talking to Dr Cable. Whether he 19 said, "I am calling Dr Cable", or whether he said, "I've 20 called Dr Cable", I can't remember. 21 Q. Your general thinking at the time, paragraph 28 of your 22 statement, 05602, you say: 23 "I have always been open about the fact that I was 24 broadly sympathetic to the proposed acquisition prior to 25 taking responsibility for it." 9 1 So that was your thinking then. Whether it changed, 2 of course, we will discuss. 3 There was another meeting, I think towards the end 4 of June, which is mentioned both in your annex B and in 5 a Guardian piece which is under tab 13 of your bundle, 6 which I think took place on 28 June. Do you remember 7 that? 8 A. I don't have the Guardian piece in front of me, but yes, 9 it did take place on 28 June. 10 Q. Was it the case that there were no officials present and 11 no written agenda or briefing? 12 A. Yes. I was told by my officials that it was entirely 13 proper to have meetings where there were officials 14 present who took minutes, and meetings where there 15 weren't officials present and minutes weren't taken and 16 it was entirely my discretion and I had that meeting 17 with Mr Murdoch. I also had meetings with other 18 officials, with the chairman of the BBC Trust, the head 19 of ITV and a number of other people when I'd just become 20 Secretary of State. 21 Q. Do you believe that the BSkyB bid was discussed on that 22 occasion? 23 A. I would be very surprised if it wasn't discussed, 24 because obviously it would have been top of Mr Murdoch's 25 mind. I don't remember any particular discussions. 10 1 I remember my rather unsuccessful attempts to excite him 2 about superfast broadband and local TV, which continued 3 to be unsuccessful. 4 Q. There was another meeting at the Conservative Party 5 conference in that year in October 2010. We see that 6 from annex B again at 05626. This time it was 7 Rebekah Brooks and Frederic Michel. Can you recall 8 whether the BSkyB bid was discussed on that occasion? 9 A. Yes, it was. 10 Q. Was Mr Smith present on that occasion? 11 A. I believe he was. 12 Q. Can you remember anything about the content of the 13 discussion which might assist us? 14 A. As I remember, I think they expressed some concern that 15 they weren't getting a sympathetic hearing from 16 Vince Cable, but not much more than that. 17 Q. What response if any did you give to that concern? 18 A. I would have said that my own view broadly speaking was 19 that I didn't think there was a plurality issue, so 20 I would have probably expressed some surprise that 21 Vince Cable may have thought there was more of 22 a problem. 23 Q. How well did you know Mr Michel by that point? Of 24 course we're October 2010. 25 A. Well, I knew Mr -- I mean, I didn't know Mr Michel 11 1 particularly well full stop. I'd, you know, probably 2 had a few coffees with him in my time in opposition, as 3 I would have met representatives from all media 4 companies when I was Shadow Culture Secretary. 5 I got to know him a little bit better because of the 6 fact that that year we both had children born 7 coincidentally in the same hospital on pretty much the 8 same night, and by chance we bumped into each other in 9 the maternity ward, but our families never socialised 10 together, we never socialised together. 11 Q. Thank you. If I can move forward now in time to 12 October, we know that on 7 October 2010 -- this is 13 page 07905, in the second of the supplementary bundles, 14 under tab SS.Aa. 15 A. Which bundle is this, Mr Jay? 16 Q. Second supplementary bundle. 17 A. If I don't need to see it, I'm happy to carry on. 18 LORD JUSTICE LEVESON: I'd prefer that you had these 19 documents in front of you, if you don't mind. 20 A. Right, I have supplementary folder 2. I think that's 21 probably the one. That's it. 22 MR JAY: If it's tabbed in the same way, you'll find a tab 23 SS.Aa. It's the first document under that tab, 07905. 24 A. No. Sorry, will it be on the screen now, Mr Jay? 25 Q. Yes. 12 1 A. Right, I can see it. 2 Q. We can see that you were sent -- in fact to know exactly 3 what you were sent we have to turn over the page, but 4 I'm sure you would accept what I say about this -- 5 a briefing document, which was addressed to you, which 6 relates, I think, to the plurality aspects of the bid. 7 We know it was sent by Mr Michel to Mr Smith, and then 8 Mr Smith forwarded it to you. That's demonstrated by 9 07905. 10 Mr Smith's observation was: 11 "Obviously strictly commercially confidential but 12 very interesting." 13 And your comment appears to be: 14 "Very powerful actually." 15 So it follows that plainly you considered this 16 document and were expressing a positive view about it. 17 Is that fair? 18 A. Yes. I think the document confirmed the view that 19 I already had that I didn't think there was a major 20 plurality issue with this acquisition. 21 Q. Did you know at the time that Mr Smith had obtained this 22 from Mr Michel? 23 A. I knew that he'd obtained it from News Corp. I don't 24 know if I knew that it had come from Mr Michel. 25 Q. Did you deduce that he probably obtained it from 13 1 Mr Michel? 2 A. I would think that would be an intelligent guess to have 3 made, if I'd been interested in who the precise person 4 was. I mean, his role -- part of his role was liaison 5 with external interest groups and stakeholders, and so 6 he would have sourced information from lots of different 7 people, but it wouldn't have been a surprise to me. 8 Q. But from within News Corporation, the main point of 9 contact from Mr Smith's perspective was Mr Michel, so 10 it's not a massive deduction, is it, to state that the 11 source must have been Mr Michel? 12 A. I agree. It's not a massive deduction. 13 Q. Did anyone other than Mr Smith know that you'd received 14 this? 15 A. I don't believe so. Nor do I believe I would have made 16 a secret of it. 17 Q. We know from other material that it went to your 18 personal email account. Is anything to be inferred from 19 that? 20 A. No, that is the only email account I use. 21 Q. So you don't have an email account within the 22 department; is that correct? 23 A. No, my departmental email gets looked after by my 24 private office, and if there's anything they need to 25 show me from that, they show me, but the only email 14 1 account that I use is my personal one. 2 Q. So most of the contact we have, perhaps all of it, from 3 Mr Smith by email is obviously to your personal email 4 account; is that the correct position? 5 A. That's correct. 6 Q. There are also some text messages at about this time 7 which are relevant, Mr Hunt. If you go to the section 8 of this same file called TT, and look at 08147. 9 A. Yes. 10 Q. And we start, please, with the message timed at 19.25 on 11 2 November 2010. This is from Mr Michel to you: 12 "Just sent Adam our digital numbers." 13 Can you assist us as to what that might relate? 14 A. This is on 2 November? 15 Q. It is, yes. 16 A. Yes. I don't think I can, actually. I'm not sure what 17 their digital numbers would have been. 18 Q. Okay. On 9 November, the message is: 19 "Can you meet James tomorrow morning for a catch-up? 20 Would be good. Even early morning." 21 And then there's an email which relates to the 22 organisation of it, but on 12 November at 19.25, FM to 23 JH: 24 "James and I will see you Monday at 6.45." 25 And you text back immediately: 15 1 "Great." 2 A. Yes. 3 Q. So this is going to be Monday, 15 November, I believe. 4 You then got some legal advice on 12 November, and 5 that's to be found in the main file of documents, which 6 is the primary evidence under tab 3, page 04248. We've 7 seen this before in another place with Mr Stephens. 8 He's also exhibited it. If you go to tab 3, I hope 9 you'll be able to turn up this advice. It's dated 10 12 November. 11 A. Could you give me the page number again? 12 Q. Yes, 13573 -- no, 04248. Sorry, I gave the correct 13 number first time. It's in two places in our files, 14 I gave the incorrect one. 04248. 15 A. Yes. 16 Q. It's directed to you personally. We know it's dated 17 12 November. You wanted to know what powers you had in 18 relation to media mergers generally. The recommendation 19 is: 20 "There is no role in the process for the DCMS so we 21 would recommend that you do not have any external 22 discussions on the BSkyB media merger nor write to 23 Secretary of State BIS about it. If you want to 24 contribute, you could write a letter stating facts 25 backed up with evidence ... however this carries with it 16 1 risks." 2 The reason being, in the middle of the page: 3 "Secretary of State BIS is performing 4 a quasi-judicial role as the statutory decision-maker." 5 So the advice was twofold, first of all not to have 6 any external discussions. Did you interpret that as not 7 to have discussions with someone like Mr Murdoch about 8 the bid? 9 A. The advice I was asking was what was my locus to express 10 an opinion that might be taken into consideration by 11 Dr Cable in making his quasi-judicial decision, and the 12 advice I got was that essentially I didn't have a locus 13 of intervention and I shouldn't intervene, so 14 I interpreted that advice to mean that I shouldn't have 15 any contact with anyone if that was part of a process 16 that was going to be making an intervention with 17 Dr Cable, because that might threaten the judicial 18 robustness of Dr Cable's solution. 19 I didn't interpret it to mean that I couldn't be in 20 touch with people in the industry that I was responsible 21 for and understand the issues around a merger that was 22 the biggest merger the media industry had ever seen and 23 on which thousands of jobs depended. In fact, I thought 24 it was my duty to understand the issues around that 25 merger and to be well across them. 17 1 Q. We'll come back to that second point fairly shortly. If 2 you look at the second page of this note, 04249, you'll 3 see that legal advisers have cleared the note and it was 4 copied to the Minister of State and to the Permanent 5 Secretary. It was also copied to the special advisers. 6 Did you discuss its content with Mr Smith, do you think? 7 A. I don't recall a conversation, but it's quite possible. 8 Q. Did you indicate to him your frustration, if you had it, 9 about the content of this note? 10 A. I think I had a concern about the situation where we had 11 this very important, very significant merger in my 12 sector where, as I had said, I didn't think there was 13 a particular problem with it but the organisation 14 concerned said that they did feel that they were 15 encountering a number of obstacles, and so I wanted to 16 be absolutely proper about the way I approached this 17 because I recognised that it was another department's 18 decision. 19 This was probably the first time that I heard the 20 phrase quasi-judicial or had some kind of exposure to 21 what the implications of quasi-judicial meant, and we 22 had a meeting in the diary initially and I decided to 23 cancel that meeting not because I thought it was wrong 24 to have contact with News Corporation, but because 25 I thought they were probably wanting to have the meeting 18 1 with me that Vince Cable had refused to have with them, 2 and that therefore to have that meeting would be to 3 create a parallel process where another government 4 department is getting involved in the process in a way 5 that might not be seen to be appropriate. 6 Q. But wasn't the logic exactly the same, that the reason 7 why Dr Cable shouldn't be meeting with people like 8 Mr Murdoch would be exactly the same reason why you 9 should not be meeting people like Mr Murdoch, if I can 10 put it in those terms. Do you accept that? 11 A. No. First of all, I don't know and I didn't know 12 whether Dr Cable was being advised whether or not he 13 should meet Mr Murdoch. That would obviously be his 14 judgment and his legal advice. My perspective as 15 Secretary of State responsible for the media sector was 16 that I thought I had an absolute duty to be across the 17 most important issue in that industry. 18 Q. You asked for the matter to be further considered, if 19 I can put it in these terms, at 04250, which is the next 20 page: 21 "SoS has noted the advice and asked to see the 22 results of Jonathan's request to the legal advisers as 23 soon as possible." 24 The legal advice came on 19 November. We've seen it 25 before with Mr Stephens. It starts at 04254, and the 19 1 conclusion at 04256 at paragraph 16 was: 2 "Whilst there is nothing legally which precludes the 3 Secretary of State CMS from making representations to 4 the Secretary of State BIS to inform the latter's 5 decision as to whether to refer the public interest 6 considerations in this merger to the Competition 7 Commission, it would be unwise to do so." 8 Did you accept that advice? 9 A. Yes. I don't know if I saw this longer version of the 10 advice or not, but I did accept it. 11 Q. On 7 -- 12 LORD JUSTICE LEVESON: Just before you go on to the 7th, 13 that advice contains within it a description of this 14 concept of quasi-judicial decision: 15 "By this, we mean a decision which is not driven by 16 policy concerns, and has to be taken on the facts before 17 the decision maker. It is not a Cabinet decision, and 18 no collective Cabinet responsibility applies. 19 Similarly, a decision on a planning application, or an 20 application for a harbour revision order will be 21 characterised as quasi-judicial decisions." 22 Did you have that understanding by this stage of the 23 exercise that Dr Cable was involved in? 24 A. I don't think I did. I don't actually recall seeing 25 this longer version of the advice. I do recall the 20 1 advice that I received on 12 November. Obviously I did 2 become extremely familiar with what quasi-judicial 3 meant. 4 MR JAY: The email which the legal director sent on 5 7 December at 04257 says: 6 "Thanks, I appreciate that the advice is not what JS 7 [that's obviously the Permanent Secretary] and possibly 8 JH wanted to hear." 9 Is that a correct deduction? 10 A. I think it probably is a correct deduction in terms of 11 myself. I don't know about the Permanent Secretary. 12 Q. The next stage is what happened on 15 November in 13 relation to the meeting which had been organised with 14 Mr Murdoch. You have referred to it, but we have 15 separate evidence of it in the file KRM 18, which 16 contains, as you know, various emails largely from 17 Mr Michel back up to his superiors. It's page PROP and 18 then the last five numbers are 01667. 19 A. Yes. 20 Q. It's Mr Michel to Mr Murdoch: 21 "Jeremy tried to call you. He has received very 22 strong legal advice not to meet us today as the current 23 process is treated as a judicial one (not a policy one) 24 and any meeting could be referred to and jeopardise the 25 entire process." 21 1 Is that an accurate statement of what Mr Michel was 2 told by someone? 3 A. I don't believe I spoke to Mr Michel, so I couldn't tell 4 you if it was an accurate statement or not. 5 Q. I think the evidence was that it was Mr Smith who spoke 6 to Mr Michel on this occasion, but it's whether Mr Smith 7 has correctly understood what the very strong legal 8 advice was, which was that the meeting in effect had to 9 be called off because this was a judicial process, as he 10 puts it. Is that broadly speaking correct in your view? 11 A. It may well have been the case that Mr Smith had seen 12 the advice that I'd received on 12 November and we had 13 decided -- well, we did decide that the meeting 14 shouldn't go ahead, so it's possible that there was 15 a discussion between Mr Michel and Mr Smith, but that's 16 obviously something that they would have to say whether 17 it happened or not. 18 Q. Is Mr Smith correct when he says that you're very 19 frustrated about it? 20 A. I may have been frustrated. I was worried about a bid 21 in my sector that could potentially mean that thousands 22 more jobs would be created, and the main protagonist was 23 concerned about the process they were having to go 24 through, so I may well have been worried. 25 Q. The next paragraph sets out what Mr Michel's advice was: 22 1 "... not to meet him today as it would be 2 counter-productive for everyone, but you could have 3 a chat with him on his mobile which is completely fine, 4 and I will liaise with his team privately as well." 5 We know that there was a telephone call between you 6 and Mr Murdoch that day. Was it by mobile phone? 7 A. I believe it was, yes. 8 Q. Was it your view that that was appropriate? 9 A. Yes. As I mentioned earlier, it was always made clear 10 to me by my officials that it was entirely appropriate 11 and proper to have contact with stakeholders at which 12 officials were present and minutes were taken, and 13 contact at which officials weren't present and minutes 14 weren't taken, that was at my discretion, and so I felt 15 in this situation I didn't want to get involved in the 16 quasi-judicial process and I thought that was the 17 intention of the meeting that News Corp wanted, but 18 I thought it was entirely appropriate to hear what a big 19 player in my industry was saying about a particular 20 situation. Indeed, I thought that was my duty to do so. 21 I should perhaps say sort of in parentheses, if 22 I may, Mr Jay, that I think having been through the 23 BSkyB bid and the process that I've been through, 24 I would take a different view about the presence of 25 officials in conversations that a Culture Secretary has 23 1 with media proprietors. I just wanted to be efficient 2 and I thought it was really a question of whether you 3 wanted someone present to take minutes, but given the 4 massive number of conspiracy theories that abound, 5 I think actually going forward I would always want to 6 have officials present and taking notes. 7 Q. If a meeting is inappropriate, as this might tend to 8 suggest, why is a telephone call appropriate? 9 A. Well, I didn't see the telephone call as a replacement 10 for the meeting. My interpretation of the advice was 11 that I should not involve myself in a quasi-judicial 12 process that's being run by another Secretary of State, 13 and that that was the purpose of the meeting that was 14 requested by News Corp and that's why that wasn't 15 appropriate. But I think it would have been perfectly 16 appropriate to have had a meeting with News Corp with 17 officials present taking notes setting out the ground 18 rules. You know, "Jeremy Hunt cannot involve himself in 19 Vince Cable's media plurality decision and we can't 20 discuss the rights and wrongs of that, but he's 21 Secretary of State for the media so he can hear if 22 you've got other concerns or concerns about process or 23 anything else you want to express, he can hear them, but 24 he can't involve himself or make representations with 25 respect to that decision." 24 1 Q. But what was discussed on the phone, then, Mr Hunt? 2 A. I just heard Mr Murdoch out, and basically heard what he 3 had to say about what was on his mind at that time. 4 Q. But what you heard on the phone is exactly the same 5 thing as you would have heard had there been 6 a face-to-face meeting, isn't that right? 7 A. Well, it depends, because I think, as I say, if he had 8 wanted to have a face-to-face meeting in which he 9 expressed the arguments as to why he believed that there 10 was no media plurality decision, that was something to 11 be decided by Dr Cable, and I think if we'd had 12 a face-to-face meeting, we'd have said, "Look, this is 13 something that's being considered quasi-judicially by 14 another Secretary of State and we can't involve 15 ourselves in that". 16 Q. Did you say that to Mr Murdoch during the course of the 17 call, do you think? 18 A. I think it's likely that we explained it, because we 19 were -- you know, we'd cancelled the meeting, which we 20 know from some of his evidence that he used some quite 21 colourful language to express his frustration about. 22 Q. The only evidence we have as to what was discussed is in 23 the file of text messages, which is supplementary bundle 24 volume 2, tab TT, 01847. A text timed at 15.49 on 25 16 November. Mr Michel to you. Do you see that one? 25 1 A. Yes. 2 Q. "Thanks for the call with James today, greatly 3 appreciated. Will work with Adam to make sure we can 4 send you helpful arguments. Warm regards, Fred." 5 And your reply almost immediately is: 6 "Pleasure." 7 We can see that? 8 A. Yes. 9 Q. So it's reasonable to suppose that the call was 10 successful to the extent that some reassurance was given 11 by you to Mr Murdoch insofar as you could give it. Is 12 that fair? 13 A. Well, I wouldn't have given him any reassurance about 14 the media plurality decision that Vince Cable was taking 15 because that was not my -- that was not anything I could 16 get involved with, and I would have made that clear to 17 him, so I probably gave him a sympathetic hearing, but 18 I wouldn't have said that I can get involved in that 19 decision because I had taken and accepted the advice 20 that I couldn't. 21 Q. The third sentence of the text: 22 "Will work with Adam to make sure we can send you 23 helpful arguments." 24 That indicates that you well knew that Mr Smith and 25 Mr Michel were working quite closely by this stage as 26 1 your point of contact with News Corporation, is that 2 fair? 3 A. It's fair, but Mr Smith was my point of contact with 4 pretty much every external state holder during my period 5 in both opposition and as Culture Secretary. 6 Q. You also knew that News Corp would be intending to send 7 you, in their words, "helpful arguments", didn't you? 8 A. Well, I suppose it's rather like Mr Smith said in his 9 evidence: if someone offers you to send something -- 10 send you something, you acknowledge it, but I don't 11 believe I'd have asked for it. 12 Q. Okay. We move forward a few days to a private 13 memorandum which went through a couple of drafts. It's 14 in this self-same file, the second supplementary bundle, 15 SS.Aa. The first draft, I think, is -- you can confirm 16 this -- 07909. This is an email you send to Mr Smith 17 timed at 13.14 hours on 19 November 2010. 18 First of all, so we know where we are with this, 19 Mr Hunt, if you go forward a couple of pages I think we 20 see the second draft and then the final version is the 21 same as the second draft but slightly differently 22 formatted. Is that a correct deduction I've made, first 23 of all? 24 A. I think so, probably, yes. 25 Q. Can we be clear about the first draft, which is 07909. 27 1 Is that something you drafted, which you asked Mr Smith 2 to look at, or is it a first draft Mr Smith prepared for 3 you? 4 A. I generally draft my own notes to the Prime Minister, so 5 I would imagine that I drafted this. 6 Q. You asked him to check it for typos and to format it 7 nicely, but we'll see what if anything happened to it: 8 "James Murdoch is pretty furious at Vince's referral 9 to Ofcom." 10 That's what you learnt on 16 November during that 11 phone call; is that right? 12 A. Correct. 13 Q. "He doesn't think he will get a fair hearing from Ofcom. 14 I am privately concerned about this because News Corp 15 are very litigious and we could end in the wrong place 16 not just politically but also in terms of media policy." 17 What did you mean by "the wrong place not just 18 politically"? 19 A. Well, I think I took that phrase out of the final draft, 20 so the first point I'd make is that that wasn't my 21 primary concern. But I would imagine that I was saying 22 that, you know, we're a party that believes in the free 23 market, in supporting enterprising companies, in 24 government bureaucracy not getting in the way of 25 companies that want to expand and backing people who 28 1 take risks, and I think that I felt that the approach 2 the government was taking felt inconsistent with that. 3 Q. Wasn't there also a question, though, that you would be 4 in confrontation, or might be, with News Corp, which 5 could place the Conservative Party at least in the wrong 6 place politically? Was that not an aspect of this? 7 A. I don't believe so. I didn't give it a huge amount of 8 thought, but I think that on a situation like this, you 9 know, the politics actually in the sense that you're 10 talking about are actually very complex, because you had 11 one Conservative-supporting newspaper group that was 12 very strongly in favour of the bid and you had two 13 Conservative-supporting newspaper groups that were very 14 strongly against the bid. I'm not sure -- I don't think 15 there's any political win in any possible outcome, as 16 far as a Conservative-led government is concerned. 17 Q. In terms of the media policy, which you then go on to 18 explain in this, it would be fair to say that you were 19 favouring the bid; is that correct? 20 A. As you can tell from the note, I could see -- I mean, my 21 perspective on the media industry is that I am a very, 22 very passionate supporter in having a free and vibrant 23 press, and I actually think we have one of the freest 24 and most vibrant media industries and press in the 25 world, and I think it's very good for our democracy, and 29 1 I had a concern and I have a concern, actually, that the 2 model of the newspaper industry is not financially 3 viable in the long term because of technology changes, 4 and because of that I saw this bid and the potential of 5 this bid as an opportunity to help modernise the 6 industry so that it could carry on playing that sort of 7 free and vibrant role. 8 Q. So for all the reasons you've given, you were supportive 9 of the bid; is that correct? 10 A. I was sympathetic of the bid. The reason I hesitate 11 slightly on the word "supportive", because I wasn't -- 12 you know, apart from informing the Prime Minister of my 13 views, I wasn't actually going out and doing anything 14 about it. 15 Q. We can see from the last paragraph: 16 "What next? Ofcom will issue their report saying 17 whether it needs to go to the Competition Commission by 18 31 December. Much of what we do will be constrained by 19 the absolute necessity to respect due process at every 20 stage." 21 So you'd fully taken on board the note of 22 12 November, where that point was made. Then you say: 23 "But I think that you, I, Vince and the DPM should 24 meet to discuss our response to potential different 25 scenarios. May I arrange such a meeting?" 30 1 So you were seeking a high level policy meeting to 2 discuss wider media policy considerations, weren't you? 3 A. What I felt was that there was a very big issue that was 4 going to affect an industry sector that I was 5 responsible for, a very important industry sector, and 6 I thought that it would be appropriate to have a meeting 7 to discuss policy and not the quasi-judicial decision 8 that Vince Cable was taking. 9 I do now understand a lot more about quasi-judicial 10 positions, it's probably pretty much engraved on my 11 brain because we've been thinking about it so hard, and 12 I think that -- I now realise that it would not have 13 been possible for Vince Cable to attend such a meeting 14 and he would have been advised not to attend such 15 a meeting. 16 Q. When we come to the second draft, 07911, which appears 17 to be timed at 16.18, may I understand what had 18 occurred. Was it Mr Smith who had reworked it or was it 19 you who had had second thoughts and sent a second draft? 20 A. I don't know, but I would imagine possibly either. 21 I may well have had a conversation with Mr Smith in that 22 time. 23 Q. There isn't a third possibility, but you're not sure 24 whether it was Mr Smith's hand which we see here in 25 terms of the amendments or whether it was your further 31 1 cogitations; is that right? 2 A. Well, I think -- 3 LORD JUSTICE LEVESON: It is an email from Mr Hunt to 4 Mr Smith. 5 A. Yes, I think it is, so I imagine it's me having 6 rethought it, is the answer, because he then replies at 7 16.30: 8 "Much happier with this version." 9 I think that probably suggests that I made the 10 changes. 11 MR JAY: The changes you made, you removed the reference to 12 "not just politically", you shortened it. Arguably you 13 beefed up the second paragraph where you say: 14 "... I think it would be totally wrong to cave in to 15 the ..." coalition, I paraphrase, as this "represents 16 a substantial change of control given that we all know 17 Sky is controlled by News Corp now anyway." 18 That statement of opinion is a clear opinion, isn't 19 it, in favour of the bid, would you agree? 20 A. Yes, I'm expressing my view, but I'm also recognising, 21 because I talk about due process, that this is not 22 a decision for either me or for the Prime Minister. 23 Q. The final paragraph is slightly changed. It's no longer 24 respecting due process, the language is "has to be 25 decided at arm's length", but the sense is fairly 32 1 similar, isn't it? 2 A. Yes. 3 Q. So you believed that this memorandum was probably the 4 subject of private discussion between you and Mr Smith, 5 is that correct? 6 A. Yes. 7 Q. So Mr Smith self-evidently knew your view on this 8 critical issue, didn't he? 9 A. Yes. 10 Q. We know from one document I didn't take Mr Smith to, 11 it's in his diary, at 09203, that on 6 December it 12 appears that he had a meeting with Mr Michel in the 13 SpAds' room, which is room 202. First of all, are you 14 able to assist us, is that the SpAds' room? 15 A. The SpAds' room I know, but I don't know what number it 16 is. 17 Q. Did you know at the time that Mr Smith and Mr Michel had 18 met at DCMS? 19 A. I don't think so. 20 Q. You don't think so or you're sure? 21 A. Well, you're asking me did I know at the time. I have 22 no recollection of being told the meeting happened. 23 Mr Smith wouldn't tell me, as a matter of course, who he 24 was meeting. I mean, he met lots of people from 25 different industry sectors. 33 1 Q. You were aware generally what Mr Smith was doing on your 2 behalf at this time, weren't you? 3 A. Mr Smith's job was to be a contact point with all 4 outside industry stakeholders, so he spent a lot of time 5 talking to people from many different companies. 6 Q. Okay. I move forward then to 21 December 2010 and some 7 text messages, first of all. If you go to the TT part 8 of this file, please, Mr Hunt, it's page 08155. We need 9 to go through this quite carefully. 10 We can see that at 12.46 in the afternoon on that 11 day you sent a text to Mr James Murdoch: 12 "Sorry to miss ur call. Am on my mobile now 13 Jeremy." 14 Mr James Murdoch, six minutes later, texts you back: 15 "Have to run into next thing. Are you free anything 16 after two fifteen? I can shuffle after this." 17 And then you fix on a time at about 4 pm. So first 18 of all, by 12.46, were you aware of -- if I can put it 19 in these terms -- the remarks which Dr Cable was 20 recorded as having made on 3 December? 21 A. I don't believe I was, because I think those remarks 22 broke in the early afternoon. 23 Q. So the purpose of the call then, if it wasn't related to 24 those remarks, was related to what? 25 A. Well, I don't think that I -- I'm trying to piece 34 1 together what might have happened that day, but because 2 I sent him a text that said "Sorry to miss ur call", I'm 3 presuming that he tried to call me and I had a missed 4 call on my mobile and so I sent him a text back. I may 5 have tried to call him back and not got a response and 6 sent him a text back. 7 Q. We certainly know that by 12.57, a few minutes later, 8 you were aware that DG in Brussels had, as it were, 9 allowed the competition aspect of the bid to go through, 10 because you send a text message to Mr Murdoch: 11 "Great and congrats on Brussels, just Ofcom to go!" 12 A. Yes. 13 Q. Would you agree that that is conveying a somewhat 14 positive view on where the process had reached? 15 A. Yes. 16 Q. But you think at that point you were unaware of the 17 Dr Cable furore, if I can so describe it? 18 A. I think we could probably find out as a matter of fact 19 when the furore broke, but as I say, I don't believe it 20 broke until the afternoon. 21 Q. The best evidence we have as to the timing, but it's not 22 conclusive, if you turn back through the bundle at tab 23 SS.B, it's going to be page 08089. 24 A. Yes. 25 Q. Your other special adviser, Sue Beeby, sends you an 35 1 emailed timed at 15.50 on 21 December. 2 A. Yes. 3 Q. Setting out what she describes as Vince's comments. I'm 4 not sure whether this is the full transcript, it doesn't 5 really matter. So certainly at the latest by 15.50 and 6 possibly earlier you got to hear about the furore; is 7 that correct? 8 A. Yes. I don't know when I opened that email, but I would 9 imagine I usually do open my emails fairly promptly. 10 LORD JUSTICE LEVESON: The probability is you'd heard 11 slightly earlier, because her email to you is: 12 "Here are Vince's comments." 13 So this isn't telling you actually something quite 14 odd has happened you ought to know about, so it may be 15 you'd had some sort of conversation. 16 A. I think that's likely, yes. 17 MR JAY: At about 4 pm, I think it was shortly after but 18 we'll see from other evidence the exact time, you had 19 a conversation with Mr Murdoch. Do you remember what 20 was discussed? 21 A. Yes. We discussed Vince's comments. So I did know at 22 that stage. 23 Q. The next relevant document is 08107, which is under tab 24 SS.E, which is a -- not sure whether it's an email or 25 a text. Probably an email, Mr Hunt. 36 1 A. Probably an email because it says Gmail at the top. 2 Q. Sorry, you're right. 16.10, so it's after the call you 3 had with Mr Murdoch on this afternoon, 21 December, to 4 Mr Coulson: 5 "Could we chat about this? Am seriously worried 6 Vince will do real damage to coalition with his 7 comments ..." 8 That speaks for itself, but the question is did you 9 have a chat with Mr Coulson? 10 A. I don't think I did talk to him, no. 11 LORD JUSTICE LEVESON: I'm sorry, could we just go back so 12 that I understand. You chatted to Mr Murdoch at 13 4 o'clock. What was that conversation? 14 A. That was Mr Murdoch expressing his concern that there 15 was bias in the process, the quasi-judicial process, 16 because of what Dr Cable had said, and I think my email 17 to Andy Coulson and text message to George Osborne were 18 my response to Mr Murdoch's call. 19 MR JAY: Yes. 20 LORD JUSTICE LEVESON: Do you remember what you said to 21 Mr Murdoch in response? 22 A. I think I -- I think we know it wasn't a long 23 conversation because the call was at 4 o'clock and 24 within ten minutes I was already sending an email, but 25 I think he was just saying he was totally horrified that 37 1 this seemed to show -- well, I used the phrase I think 2 in a text to Mr Osborne of "acute bias" and I suspect 3 that was the phrase that he used to me. 4 MR JAY: The relevant texts to Mr Osborne are under the TT 5 file at 08159. You sent him two texts timed at 16.08; 6 is that right? 7 A. Yes. 8 Q. The first one says: 9 "Cld we chat about Murdoch Sky bid? I am seriously 10 worried we are going to screw this up. Jeremy." 11 And then at the same time you sent another text: 12 "Just been called by James M. His lawyers are 13 meeting now and saying it calls into question legitimacy 14 of whole process from beginning", and then the phrase 15 you have remembered, "acute bias." 16 The inference is that the call with Mr James Murdoch 17 didn't last very long; is that right? 18 A. Yes. 19 Q. Did you have any discussions after 16.08 with anybody 20 else you can recall, Mr Hunt, about this issue? 21 A. I may well have talked about it internally to my 22 officials and special advisers. I imagine it was a sort 23 of hot breaking issue, so I probably talked about it to 24 a few people internally. 25 Q. Do you think you had any conversation with Number 10 at 38 1 this stage? 2 A. No. 3 Q. At 16.58, Mr Osborne texts you: 4 "I hope you like the solution!" 5 What was that a reference to? 6 A. Well, I think his -- well, first of all I think my text 7 to him was saying basically I'm worried this process 8 doesn't look like it's being run fairly, and his 9 response was saying, "Well, we've got a solution", and 10 I think in between me sending a text to him and me 11 getting that response, at official level we had an 12 inkling that Number 10 were thinking of transferring the 13 responsibility to me as a way of dealing with the issue. 14 Q. Yes. But you were the solution, and that's what you 15 were being told at 16.58; is that correct? 16 A. Correct. 17 Q. Can I be clear, though, that when Mr Osborne says, 18 "I hope you like the solution!", does that mean that you 19 already knew what the solution was or was this the 20 revelation of the solution? 21 A. Well, I think my -- I think I knew that it was in the 22 offing, but I was worried about that being the solution 23 because I knew that I had publicly made some comments 24 that were sympathetic to the bid and I wasn't sure 25 whether that would mean that I could handle the bid, so 39 1 I think by that stage we were making sure Number 10 knew 2 about those comments so that they didn't go ahead and 3 announce me and then -- not knowing about those 4 comments, and then find out that actually I wouldn't be 5 able to do it as a result of those comments. 6 Q. I think it's clear from that last answer that there were 7 discussions internally involving the Permanent Secretary 8 as to whether any of your public pronouncements might 9 preclude you from acquiring responsibility under the 10 Enterprise Act for this bid; is that correct? 11 A. Yes. 12 Q. Were you asked, though, about anything which was not in 13 the public domain, but which might embarrass you should 14 it enter the public domain? 15 A. No. 16 Q. Do you feel that such matters should have been 17 volunteered by you? 18 A. Are you talking about my memo to the Prime Minister? 19 Q. Well, the memo to the Prime Minister, the conversation 20 with Mr Murdoch and the text message we've looked at 21 about the congratulations for Brussels, just Ofcom to 22 go. It's the accumulation of pieces of evidence. It's 23 that material, Mr Hunt, basically. 24 A. I think that all that material is entirely consistent 25 with the overall position that I'd taken that I was 40 1 sympathetic to the bid and I didn't think there was 2 a media plurality issue, I didn't think we should 3 second-guess the regulators and I thought that due 4 process should be followed. 5 Q. Isn't there a difference, though, between what was 6 stated publicly at interview with the Financial Times 7 and the sort of material we've been looking at? Do you 8 see there as being possibly any difference? 9 A. I don't think there's a substantive difference because 10 substantively my position in all those communications is 11 the same: I, broadly speaking, had the view that BSkyB 12 was already controlled by the Murdochs so I didn't think 13 there was a change in plurality, but I believed that due 14 process had to be respected, so I do not think there's 15 a particular difference. 16 Q. Would you have sent that text message of congratulations 17 after 16.58 that afternoon? This is the text: 18 "Great and congrats on Brussels, just Ofcom to go!" 19 A. No, I don't think I would have sent that text. But 20 actually, I don't think that I had been appointed at 21 16.58. I think that they were still -- I think that it 22 was being mooted as a possible solution then, but 23 I don't think there had been a final decision. 24 Q. When do you think the final decision was taken? 25 A. When the Prime Minister got legal advice that it would 41 1 be okay for me to take responsibility for the 2 quasi-judicial process. 3 Q. Approximately when was it that evening, do you think? 4 A. An hour or so later. 5 Q. So if we move the time forward an hour, I think it's 6 clear you wouldn't have sent that text message to 7 Mr Murdoch after you had formally acquired 8 responsibility; is that correct? 9 A. Um, yes. 10 Q. But doesn't it follow from that answer that this is 11 something that you should have volunteered for 12 consideration by the lawyers as to whether you were the 13 right person? 14 A. I don't believe so, because I don't think there's 15 anything substantively different in my texts to 16 Mr Murdoch. It just shows that I was broadly 17 sympathetic to the bid and that was the issue that was 18 being considered by government lawyers. 19 Q. To put it bluntly, Mr Hunt, Dr Cable had just lost the 20 role through the appearance of bias in one direction. 21 Doesn't it emerge from a fair reading of this text that 22 you shouldn't acquire the role for the equal and 23 opposite reason? 24 A. No, because, as I understand it, the point about 25 a quasi-judicial role is not that you acquire 42 1 a responsibility for a quasi-judicial decision with your 2 brain wiped clean. The point about a quasi-judicial 3 role is that you set aside any views that you have and 4 you decide objectively on the basis of, in this case, 5 media plurality and not on the policy considerations 6 that had been my preoccupation to that point. 7 Q. Your text message went beyond the wider policy 8 considerations. Arguably it went into the merits of the 9 issue. When one couples it with the memorandum you sent 10 to the Prime Minister, you were setting out a clear 11 position, I'm sure it was defeasible, but a clear 12 position as to where you stood in relation to this bid. 13 Would you not agree? 14 A. I wouldn't agree, no. I think I was expressing my 15 sympathy for the fact that I thought this bid could be 16 very important in terms of the UK media sector. I was 17 giving a view that I'd expressed publicly that I didn't 18 think that there was a plurality concern and I was also 19 talking about due process, but the moment that I was 20 given responsibility, I think my suitability in the 21 role, if I can put it this way, is demonstrated by the 22 actions I took when I did take responsibility for the 23 role, because I believe I did totally set aside all 24 those sympathies. Indeed, I set up a process explicitly 25 to make sure that I couldn't express any of those 43 1 sympathies or use any of those sympathies to inform my 2 decision. 3 Q. There was some legal advice, we know, from tab SS.E, 4 again from the legal director within your department, 5 timed at 17.30. It's 08108. We've seen it before with 6 Mr Stephens. Have you found that one, Mr Hunt? 7 A. Yes, I have. 8 Q. It's clear looking at this that this is a reference to 9 your Financial Times interview, isn't it? 10 A. Yes. 11 Q. But to nothing else, would you agree with that? 12 A. Yes. 13 Q. And it's that that you forwarded to Mr Edward Llewellyn 14 at Downing Street; is that correct? 15 A. Yes. I don't know if I personally forwarded it, but we 16 made sure that Downing Street was aware of that. 17 Q. It looks as if it's come from your email to Mr Llewellyn 18 at the top there, do you see that? 19 A. I haven't got that, but if it did, then I sent it. 20 Q. Given all the flurry of activity that day and the 21 expression of private view which that activity 22 evidences, don't you feel that that should have been 23 placed into the melting pot for consideration? 24 A. No, because I don't think there was anything different 25 in the private view to what I'd expressed publicly. 44 1 Q. It was consistent but it was additional in the sense 2 that in quantitative terms there's more of it, and in 3 qualitative terms we can see that you've expressed 4 a view about the bid itself. Do you see that? 5 A. Well, I am not a lawyer, but I would say that I don't 6 think there is a substantive difference. I think that 7 it was widely known that I was broadly sympathetic to 8 the bid and I'd said so, and I'd also talked about my 9 belief that due process was extremely important and that 10 was the substantive issue that had to be considered. 11 Q. Was it your view that adherence to due process and the 12 taking of independent advice at all material times 13 would, as it were, cure any perception of bias which 14 might have arisen? 15 A. Well, the two are separate. Adherence to due process 16 didn't require me to seek independent advice every time 17 I had to make a critical decision. That was my choice 18 to do that. One of the reasons I did that was precisely 19 because I had expressed these public sympathies for the 20 bid and so I wanted the public to know that I was 21 approaching this completely even-handedly, and so 22 I believe that the best discipline for that would be 23 when there was a critical decision, that at the same 24 time as I announced that decision, I would publish the 25 independent advice that I had received. I wouldn't be 45 1 bound by that independent advice, but if I wanted to 2 differ from that independent advice, I would have to 3 give a pretty good reason as to why I was differing from 4 it, and I thought that was the best way of giving people 5 confidence that I was approaching this decision totally 6 impartially, which indeed I was. 7 Q. Because by approaching it in that way, you would also 8 protect yourself and your department from judicial 9 review proceedings, which is presumably what you were 10 advised; is that right? 11 A. I certainly wanted it to be a legally robust decision, 12 but I didn't have to seek independent advice, for 13 example, on the suitability of the UILs in order to 14 protect myself from judicial review. There's absolutely 15 no legal requirement to seek that independent advice. 16 But I think it was more about persuading the public that 17 I was approaching the process fairly. 18 Q. Do you think that the decision to transfer to you was 19 made over hastily without proper regard to whether you 20 were truly the right person to undertake this sensitive 21 and difficult task? 22 A. I don't believe so, no. The Prime Minister asked for 23 legal advice, he got it from the government lawyers, and 24 he made his decision accordingly. 25 Q. We know that the decision had been made in principle by 46 1 16.58, subject to any legal advice. The final decision 2 was made within about an hour of that. The Cable 3 comments as it were broke earlier that afternoon. 4 I know it was four days before Christmas, but it was 5 made quickly, wasn't it? 6 A. Well, I think the situation demanded the government 7 acted quickly because it was a very important merger 8 decision. There was a very serious issue created by 9 Dr Cable's comments, which I'm sure he would 10 acknowledge, so I think it was absolutely right the 11 Prime Minister acted decisively. 12 Q. It's also right that there shouldn't be delay because 13 the greater the delay, the greater the uncertainty, and 14 the higher the risk that the bid might not go through. 15 Is that correct? 16 A. That wasn't the preoccupation of any of us. Our concern 17 was to make sure that there was a proper, fair process. 18 That was the government's responsibility. 19 Q. But as an underlying or background consideration, 20 a delay would create uncertainty, which might imperil 21 the bid. Do you accept that as a proposition of common 22 sense? 23 A. I mean, you know, obviously any delay might imperil the 24 bid, but that wasn't the priority. I don't even think 25 that was a consideration. As far as the Prime Minister 47 1 was concerned, he had a problem because one of his 2 Cabinet ministers had made comments that meant that it 3 was not going to be appropriate for him to continue 4 being responsible for the bid, so he needed to find 5 another Cabinet Minister who could take on those 6 responsibilities, so that was a government 7 responsibility to solve that problem. 8 Q. We know there was a meeting the following day when BIS 9 officials came to DCMS to advise as to where they were 10 in relation to the process and to bequeath the bid, as 11 it were. There's some evidence as to that. Under this 12 same file in tab INB, you'll find, I hope, at page 07896 13 a briefing note. 14 A. Yes. 15 Q. Which I think is a briefing note which comes from BIS, 16 but if it doesn't, could you assist us? 17 A. I'm afraid I don't know who it comes from, but it may be 18 a composite note that was done by BIS and my own 19 officials. 20 Q. The only reference to the process is the first bullet 21 point: 22 "The DCMS Secretary of State will now take the 23 decision. Legally, it is important he does so on the 24 merits of the case, ie it is not a collective Cabinet 25 decision, and it is important to avoid any appearance of 48 1 his independence being compromised." 2 But there's no other explanation, is there, of what 3 the quasi-judicial process entails, would you agree? 4 A. No. Just looking through it, I can't see anything else. 5 Q. Mr Stephens exhibited an email on 22 December which also 6 recorded the advice, at least from the DCMS perspective. 7 It's page 13583. 8 A. In the same file? 9 Q. No. I'm not sure you have it, unfortunately. 10 Mr Stephens when he gave his evidence referred us to it. 11 It is quite short. It's going to come up on the screen. 12 A. It's on the screen, yes. 13 LORD JUSTICE LEVESON: It's on the screen. 14 MR JAY: It's timed at 17.44. We know the meeting was in 15 the afternoon. The first bullet point: 16 "BIS officials outlined the Secretary of State's 17 role in the process and the various legal 18 considerations." 19 So it looks as if that was a reference to the 20 quasi-judicial aspect of the decision? 21 A. Correct. 22 Q. Do you think that term was used on that occasion? 23 A. I'm sure it was. 24 Q. I think it's clear that you yourself had not previously 25 exercised a quasi-judicial function, had you? 49 1 A. No. 2 Q. Your witness statement at paragraph 35 and following 3 deals with your understanding of what this function 4 amounted to. It's paragraph 36, really. Our 5 page 05603. You set aside your personal views, make 6 your decision objectively and impartially on the 7 evidence -- 8 A. Sorry, which page are we, Mr Jay? 9 Q. It's your paragraph 36, page 05603. 10 A. Yes. 11 Q. "I should not be biased or make the decision on party 12 political grounds. It should be a case-specific 13 decision taken with reference to the issue of plurality 14 ... and not on other policy considerations ..." and you 15 take it alone. 16 A. Yes. 17 Q. Paragraph 37: 18 "Unlike a judge, whilst I needed to be careful, 19 I was not incommunicado and continued to exercise my 20 duties as Secretary of State ..." 21 And that obviously entailed appearing in Parliament. 22 The third full sentence of this paragraph: 23 "They involved frequent interactions with many 24 people both supporting and opposing the bid." 25 So you felt that your quasi-judicial role allowed 50 1 you to undertake frequent interactions; is that correct? 2 A. No. What I felt was that in terms of the decision 3 I took, the quasi-judicial role meant that I had to be 4 fair to both sides. So we had to be very careful in 5 terms of treating each side equally. That didn't mean 6 the same amount of meetings with each side, because at 7 certain moments in the bid process it was going to be 8 necessary to have more meetings, principally because 9 News Corp decided to go the UIL route and there was 10 a period of negotiation of the contents of the UILs, but 11 what I'm really saying in paragraph 37 is that because 12 of my other duties as Secretary of State, I was going to 13 be bumping into people who had views on the bid. 14 I think during that period I spoke at the Oxford 15 Media Convention where the whole media world would be 16 gathered and I gave a speech and answered questions and 17 there would have been coffee afterwards, and so there 18 would have been -- but they were brief interactions, and 19 I interpreted that to mean there might be a casual 20 comment about the bid, but they weren't part of my 21 consultation process. 22 Q. So putting aside de minimis interactions, which you've 23 just discussed, can we see if this works, that any 24 communication you had would have to be transparent, 25 preferably documented within the Parliament and if 51 1 necessary placed in the public domain if need arose. 2 Would you agree with that formulation? 3 A. I would agree with that formulation with respect to 4 anything that was material to my decision. 5 Q. Or anything which was material to the process by which 6 your decision was taken, would you agree with that? 7 A. No. I think what I interpreted -- my interpretation of 8 quasi-judicial, I think, you know, obviously having 9 completed this process, one learns lessons, and I'm not 10 saying I would necessarily make exactly the same 11 interpretation now, but my interpretation at the time 12 was that what was important was that the decision was 13 impartial, unbiased, and that I decided it on the basis 14 of the evidence in front of me, and so that was where 15 the transparency was important, but if there was 16 something that was, you know, a trivial -- not trivial, 17 that's the wrong word, but it wouldn't necessarily apply 18 to every single matter of process. 19 Q. We can put to one side minimal interactions, certainly, 20 but can I be clear, would such interactions have to be 21 through official channels? 22 A. All the interactions which related to the decision that 23 I was going to take would be through official channels, 24 but as I explained there, if I bumped into someone in 25 a lift or gave a courteous reply to a text message, 52 1 I didn't think that was off limits. 2 Q. Yes. Putting those to one side, we're talking about 3 matters of greater substance, but are we agreed that 4 those interactions would have to be through official 5 channels? 6 A. Any formal interactions with respect to my decision, 7 yes. 8 Q. And official channels included Mr Smith, didn't they? 9 A. Yes. 10 Q. And you were aware that he was, as it were, your channel 11 out to News Corp in the personification of Mr Michel; is 12 that correct? 13 A. Well, I think it's important to be clear about what we 14 mean by "channel". I didn't see Mr Smith in this 15 process as being someone who would be telling me what 16 News Corp thought or telling News Corp what I thought. 17 I saw him as a point of contact, an official point of 18 contact in the process, so that News Corp had someone 19 that they could call if they had concerns about the 20 process, and someone who was there to -- you know, 21 I mean the situation in which we inherited 22 responsibility for a bid was one in which News Corp felt 23 they had not been fairly treated, and so I wanted to 24 make sure that there was someone there who could answer 25 questions about how the process was going in a helpful 53 1 way. 2 Q. Any communication between Mr Michel and Mr Smith would 3 be no different, would it, to communication between 4 Mr Michel and you, because Mr Smith was your agent. Do 5 you agree with that? 6 A. Not in this process. I think sometimes special advisers 7 have a role which is about speaking for their boss, but 8 in this situation Mr Smith's role was a different one. 9 He was a point of contact in a very complex process, and 10 there to advise News Corp about the questions they had 11 about the process and I think also to reassure them that 12 the process was fair. 13 Q. What express instructions, if any, was Mr Smith given as 14 to what his special role was? 15 A. Well, he was present at all the meetings where we had 16 advice from lawyers and officials in the department, so 17 he heard that advice, and it was understood that he 18 would be a point of contact for News Corp in the 19 process. 20 Q. But what express instructions was he given as to the 21 role he would undertake? 22 A. I don't think he was given any express instructions 23 other than how I've described it. 24 Q. So in terms of the discharge of the function which had 25 been allocated to him, your evidence is he would work 54 1 that out from what he heard at meetings; is that 2 correct? 3 A. Yes. 4 Q. Did you give him any instructions as to what not to do? 5 A. No. As I say, he heard in the way that I heard all the 6 things that we needed to be careful about. 7 Q. His ordinary function as special adviser was to 8 represent you and to communicate your view, is that not 9 correct? 10 A. That is one of the things that special advisers do, but 11 that isn't -- that isn't the only thing they do. A lot 12 of the things that special advisers do is they are 13 a contact point for industry stakeholders, they are 14 understanding policy issues, and giving me advice as to 15 what policy I should have with respect to a particular 16 issue that's bubbled to the surface, so they have 17 a number of different functions. 18 Q. Yes, but in their interactions with third parties, they 19 are representing you, aren't they? 20 A. I think they would be seen by third parties as someone 21 who had a good understanding of what I thought. 22 Q. But they would be expected to communicate your view and 23 no one else's, would you agree with that? 24 A. Well, I think they -- because they worked closely with 25 ministers, and I doubt there's a minister who worked 55 1 more closely with a special adviser than I worked with 2 Adam Smith, I really did work very closely with him for 3 the best part of six years, I think it was a given that 4 he would know what I thought on different issues. 5 I don't think that's quite the same as speaking for me, 6 which is a different thing, but I think people would 7 have expected him to know my views. 8 Q. Yes, he knew your thinking on any significant issue. 9 That was part of his job. He would acquire that through 10 his familiarity with working with you. Would you agree 11 that he's not just able, but also politically astute? 12 A. I think he's politically astute, but I wouldn't have 13 said amongst the different type of characters that we 14 have at Westminster Adam was one of the more political 15 ones. I would say he was politically fairly neutral. 16 I mean, I -- for me, Adam's primary role -- I had 17 certain policy priorities and, you know, superfast 18 broadband is just by way of an example, and Adam knew 19 what I wanted to do and I only had the time to have one 20 meeting a week on superfast broadband, but I wanted 21 things to be happening every day, so Adam would be 22 someone who could go to other meetings behind the scenes 23 with officials and they knew that he would know what 24 I was thinking and they could get more details. I might 25 have said something in a meeting that was just one 56 1 sentence and he might be able to elaborate on that 2 because he knew me well. That was, I think, his main 3 role. 4 Q. You appreciated that your departmental lawyers were in 5 contact with their opposite numbers, as it were in 6 News Corp and BSkyB. You also appreciated that your 7 officials were in contact, but Mr Smith's role 8 specifically was to be the point of contact with 9 Mr Michel. Is that agreed? 10 A. No, I don't think that was how it was decided. I think 11 Mr Smith's role was to be a point of contact amongst 12 a number of official points of contact, but I do not 13 think we said, "Adam, you're going to look after 14 Mr Michel." I don't think we had that kind of 15 conversation. 16 Q. But in terms of who was going to look after Mr Michel in 17 the ordinary course of things, that would be Mr Smith 18 because that's what he'd been doing before 21 December, 19 would you agree? 20 A. It's certainly true that Mr Smith would be the person 21 that Mr Michel would naturally want to contact. 22 Q. And the text message which Mr Michel sent you on 23 Christmas Eve under the TT file, page 08147, states -- 24 you probably remember this one: 25 "Hi, James has asked me to be the point of contact 57 1 with you and Adam throughout the process on his behalf." 2 A. Yes. 3 Q. So that's making it clear what role Mr Smith might be 4 attaining. And then your reply is: 5 "Thanks Fred. All contact with me now needs to be 6 through official channels until decision made." 7 But in context that means that "for these purposes 8 Mr Smith is my official channel", would you agree? 9 A. I wasn't specifying that it had to be Mr Smith. I was 10 saying that all contact had to be go through the 11 official machinery of which Mr Smith was a part. 12 LORD JUSTICE LEVESON: Is that convenient? 13 Mr Hunt, we take a break to give the shorthand 14 writer a rest, but just before we do, if I just ask one 15 question: it was abundantly clear to you, wasn't it, 16 that enormous care had to be exercised? One of the 17 things in the note from BIS was a reference to the fact 18 that the Secretary of State for BERR -- the decision to 19 intervene in the Lloyds HBOS merger was judicially 20 reviewed on the basis that his discretion had been 21 fettered by comments by the Chancellor, so great 22 sensitivity around all these decisions? 23 A. Absolutely right. 24 LORD JUSTICE LEVESON: Yes. All right, we'll just take 25 a few minutes. 58 1 (11.29 am) 2 (A short break) 3 (11.39 am) 4 MR JAY: Mr Hunt, why involve a special adviser at all in 5 this quasi-judicial process? 6 A. Well, he was an absolutely key and trusted aide. He is 7 highly intelligent, highly able, and I believed that he 8 would have a very positive role to contribute in terms 9 of making sure that the process was run robustly and in 10 the right way generally. He's a very talented person 11 and he's amongst the officials who are closest to me, so 12 it would have been quite a natural thing; indeed, 13 I think as Mr Stephens said, entirely proper and 14 appropriate for special advisers to be involved in 15 decisions that their ministers -- or issues that are 16 very important to their ministers. 17 Q. In paragraph 38 of your statement you make it clear that 18 the most important way you could demonstrate objectivity 19 in your decision-making was to commission independent 20 advice, and of course you had a panoply of expert advice 21 within the department and you had legal advice, but why 22 have this extra layer of contact between a special 23 adviser and, to put it bluntly, a lobbyist? 24 A. There wasn't an extra layer of contact. Adam Smith's 25 role was to be an official point of contact. It was 59 1 absolutely essential in a process like that that there 2 should be someone who News Corp would be able to contact 3 at the department if they had questions about process, 4 and it was agreed Adam Smith would be an appropriate 5 person to do that. 6 Q. But it was an extra layer in the sense that the lawyers 7 and the department would be the primary layer of formal 8 contact, they could provide detail as to process, as to 9 timetable, but this was superadded. This was Mr Smith 10 in contact, with your agreement, with News Corp's 11 lobbyist. Why was that appropriate? 12 A. I don't accept that it was an additional layer. We set 13 up Mr Smith to be one of a number of points of contact. 14 The context of our approach on this was that we had 15 inherited responsibility for a deal where we believed we 16 were at serious risk of judicial review by News 17 Corporation over the way that the government had handled 18 the bid, and I was absolutely determined to make sure 19 that it was an open and transparent process and 20 a process that was fair to them. It had to be fair to 21 everyone, but the context that we inherited 22 responsibility for the bid was a question mark over 23 whether the government was being fair to them. 24 So I said we want to be open and transparent and we 25 do want to have points of contact for News Corporation, 60 1 and Mr Smith was one of those. 2 Q. In what way were Mr Smith's contacts open and 3 transparent, given that they could never have emerged 4 had there not been this Inquiry or, heaven forbid, 5 a judicial review application against the department 6 when the department would have been obliged to have 7 disclosed them? 8 A. Mr Smith's contacts in that respect were, in terms of 9 what they were -- not the content of the contact but in 10 terms of the fact of the contact was no different to 11 contact by Mr Zeff, one of my departmental officials, 12 who also had text message exchanges with Mr Michel and 13 email exchanges with Mr Michel, so the fact of his 14 contact wasn't different. 15 Q. Wasn't there at least a risk that in the absence of an 16 express instruction or warning as to what he couldn't 17 do, Mr Smith would as it were revert to the default 18 position, which was to act as your representative? 19 A. I didn't believe there was a risk of that because 20 Mr Smith is extremely able, bright. He's dedicated, 21 he's hard-working, and he was new to the process as 22 I was new to it and he was party to all the advice that 23 I was hearing and he was hearing. 24 Q. You were, of course, aware that Mr Michel was an 25 extremely effective lobbyist, weren't you? 61 1 A. I think we are all aware of that now. 2 Q. You were aware of that at the time, weren't you, from 3 your interactions with him? 4 A. I just thought he was, you know, a public affairs 5 specialist at News Corporation. 6 Q. Yes, but the job of such an individual is to be 7 charming, charismatic, try and push doors open, frankly 8 to be pushy. Are we agreed about that? 9 A. I think different organisations do their lobbying in 10 different ways, and he was certainly a character. 11 I didn't mark him out as being more effective or less 12 effective than people representing organisations that 13 I've come across. 14 Q. Didn't you think he's someone whose personal text 15 messages to you were evidence of a degree of pushiness? 16 A. There was a bit of pushiness, yes, I think that was 17 apparent, and you can probably sense my responses were 18 often sort of one word. I do as a point of principle 19 always try and reply to text messages as a courtesy, but 20 they got pretty brief. 21 Q. Didn't you see risks here in relation to Mr Smith that 22 he was the point of contact with Mr Michel, Mr Michel 23 wasn't exactly one who would push back, he would push 24 forward, you were exposing him to danger, weren't you? 25 A. We didn't see any risks at the time. The reason that we 62 1 didn't was because we didn't predict this barrage of 2 contact from Mr Michel. We thought he was perhaps 3 a little pushy, yes, I suppose we would have said that 4 he was at that end of the spectrum, but we weren't 5 expecting 542 text messages to Mr Smith, including, 6 I think -- to my total astonishment, I think it was 35 7 text messages in just two days at one point in the 8 process, and however many, 140 or so, phone calls. 9 I think when you do the analysis, and it's slightly back 10 of the envelope analysis, Mr Michel looks like he was 11 trying to contact Mr Smith about five times every 12 working day, which is an extraordinary amount of 13 contact, and we didn't anticipate that at all. 14 Q. Was Mr Smith given equivalent instructions to be the 15 point of contact with lobbyists, public relations 16 experts, whoever, for the coalition? 17 A. He would have fulfilled that role as being a point of 18 contact for the department, but for large parts of the 19 process it was only appropriate to have contact with 20 News Corporation, and so the vast majority of his 21 contact would have been with News Corporation. 22 Q. Do you accept that Mr Smith interpreted his role, at the 23 very least, to reassure News Corp during the process? 24 A. Yes. I think they had felt that they had not been 25 fairly treated by the government, and we all wanted to 63 1 reassure them that they were going to get no favours, 2 but they were going to be fairly treated. 3 Q. What other value then was Mr Smith adding? 4 A. Well, he was adding immense value to me as a special 5 adviser in lots of other policy areas. I mean, we were 6 doing lots of other things at the same time as this bid 7 was happening, but for the bid process this was what he 8 was doing. 9 Q. But his role was to keep News Corp reassured, some would 10 say happy, during a process which became increasingly 11 protracted and difficult. Is that not fair? 12 A. Well, it was certainly to keep them on board with the 13 fairness of the process, yes. 14 Q. Why not to keep them on board overall, since you had 15 a concern that the wheels might fall off if there were 16 excessive delay? 17 A. I didn't have that concern. I was responsible for 18 a quasi-judicial process. I had put aside my policy 19 priorities in this area. I'd actually put them aside 20 willingly because of course it's important that the 21 media industry is successful, but media plurality is 22 a much, much higher order decision. It's about the 23 health of the democracy and it's about making sure that 24 many generations of Brits go on to be able to choose 25 their own destiny. It was a very, very important 64 1 decision so that was my priority. 2 Q. Do you feel, looking back on this, that Mr Smith 3 reasonably drew the inference that you would wish him to 4 communicate to your private view to Mr Michel? 5 A. I don't believe he did communicate any private views to 6 Mr Michel. I think the views of mine that he will have 7 communicated to Mr Michel were views that I had 8 expressed in meetings with News Corp, and anyway, my 9 private view was the same as my public view: I needed to 10 make a decision about plurality. That was the decision 11 and it needed to be done objectively and impartially and 12 that was what I did. 13 Q. In that sense, you had two private views. You had the 14 private view that you needed to undertake the process 15 according to law, but at the same time you had a private 16 view, see the memorandum to the Prime Minister of 17 19 November, which was favourable to this particular 18 view. It's that private view to which I'm referring. 19 Do you see that, Mr Hunt? 20 A. But I set that private view aside, I knew that 21 I couldn't make this decision on the basis of that 22 private view, and I had a view that I felt more 23 passionately the more I thought about the decision about 24 plurality that actually a decision about plurality is 25 a public interest decision. It's an absolutely 65 1 fundamental and important decision. Far, far more 2 important than even something as important as the 3 commercial viability of the UK media industry, and that 4 was my focus. 5 Q. Okay, we may come back to that issue, but can we deal 6 now fairly economically, Mr Hunt, with the way the bid 7 was handled in terms of process after 22 December? You 8 set out a general narrative in your witness statement in 9 paragraph 39 and following. 10 The key messages we can read are that you took 11 expert advice at all material times, you went further 12 than the statute strictly speaking required although you 13 had power under the statute to obtain advice from Ofcom 14 and the OFT on the UILs, which is what you did. When 15 the UILs were put out for consultation first on 3 March, 16 then consideration was given subsequently to revision, 17 following advice from Ofcom. Then finally, at the end 18 of June the second version of the UILs were put out for 19 short consultation, a period closing on 8 July. That's 20 the broad message. But the detail is to be found in 21 annex A, which is under tab 2. 22 May we spend just a little time looking at the 23 highlights because I'm sure you would wish to bring the 24 points out, but I've been able to cross-reference this 25 with three lever-arch files of detail and everything you 66 1 say here is factually correct, so we're not going to 2 look at underlying material. 3 30 December 2010, you received advice from the OFT, 4 which was to the effect that you had jurisdiction to 5 make a reference to the CC. That was a limited decision 6 under the 2002 order. 7 Then the following day, more importantly, you 8 received advice from Ofcom on the plurality issue, and 9 their advice was -- this is paragraph 1.57 at 04385 -- 10 that there was a need for a fuller review by the 11 Competition Commission. Is that correct? 12 A. Correct. 13 Q. There are two documents we should look at. There was 14 a meeting on 6 January 2011 with representatives of 15 News Corp. 16 A. Yes. 17 Q. That is in the bundle of primary materials under tab 18. 18 The Inquiry has seen this document before. It's 19 page 04536. May we note in relation to this meeting, 20 once you've found it in the bundle, who was present? 21 A. Well -- 22 Q. We can see who was present. Mr Smith was there, amongst 23 others on your side, and Mr Michel was there on behalf 24 of News Corp. 25 A. Yes. 67 1 Q. When you had a meeting with the coalition on 24 March 2 2011, their public relations advisers, who I think were 3 Weber Shandwick -- 4 A. Weber Shandwick. 5 Q. They weren't invited, were they? 6 A. Mr Michel was an employee of News Corp, so he had a role 7 as Mr Murdoch's aide, and that's why it was appropriate 8 for him to be there. 9 Q. But the coalition's public relations advisers then were 10 independent contractors and you felt that that made 11 a material difference; is that the argument? 12 A. I don't think it was my decision, but that was the 13 decision that was communicated to them. 14 Q. The message you put across on this occasion was that the 15 Ofcom advice was that there should be a reference to the 16 CC. You were considering the matter but were likely to 17 conclude, given the low threshold, that that's what 18 would happen, but the possibility of accepting 19 undertakings in lieu of a referral were mentioned at 20 this meeting. Do you see that? 21 A. Yes. They weren't mentioned by us. What actually 22 happened, to my recollection, was that I arrived back in 23 the office on 5 January, I believe, that year, and I had 24 this introductory meeting with News Corp and I said that 25 I had read the Ofcom report, basically accepted it, 68 1 I was going to refer it to the Competition Commission. 2 The process was that we sent them a letter saying 3 that we were minded to refer it to the Competition 4 Commission because they are an adversely affected party. 5 They then had the opportunity to make representations 6 back, and so that was what I told them. I don't think 7 they had seen the Ofcom report at that point so we let 8 them see the Ofcom report and make representations back, 9 but they knew that I basically planned to refer it to 10 the Competition Commission. 11 Q. We know that the first version of the UILs were sent to 12 you as early as 18 January, but before then I should 13 make reference to a meeting you had with Mr Ed Richards 14 of Ofcom on 10 January which is under tab 24. 15 LORD JUSTICE LEVESON: Just before we do, if we just go 16 through because I think it may be important to see the 17 sense of this. You opened this meeting on 6 January, 18 and you spoke about a fair and legally robust process, 19 that you were minded to send to the Competition 20 Commission. You identified the timeframe for them to 21 respond. Then they came back to say they had concerns 22 about the analysis and they wanted to explore remedies. 23 And then you said there were areas where you wanted to 24 seek clarification of the Ofcom report; is that right? 25 A. Yes. 69 1 LORD JUSTICE LEVESON: And you were going to share both the 2 questions and the answers, and then they responded to 3 that? 4 A. Yes. 5 MR JAY: The meeting with Mr Richards is under tab 24 at 6 page 04553. Its purpose was to seek clarification on 7 aspects of the report, and you asked five specific 8 questions of Mr Richards, as we can see from this. 9 A. Yes. 10 Q. Mr Smith was present. You said under item 3: 11 "He had agreed to provide News Corp with the minutes 12 of today's meeting with Ofcom, Ofcom would be able to 13 agree the minutes in advance." 14 Do you happen to know when the minutes became 15 available? This is relevant to one of the emails in KRM 16 18. 17 A. I don't. 18 Q. Okay. The next meeting is the one of 20 January, which 19 is item 31 in this bundle at page 04626. The same 20 personnel who attend, save I think that this time junior 21 counsel is present, just before he took silk, actually. 22 A. Right. 23 Q. But by then you'd got the UILs in, perhaps not in draft, 24 in final form, and your opening remarks were that you 25 were still minded to refer. 70 1 You acknowledged they had supplied UILs "aimed at 2 addressing any potential impact on the sufficiency of 3 plurality from the proposed merger. The legal framework 4 was clear that undertakings were permissible at this 5 stage ..." 6 So you had received advice internally to that effect 7 presumably, Mr Hunt; is that right? 8 A. Well, what had happened at that stage was that we had, 9 if you like, concluded the first part of the process, 10 which is that I had said that I was minded to refer it 11 to the Competition Commission, I had a duty to consult 12 News Corp. They had given me their objections to the 13 Ofcom report. I had also spoken to Ed Richards and 14 asked him some questions that had arisen in my mind 15 about the report, but I was -- after that process, I had 16 still decided that it met the low threshold necessary 17 for referral to the Competition Commission. So that was 18 my decision. 19 Then they said -- in fact, they indicated on 20 6 January in their meeting that were that to be the 21 case, they would want to offer undertakings, so we had 22 an inkling, and I was advised that I had a duty under 23 public law to consider any undertakings, if I thought 24 they were -- merited consideration. And I think on 25 18 January, I don't think we were sent the UILs in final 71 1 form, but they may have been the final form that 2 News Corp wanted, but really that was just to give us an 3 indication of what the undertakings were, and they were 4 a pretty big offer. I mean, they were basically 5 saying -- this was a decision I had about news 6 plurality, and they were saying that they would exclude 7 the one news organisation that's part of BSkyB from the 8 whole deal. 9 So prima facie, it seemed to be an offer that 10 I needed to consider, and I was also advised that I was 11 obliged to consider it as a public law duty, so we then 12 had that meeting. 13 Q. You also received advice which News Corp had obtained 14 from Lord Pannick Queen's Counsel, which was precisely 15 to the same effect, namely that you did have not merely 16 the power but a public law duty to consider any 17 substantial UIL offers to remedy at this stage. That 18 was sent to you at about this time, wasn't it? 19 A. Yes. There were two additional points that I think it's 20 worth mentioning. The first is that News Corp in their 21 submission objecting to the Ofcom report said that I did 22 have the option to -- not to refer it to the Competition 23 Commission and I would have to do that by challenging 24 certain assumptions that were made in the Ofcom report 25 that they thought were not fair, and I rejected that 72 1 advice. 2 Then the second thing, which doesn't come out in the 3 minutes because civil servants -- 4 LORD JUSTICE LEVESON: It's not advice, you rejected the 5 submission. 6 A. I rejected the submission; correct. I rejected their 7 legal view that that was a way that I could proceed. 8 And then the second significant thing that happened 9 at that meeting, so we got into a situation where they 10 had put in this very substantial undertaking, which is 11 to remove the one news organisation that's part of BSkyB 12 from the whole bid, so I thought, you know, this does 13 merit serious consideration, this could potentially 14 address plurality concerns because they're just going to 15 leave Sky News exactly as it was, that was the sort of 16 gist of it. 17 But then I decided to do something else, which 18 I wasn't required to do, which Mr Murdoch was very cross 19 about. In fact, I would describe that meeting as, you 20 know, a very difficult meeting in terms of the tone of 21 the meeting, because I said I will consider these 22 undertakings, but I'm going to get independent advice 23 not just from one regulator, but two. The 24 Enterprise Act allows me, if I want to, to get advice 25 from the Office of Fair Trading and I said I was going 73 1 to exercise that right. It says nothing about going to 2 Ofcom, but I said I was going to ask for Ofcom's 3 independent advice as well. 4 This was not welcome to Mr Murdoch, because, as 5 you'll see from some of his exchanges, he considered 6 Ofcom to be an organisation that was hostile to the 7 interests of News Corp, but I thought it was very 8 important to do so because it was Ofcom who had said in 9 their report delivered on 31 December that they had 10 plurality concerns, and they listed in a lot of detail 11 in a very thorough report -- I didn't agree with every 12 word, but they listed in a lot of detail what their 13 plurality concerns were, and I thought it was very 14 important to test these UILs against the experts who had 15 told me that they did have plurality concerns with the 16 original shape of the deal. 17 Now, from Mr Murdoch's point of view, he considered 18 that was tantamount to wanting to kill the deal, because 19 he believed that Ofcom would use every mechanism at 20 their disposal -- you see a sense of this from some of 21 Mr Michel's comments about Ofcom. So that was the first 22 thing. 23 Then the second thing which was very important 24 was -- and this was a concern that was regularly raised 25 by opponents of the bid, even at this early stage, 74 1 because we got lots of letters from Slaughter & May 2 acting for the media coalition -- was that they should 3 be financially viable, because it was all very well to 4 spin off Sky News, but if in fact in practical terms it 5 was totally dependent on News Corp for its single 6 biggest contract and its revenue, then in practical 7 terms it wouldn't be independent of News Corp, they 8 might be able to exercise some editorial control. 9 So I thought financial and commercial viability was 10 incredibly important, and plurality considerations were 11 very important, and that was, I think, the moment when 12 I put in place two processes to make sure that every 13 decision I had I was in possession of expert advice and 14 was going to be able to decide it on a totally impartial 15 and unbiased basis. 16 MR JAY: Yes. The final version of the UILs came through on 17 24 January. OFT and Ofcom were commissioned to provide 18 advice the following day. The advice came back on 19 11 February, as annex A demonstrates, and they had 20 concerns, Ofcom in particular, in four key areas, which 21 you identify on page 05619, the entry there for 22 15 February. 23 Some of those areas you've mentioned, but one 24 important one was that the board of the new company 25 would need to be independently chaired. 75 1 A. Yes. 2 Q. In other words, it wouldn't be Mr James Murdoch? 3 A. That was a very, very significant thing for Mr Murdoch. 4 I mean, you know, News Corporation thinks that one of 5 its primary functions is what it says on the tin, is 6 news. He first of all didn't think he should have to 7 spin off Sky News at all because he didn't believe there 8 was a plurality issue with the original proposal, and 9 this was going to cost him hundreds of millions of 10 pounds more; but secondly, he was at the time chairman 11 of BSkyB, and that included being chairman of Sky News, 12 and he thought he would -- he wanted to continue to be 13 chairman. I think that was pretty important to him. 14 And Ofcom did not want that, and so they -- so that was 15 then presented to me. 16 There were other things that Ofcom -- there were 17 other concerns. There was a concern that they wanted to 18 have very strict measures in place to stop News 19 Corporation buying additional shares above 39 per cent. 20 James Murdoch was very concerned, for example, that 21 a commercial rival would come in and purchase the other 22 61 per cent of the shares and that might mean that he 23 lost control of Sky News forever, and so there was 24 a concession there that -- there was a dispute. 25 This was presented to me, and I wrote to 76 1 James Murdoch with all the outstanding areas of 2 disagreement between himself, Ofcom and the OFT, and 3 I gave him 24 hours to back down on every single one of 4 them. So I said, you know, I support Ofcom, I support 5 the OFT, and if we're going to accept these UILs, we're 6 going to consider them and start the consultation, 7 I need to know that you will back down. I think I sent 8 that on 15 February. 9 Q. You did, and within your 24-hour deadline on 16 February 10 they came back with further revisions to the UILs which 11 met the four concerns, or which at least purported to. 12 You sought further advice from Ofcom and OFT on that. 13 The advice came back on 1 March and that advice was 14 generally speaking that the plurality concerns were now 15 met. Is that fair? 16 A. Yes. In fact, I think I had legal advice as early as 17 14 February that in principle I could accept the UILs if 18 I wanted to and allow the deal to go through, but Ofcom 19 and the OFT still had these concerns, and I said I want 20 to get to the bottom of these concerns and I want them 21 to be addressed, and so we didn't get the final advice 22 from Ofcom until just before 3 March. 23 Q. After overnight work on 2 and 3 March, which we know 24 about from material in KRM 18 when the UILs were tweaked 25 and more importantly redactions were made to them on 77 1 grounds of commercial sensitivity, you gave an 2 announcement to Parliament that you were minded to 3 accept the UILs on 3 March, but that there was going to 4 be a public consultation, which would expire on 5 27 March. 6 A. I think 21 March. 7 Q. 21 March, pardon me, that's correct. We know what the 8 fruits of that consultation were. There were 40,000 9 responses. Most of them were hostile to the UILs; is 10 that right? 11 A. That's correct. 12 Q. 24 March there was also a meeting with the coalition. 13 You asked Ofcom and the OFT to provide further advice on 14 the carriage and brand licence agreements, but that took 15 a period of time before it arrived. Indeed, it didn't 16 arrive, I think, until 22 June, so there was a period of 17 apparent delay, without seeking to apportion any blame 18 for it, between March and June. Is that the picture? 19 A. Yes. The reason for that principally was the 40,000 20 responses that we had. I mean, we had a lot of 21 responses, it was a genuine consultation. We were 22 looking through those responses to see whether there 23 were relevant comments. A lot of the responses were 24 about competition issues, which I wasn't allowed to 25 consider, because I could only look at media plurality 78 1 issues, but it takes time to go through all those 2 responses and that's what my officials were doing. Then 3 they were discussing with Ofcom and the OFT whether they 4 felt there was substance to any of the points that were 5 raised, and then when they did find there was substance 6 to some of them, they then went back to News Corporation 7 to ask for further safeguards. 8 One of the original -- in the original UILs, one of 9 the safeguards in terms of editorial independence was 10 that the Broadcasting Code, which includes political 11 impartiality, and there was a big worry about political 12 impartiality being preserved at Sky News if News 13 Corporation owned 100 per cent of it, so the 14 Broadcasting Code was going to be written into the 15 Articles of Association. That was a very significant 16 point. 17 But in the consultation responses, people suggested 18 we should go further than this and so we decided that we 19 would suggest that the Secretary of State had to approve 20 the Articles of Association for the new company. We 21 made the point that there had to be a monitoring trustee 22 who would check that in the process of being spun off 23 the spirit of the undertakings was being observed, and 24 we also insisted on some kind of protection for the new 25 company because we recognised that Sky News gets a lot 79 1 of cross-marketing on other Sky channels and we wanted 2 to make sure that that continued under the new 3 arrangement. 4 So it was a further strengthening of these UILs in 5 a way that made Sky News massively more independent of 6 James Murdoch than it was then or indeed is now. 7 Q. Thank you. The advice came back from OFT and Ofcom on 8 22 June. By 24 June, you'd given some preliminary 9 consideration to it. There's one email I'd like you, 10 Mr Hunt, to look at, please. It's in the file of 11 primary documents under tab 120, page number 05121. I'm 12 afraid it's in the second volume. 13 A. Is it on the screen, because I can perhaps have a look 14 at it there, because I can't find it -- 15 Q. Yes, it's come up. This is from your PPS, isn't it? 16 A. Yes. 17 Q. So expressing your view. Your two special advisers are 18 copied in. It gives us some flavour of where you are at 19 this time because it may be relevant to one of the KRM 20 18 documents: 21 "Sorry for keeping you hanging on earlier. SoS has 22 read the covering letters and advice from OFT and Ofcom, 23 but not the amended documents in full yet -- which he is 24 keen to do Monday so I've scheduled him some time for 25 that. 80 1 "SoS talked to Jon ..." 2 That's Jon Zeff, of course, who is the lead policy 3 adviser on this, isn't he? 4 A. Yes. 5 Q. "... and I briefly on his way out of the building. In 6 principle SoS would like to aim for an announcement on 7 Thursday next week ..." 8 So this is an announcement which would be to 9 Parliament, would it? 10 A. Yes. 11 Q. "... subject to giving further thought to Ofcom and 12 OFT's advice and studying the docs in more detail on 13 Monday. He understands the challenges with that -- 14 specifically in agreeing redacted docs -- but thinks we 15 should push News Corp to have redactions done for Tues 16 night. He's also not minded to give more than the 17 statutory 7 days for further consultation." 18 These are your preliminary views, which as it 19 happened did not depart much from your final views, once 20 we see what happened on 30 June. 21 The last paragraph has been either cut off or 22 redacted off, it's not altogether clear: 23 "I think you were going to take up with colleague 24 and News the viability of this. If there are any show 25 stoppers [again I can't read what follows] ... it might 81 1 be good to discuss at/in the margins of the Monday 2 morning coms meeting." 3 Was the idea that Mr Smith would speak to News about 4 the viability of this? 5 A. I don't think it was particularly that Mr Smith should, 6 but I think the sense of that is that someone should. 7 Q. Thank you. On 30 June you make your announcement to 8 Parliament. Because we were only now looking at amended 9 UILs and there had already been a consultation on the 10 first version, the statutory consultation period could 11 be very short, and you indicated that it could close, as 12 it did, on 8 July; is that correct? 13 A. That's correct, yes. 14 Q. And you received in that short period of time 156,000 15 responses. Virtually all were, again, anti, weren't 16 they? 17 A. Yes. 18 Q. What happened thereafter is well known, but we're going 19 to have to look at underlying documents as well. On 20 11 July you wrote to OFT and Ofcom asking them whether 21 the responses to the second consultation led them to 22 reconsider any part of their advice, but on that 23 self-same day, News Corp withdrew the UILs -- 24 A. Mm. 25 Q. -- probably with the intention but certainly with the 82 1 consequence that you then indicated you would refer to 2 the CC and then on 13 July the bid was withdrawn. 3 A. Yes. 4 Q. In the circumstances of which we're all aware. 5 A. Yes. 6 Q. That is the formal process. We've taken it quite 7 quickly, in about 20 minutes, but can I give you this 8 opportunity. Is there any aspect, Mr Hunt, that you 9 would like to draw out particularly from this formal 10 process which we haven't, you feel, properly covered? 11 A. Well, I think the bit that we haven't touched on, which 12 I think is relevant to these considerations, is the way 13 the phone hacking issue was developing, sort of in 14 parallel to decisions about this bid. 15 I sort of think the phone hacking happened, as far 16 as I was concerned, in three stages. The first stage 17 was on 26 January, when Operation Weeting started, so we 18 had a moment there where we were having a proper, full 19 police investigation into these issues and there had 20 been lots of discussion prior to that as to whether this 21 had been investigated properly or not, and Assistant 22 Commissioner Sue Akers was starting that very rigorous 23 process. 24 So my perspective at this point is: this is a police 25 matter. 83 1 Then, I think, on -- if I remember rightly, on 2 8 April, News International announced that phone hacking 3 had gone much more widely than was suggested in the 4 Clive Goodman case and that potentially thousands of 5 people had been affected by it, and what I wanted to 6 know at that stage was: should that impact on my 7 consideration of media plurality? 8 We sought legal advice I think the same day, 9 actually we didn't get it for about ten days, but we 10 sought legal advice about whether phone hacking was 11 relevant. The general advice we'd been getting was: 12 just as I shouldn't allow policy issues to impinge on my 13 decision-making on media plurality, so phone hacking 14 shouldn't impinge on it either. This was an extraneous 15 matter. 16 But the advice we got on 18 April did say that the 17 one way that phone hacking could impinge was if they 18 thought there was an issue of trust, so that accepting 19 undertakings basically meant that you had to be 20 confident that you could trust the people that you were 21 doing a deal with over those undertakings. 22 So at that stage it was a matter about 23 News International. It wasn't a matter that there was 24 any evidence at all that it affected News Corporation 25 executives that we were dealing with. We thought they 84 1 had a problem with a company that was part of News 2 Corporation group, but there was no evidence, and we 3 didn't think we'd have any legally robust basis to 4 suggest at that stage there was an issue of trust. 5 Then -- I'm sorry to be a bit lengthy, but I just 6 think it's important to understand why I wrote the final 7 letter that I wrote to Ofcom, because it is -- you know, 8 I think it's an important indication of the way we 9 approached the bid. 10 Then we had the horrific Milly Dowler revelations on 11 4 July, which I don't think anyone could not have been 12 touched by, and then a couple of days later News 13 Corporation announced that they were closing the News of 14 the World. 15 That, for me, was a very, very significant moment 16 because then I began to wonder whether there could be 17 a management issue that spread beyond News International 18 to News Corp, and even if it wasn't an issue of trust, 19 even if I accepted that the people that we were 20 negotiating the UILs with, we were doing so in good 21 faith, I asked myself, if they found it necessary to 22 close down a whole newspaper -- this is a big, big deal 23 for a company like News Corporation -- is there 24 a corporate governance issue here? Is this a company 25 that actually doesn't have control of what's going on in 85 1 its own company, even if the management don't know about 2 what's happening? 3 So it was really that and, of course, the fact that 4 there was a plurality issue with a big newspaper being 5 closed down and the fact that Ofcom had been asked to 6 investigate whether BSkyB was a fit and proper licence 7 holder for a broadcasting licence, those came together. 8 So a week after the Milly Dowler revelations I wrote to 9 both Ofcom and the OFT to ask them whether they still 10 stood by the advice they'd given me at the end of June 11 that plurality considerations had been addressed by the 12 UILs as they did then. 13 Q. Yes. 14 LORD JUSTICE LEVESON: Is that advice available? The advice 15 as to the impact of phone hacking? 16 MR JAY: It's referred to in some of the documents we're 17 going to look at fairly shortly. 18 LORD JUSTICE LEVESON: Very good. 19 MR JAY: As a matter of law, Mr Hunt, what you've said is 20 correct on my understanding, that the intervention 21 notice which Dr Cable promulgated on 4 November 2010 was 22 on one ground only under the Enterprise Act and 23 therefore it could not be appropriate to take into 24 account an extraneous consideration, which is the phone 25 hacking issue. It only could become relevant 86 1 contingently when the UILs were being considered in the 2 context of whether you could trust the company to be 3 loyal to the UILs. 4 Your view was in April there was insufficient 5 evidence, but your view changed in July, that there 6 might be sufficient evidence. That's really the nub of 7 it, isn't it? 8 A. Yes. And then I followed the procedure that I'd 9 followed consistently, which was to seek an independent 10 view about that before I took a decision. 11 But just to answer Lord Justice Leveson's point, we 12 didn't get that advice back from Ofcom and the OFT, 13 because in the event the bid was withdrawn just a couple 14 of days after we sent the letter asking Ofcom for that 15 advice. 16 Q. Mr Hunt, we've looked at the formal process and it's all 17 documented. There is also a process within the 18 department which is evidenced by a range of emails which 19 you've disclosed and there are also some text messages. 20 I'm going to deal with it chronologically, but I have to 21 take it in sections otherwise we're going to be darting 22 around too much material. We've going to look first of 23 all at what the emails might demonstrate and then we're 24 going to look at the text messages, but the emails will 25 be looked at chronologically. The first one is in the 87 1 second supplementary file under tab IND at page 07747. 2 A. 007? 3 Q. 07747, under the tab IND. 4 A. Yes. 5 Q. We're on 27 January, where we have evidence here that 6 the two-week period which is being referred to in the 7 context of OFT and Ofcom was their advice on the UILs; 8 is that correct? 9 A. Yes. 10 Q. And we can see that Mr Smith sent an email back to 11 various people indicating that he had a conversation 12 with you about the two weeks. He says: 13 "I agree, Jeremy was pretty clear to me he wanted it 14 done in two weeks unless, having looked at it, they come 15 back with a good reason for needing longer." 16 LORD JUSTICE LEVESON: I think we just ought to explain what 17 a UIL is, for those who may not be quite as familiar as 18 we've become with this concept. 19 If you refer to the Competition Commission, then 20 there's a complete process that analyses probably at 21 great length all the features surrounding this 22 particular bid, and the idea of an undertaking in lieu, 23 which is what a UIL means, is that the company seeking 24 to acquire says to you, the Secretary of State, "Well, 25 I understand what your concerns are, they are A, B, C, 88 1 D. We will give you the following undertaking -- or 2 make the following promises to cope with your concerns, 3 and in that way avoid the complexity, complication, 4 time, all the rest of it, of a referral to the 5 Competition Commission, because if we can make promises 6 that satisfy your concerns, then there won't be 7 a necessity to do it." 8 That's what you were doing, talking about UILs. 9 They were then making promises to you as to how they 10 would organise their affairs, to see whether that coped 11 with the concerns which had been expressed to you 12 through the OFT and Ofcom, and therefore by April your 13 question becomes: well, they're making these promises, 14 but is there a question about whether I should be 15 accepting promises in the light of what is being 16 revealed in another subsidiary of News Corp? 17 A. That's right. 18 LORD JUSTICE LEVESON: And that's the concern that gets 19 greater throughout July. 20 A. That's correct. 21 LORD JUSTICE LEVESON: Have I correctly understood it? 22 A. Absolutely. 23 LORD JUSTICE LEVESON: I thought I had, but just in case it 24 wasn't, that was the point. 25 MR JAY: Thank you. The next document we're going to look 89 1 at is under tab SS.Aa at page 07931. Mr Smith forwards 2 to you, if you have it, an email on behalf of 3 Ed Miliband's director of strategy, who is Tom Baldwin. 4 Are you with me on that? 5 A. Yes. 6 Q. 07931. It was to the effect that Labour spokespeople 7 should "... avoid linking hacking with the BSkyB bid, to 8 accept ministerial assurances that meetings with 9 Rupert Murdoch are not influencing that process and to 10 ensure that complaints about tapping are made in 11 a personal, not shadow ministerial capacity. 12 And then you emailed back Mr Smith: 13 "Classic!! Something for the dispatch box or to use 14 any time we are accused of being pro-Murdoch." 15 That's a sort of private joke, I suppose, between 16 you and Mr Smith, is it? 17 A. I don't think it was particularly a private joke. We 18 saw great irony in the fact that first of all we had 19 a process where we weren't being pro-Murdoch, we were 20 actually doing things that James Murdoch was very cross 21 about. At that stage on 2 February, we had said that 22 even though we didn't have to, we were going to go back 23 to Ofcom to ask what they thought about the UILs, and he 24 was pretty furious about that, but at the same time -- 25 so we're getting these accusations that we were being 90 1 pro-Murdoch and at the same time the Labour Director of 2 Communications was contacting all Labour front benchers 3 with, you know, the line that you shouldn't link phone 4 hacking and -- which was obviously something that the 5 Murdochs would welcome. 6 Q. Wasn't the irony possibly this, that both you and 7 Mr Smith appreciated that privately you were 8 pro-Murdoch, although of course you had to follow 9 a proper legal process which had the appearances of 10 being anti-Murdoch? 11 A. No. Because we weren't following a process for 12 appearances sake. I mean, I did not know what the 13 independent advice I would get back from Ofcom and the 14 OFT was. If Ofcom had said that the undertakings were 15 not financially viable, I would have taken that very 16 seriously -- sorry, if OFT had said they weren't 17 financially viable, I would have taken that very 18 seriously. If Ofcom had said that the undertakings 19 didn't meet plurality concerns, I would have taken that 20 very seriously. 21 So we pushed the boat off the pier, but we didn't 22 know where the boat was going to end up, so that was 23 a very -- it was a very different process to the way 24 I think you've described it, if I may say. 25 Q. Okay. Under tab SS.B, further forward in the same file, 91 1 page 08096, now you're communicating with your other 2 special adviser, Sue Beeby, do you see that? 3 A. Mm-hm. 4 Q. You say: 5 "Both our favourite journalists, Andy Porter and 6 Patrick Foster ..." 7 Who do they work for? 8 A. I think one worked for the Telegraph and the other for 9 the Times. 10 Q. "... have texted me asking for an exclusive on ..." 11 That bit has been redacted out, I'm not exactly sure 12 why. 13 "Could we think of something exclusive we can give 14 each of them either on that or perhaps something around 15 News Corp. Let's chat tomorrow." 16 And then: 17 "Your special adviser has spoken to Mr Foster. 18 I have spoken to Patrick and given him ..." I'm not sure 19 what that is, "exclusive." 20 LORD JUSTICE LEVESON: Is that something "nothing at all to 21 do with our business"? 22 A. Yes. 23 MR JAY: "This is on the proviso that he writes a bit about 24 Labour ... he's happy to do that. Andy will want [then 25 it's all redacted out] before we officially announce it. 92 1 Shall we chat about this later as it's a bit more 2 sensitive, as is anything on News Corp." 3 I mean, this is an example of no doubt fairly common 4 practice of feeding favourite journalists stories; is 5 that right? 6 A. I think when you're -- you know, you're managing your 7 media as either in opposition or in governments, you 8 have a choice. You can sometimes put a story out to 9 everyone, in which case it might not get picked up at 10 all, or you give a journalist an exclusive on the basis 11 that they'll give it a good show. So I think both those 12 two journalists had contacted me asking me if I could 13 give them some kind of an exclusive and I was just 14 passing on that request to Sue Beeby. 15 Q. Was there any irony then, Mr Hunt, in the use of the 16 term "favourite journalists", or do we read that 17 literally, as they were chosen because they are your 18 favourite journalists? 19 A. No, I think I was just -- they are two people that I -- 20 we knew them both quite well and so I was just -- I knew 21 them better than I knew many journalists. That was all 22 I was really saying. 23 Q. Okay. I'll leave that one and go forward in time but 24 backward in the bundle to the 2 March 2011, page 07787, 25 which is under tab IND. The evening of 2 March. 93 1 A. Yes. 2 Q. A meeting which you chaired. This is in advance of the 3 announcement you're going to make to the markets first 4 thing in the morning, that's going to be about at 7.30 5 in the morning, and then later to Parliament. 6 The relevant part of this is the next page. You can 7 help us with this, please, because it may assist us. Do 8 you see the third line: 9 "I would have thought that we could send them 10 [that's the letters to OFT and Ofcom] to News Corp at 11 the same time as we communicate our decision, but 12 grateful for views. They would also like to see a copy 13 of the PN ..." 14 That's the Parliamentary announcement, is it? 15 A. That's the press notice. 16 Q. "Could we show them that at the same time (assuming that 17 it is ready by then)?" 18 Does one draw the inference that authorisation was 19 being sought and given to give News Corp advance notice 20 of the announcement which was going to be made by press 21 notice at 7.30 am on 3 March? 22 A. I believe that it is standard practice when you make an 23 announcement to Parliament about a particular company 24 that they do have notice of that in advance, and I think 25 that was all that was talking about. 94 1 Q. Because it's clear that Mr Smith acted on that vis-a-vis 2 Mr Michel, but it's relevant to understand on what basis 3 he might have done so. We can see Mr Smith was copied 4 in on this email. 5 A. (Nods head). 6 Q. Back to tab SS.Aa, 8 March now, page 07957. What had 7 happened, Mr Hunt, so that we have our bearings, is on 8 this date Enders had provided a note, a critical one, on 9 the UILs. This was part of the consultation process. 10 That was forwarded to you by Mr Smith, that's clear from 11 the bottom of page 07957, and then Mr Smith, 17 minutes 12 later, also sent you what he described as News Corp's 13 initial reaction to the Enders analysis. Do you see 14 that? 15 A. Mm. 16 Q. We know from other evidence that News Corp's initial 17 reaction was communicated to Mr Smith by Mr Michel. Did 18 you know that to be the case at the time? 19 A. I didn't know it to be the case, but I wouldn't have 20 been surprised to know that the News Corp reaction was 21 coming via Mr Michel. 22 Q. Did he to your recollection have a discussion with you 23 about News Corp's initial reaction or not? 24 A. Not to my recollection, but it might have happened. 25 Q. Because throughout this process are we to gain the 95 1 impression that if an email like this was sent on to 2 you, if it was self-explanatory, then you'd deal with it 3 without a discussion, but if it warranted a discussion, 4 you would in the natural and ordinary course of things 5 have one with Mr Smith? 6 A. Yes. I think that's probably slightly overstating how 7 closely involved I was in the discussion. I think he 8 kept me informed. I don't actually recall this 9 particular part of the bid in great detail, but if 10 Enders, who are a respected industry analyst, had 11 written with some concerns about the UILs, we would have 12 taken it very seriously and tried to understand if there 13 was substance in them, and as I know Enders, Adam might 14 have wanted to let me know that that was happening and 15 what News Corp's reaction was, but it wasn't really 16 a process that I would be involved in, because 17 essentially because I wanted to structure the process so 18 that I -- basically no one would believe that I had any 19 kind of discretion, I was following independent advice, 20 giving huge weight to independent advice, and it was 21 really my own discretion for making -- or to a large 22 part removing my discretion, really the negotiations at 23 this stage were between Ofcom and the OFT and News Corp, 24 so I was being informed of what was going on, but in 25 terms of what the UILs should contain, I think News Corp 96 1 knew by this stage that I would listen to Ofcom and the 2 OFT, so if they wanted something in as a UIL, if they 3 wanted something excluded as a UIL, it was Ofcom and the 4 OFT that they had to persuade. 5 Q. Yes, thank you. Can we move to the first file of 6 supplementary material. We're now on 24 March, under 7 tab EX.P, page 07656. 24 March is the date of the 8 meeting you're going to have with the Slaughter & May 9 team for the coalition. It was fixed for the afternoon 10 of that date. Do you recall that? 11 A. Yes. Sorry, what was the page reference? 12 Q. 07656. This is an email we saw last week, sent by 13 Mr Michel to Mr Smith, which contains what he calls 14 a rebuttal document. If you look on the next page, 15 07657, you'll see the Slaughter & May argument to the 16 left-hand side, and then the News Corp rebuttal on the 17 right-hand side. 18 A. Yes. 19 Q. Is this a document which was sent to you by Mr Smith, do 20 you believe, in advance of the meeting? 21 A. Not to my recollection, no. 22 One thing I should say, which is something that 23 didn't really occur to me until I was looking at these 24 documents closely as part of this Inquiry's process, was 25 that it's quite interesting, we had quite regular 97 1 contact from Slaughter & May, and we did -- right from 2 the start of the process we did actually take into 3 account what they said quite seriously. 4 So when the idea of undertakings was broached in the 5 press, somehow it got out into the press, Slaughter & 6 May fired off a letter pretty quickly saying any 7 undertakings would have to be structural and couldn't be 8 behavioural and would have to be financially sustainable 9 and that's a big question as to how you would get them 10 to do that, and that advice we followed. So we did take 11 what they said pretty seriously. 12 Q. Although Mr Smith in the events which happened was not 13 in contact at all with their public relations advisers, 14 was he? 15 A. I don't think that's material. What's material is that 16 the points that they were making were being carefully 17 considered. 18 Q. But there may be a difference, though, between the 19 message and the messenger for these purposes, would you 20 accept that? 21 A. I think what's important in the process that I was 22 running is that we were being even-handed, we were being 23 open-minded. We were listening to comments from the 24 opponents of the bid, we were listening to what 25 News Corp said, we were wanting to be fair. And, if you 98 1 like, we had this lock on the process that in the end we 2 were going to get advice from the OFT and Ofcom about 3 the UILs before I made my decision, and it was going to 4 have a lot of impact on that decision. 5 Q. Okay. May we move forward in time to April 2011 and 6 back to the second supplementary file, tab IND, 7 page 07805. 8 A. Sorry, just give me a moment. What was the tab again, 9 Mr Jay? 10 Q. IND. 11 LORD JUSTICE LEVESON: D? 12 MR JAY: D, pardon me. 13 A. Yes. 14 Q. I'm sorry to dart around, but I wanted to bring this out 15 chronologically. Page 07805. Look at the bottom of the 16 page once you've found it. 17 A. Yes. 18 Q. You'll see an email of 18 April. The second bullet 19 point meshes in with what you've told us half an hour 20 ago, namely that you were giving some consideration to 21 the fit and proper person issue in relation to the 22 News Corp/Sky merger, do you see that? 23 A. Yes. 24 LORD JUSTICE LEVESON: PI, is that public interest? 25 A. Yes, it is. 99 1 LORD JUSTICE LEVESON: Thank you. 2 MR JAY: In the middle of the page, Rita recalls you as 3 raising two points. The first is: 4 "Are we sure the process is going as fast as it 5 can -- Secretary of State keen to make decision asap 6 post holidays. I said I thought it was but we'd stay on 7 the case." 8 That's the first point. Possible concern now about 9 the delay, would you accept? 10 A. Well, I want everything to happen quickly in government, 11 and this had been a process that had been -- at this 12 stage it had already taken four months, or the best part 13 of, and so I wanted it to happen as briskly as possible. 14 However, whenever I was asked by people who were looking 15 through the consultation responses or by Ofcom and the 16 OFT for more time, I would always give them more time. 17 So I wanted to make sure that everyone involved in 18 the bid was giving it priority amongst the other things 19 they had to do, but having given it that priority, I was 20 happy for them to have as long as they wanted. 21 Q. Okay. And the other point is, and it's coincident with 22 the point which we've already seen: 23 "Secretary of State wants to make sure we've 24 thoroughly kicked the tyres on scope for invoking the 25 standards limb of the PI test." 100 1 So we're back to the same point, it's the fit and 2 proper person point, isn't it, which you were as it were 3 testing out for consideration? 4 A. Well, I wanted to know, because there is a fit and 5 proper person public interest test in the 6 Enterprise Act, and what I wanted to establish was: am 7 I able to invoke that because of the phone hacking 8 considerations? Was I able to invoke that? And I was 9 advised that I wasn't able to do that because you can 10 only invoke a public interest test once. 11 So it could have been invoked by Dr Cable when he 12 invoked the test on media plurality. Obviously he 13 didn't know about the phone hacking at that stage, so 14 that's why he presumably didn't consider that, but we 15 did know about phone hacking now, so that's why I wanted 16 to know whether I was able to invoke it, and I was told 17 I wasn't. 18 LORD JUSTICE LEVESON: At this stage you're simply asking 19 the question? 20 A. Correct. 21 MR JAY: 12 May now. First volume of the supplementary 22 bundle, tab EX.P, page 07696. This is an email from 23 Mr Michel to Mr Smith. Has it come up? This is further 24 thoughts from Mr Michel to Mr Smith. It's not forwarded 25 to you at the time. What we see at the top of the page 101 1 refers to the disclosure exercise for this Inquiry. 2 Just what Mr Michel says at the end: 3 "We are keen to start the consultation as quickly as 4 possible because, in any event, the agreements are not 5 subject to the consultation. 6 "Otherwise, we won't be done before mid-June, which 7 will be catastrophic for many important reasons." 8 Do you happen to know what those reasons were? 9 A. I don't. I obviously didn't see this letter, but 10 I think with the benefit of hindsight we can probably 11 understand what he might have been talking about. 12 Q. Can you share that with us, please? 13 A. Actually, I can't see the sentence that you're talking 14 about. I heard you read it out. 15 LORD JUSTICE LEVESON: It's the last sentence in the email. 16 A. Oh, right. Well, I think that, looking at Mr Michel's 17 emails in KRM 18, his internal emails, it's very clear 18 that phone hacking was something that was a growing 19 concern to News Corp, and I think they obviously were 20 worried that it might derail this bid, as indeed in the 21 end effectively it did. 22 LORD JUSTICE LEVESON: I see. It's the pace of the police 23 investigation and the impact on further disclosures that 24 that might generate which might create more trouble; is 25 that the point you're making? 102 1 A. I think that they thought that the phone hacking -- 2 I mean, obviously it was their -- News International was 3 part of News Corp, so they might have been more aware 4 than we were that there were more and more explosive 5 revelations down the track, as it were, and they were 6 worried about the impact they might have, and I think 7 reading through Mr Michel's internal emails in KRM 18, 8 he constantly says phone hacking is -- they're not 9 taking account of phone hacking, so we don't need to 10 worry. That was kind of the News Corp internal view. 11 We, looking at it externally, didn't know that this 12 was a volcano that was about to erupt. We just had to 13 look at the evidence of what was emerging in the media. 14 We didn't know that there was worse to come. And we 15 were just taking legal advice at every stage as to 16 whether we should have been intervening on the basis of 17 it. 18 LORD JUSTICE LEVESON: What, of course, News Corp will have 19 known was that their Management Standards Committee, 20 chaired by Lord Grabiner, was in the process of going 21 through materials and handing such materials as they 22 felt were appropriate to the police; is that right? 23 MR WHITE: Not in May. July. 24 LORD JUSTICE LEVESON: Thank you very much, I'm happy to be 25 corrected. 103 1 MR JAY: If that's your interpretation, Mr Hunt, presumably 2 that's the interpretation Mr Smith received from this at 3 the time from Mr Michel. Are we in agreement? 4 A. No, because this is not my -- this is not -- this is 5 saying that's what my interpretation is now, now I know 6 what was happening with phone hacking. Neither myself 7 nor Mr Smith knew the picture that was about to emerge 8 for phone hacking. 9 Q. What's rather odd is that Mr Michel is expressing 10 a private thought of some sensitivity to Mr Smith. He's 11 saying rather Delphically: unless it's done by a certain 12 date, it will be catastrophic for many important 13 reasons. One inference might be that Mr Smith will 14 either know what that was or will find out. But wasn't 15 that notion communicated to you, Mr Hunt? 16 A. It certainly wasn't, and I'd be very surprised if 17 Mr Smith had any idea whatsoever as to what those 18 Delphic reasons might be. I think that News Corp are 19 a very determined company and they're always putting 20 everyone under pressure to do things quickly. I wanted 21 to do things briskly but properly, so I think he would 22 just look at that and say this is just another example 23 of News Corp trying to pile on the pressure. 24 Q. But didn't you get the general message from Mr Smith 25 that that's precisely what News Corp were doing through 104 1 Mr Michel, namely piling on the pressure? 2 A. No, I didn't. I didn't get that impression. You've 3 spoken to Mr Smith. He's a very uncomplaining, decent, 4 hard-working person, and I think he said to you that he 5 saw his job as being a buffer for me, so he saw his job 6 to absorb that pressure. I was very determined as 7 Secretary of State that responsibility for this bid 8 should not derail all the other important things that 9 I had to do in my department, so I think Mr Smith saw 10 himself as being that buffer and that was why he 11 wouldn't have informed me of all these conversations. 12 Q. One might see that as a buffer he wouldn't inform you of 13 all the conversations but given we are encountering here 14 a period of delay with attendant pressure from News Corp 15 as one might expect, did not the general gist of the 16 message from Mr Michel be imparted to you by Mr Smith, 17 namely they're getting a bit uppity now or words to that 18 effect? 19 A. It may well have been, and it wouldn't have been any 20 surprise. You know, as a company they want everything 21 done at the speed of light, but I don't remember it 22 being raised with me, if I can put it this way, as 23 a specific issue that I needed to address. 24 Q. It would just have been part of the background noise 25 which was coming out at this stage, is that fair? 105 1 A. If Mr Smith said anything to me at all. 2 Q. Turn over the page to 07697. This is Mr Michel again to 3 Mr Smith, 29 May. 4 A. Sorry, I don't have it yet. There we are. 5 Q. It's been redacted for some reason, the name, but we 6 know from KRM 18 that this is a reference to 7 Ed Richards, okay, so we might as well put his name 8 straight back in. 9 "We are getting some feedback from OFT and MPs that 10 Ed Richards is very much in driving seat on the 11 agreements discussion and meeting JH regularly to update 12 him." 13 Was that factually correct? 14 A. No. It is true that I met Mr Richards most weeks 15 because I have a meeting about the rollout of superfast 16 broadband and local television which Mr Richards came 17 along to, so I did see Mr Richards regularly. 18 If you're saying -- obviously for News Corp Ofcom 19 was a bete noir so they would have thoroughly objected 20 to the idea of Ofcom being in the driving seat of 21 anything, but as far as I was concerned actually Ofcom's 22 view was critical. I wanted to know whether Ofcom were 23 satisfied that plurality concerns were being addressed 24 by these undertakings, and so whether you would describe 25 that as them being in the driving seat or not I don't 106 1 know, but I did certainly attach a lot of weight to what 2 they said. 3 Q. The third substantive paragraph: 4 "It would be good to understand the state of play as 5 it does seem the timetable you outlined to me is 6 slipping away massively and we might want to consider 7 our options at this stage." 8 So it looks as if Mr Smith had communicated 9 a timetable to Mr Michel and we get some understanding 10 of what that timetable was from the next sentence, would 11 you agree? 12 A. Yes. 13 Q. And in so doing, Mr Smith was acting within or without 14 his authority, in your view? 15 A. I think entirely within his authority. He was a contact 16 point about process. We wanted to be open and 17 transparent with News Corp about the process that we 18 were following that involved their company. This was 19 nothing to do with the decision as to whether I was 20 going to accept that the UILs met plurality concerns or 21 not, but to tell News Corp that we were aiming for 22 24 June, I think, would be absolutely a legitimate part 23 of the process. 24 Q. Okay. We can move forward in time, I think, to 28 June. 25 I'm afraid we're in the second volume of this 107 1 supplementary bundle under SS.Aa at page 08008, which is 2 an email from you to Mr Smith. 3 A. I haven't quite got it on the screen. 4 Q. The UILs which are being referred to there -- 5 LORD JUSTICE LEVESON: It's not there yet. I'll read it: 6 "Hiya. Those new UILs are pretty thorough ..." 7 A. I have it now, sir. 8 LORD JUSTICE LEVESON: Very good. 9 MR JAY: "... feels like the world doesn't trust the 10 Murdochs further than they can be thrown! What was the 11 resolution on the issue of Murdoch family members buying 12 shares in Newco? Thx." 13 Can you remember the context of that observation 14 about the Murdochs? 15 A. I can't remember the exact context. We'd had 40,000 16 objections to the UILs that Ofcom and the OFT had said 17 satisfied their plurality concerns. I think it's 18 a fairly accurate description of the mood of the country 19 at that time, actually, and, you know, in terms of the 20 Murdoch family members buying shares in Newco, the 21 concern had been expressed that if Sky News was spun 22 off, that a Murdoch family member might buy -- you know, 23 News Corporation was limited to holding 39 per cent of 24 the shares of Sky News, but a Murdoch family member 25 might purchase some of the other shares in order to, as 108 1 it were, help the Murdochs gain control of the spun-off 2 Sky News through the back door, and I wanted to be sure 3 that that wasn't going to be possible in terms of the 4 way the UILs were set up. 5 Q. So this is a remark which one reads entirely 6 straightforwardly, it's your interpretation of what the 7 world at large were saying, and you were reporting that 8 back without irony to Mr Smith; is that right? 9 A. Yes. 10 Q. Can we move forward to July? We are still in the second 11 supplementary bundle under tab IND, a series now of 12 emails which start at 07822. There are seven of them 13 we're going to look at, or seven pages worth. 14 LORD JUSTICE LEVESON: Can you do this in five minutes? 15 MR JAY: Probably best to do it with a clean start. 16 LORD JUSTICE LEVESON: Then let's break now and we'll resume 17 at 2 o'clock, if that's all right with you, Mr Hunt. 18 A. Yes. 19 LORD JUSTICE LEVESON: Thank you very much. 2 o'clock. 20 (12.58 pm) 21 (The luncheon adjournment) 22 23 24 25 109 1 2 (2.00 pm) 3 LORD JUSTICE LEVESON: Mr Rhodri Davies, I understand there 4 is some concern about the redaction of documents in 5 relation to Mr Hunt's exhibits. Let me make it clear 6 that in the light of what has happened in the past, 7 I have agreed to publish all Mr Hunt's exhibits today. 8 They've been released over some days, if not rather 9 longer than that, and I would have hoped that if there 10 were issues about redaction, that they would have been 11 resolved by now. What is the problem? 12 MR DAVIES: Mr White will explain, sir. 13 LORD JUSTICE LEVESON: Very good. 14 MR WHITE: I'm sorry, it only came to our attention late. 15 You're right that the documents were released about five 16 days ago, but there's an enormous amount of material. 17 What I spotted yesterday, I can just give you an 18 example. There is an email at EX.L.74, which if I just 19 hold it up, is redacted to that extent to remove 20 commercially sensitive information. 21 LORD JUSTICE LEVESON: Hang on. EX.L.74? 22 MR WHITE: EX.L.74. You see the extent, it's on page 07334. 23 And that is information that the department accepts is 24 commercially confidential and ought to be redacted. 25 When the same email appears at EX.L.92, 07348, it 1 1 appears in entirely unredacted form. And once I spotted 2 that, I realised that that unfortunately has happened on 3 several occasions. Do you see the point? 4 LORD JUSTICE LEVESON: Yes, I see that it's redacted in one 5 place and not in the other. Let me just see what's been 6 redacted. (Pause). 7 I don't really see that it matters, given that all 8 this is now history, but there it is. 9 MR WHITE: I take that as an example just to show what's 10 happened. It's not perhaps the most sensitive. There 11 are others where the same thing has happened, where it's 12 more obviously sensitive. There's an end date to 13 a contract, for example, which is accepted is 14 confidential. 15 As soon as we saw that, we've put a team of people 16 on to go through and check and we're making good 17 progress on that as quickly as we can, but whether we'll 18 have checked it all by the end of today, I simply don't 19 know. 20 LORD JUSTICE LEVESON: I think we'll be going a bit faster 21 than that, Mr White. 22 The position is this, that Linklaters informed the 23 Inquiry, I think this morning, and an email was 24 dispatched in return saying, "Well, you'd better let us 25 know what you're talking about", to which there has 2 1 been, as I understand it, no response. 2 I think this has to be done jointly and extremely 3 urgently. Presumably it's only in relation to a few 4 documents that we're talking about. You may be looking 5 at them all, but most of this material will be entirely 6 innocuous. 7 MR WHITE: The difficulty, sir, is as you've said, having 8 been alerted to it, we are now turning the pages as 9 quickly as possible, but it is important that material 10 which is properly regarded as commercially sensitive 11 shouldn't come out accidentally. That's our position. 12 LORD JUSTICE LEVESON: I understand that, but it's equally 13 important that if I've given my assurance that documents 14 will be published, that they should be published. 15 So this is irresistible force and immovable object, 16 Mr White. Have Linklaters communicated any of the 17 detail to the Inquiry? 18 MR WHITE: I know that Ms Ellis has been in contact with the 19 office and has been pushing this forward over lunchtime. 20 I don't yet know whether an email has gone. 21 LORD JUSTICE LEVESON: What might be better is if somebody 22 from Linklaters actually comes down to the Inquiry and 23 works with Inquiry Team staff to make sure that the 24 issues which concern you are considered this afternoon. 25 I don't think there's any point in just working in 3 1 Linklaters' offices and then sending us an email with 2 three minutes to go when we want to press the button. 3 MR WHITE: We are doing it absolutely as quickly as we can. 4 There are a lot of documents to go through. We can 5 certainly explore someone coming down with -- 6 LORD JUSTICE LEVESON: It should be concurrent, not 7 consecutive. That's what I'm saying, I think, Mr White. 8 MR WHITE: What Ms Ellis reminds me of course is Linklaters 9 didn't act in relation to the transaction so they have 10 to liaise with Allen & Overy and the client about what 11 is particularly sensitive. 12 Sir, can we try and hold off pressing the button on 13 publication until Linklaters have had the opportunity to 14 come down and tell the Inquiry those documents -- 15 LORD JUSTICE LEVESON: Linklaters had better get into a taxi 16 now and come down now. I am going to fulfil the 17 commitment that I have given. I'm very happy to look at 18 individual documents and I'm very happy to consider 19 individual documents. I readily respect the commercial 20 confidentiality of News Corp and I don't want to impact 21 upon it, although one has to say that in relation to 22 a bid which ceased to be effective almost a year ago and 23 deals with material that is very, very historic, I'm not 24 entirely convinced how up to date all of it will be and 25 how commercially sensitive it will remain, given the bid 4 1 is now finished. If it were going on, if it had 2 potential impact on the market, I could understand all 3 that. 4 I'm not stopping you doing the exercise, but I am 5 prepared to make sure that the Inquiry Team are ready to 6 consider everything that Linklaters want to say. If 7 they want to bring somebody from Hogan Lovells down, 8 they can bring Hogan Lovells down. If they want to 9 bring somebody who's involved from News International or 10 News Corp, obviously News Corp, they can do that, but 11 I'm afraid that to say "Well, we'll send you an email 12 some time today" is not good enough. 13 I'm conscious of the work that you've done, and I'm 14 not in any sense minimising it, Mr White. I've said 15 several times that I have a great respect for what 16 Linklaters have done to work their socks off to help the 17 Inquiry, but there have been difficulties about the 18 publication of documents, which has caused embarrassment 19 for which I am responsible, and I don't want to be 20 responsible for any more. 21 MR WHITE: I fully accept that. We are working absolutely 22 flat out. We thought rather than send intermittent 23 emails we should try and go through -- I see your point 24 about it being concurrent rather than consecutive. May 25 we try and be practical, but I would simply ask that the 5 1 button isn't pressed on publication until we've had the 2 chance to put our concerns. 3 LORD JUSTICE LEVESON: Well, I hear what you say. I'll 4 return to it at the end of Mr Hunt's evidence. 5 MR WHITE: Thank you, sir. 6 MR JAY: Mr Hunt, I think we were on page 07822, which is an 7 email of 6 July 2011. 8 A. Yes. 9 Q. Are you with me on that? 10 A. Yes. 11 Q. You reached the point where there were now debates in 12 Parliament on phone hacking. The second paragraph of 13 the email at the top: 14 "The basic line is that the Secretary of State and 15 he alone has to make a quasi-judicial decision on the 16 merger on media plurality grounds. Whilst we all agree 17 that phone hacking is dreadful and the police should 18 pursue their investigations vigorously, the Secretary of 19 State has made his decision on media plurality grounds, 20 not wider public interest. He has followed the legal 21 process and been openly transparent in doing so, seeking 22 publishing advice from independent regulators at every 23 step of the way." 24 So that was the official line as at that date; is 25 that correct? 6 1 A. Yes. 2 Q. At 07824, you'd apparently seen something in Private Eye 3 which made some legal points about the strength 4 enforceability of the articles and you wanted a legal 5 view on that, is that fair? 6 A. Yes. 7 Q. 07826, we're now on to 10 July, things were hotting up 8 politically, some might say. The second email: 9 "To be aware ... I've just had a call from [someone 10 at] Number 10 are very worried about the vote on 11 Wednesday -- they think it's highly possible that 12 Miliband will win. [This someone] said that he needs us 13 to do more work on the legal position/fallback options, 14 et cetera. Number 10 are most worried about the line 15 that the fit and proper person evaluation is a matter 16 for Ofcom. They are not convinced that this argument is 17 sustainable." 18 Isn't that an indication that by this point for 19 political reasons the fit and proper person issue had, 20 as it were, come to the surface rather than for any 21 reasons of the substantive merits? 22 A. I think what we have here is that what happened was that 23 Number 10 did start talking to DCMS after the 24 Milly Dowler revelations occurred, because this was such 25 a huge national issue, they needed to understand 7 1 timescales, and they needed to have a sense of what was 2 coming down the track with respect to the BSkyB bid, 3 because they were certainly linked in the public mind, 4 even if they weren't initially linked in my mind. 5 And so we were having lots of discussions between 6 the communications teams at Number 10 and communications 7 teams at DCMS. These were not discussions with me, and 8 they were not discussions about my decision. My actual 9 decision to write to Ofcom was a decision that was 10 primarily prompted by the closure of the News of the 11 World because I thought that indicated that there could 12 be a massive failure of corporate governance in 13 News Corp, which made it potentially risky to accept the 14 undertakings. So that was my perspective on the issue. 15 Q. Although the discussions were not with you, they were 16 with your department, and presumably drawn to your 17 attention; is that right, Mr Hunt? 18 A. Only in a casual way, as in, you know, Number 10 are 19 getting worried about the fact that the phone hacking 20 issue is getting big and they wanted to be sure that the 21 public would understand that we couldn't link the two 22 issues. I think that was essentially what their worry 23 was. 24 LORD JUSTICE LEVESON: But you'd actually got further than 25 that because you'd found a way in which it was arguable 8 1 that the issues could be linked. 2 A. By this date, yes, because the News of the World had 3 been closed in the middle of the previous week. But I'd 4 had very clear advice -- as I say, it was the corporate 5 governance issue, the fact that a newspaper had been 6 closed down, that really made me re-evaluate the advice 7 that I'd previously received on trust. 8 MR JAY: But wasn't it pressure from Number 10 which was 9 drawn to your attention which caused you to look at the 10 matter afresh, Mr Hunt? 11 A. No. I was already looking at the matter under my own 12 steam, if I can put it that way. 13 Q. There's further pressure at 07827, where Number 10 14 apparently had been in touch and had spoken directly to 15 Jon Zeff: 16 "They want a note for the Prime Minister this 17 evening on current situation and our assessment of 18 available options in relation to delay, fit and proper 19 person and Wednesday's vote." 20 So what they were hoping for: let's see if we can 21 park this for the time being, let's see if we can 22 consider this as a fit and proper person issue, and what 23 are we going to do about Wednesday's vote? This is 24 a clear political steer, isn't it? 25 A. I think there were lots of discussions going on between 9 1 communications teams because this issue had exploded 2 onto the national scene and Number 10 wanted to 3 understand what we were doing and how to handle it in 4 communications terms. It wasn't anything that was 5 affecting my decision. 6 Q. Of course the decision remained yours pursuant to the 7 same quasi-judicial obligation you'd been discussing; is 8 that right? 9 A. Absolutely. 10 Q. We can take the matter forward quite quickly because 11 things soon come to a head. 07830, Mr Hunt. Still on 12 the afternoon of 10 July. We can see the message at the 13 bottom of the page, which I believe is coming through 14 from Sir Jeremy Heywood. I deduced that from 07831. 15 This is the message beginning "These are the broad 16 fallbacks we briefly discussed." 17 A. My copy is redacted so I'm afraid I can't see who it's 18 from. 19 Q. The Heywood note is referred to on the next page. 20 That's all I'm saying, Mr Hunt. I may be incorrect 21 about it. 22 LORD JUSTICE LEVESON: If the normal policy has been 23 followed, the name will only have been redacted if it 24 was somebody other than a member of the senior Civil 25 Service. 10 1 MR JAY: That's correct, but the note would have been sent 2 by email by someone junior, but it appears to be from 3 Sir Jeremy Heywood, but that's at least one possible 4 deduction. I understand there may be others. 5 But at all events your response to it is recorded in 6 the email above that, isn't it: 7 "Secretary of State has said he would like to see 8 the note before it goes." 9 A. Yes. I'm sorry, which is the note we're talking about? 10 I'm not familiar with this material, Mr Jay. 11 Q. I had deduced, but it may be incorrect, that the note 12 that is being referred to is in fact the text of the 13 email which starts halfway down page 07830 and is not 14 a separate document. But it may be that that inference 15 is incorrect. I'm not sure we could take it any 16 further. 17 A. No, I'm sorry, I can't. 18 Q. Later that afternoon, there was a conference with 19 counsel and others. Can you remember whether Number 10 20 was involved in that? Possibility that it was because 21 of the email at the top of 07832, if you can look at 22 that? 23 A. I don't think that would imply that, actually, because 24 all conference calls that ministers have are set up by 25 the Number 10 switchboard. 11 1 Q. I understand. 2 LORD JUSTICE LEVESON: I'm not sure you're talking about the 3 right Jeremy. At the bottom of 7832, that's a letter to 4 Daniel Beard, who is of counsel, isn't he? 5 MR JAY: It is. 6 LORD JUSTICE LEVESON: And it's obviously from a legal 7 adviser to the Department of Culture, Media and Sport. 8 And it's referring to Daniel, that's clearly Mr Beard: 9 "Jeremy was wondering if he could have a preliminary 10 chat with you about this this afternoon at about 5 pm. 11 I don't know if that would be possible but I'm copying 12 Paul Oldfield, Jeremy's Principal Private Secretary in." 13 That's clearly Mr Hunt. 14 MR JAY: Yes. 15 LORD JUSTICE LEVESON: Not necessarily Sir Jeremy Heywood. 16 MR JAY: But that's the top of 07831. 17 LORD JUSTICE LEVESON: I understand that point. That's 18 a slightly different one. 19 MR JAY: Okay. 20 LORD JUSTICE LEVESON: Yes. 21 MR JAY: There was a conference with counsel where the 22 issues we'd seen in earlier emails were discussed. We 23 know it took place at about 5 pm, 07833. I think 24 actually it was a conference by telephone, which you 25 listened in on as well as Mr Smith; is that correct, on 12 1 the top of page 07833? 2 A. I don't know if Mr Smith was listening. He may well 3 have been. But I was on it. 4 Q. Soon thereafter, matters were overtaken by events 5 because on 11 July News Corp withdrew the undertakings; 6 is that right? 7 A. I'm not sure I would necessarily describe it that way, 8 Mr Jay. We decided in that conference call that I would 9 take the very significant step of writing to Ofcom and 10 the OFT to ask them whether they still stood by their 11 advice of around 10 days earlier, in which they said 12 that they were satisfied with the undertakings and that 13 they addressed plurality concerns and they were 14 financially viable. We also asked Ofcom to look at the 15 fit and proper person issue, which is an Ofcom issue, 16 but the development that happened during that week was, 17 I believe, that the Select Committee had written to 18 Ofcom to ask them whether BSkyB was a fit and proper 19 licence holder, and that was something which could have 20 been relevant to the bid. Obviously you accept 21 undertakings from someone that then loses their 22 broadcasting licence, that would be pretty significant. 23 And we had the issues that I've talked about 24 earlier, my concern about a failure of corporate 25 governance. If wrongdoing was so endemic in a company, 13 1 then it does become potentially a question for 2 management structure. 3 So all those things had come together in less than 4 a week, because I think the Milly Dowler story broke on 5 Monday, 4 July, and the News of the World was closed 6 later that week, and I thought it was appropriate to ask 7 Ofcom and the OFT whether they still stood by the advice 8 that they had given me. 9 LORD JUSTICE LEVESON: 7836, I think, says just that. 10 A. And that was made public pretty much first thing on the 11 Monday morning, so the conference call was on the Sunday 12 evening. That was made public on the Monday morning, 13 and by Monday lunchtime the undertakings had been 14 withdrawn. I don't know whether you can link those two 15 events or not, but -- well, one can infer whatever one 16 wishes. 17 MR JAY: And on the Wednesday, which was going to be 18 13 July, I believe, there was going to be a vote on the 19 undertakings in any event in Parliament; is that 20 correct? 21 A. I don't think it was so much a vote on the undertakings, 22 it was a vote on the whole BSkyB bid. 23 Q. We can see the underlying concern in the emails, that 24 the government might have lost that vote, can't we? 25 A. Yes. That was a political concern, which obviously was 14 1 on Number 10's mind because it was a big motion. 2 Q. Two final emails in these files, Mr Hunt. Go forward to 3 tab SS.B -- 4 LORD JUSTICE LEVESON: Just before you go on, it seems clear 5 from 7839 that the timing is as Mr Hunt has identified 6 it, because Mr Murdoch withdrawing the bid refers to the 7 letters to Ofcom and the OFT asking for advice as to 8 whether they should reconsider accepting undertakings. 9 A. Yes. 10 MR JAY: Thank you. 11 LORD JUSTICE LEVESON: All right. 12 MR JAY: SSB, page 08105. It's an email you send to your 13 special adviser Sue Beeby on 20 July. Have you found 14 that one? 15 A. 8015? 16 Q. 08105. 17 A. Sorry. 18 Q. I wonder if you could explain this for us, please. You 19 say: 20 "You may need to correct any press/make a statement 21 about my apparent admission that DC discussed BSkyB with 22 Rebekah Brooks. I am pretty sure I said 'any 23 discussions were irrelevant' but Labour have seized on 24 it as 'the discussions were irrelevant'. I think the 25 best thing to say is that I couldn't have been 15 1 confirming that there were discussions because I have 2 never discussed it with the PM and don't know. Hope it 3 doesn't cause an issue." 4 But what did you mean by "I think the best thing to 5 say"? 6 A. Well, because I was proposing how we deal with the fact 7 that the Labour Party at that time, I believed, were 8 misinterpreting something that I had said. They were 9 suggesting that David Cameron was in cahoots with 10 Rebekah Brooks and this was having some kind of 11 influence on the whole process, and my response to that 12 consistently had been that it's irrelevant whether the 13 Prime Minister was having any discussions with 14 Rebekah Brooks because the Prime Minister wasn't taking 15 the decision on the BSkyB merger, and I think in the 16 Parliamentary statement, they had said what I said -- 17 I don't know what I actually said, but they had used 18 what I had said to try and confirm that there were such 19 discussions between the Prime Minister and 20 Rebekah Brooks about the bid. 21 I didn't know whether there had been any discussions 22 or not. All I was saying was: if there had been any, it 23 was irrelevant. And Labour were saying: Ah, he's 24 confirmed there were discussions, which I wasn't at all. 25 So we were discussing how to deal with that situation 16 1 that had come up. 2 Q. And then your special adviser emails you on 26 July on 3 the next page, 08160, stating: 4 "We have published the list of meetings you've had 5 with media organisations today and I've gone through the 6 lists to pick out the facts in case you get any hostile 7 questions when you're doing media tomorrow morning. 8 "Basically there is absolutely nothing surprising 9 about your meetings at all (but that doesn't mean to say 10 people haven't been trying to find something dodgy). 11 Here are some rebuttals." 12 And then there are really lines to take. But were 13 those based on what you told your special adviser as 14 matters of fact or were they just lines to take? 15 A. Well, they're a suggestion from Ms Beeby to myself, 16 she's my press adviser, and she would have worked out 17 those lines to take on the basis of fact. 18 Q. Okay. Can we go back, please, to the file of text 19 messages, which is the tab at the end of this second 20 supplementary bundle. We're going to look first of all 21 at the post 22 December 2010 messages between you and 22 Mr Michel and we can pick these up on page 08148, 23 Mr Hunt. Are you with me? 24 A. Yes. 25 Q. Which really start at the very end of the last page. On 17 1 20 January, the date of your second meeting with 2 News Corp, do you see -- 3 A. Sorry, which date was that? 4 Q. 20 January 2011, bottom of page 01847. 5 A. Sorry, I'd turned over the page. 6 Q. You have to turn over the page to see the time. It's at 7 20.53. Mr Michel says: 8 "Great to see you today." 9 Then there's a reference to your babies, so 10 obviously we pass over that, it's been redacted. 11 "Warm regards." 12 And then you at a quarter to midnight text him: 13 "Good to see u too. Hope u understand why we have 14 to have the long process. Let's meet up when things are 15 resolved." 16 Is that not giving a somewhat positive message, 17 Mr Hunt? 18 A. Not at all. I'm just saying to him we have a long 19 process, hope you understand why that's necessary. 20 Q. Then he replies the following morning -- for him he's 21 slightly late coming back to you, but never mind: 22 "We do and will do our very best to be constructive 23 and helpful throughout. You were very impressive 24 yesterday. And yes let's meet up when it's all done. 25 Warmest regards, Fred." 18 1 This is very pushy, isn't it, Mr Hunt? 2 A. Yes, it is, and it's also -- it's also a little bit 3 cheeky, actually, because that was the day that I'd had 4 the row with Mr Murdoch when he was pretty cross about 5 the fact that I'd said that I was going to involve Ofcom 6 and the OFT in advising me as to whether to accept the 7 undertakings, so it was a very difficult meeting. 8 I wonder whether he was trying to break the ice or 9 something like that, but it was -- but I agree. 10 Q. For someone exercising a quasi-judicial function, you 11 would have been concerned, would you not, by the tone of 12 this pushy and frankly cheeky text message, would you 13 agree? 14 A. Well, I would have been -- I just would have given 15 a courteous reply and thought, you know, he's -- he 16 knows he can't have any contact with me about the bid 17 process and so I want to close down the conversation as 18 quickly as possible. 19 Q. Closing down the conversation as quickly as possible 20 might have entailed you sending a text message back 21 along these lines: 22 "Given the role I'm performing, any contact of this 23 sort is inappropriate and might stop." 24 Why didn't you do that? 25 A. I don't think that -- I didn't think that a courteous 19 1 reply to a text message was inappropriate. I would have 2 thought it was inappropriate to put anything of 3 substance in a text message. I mentioned earlier, I do 4 make a point of replying to text messages that people 5 send me, so I was just trying to give a courteous brief 6 reply, essentially try and close down the discussion. 7 Q. If he was being pushy and cheeky with you, you would 8 know evidently that he would be trying the same with 9 Mr Smith, wouldn't you, Mr Hunt? 10 A. Yes. I wouldn't get the -- I wouldn't know about the 11 volume of communications that he was having with 12 Mr Smith. I might have expected the tone to be similar, 13 but what we've learnt about the 35 texts in two days, 14 that kind of thing, I wouldn't have been able to 15 surmise. 16 Q. But the tone continues, one might argue. On 3 March, 17 which of course was the day you'd made your announcement 18 to Parliament after the long night when the UILs and 19 redactions were being sorted out, he comes back to you 20 unprompted: 21 "You were great at the Commons today. Hope all 22 well. Warm regards." 23 That's along similar lines, isn't it? 24 A. Yes. I think we can see that flattery is a weapon that 25 Mr Michel tries to deploy quite frequently. 20 1 Q. And persistently, would you agree? 2 A. And persistently, yes. 3 Q. You do reply to it in only four words, though: 4 "Merci large drink tonight!" 5 And then he has another go instantly: 6 "Me too! Taking wife out for dinner!" 7 That's the end of that one but ten days later he's 8 flattering you again: 9 "Very good on Marr. As always!" 10 A. Yes, and I think one is beginning to slightly discount 11 his flattery by this stage, because one is getting used 12 to it. 13 Q. Well, that's one possibility, but you don't quite rise 14 to the bait, but you lapse into French again: 15 "... hopefully when consultation over we can have 16 a coffee like the old days!" 17 Are you happy with that message? 18 A. Perfectly. I had a friendly professional relationship 19 with him. It was a relationship that had become 20 a little bit warmer because of the coincidence of both 21 our wives having children on pretty much the same night 22 in the same maternity ward, and we'd said, as I think 23 one would frankly, we'd said let's get the families 24 together because we have children of the same age, and 25 then of course it wasn't possible to do that because of 21 1 the bid process, and so I was basically saying, well, 2 you know, that's something that will have to wait. 3 Q. Some might say if the consultation is over and the bid 4 is turned down, it would be a rather frosty cup of 5 coffee, wouldn't it? 6 A. Well you could exactly say that, but I was just saying, 7 "Look, I can't have any contact with you until the bid 8 is over", and I think that was the proper thing to say. 9 Q. The final piece of pushiness. I deduce that he sees you 10 at Wimbledon at quarter to 4 in the afternoon on 3 July, 11 I recall the occasion, it was a Friday afternoon, and he 12 starts texting you: 13 "Come on Nadal!" 14 And you text him back. This is pushiness par 15 excellence, isn't it? 16 A. I think it's incredible ingenuity. I mean he was just 17 looking for any opportunity he could to try and 18 establish contact of some sort or another. You know, it 19 was pushy. You know, I responded briefly, courteously, 20 and in a friendly way as well. 21 What I didn't deduce from this, and I think you 22 alluded to in your earlier comments, was the effect of 23 this kind of contact multiplied many, many times over to 24 Adam Smith. And that was the crucial thing right at the 25 beginning of the process that we didn't foresee, the 22 1 fact that there was going to be such a volume of 2 correspondence, and I think it's something that we have 3 to reflect on in terms of the way that we handle bids in 4 the future, because -- and maybe this is a line of 5 questioning that you're going to come onto, but I just 6 make the point now anyway. 7 My feeling is that, you know, Adam Smith is the most 8 decent, straight, honourable person that one could 9 imagine, and even he was not able to maintain the 10 impartiality that he needed to because of the volume of 11 communication, and I think that was where things went 12 wrong as far as his communication was concerned. 13 Q. We will come back to that. You did tell us, though, 14 that in your view Mr Michel was looking for every 15 opportunity he could to establish contact one way or 16 another, but that was his job, wasn't it? 17 A. Yes. 18 Q. And once the door pushed open, he was in, wasn't he? 19 A. Well, no, because none of his text messages led to any 20 substantive discussions about the bid. 21 Q. Okay. The messages between you and Mr Smith start at 22 08149. Until the end of June, there are only about 23 a dozen, indeed there are only 11 texts between 24 19 January and 4 March. Do you see that, Mr Hunt? 25 A. Yes. 23 1 Q. We can skim read them, but the only one that is of 2 slight interest is at nearly 11.30 on 4 March you thank 3 him for his "utterly outstanding help". Do you see 4 that? 5 A. Yes. 6 Q. What specifically were you referring to there? 7 A. I'm afraid I can't remember what event happened that 8 day. 9 Q. It was in fact the day before. 3 March was the 10 announcement -- 11 A. Oh, right, sorry, yes. So it was the day after I'd made 12 the announcement about the UILs and I sent him a text to 13 thank him for his help and I also sent my other special 14 adviser a text to thank her for her help. 15 Q. Thank you. Go to 30 June. So we pick up the flavour of 16 these messages passing between you. He texts you: 17 "Chap from Enders analysis just told BBC that this 18 was the only logical outcome." 19 Of course you'd just made the announcement to 20 Parliament on the amended UILs. 21 "And that Competition Commission wouldn't have done 22 anything different. Nice third party endorsement." 23 And you say: 24 "Nice!" 25 Then on 5 July: 24 1 "Vince was fine. Stuck completely to the line. Sue 2 concerned we don't stick up for news so thinks sticking 3 to need for police inquiry to finish is strongest line." 4 Do you know what the reference particularly to 5 "Vince was fine" is or was? 6 A. Well, I think these discussions were really about 7 presentational issues. We wanted to make sure that 8 Cabinet ministers spoke with a united voice in saying 9 that it was a quasi-judicial that I had to take, it had 10 to be taken on grounds of media plurality. Obviously 11 given the history of what had happened before, I'm 12 guessing that there may have been some concerns about 13 what Dr Cable might say, which was why that reference 14 was made. 15 Q. Right. Then he gives you some advice at 15.48, on 16 5 July: 17 "You should be at the debate even if not leading it. 18 Can't get hold of Home Office." 19 So he's not afraid to tell you his opinion at any 20 relevant point, is he? 21 A. No. 22 Q. Then you try to find out what the Prime Minister is 23 going to say but he finds out for you and tells you at 24 the bottom of the page on 8 July: 25 "PCC has failed. Needs reform. Must be independent 25 1 of press and government. Inquiry will look at how to 2 reform it." 3 So this is an example of him, I suppose, being your 4 eyes and ears and going to find out information for you, 5 is it? 6 A. Yes. Eyes and ears? He was an aide to me, he was 7 a very important aide, and this was a very big issue 8 about the type of inquiry that we were going to have and 9 he was finding out for me, you know, what Number 10 was 10 going to say and what the Prime Minister had decided to 11 say. 12 Q. Then on 11 July, 1800 hours, he gives you some not so 13 much further advice but certainly an opinion of your 14 appearance in Parliament that day: 15 "You did exactly what was needed, pulled back when 16 they got political but were calm and considered 17 otherwise. A view from journos seems to be you were 18 dumped on by Number 10. Give me a call on broadband 19 when you are free." 20 So again he's not holding back from expressing 21 a view and he's quite astute and exhibiting political 22 nous here, isn't he? 23 A. Yes. I mean, to be honest, I think this is a fairly 24 normal kind of interchange between any special adviser 25 and any minister. 26 1 Q. Yes, I'm sure it is, Mr Hunt, but it's just so that we 2 get the flavour of your interactions. 3 On 13 July there's some material he draws to your 4 attention about Mr Dacre's interaction with Mr Brown 5 over the Criminal Justice and Immigration Bill. Do you 6 see that? 7 A. Yes. 8 Q. Something the Inquiry knows a lot about. And he's keen 9 to draw to your attention, that's to say Mr Smith is, 10 that there might be some evidence that Mr Dacre might 11 have been influencing Mr Brown on that issue. Do you 12 see that? 13 A. Yes. 14 Q. And that was of political value to you at that point, 15 wasn't it? 16 A. I think it was just in the context that we were having 17 debates in Parliament in which we were being accused by 18 the Labour Party of being influenced by the press and we 19 were trying to find examples where it was suggested that 20 Labour had been influenced by the press when they were 21 in office. 22 Q. And then on 15 July he tells you -- this is the top of 23 page 08151 -- do you see that: 24 "Rebekah Brooks has resigned." 25 And you say: 27 1 "About bloody time!" 2 A. That was nothing personal against Mrs Brooks. It was 3 just that I did think it was difficult to see how she 4 would be able to lead an investigation into practices at 5 News of the World during precisely the time when she was 6 editor of News of the World. 7 Q. On 20 July at 13.13 hours he texted you: 8 "If this keeps up it looks like you'll need the 9 partisan speech!" 10 Is it the case that you had as it were two versions 11 of a speech you were going to give and he was advising 12 you as to which one might be the one you should run 13 with? 14 A. I'm not sure which speech he's referring to on this 15 occasion, but very often in Parliament when you're 16 giving a speech and you're trying to get the mood of the 17 House, you basically respond to the way your opponents, 18 your political opponents, speak. So if they give 19 a partisan speech, then you give a more partisan speech 20 back. So I may well have had that discussion about how 21 partisan do we think Labour are going to be. 22 Q. The overall impression is of someone who exhibits 23 political understanding and empathy and also has empathy 24 to or with you. Is that a fair impression? 25 A. Yes. 28 1 Q. And aside from all these text messages, one assumes 2 that's not the only way you communicate, there are 3 face-to-face meetings, there are discussions by mobile 4 phone, et cetera. That's also right, isn't it? 5 A. Yes. 6 Q. Okay. Can we move on through this bundle. 08153. We 7 have some material on 3 July. These are messages 8 between you and Mr Oliver at Number 10. He starts off 9 texting you at 8.11 in the morning -- I said July. This 10 is March, isn't it? 11 A. Yes. 12 Q. So this is just after the press notice that the UILs 13 were matters you were minded to accept? 14 A. Correct. 15 Q. He says: 16 "Hi Jeremy. One thought which I'm sure you are 17 onto. View emerges that Murdoch will pull a fast one on 18 selling Sky News -- needs assurances that won't happen." 19 Then you go back immediately: 20 "Thanks think our agreement will address those 21 concerns and will feed out." 22 You're absolutely right that the agreement did 23 address those concerns, but as this indicates that there 24 were at least concerns at Number 10 that a fast one 25 might be pulled and you had already foreseen it. Is 29 1 that fair? 2 A. I think that's -- I think it was more a presentational 3 thing. Craig Oliver is head of communications at 4 Number 10, so if he was contacting me, I think he's 5 saying "view emerging", I think he's probably talking 6 about a view in the press is emerging and so he was just 7 alerting me to what the press were saying. 8 Q. Thank you. The next section, messages between you and 9 your other special adviser, who of course is Sue Beeby. 10 This is 08154. We start off on 22 December, so you've 11 just acquired the bid. And you text her: 12 "Daily Tel running something on my mtg with 13 James Murdoch at DCMS earlier in year. Cld u check they 14 know I met all media owners, et cetera? Pretty sure Sky 15 bid not discussed." 16 That's likely to be a reference to the meeting on 17 28 June 2010; is that right? 18 A. Yes. 19 Q. Then she says: 20 "Do you know who is writing it?" 21 The answer is: 22 "Really sorry deleted message. I'm sure we'll be 23 fine, they hardly have credibility reporting this 24 issue!" 25 She says: 30 1 "Exactly! Have spoken to the Guardian too who have 2 run the story and know from an FOI [that's request] that 3 the meeting wasn't minuted." 4 We've seen that in the bundle we were looking at 5 this morning. 6 A. Yes. I think I was just pointing out that the Telegraph 7 was a commercial opponent of -- well, it was an opponent 8 of the bid. 9 Q. Yes. Could you help us, please, with the next message, 10 17 February 2011, 14.17, Sue Beeby to you: 11 "Hi. Had a think about Andy drink ..." 12 That of course is Andy Coulson, isn't it? 13 A. Yes. 14 Q. "... and think it might be best to wait till News Corp 15 process is over. He's so closely linked to them that if 16 you were seen it wouldn't look great. I'm sure he would 17 understand and it should only be a week or so." 18 So it looks as if you were minded to or had arranged 19 a drink with Mr Coulson and you were being advised that 20 that wasn't a good idea; is that right? 21 A. Yes. I think what happened there was when Mr Coulson 22 left Downing Street, I'd known him not socially 23 particularly but I'd known him professionally and 24 I'd respected his work and when he left I'd said 25 probably in a text message, "Let's meet up for a drink", 31 1 or something like that, and I think I'd left Sue to 2 arrange the drink and she was basically saying, "It's 3 better to wait until after the quasi-judicial process is 4 over." 5 Q. Did it really need your special adviser to tell you 6 that? 7 A. She had the job of arranging the drink and she probably 8 thought about it and I think she was absolutely right, 9 it was something that would be wiser to wait for doing. 10 Q. The last one on this page. 23 June 2011 at 11.13, 11 Sue Beeby texts you: 12 "Warning! Please don't take any calls from Vince 13 over the next few days. Will explain all when we speak 14 but he is trying to be very sneaky over News Corp." 15 What was that about? 16 A. Well, I don't actually know whether that was true about 17 Vince, but I think Sue Beeby had heard a rumour that 18 Vince might be somehow planning to distance himself from 19 my quasi-judicial decision and -- we didn't quite know, 20 but she was worried that there might be something there 21 and there was a presentational issue for the government 22 and so she was trying to minimise it. 23 Q. I mean, in one sense he couldn't distance himself from 24 the quasi-judicial decision because it was your decision 25 and he had to remain distant from it, but are you saying 32 1 that politically once you'd made it he would seek to 2 place a distance between himself and your final 3 decision? 4 A. Yes. I imagine that was what the rumour was that he 5 might be thinking of doing. As I say, we have no 6 evidence that that is what he was thinking of doing, but 7 these are the kind of rumours that go around the 8 Whitehall rumour mill pretty regularly. 9 Q. The next page are messages, we've seen some of them 10 already, between you and Mr James Murdoch. 08155. We'd 11 halted in the morning at 12.57 hours on 21 December, 12 hadn't we, but on 3 March at 18.33, which of course is 13 the day of the announcement on the UILs, he texted you: 14 "Big few days. Well played. JRM." 15 What did you make of that? 16 A. I thought it was something of an olive branch because my 17 two previous contacts with Mr Murdoch had been very 18 difficult. I'd had the row with him in the meeting of 19 20 January, when I had insisted on involving Ofcom in 20 the assessment of the UILs, and then on 15 February 21 I had written to him giving him 24 hours to back down on 22 a whole series of things where he was in dispute with 23 Ofcom and the OFT, so I think it was a sort of -- we'd 24 made the announcement in Parliament and I saw it as 25 a sort of olive branch, I suppose. 33 1 Q. It could be read in a slightly different way, that he's 2 indicating approval for the state of affairs which had 3 been reached and your participation in that process. Do 4 you feel that that's a fair interpretation or not? 5 A. Well, he might have been indicating to me that he wasn't 6 as angry about the state of affairs as I might have 7 thought he would have been. I just saw it as a brief 8 comment because it was a moment in the process, and as 9 I say, we'd had these very, very difficult conversations 10 leading up to that point. 11 Q. And you texted back: 12 "Thanks think we got right solution!" 13 Which I suppose speaks for itself, does it not? 14 A. Well, I was just saying what I'd been saying in the 15 media and in Parliament all day. We, the government, 16 had been working hard with Ofcom, the OFT and News 17 Corporation to see whether we could find a version of 18 the undertakings that address plurality concerns. 19 I thought we had got the right solution. It wasn't the 20 solution that Mr Murdoch wanted, but it was the right 21 one. 22 Q. The next message looks as if you in fact were trying to 23 complete the previous message but gave up on it and 24 started again, or maybe you didn't, but is that the 25 right deduction I've drawn? 34 1 A. I suspect that the next message was actually one that 2 was sent prior to the first message. 3 Q. Yes. You pressed the send button too early because you 4 didn't complete the message so you had another go. They 5 should appear the other way around. 6 But at 31 March in the morning, you congratulate 7 Mr Murdoch on his promotion: 8 "... although I am sure u will really miss Ofcom in 9 New York!" 10 A. I was just -- I mean this is nothing to do with the bid. 11 I'd heard on the Today programme that he had been 12 promoted to a post in New York and he was going to be 13 moving from London to New York, so I was just sending 14 him a congratulations text. 15 Q. But Ofcom was heavily involved in the bid at this stage, 16 wasn't it? 17 A. I was pulling his leg about the fact that being in 18 New York he would be a long way away from his much-hated 19 Ofcom, the same Ofcom that I'd insisted on involving in 20 the whole undertakings greatly against his will. 21 Q. So it's slightly tongue in cheek? 22 A. I think that's a fair assessment of the message. 23 Q. And then he emails or texts you back instantaneously: 24 "Thanks Jeremy -- sadly I fear they won't see the 25 back of me that easily! Hopefully we can move our other 35 1 business forward soon so we can catch up properly." 2 So the reference to "moving our other business 3 forward", that's still the BSkyB business, isn't it? 4 A. Yes. 5 Q. Were you at all uncomfortable communicating with 6 Mr James Murdoch in this way? 7 A. Well, I think, you know, as we look at the whole way 8 quasi-judicial processes are run and as we look at the 9 lessons that we learned from what happened between 10 Adam Smith and Mr Michel, I think there are probably 11 things we would learn, and my interpretation of my 12 quasi-judicial role was that a courteous reply to a text 13 message was fine. I think probably now I wouldn't take 14 the same view, and I would just avoid all text messages, 15 but that was my assessment, that it had absolutely no 16 impact on the process. It was not material to the 17 decisions I took, and it was just me being courteous. 18 Q. There are some limited communications next between you 19 and Mr Llewellyn at Number 10, 08157. We're on 3 March. 20 You offer a briefing at 7.21 to the Prime Minister or 21 the DPM. Mr Llewellyn says: 22 "Possibly yes." 23 And then at 18.20 that evening: 24 "Am I officially allowed to talk to my boss now? :-) 25 seriously think we r thru worst, broadcast fine although 36 1 Mail and [Telegraph] will be horrible." 2 And he says: 3 "Yes you are! Well done today. Give me a call 4 tomorrow -- time we had a catch up." 5 "Not a single PMQ on Murdoch -- I declare victory!" 6 "Well done!" 7 Are you possible indicating there a degree of 8 favouritism towards Mr Murdoch or not? 9 A. No, not at all. The context of the first text to 10 Mr Llewellyn was that the Prime Minister's office, which 11 Mr Llewellyn runs, had made strenuous efforts from the 12 moment that I was made responsible for the 13 quasi-judicial process to avoid all one-on-one contact 14 between me and the Prime Minister, so I would have 15 obviously met him at Cabinet meetings but I didn't have 16 any one-on-one meetings with him about any issue at all 17 during the period of the bid because they were 18 absolutely clear it was his decision. 19 They even cancelled a dinner that was organised 20 between the Prime Minister and his wife and me and my 21 wife just because they wanted not to have any 22 opportunity when people could have said that the 23 Prime Minister had privately discussed the bid with me, 24 and so I was just saying -- because 3 March, it wasn't 25 the conclusion of the process, and in fact, I think 37 1 looking back I suppose I didn't know quite how long the 2 process was going to last. I was expecting it to finish 3 more quickly than it did at that point, so I was sort of 4 saying are we getting to the point where I'm allowed to 5 talk to the Prime Minister? 6 And then when it came to Prime Minister's Questions, 7 the reason I made that comment was very simple. 8 I thought that if there had been any questions about the 9 probity of the process, any possible argument that the 10 Labour Party could make that the process had not been 11 fairly handled, it would be sure to be raised in 12 Prime Minister's Questions by Ed Miliband, and because 13 I had, of my own volition, sought independent advice 14 from Ofcom and the OFT that I didn't have to do, I think 15 the world knew then that the decision had been 16 completely impartial, completely fair and completely 17 unbiased, and the fact that the Labour Party chose not 18 to raise it in Prime Minister's Questions I thought was 19 significant evidence that we had persuaded the world 20 that actually the process had been handled totally 21 fairly, as it had been. 22 Q. Thank you. The next page there's only one text, 08158. 23 This is between you and your private secretary, and 24 relates to 21 January 2011, so we're back in time. 25 The reference to "News uncomfortable", that's 38 1 obviously News Corp uncomfortable, "but understand. 2 They are working over weekend to get us final UIL on 3 Monday. Adam suggests we take stock on Monday after 4 receipt and make final decision with lawyers." 5 Is that not an indication that Mr Smith knew that 6 News was uncomfortable and that that message is being 7 communicated back to you? 8 A. It's quite possible, yes. I don't know. It's -- 9 I suppose it's an indication, though, that Mr Smith was 10 communicating information that he was getting from 11 News Corp to officials in the process. It wasn't just 12 to me. He was just telling everyone. He was really 13 acting as an official. He was just saying, "Look this 14 is what they're saying", and that might be the case. 15 Q. But of course he wasn't an official, he was a special 16 adviser, wasn't he? That's the difference. 17 A. Well, no. Special advisers are civil servants, and he 18 was one of my officials as a special adviser and he had 19 an official part in the process. 20 Q. The final document to look at, but it doesn't require 21 any analysis, is 08160, which is messages passing 22 between Mr Zeff and Mr Michel. You mentioned that 23 before lunch, didn't you, and this is the evidence of 24 those messages. There are probably about 30 of them on 25 this page and the next page and they speak for 39 1 themselves. 2 I think that completes the picture of this bundle of 3 text messages. Can we look now at KRM 18. May I ask 4 you first of all whether you've had the chance to study 5 this bundle, which contains 161 or 163 pages of emails 6 passing between Mr Michel, primarily, and Mr Murdoch and 7 his team? 8 A. More times than I would care to mention, Mr Jay. 9 Q. We're not going to look at all of them, Mr Hunt, for 10 obvious reasons. We've studied them with care, and of 11 course it is well understood that issues arise -- 12 I don't put it any differently than that -- as to 13 whether some, most or even all of these messages are 14 a misrepresentation of an anterior text message or 15 conversation that Mr Smith might have had with 16 Mr Michel, so there's a question of fact, as it were, 17 which would need to be resolved before we get any 18 further. 19 But can we just look at some of them and just see 20 where we are on a number of points. This is the PROP 21 file starting at page 01687. 22 The first point, if you could get your bearings on 23 this one, is two-thirds of the way down there's 24 reference to you seeing Mr Richards or Ed Richards, 25 pardon me, described here, today. We know from the 40 1 documents we saw before lunch that indeed you did see 2 Mr Richards today. 3 A. Correct. 4 Q. But it's unlikely, given the time, that the minutes had 5 been available. And he sets out, or rather Michel sets 6 out what you apparently told Mr Richards. Would you 7 agree that this is broadly speaking a correct summary of 8 what you told Mr Richards? 9 A. Broadly speaking, but actually it's exactly the same as 10 I told News Corp themselves I was going to do at the 11 meeting I had with them on 6 January. 12 Q. Although this is sort of fresh evidence of a discussion 13 which plainly hadn't taken place on 6 January but is an 14 update really on the actual discussion you had that day, 15 would you agree? 16 A. I suppose what I'm saying is I don't think there's much 17 substance there that they didn't know, because we don't 18 know what actually happened in the conversations, but 19 I'm very persuaded by what Mr Smith said that quite 20 a lot of these conversations might have been built on 21 Mr Michel offering something and Mr Smith just 22 acknowledging it, so Mr Michel might have said, you 23 know, were those areas raised that were mentioned and 24 Mr Smith may well have said yes. 25 Q. If you cast your eye three lines above "he saw 41 1 Ed Richards today," you'll see: 2 "He understands the cost of a CC referral and the 3 potential damage for the bid. Asked me if we could 4 mention it again in our document." 5 First of all, is that a fair reflection of what your 6 thinking was? 7 A. No. What News Corp had said to us at the meeting on 8 6 January was that a Competition Commission referral 9 would be very expensive. In fact, they'd basically said 10 that they would probably not go ahead with the deal, so 11 they'd said that. So I could well imagine a situation 12 where Mr Michel said, "Does Jeremy Hunt understand what 13 was said?" and Adam Smith could well have said, "Yes". 14 I don't think that Adam Smith asked for anything to 15 be included in any document or anything like that, but 16 that's obviously for Mr Smith to respond to. 17 Q. Although there's no reason why he wouldn't have said 18 that, is there? 19 A. Well, you've asked him what he thought about this email 20 and he says that he doesn't recognise the language. 21 Q. Yes, but we're trying to test whether the language 22 chimes with other evidence, if you follow me, Mr Hunt. 23 I mean, I think we understand the first bit: 24 "He understands the cost of a CC referral and the 25 potential damage for the bid." 42 1 That can simply be interpreted as he, that's you, 2 understands the point that's been made on 6 January 2011 3 about the cost of a CC referral and the potential damage 4 for the bid. In other words, you'd listened to what you 5 were told and you understood it. So, as it were it 6 doesn't take us very much further. But after the colon: 7 "Asked me if we could mention it again in our 8 document." 9 That's not implausible, is it? 10 A. I may well have said at the meeting on 6 January, 11 because you remember the context, the meeting of 12 6 January we were giving the Ofcom report to News Corp, 13 and then we said we would -- we told them we were minded 14 to refer to the CC and then we invited them to make 15 submissions back to us with their response to the Ofcom 16 document, so I could well imagine that I said, "If you 17 have any points, put them in your submissions that you 18 send back to me." 19 Q. Three lines from the bottom: 20 "He made again a plea to try to find as many legal 21 errors as we can in the Ofcom report and propose some 22 strong and 'impactful' remedies." 23 Is the adjective "impactful" one which would 24 naturally fall from your lips, Mr Hunt? 25 A. No. 43 1 Q. It's not a word you would tend to or like to use? 2 A. No. 3 LORD JUSTICE LEVESON: Is it a word? 4 MR JAY: It's a rather bad word, I think, but I have heard 5 it used. Not one I would use, it's fair to say. 6 What about the reference to a plea to "try to find 7 as many legal errors as we can"? Had anybody said 8 anything along those lines in your hearing? 9 A. No. I mean, Mr Smith says he doesn't recognise that 10 language, and, you know, what we would have said to them 11 is, "If you have any points, put it in your document, 12 which is your response to the Ofcom report, which we 13 will consider." 14 I think they said to us, incidentally, that they 15 believed there were some legal problems with the 16 assumptions that Ofcom had made. Their hope at that 17 stage was to avoid a CC referral by telling us that 18 there were legal flaws in the Ofcom report, which would 19 mean that I should ignore the Ofcom report and wave the 20 bid through, and I rejected that advice. 21 Q. You're clear then that -- I suppose the most damaging 22 line, if that's the way to put it, in this email is, "He 23 made again a plea to try to find as many legal errors as 24 we can"; you're clear that that does not emanate from 25 you? 44 1 A. We know the conversation is with Mr Smith and Mr Smith 2 says it doesn't emanate from him, so it certainly 3 doesn't emanate from me. 4 Q. Thank you. 01692. This is an email timed at 8.59 in 5 the morning on Sunday, 23 January 2011, and the previous 6 evening there had been a 17-minute telephone 7 conversation between Mr Michel and Mr Smith. Are you 8 surprised that Mr Smith was working on your behalf so 9 early on a Sunday morning? 10 A. I'm sorry for him, actually, because I think that he was 11 getting this incredible volume of contact from News Corp 12 and he's a very helpful, courteous person, so I would 13 imagine it was the last thing that he wanted to do, to 14 be dealing with this at the weekend, and I didn't have 15 any idea about this until I saw these documents. 16 Q. I suppose it might be said that the greater the volume 17 of contact, arguably the more extraordinary the contact, 18 the more likely it is that he'd communicated the fact 19 that there had been such an amount of contact with you. 20 Are you sure that he didn't, Mr Hunt? 21 A. He didn't, and I was totally shocked when I discovered 22 the level of that contact. I think it does explain why 23 sometimes he slipped into inappropriate language. 24 Q. So are you saying that we shouldn't necessarily read all 25 of this as exaggeration by Mr Michel; some of it might 45 1 reflect inappropriate language by Mr Smith, is that it? 2 A. I don't think we should speculate on -- these are -- 3 this is a conversation between two other people. We 4 know there's an element of exaggeration. We know there 5 are elements of truth in what is stated in these. But 6 the extent to which there is truth and the extent to 7 which there is exaggeration is, I think, a very 8 difficult thing to do. 9 Q. Would you or did you use language like "very substantial 10 UIL" or "strong UIL", that is to say privately to 11 Mr Smith? 12 A. I think I would have said that this is a serious UIL. 13 I mean, for BSkyB to be saying that they were going to 14 take Sky News out of the whole deal, the only news 15 organisation that they have, when I'm making a decision 16 about news plurality, so this is a UIL which clearly 17 needs to be seriously considered. 18 But I put a lock on this process, which was that 19 I was getting independent advice from Ofcom and the OFT, 20 so I was going to wait until I heard from them before 21 I made my decision. 22 Q. I'm sure the final decision had to await the final 23 attention of legal and expert advice, but it's whether 24 he's correctly reporting to Mr Michel the expression by 25 you of a provisional view. Do you see that, Mr Hunt? 46 1 Might you have said "strong UIL" for example? 2 A. I think if I'd said anything along those lines, it would 3 be, "Looks on the surface like it might be a strong UIL 4 but we're going to go through a process now and Ofcom 5 and the OFT are going to look at it and then we'll hear 6 their view and take a final decision." 7 Q. So "looks on the surface like a strong UIL" might have 8 been interpreted by Mr Smith as "strong UIL", is that 9 a possibility? 10 A. Well, I think we're sort of getting into a game of 11 trying to predict how Chinese whispers happen when 12 I don't know if I even said those words, so I don't 13 think I can really predict on the basis of not even 14 knowing -- I'm just giving you an indication of what 15 I might have said at the time. 16 Q. We know what you wouldn't have said. You wouldn't have 17 used the word "impactful" because that was -- 18 LORD JUSTICE LEVESON: Well, come on, Mr Jay. 19 MR JAY: Okay. 20 What about "it's almost game over for the 21 opposition", would you have used language like that? 22 A. No, absolutely not. 23 Q. You never use that turn of phrase? 24 A. Well, certainly not in the context of the BSkyB bid. 25 Q. Later on: 47 1 "He very specifically said that he was keen to get 2 to the same outcome and wanted JRM to understand he 3 needs to build some political cover on the process." 4 Was that your private state of mind? 5 A. Not at all. How could referring these undertakings to 6 Ofcom and the OFT possibly be political cover? Because 7 I would have absolutely no idea what they were going to 8 say. They were independent regulators. They could have 9 come back to me and said, "Actually, these UILs do not 10 satisfy our plurality concerns." 11 Q. Wasn't it your assessment though that one way or 12 another -- and this may have been the advice you were 13 getting -- that this would be resolved by UILs which 14 would be negotiated and ultimately approved by the 15 regulators? 16 A. Well, I didn't know whether it would be -- whether there 17 would be a resolution. I didn't know whether the UILs 18 were going to be knocked into a shape which satisfied 19 the regulators and was commercially acceptable to 20 News Corp. So what I knew was that if there was going 21 to be a solution, it would have to be because there was 22 a version of the deal that satisfied the plurality 23 concerns of Ofcom and was commercially and financially 24 viable as far as the OFT were concerned. 25 Q. And then towards the end it says: 48 1 "He said we would get there at the end and he shared 2 our objectives." 3 Is that something which you might have said 4 privately to Mr Smith? 5 A. Not at all. I didn't share their objectives. My 6 objective was to see whether a version of this bid could 7 satisfy media plurality concerns, and if it could, 8 I would approve the bid. If it couldn't, I would refer 9 it to the Competition Commission. 10 Q. So your position is, on any view, what we see here does 11 not reflect your opinion; is that right? 12 A. Correct. 13 Q. Okay. 01704. Do you have this one: 14 "JH just said there was plenty of support for the 15 remedy in the statement -- 'potential to mitigate 16 problems' ... he can't say they are too brilliant 17 otherwise people will call for them to be published." 18 Now, in this case, as you know, there is a text 19 message which immediately precedes this which is on very 20 similar lines. Are you aware of that? 21 A. No, I don't know what the text message is, I'm afraid. 22 Q. Just bear with me while I produce the document. It's in 23 Mr Michel's -- 24 LORD JUSTICE LEVESON: It's a text message from Mr Smith to 25 Mr Michel. 49 1 MR JAY: Yes, on 25 January. This is one of the ones which 2 were repeated verbatim. Yes. Text message at 8.03. 3 The message from Mr Smith to Mr Michel: 4 "There's plenty -- potential to mitigate problems. 5 We can't say they're too brilliant otherwise people will 6 call for them to be published. Will check on meeting." 7 So this is passed on virtually verbatim. Do you 8 think you might have told Mr Smith something along those 9 lines? 10 A. No. Mr Smith, I think, said that this was a sort of -- 11 this was an attempt to pacify Mr Michel. I think, as 12 I see it, because I didn't know about these discussions 13 between Mr Smith and Mr Michel, so I'm just inferring 14 what I can from the documents that we've now seen, but 15 it appears that News Corp were putting Mr Smith under 16 pressure to say that these UILs were brilliant in the 17 statement on 25 January and I wasn't prepared to say 18 that because actually what we were doing was considering 19 them but then we were going to wait and see what 20 independent regulators said before we made a decision, 21 and I think that Mr Smith was just trying to find 22 a reason why we weren't prepared to change that 23 language, and, you know, as he said, he probably didn't 24 choose his words particularly carefully. 25 Q. In relation to this email, the possibility of 50 1 exaggeration is ruled out of account because there's the 2 antecedent text message, so there are two possibilities. 3 Either Mr Smith for whatever reason has said something 4 possibly out of a good motive, as you've ventured to 5 suggest, or it reflects some things that you told 6 Mr Smith which Mr Smith has passed on to Mr Michel. Why 7 are we ruling out the second possibility, Mr Hunt? 8 A. Because I didn't tell Mr Smith that. I don't think 9 I would have even had a conversation on this level of 10 detail with Mr Smith. 11 Q. Okay. Move on then to 01707. 25 January. You see the 12 last line: 13 "JH believes we are in a good place tonight." 14 Immediately preceding -- 15 LORD JUSTICE LEVESON: We have to keep remembering that JH 16 does not mean Mr Hunt. 17 MR JAY: The text message was, Mr Michel to Mr Smith: 18 "I think we're in a good place tonight, no?" 19 And his reply is: 20 "I agree. Coverage looks okay. Let's look again in 21 the morning though." 22 You see the last sentence of the email: 23 "Let's see what the morning's coverage brings." 24 That's a reflection of the text message. Did you 25 express the view that at least as regards the coverage 51 1 you were in a good place? 2 A. I can't remember if I expressed that view or not. But 3 I would have wanted the coverage to be fair. You know, 4 in particular, this is one of the differences I suppose 5 between a quasi-judicial process and a judicial process. 6 I'm still a Secretary of State, accountable to 7 Parliament. I have to defend my decisions in the media 8 and it was a particular challenge in terms of media 9 coverage, which was to try and get the media to 10 understand that I could only decide on grounds of media 11 plurality and not on grounds of competition, and we 12 actually did get there in the end with the media, and it 13 took a lot of engagement to do that, but that was a very 14 big problem that we had in the early days. 15 LORD JUSTICE LEVESON: This exchange reveals something 16 rather interesting, doesn't it, because the text was 17 Mr Michel saying to Mr Smith, "I think we're in a good 18 place tonight", which might be read to mean "News Corp 19 are in a good place tonight", Mr Smith says "I agree", 20 then that's translated to Mr Murdoch as you or Mr Smith 21 believing that "we", which could equally mean the joint 22 combination of the two of you, are in a good place 23 tonight. 24 A. (Nods head). 25 LORD JUSTICE LEVESON: One has to be a bit careful about 52 1 translating from one to the other, hasn't one? 2 A. Mm. 3 MR JAY: I should have asked you, Mr Hunt, about an earlier 4 email that day at 01705, sorry to go back in time: 5 "Just had a chat with JH re statement before he went 6 to Parliament, to get further reasons why not stronger 7 support of the remedy. 8 "He said he had no legal wriggle room in a statement 9 to Parliament; that it's all exactly as he said 10 yesterday and he only needs some space to prevent any 11 accusation of deal-making at this stage." 12 The text messages which were within half an hour of 13 this email, Mr Smith to Mr Michel: 14 "Other than what Jeremy and I have told you, we have 15 no legal wriggle room in a statement to Parliament." 16 Mr Michel then texts back: 17 "Will do my best to get James on board." 18 And then Mr Smith: 19 "It's all exactly as we said. We just need space." 20 So apart from the words "to prevent any accusation 21 of deal-making at this stage", which may be an 22 elaboration, it may be an exaggeration, it may be an 23 influence, the rest is vouched by the earlier text 24 message. Do you see that? 25 A. Yes. 53 1 Q. Do you think you might have used the term in this 2 context "we just need space"? 3 A. No. 4 Q. Why not? 5 A. Because I was running a process and my interest in this 6 was that the process should be transparent and fair, and 7 we would need to take as long as it took. I didn't want 8 to send a signal to everyone involved in the process 9 that they could drag their feet over this. I thought, 10 you know, this was something we needed to conclude as 11 briskly as we could. But, you know, consultations are 12 extremely important parts of the process. 13 To me -- may I offer an observation, Mr Jay, about 14 a number of these things? I mean, to me, the way 15 I interpret this exchange is that Mr Smith is trying to 16 say things to get Mr Michel off his back, and he's 17 basically saying -- you know, he used the phrase "no 18 legal wriggle room". Quite an easy way to get someone 19 off your back if they're pressuring you is to say, "I'm 20 not allowed to by law". Sort of difficult to argue 21 with. I don't know if that's what Mr Smith was doing, 22 but that seems to me to be a reasonable interpretation. 23 But what Mr Smith hasn't done, as far as I can tell, 24 and I've looked as hard as I can through KRM 18 and his 25 text messages, is ever go back and agitate for the thing 54 1 that Fred Michel is putting him under pressure to 2 achieve. So, you know, when Fred Michel complains about 3 the role of Ofcom, Mr Smith doesn't come to me or to 4 anyone else in DCMS and say, "We've got to rethink the 5 role of Ofcom"; he just bats it back. 6 When he -- at a later stage, I think it was in June, 7 Mr Michel actually made a threat that News Corp would 8 walk away from the deal. He said, "This is the bottom 9 line", or something, "We're not going to give any more 10 on these UILs", and Mr Smith doesn't even contact me to 11 tell me that he's heard what you might consider to be 12 quite a significant piece of news. He just sends a text 13 straight back saying, "That's up to you and it won't 14 affect Jeremy's thinking." 15 I think that the picture that emerges to me is of 16 someone trying very hard to keep a stakeholder on board 17 with a process under huge pressure and occasionally 18 lapsing into inappropriate language, but not someone who 19 is giving them any substantive help in any way at all 20 that is influencing the impartiality of the 21 decision-making process. 22 Q. Just the terminology, though. "We just need space". 23 Are you putting that into the category of inappropriate 24 language or not? 25 A. Did that appear in the text? 55 1 Q. Yes. 2 A. It did. I think I would put that in the category of 3 inappropriate language, yes, because I think you could 4 interpret that as a suggestion that we're trying to do 5 what you want to do. 6 LORD JUSTICE LEVESON: We'll just take another few minutes, 7 Mr Hunt. Thank you very much. 8 (3.26 pm) 9 (A short break) 10 (3.35 pm) 11 LORD JUSTICE LEVESON: Just one moment, Mr Jay. 12 I'm told, Mr White, that my words at 2 o'clock meant 13 that Linklaters, Allen & Overy and News Corp all came 14 over to the Royal Courts of Justice. I'm very grateful 15 to them for the speed with which they responded to what 16 I said. 17 It appears that there may not be as much concern as 18 originally thought. That's what I'm told. I hope 19 you've received the same information. I am still very 20 keen to ensure that I do fulfil the undertaking I gave 21 to be able to publish today, and if there is anything 22 that I can do to make that easier, let me know. I trust 23 that you'll be able to provide appropriate assurances to 24 Linklaters in the meantime. 25 MR WHITE: We know that the process is moving forward as 56 1 quickly as it can. 2 LORD JUSTICE LEVESON: Thank you. We'll review it at the 3 end of the day. 4 MR JAY: We were on the turn of phrase "we just need space", 5 Mr Hunt. You say that's inappropriate. Why do you say 6 that that doesn't represent your view? 7 A. Because my view wasn't about time apart from the fact 8 that I just wanted to -- I wanted the thing to proceed 9 at a brisk pace, but I think the phrase "we just need 10 space" sort of has an implicit suggestion of wanting to 11 get to the same destination and that wasn't my view. 12 Q. But didn't you want in one sense to arrive at the same 13 ultimate destination, which was in one way or another 14 a successful bid with appropriate UILs? 15 A. I would have been happy to approve the bid if we could 16 have found a version of it that satisfied plurality 17 concerns, yes. My default position is not that we 18 should block bids. But I would not have approved it if 19 we hadn't been able to find a way of satisfying those 20 plurality concerns. 21 Q. In terms of Mr Smith trying to understand your own 22 personal thinking on the issue, which after all was in 23 part his role, wasn't it? 24 A. I don't think it was his role in this situation. 25 Q. But generally it was his role, wasn't it? 57 1 A. Well, he was important because he did understand my 2 thinking, yes. 3 Q. But we know what your own personal thinking was from, 4 for example, the memorandum of 19 November 2010 and the 5 text messages around 21 December 2010. So Mr Smith 6 wasn't going way off-piste, was he? 7 A. We knew what my thinking was up until the point when 8 I took responsibility for the bid, but when I took 9 responsibility for the bid, I didn't just set aside 10 those views but I actually had a much higher order job 11 to do, which was to make sure that our democracy was 12 safe. It was a much, much more fundamental task. 13 Q. This goes back to the point, I suppose, that your mind 14 had a series of Chinese walls in it by this point. You 15 of course had got to discharge quasi-judicial functions 16 according to the law, you were putting to one side of 17 your mind your private views, but in terms of what 18 Mr Smith was trying to do, he might find it difficult to 19 differentiate between those two compartments of your 20 mind, would you accept that? 21 A. No, because I don't think my mind had different 22 compartments. I believed that I had a different job to 23 do and it was an important job and it was about making 24 a very fundamental decision that made sure that our 25 democracy can function properly, and that was my 58 1 absolute priority and I think Mr Smith knew that was my 2 priority. 3 Q. I'm not sure you're telling us that you were successful, 4 or could you logically erase from your mind all the 5 thinking which you brought on this issue which we see 6 culminating in the text message at 12.57, I think, on 7 21 December? It's impossible to wash one's mind clear 8 of anterior thoughts, is it? 9 A. No. You know, from a policy point of view, the 10 arguments I was making in my memo to the Prime Minister 11 were what I believed, but I now had a much bigger job 12 and a much bigger concern. I knew that I mustn't 13 consider those policy considerations, but actually 14 I didn't want to consider those policy considerations 15 because media plurality, as this Inquiry has discussed 16 many times, is so fundamentally important. The idea 17 that no one person should have too much control over -- 18 no one person or no one company should have too much 19 control over the media we consume is fundamentally 20 incredibly important. 21 Q. I think we agreed in the morning that at no stage did 22 you sit down with Mr Smith and tell him expressly, "You 23 have to be extremely careful here in your dealings with 24 any third party, in particular News Corporation, because 25 I, the Secretary of State, am now occupying a different 59 1 role, a quasi-judicial function, and I must exclude from 2 consideration any private view I might have told you 3 previously"? That never happened, did it? 4 A. Well, it never happened if you're saying did we have 5 a specific conversation with Adam Smith, but we had 6 discussions that we were all part of in which the way 7 a quasi-judicial process worked and the things that 8 I could consider and the things that I couldn't consider 9 were discussed in front of all of us. I actually 10 believe Adam Smith knew that too. I think he understood 11 that. I don't think that he was in his way of 12 thinking -- he was really trying to deal with 13 a difficult stakeholder. He wasn't in any way trying to 14 give them advantage, and I don't believe that he did 15 give them substantive advantage. 16 Q. You'll recall Mr Smith's witness statement where he said 17 something rather different, namely that he did not 18 understand his role to be any different from the role he 19 would ordinarily undertake in relation to any other 20 policy decisions. It's paragraph 51 of his witness 21 statement. 22 A. I don't, I'm afraid, have his witness statement, but 23 I can remember the concept. 24 Q. It's page 09042. What he told us in his statement and 25 he confirmed it: 60 1 "As I had not received any specific instruction as 2 to how I should deal with the contact I received from 3 News Corp, I approached the matter in the same way as 4 I did in other projects with which I'd been involved." 5 In answer to my questions, he confirmed that that 6 meant that he followed his usual practice in relation to 7 policy issues and did not regard this function as 8 possessing any special and unusual features. You follow 9 that, Mr Hunt? 10 A. Yes, I do. 11 Q. Didn't you think that there was at least this risk, that 12 although the legal advice which Mr Smith may well have 13 heard related to you in terms of the quasi-judicial 14 functions you were exercising, it wouldn't automatically 15 be obvious to your special adviser, even acting as your 16 alter ego, that he should follow exactly the same ground 17 rules? Do you see that? 18 A. I think it would have been obvious, but I also think 19 that we could have spelt it out, and looking back, you 20 know, when something very sad has happened and someone 21 very capable and decent has lost their job, you always 22 ask yourself what you could have done better, and I wish 23 we had spelt out to him that he needed to be very 24 careful, to use appropriate language. I wish he had 25 told us about the pressure that he was under and the 61 1 barrage that he was getting and then we could have 2 perhaps warned him at that stage as well, and the 3 consequences were very unfortunate. 4 Q. We're in the somewhat unusual position then of a person 5 of obvious intellectual ability and some political 6 judgment, someone might say if you look at the text 7 messages he sent to you, simply misunderstanding what 8 all this was about, if paragraph 51 of his witness 9 statement is correct. Do you accept that? 10 A. I believe what happened was that he did understand his 11 responsibilities in the quasi-judicial process. I think 12 he broadly understood the importance of being free from 13 bias and being free from appearance of bias, but I just 14 think that the barrage that he was subject to, the 15 amount of contact that he had, ended up pushing him in 16 certain situations into language that was inappropriate, 17 and I think that's -- that is the core of the problem, 18 and I think we do need to think hard about how we 19 prevent that kind of thing happening in the future. 20 Q. Can I just understand saying something that was 21 inappropriate or words to that effect. It might have 22 been inappropriate in the sense that if he were 23 communicating a private thought of someone, he shouldn't 24 have communicated it at all, so it was inappropriate to 25 share it, or it might have been inappropriate in the 62 1 sense that it didn't in fact represent the private 2 thought of someone, so in other words it misrepresented 3 his master's voice, if I can put it in those terms. In 4 which sense are you using that phrase? 5 A. I'm using the phrase in the sense of language that 6 suggests that he shared News Corp's objectives in trying 7 the get the bid through. 8 Q. I'm not sure that correctly groups with the question 9 I put. The two possibilities are he shouldn't have 10 expressed a private view at all, or he shouldn't have 11 expressed the private view or a view in the way in which 12 he did because in fact he misrepresented your private 13 view. Do you see the difference? 14 A. Well, I'm not sure that he did ever misrepresent my 15 private view. We don't know from Mr Michel's emails how 16 much is fact and how much is fiction, so I don't know 17 that he -- whether he misread -- certainly if some of 18 the things he's alleged to have said were said, then he 19 would have been misrepresenting my thoughts, but we 20 don't know that he said them. 21 In terms of actually passing on my thoughts, I don't 22 think that when you actually look at the -- you know, 23 what Mr Michel suggests are great big insights into my 24 thinking, the evidence I've seen is that basically 25 Mr Smith was just repeating stuff that News Corporation 63 1 would have already known was my thinking from meetings 2 that I'd had and official contacts. 3 Q. But there's quite a lot of material here which there are 4 only two possibilities. Either it is your private 5 thinking or it is a misrepresentation of your private 6 thinking, because it's material which couldn't have been 7 derived from any other source. Would you agree with 8 that? 9 A. I'm happy to look at any of those and I can tell you 10 which it is. 11 Q. But in terms of Mr Smith's instincts and from your 12 knowledge of him, it was his job, insofar as he would be 13 speaking for you, to represent your thinking. It would 14 certainly not be his job to misrepresent it, would it? 15 A. It's certainly not his job to misrepresent my thinking, 16 but I don't think -- a special adviser has many roles. 17 They help you work out a difficult policy solution in an 18 area where you have a conundrum that you're trying to 19 resolve. Sometimes they go into a meeting where, as you 20 say, they're speaking for me. I would say that the best 21 example of that is probably internal meetings inside 22 DCMS, where he would sit in a meeting about local 23 television or broadband or one of our other policy areas 24 and the civil servants would be trying to better 25 understand what I meant when I'd had a meeting with them 64 1 that might have been quite a brief meeting and Adam 2 would explain it more. That would probably be a more 3 typical time that he would be speaking for me in the 4 terms that you suggest. 5 But in this bid, his role was to act as an official 6 point of contact for News Corp, to keep them informed 7 about the process, to reassure them that the process was 8 fair because of the circumstances that we'd had. That 9 was what -- that's what we thought his job was. 10 Q. I think the real point you're making, Mr Hunt, is that 11 he shouldn't have been expressing any private views at 12 all, isn't it? 13 A. Any of my private views? 14 Q. Or indeed any of his either? 15 A. Well, I think that part of the reason why his 16 conversations did lapse into inappropriate language -- 17 and we don't know the extent to which he expressed 18 private views because we just don't know what Mr Michel 19 said -- but if that happened, I think part of the reason 20 might be the volume of contact that he was subjected to. 21 LORD JUSTICE LEVESON: Could you tell me, Mr Smith had 22 worked for you for some years, including the period when 23 you were in opposition, and doubtless had been doing the 24 same sort of role advising you as an opposition 25 spokesman as he later took on advising you as 65 1 a minister. Would that have brought him into contact 2 with Mr Michel? 3 A. I think he may well have met Mr Michel in opposition. 4 I met Mr Michel in opposition. His roles were 5 different. I mean, he started working for me as 6 a Parliamentary researcher, which is sort of the bottom 7 of the tree in terms of jobs that people do working for 8 MPs, and then when I joined the Shadow Cabinet, he 9 became my chief of staff and he had a small team working 10 for him and his primary responsibilities there would 11 have been policy developments for the manifesto. And 12 then when I moved into office, he then came as my 13 special adviser, where his role changed again, but each 14 time when he had as it were a promotion, he showed 15 himself extremely able and capable -- 16 LORD JUSTICE LEVESON: No, that wasn't the point that I was 17 seeking to ask about. It was rather different. If he 18 had had a previous relationship, professional 19 relationship, with Mr Michel where the rules of the game 20 were perhaps somewhat different, I'm just wondering 21 whether it wasn't rather more difficult for him to step 22 out of the relationship that he had had with him prior 23 to your taking responsibility for this bid and adjust 24 for the differing nature of the relationship. It's 25 a question, it's not a statement. I'm asking. 66 1 A. I think it's a very valid question because I think that 2 one of the things that both he and I had to do in this 3 quasi-judicial situation, this is I think a situation 4 that you can get when any politician or politician's 5 assistant is, as it were, having to do a job in 6 a different way to the normal course of work, one of the 7 differences between what I had to do and perhaps what 8 you do, sir, is that I was adjudicating on a decision 9 where I had pre-existing relationships with the 10 individuals concerned and an expectation that there 11 would be relationships that would continue afterwards, 12 so I had to set all those considerations aside, and 13 I believe I did. 14 But it may have been that one of the factors that 15 made it easier for Mr Michel to suck Mr Smith into 16 a situation where he was using some inappropriate 17 language was partly because there was some pre-existing 18 relationship, which would have been less likely with 19 a civil servant, and that might be something that we 20 want to reflect on in terms of doing things in the 21 future. 22 LORD JUSTICE LEVESON: Well, I merely raise it for you to 23 comment upon it. Thank you. 24 MR JAY: May we look at another email, this is the Swan Lake 25 email. In fact, it's Black Swan, isn't it? 67 1 A. That's right. The mystery is resolved. 2 Q. 01717. 3 LORD JUSTICE LEVESON: Yes, well, I'm pleased we've done 4 that. 5 A. I just need to find the famous Swan Lake -- ah. 6 MR JAY: 01717. 7 A. Right, okay. Here we are. 8 Q. You'll remember the evidence about this. There were 9 a number of calls or conversations between Mr Smith and 10 Mr Michel that evening, I think five of them, but the 11 records show that Mr Smith called you at 19.03 hours and 12 spoke for 3 minutes, 23 seconds with you. And the email 13 is timed 7.24 in the evening. Can you remember anything 14 about that conversation out from Mr Smith to you? 15 A. I'm afraid I can't. I mean, he does call me quite 16 regularly, so there would have been numerous 17 conversations that happened at times when I wasn't in 18 the office, so I'm afraid I can't remember the 19 particular details. 20 Q. If I were to suggest to you it's likely to have been 21 about the BSkyB bid, would you agree with that? 22 A. I -- it's certainly possible. I can't say it's likely 23 because I just don't know what other issues -- we were, 24 you know, doing a lot of other different things as well 25 at the same time as the BSkyB bid which Adam would have 68 1 been involved in. 2 Q. But it comes amidst a number of calls, I said there were 3 five of them, that evening. The most sensible 4 inference, Mr Hunt, is that the discussion was along 5 similar lines as his other calls, namely what we see 6 here, namely the bid. Do you follow that? 7 A. I'm sorry, I'm not sure I do, Mr Jay. 8 Q. Okay. If the evidence shows that Mr Michel and Mr Smith 9 were speaking on a number of occasions about the bid, 10 and before the last of those occasions, which was just 11 after 8.00 in the evening, at 19.03 there's also a call 12 to you, can't we reasonably draw the deduction that the 13 subject matter of the call to you is going to be the 14 same as the calls Mr Michel and Mr Smith were enjoying 15 at about the same time? 16 A. I think we can deduce that it's possible, but I don't 17 think we can deduce that that was the case. There could 18 have been another reason that he called me. But 19 I agree, it's entirely possible. 20 Q. And you can't think of any other subject matter which 21 might have arisen at about this time, can you? 22 A. Not off the top of my head, but, you know, we would have 23 had lots of other issues happening at the same time. As 24 I say, I may have talked to him about the BSkyB bid. 25 I'm not trying to say that I didn't. I just don't know. 69 1 Q. Can I ask you about the language which is put in 2 inverted commas here about six lines down: 3 "We all know what Ofcom's intentions are and have 4 been from the start on this." 5 Did you say anything along those lines to Mr Smith? 6 A. No, and Mr Smith says that he didn't say anything along 7 those lines to Mr Michel. 8 Q. So even privately that's not the sort of view, is it, 9 that you would have expressed to Mr Smith? 10 A. No. And I would hardly, if I had had that view about 11 Ofcom, which I certainly don't have and certainly didn't 12 have, I would have hardly said to them, "I want you to 13 take an independent look at the UILs". I see them as 14 a highly professional independent regulator. 15 Q. Is it your evidence that what we read here is simply 16 something you don't recognise? 17 A. What I -- 18 Q. The core messages anyway? 19 A. The thing that I recognise in this is the fact that 20 News Corp had massive, massive suspicions about Ofcom, 21 and it's just absolutely no surprise to me at all that 22 they would -- I mean, as you know, we had the row with 23 News Corp on 20 January, where they strongly objected to 24 the idea that Ofcom should have any role in saying 25 whether the UILs addressed plurality concerns, and so 70 1 I imagine -- this isn't that long after that -- that 2 there's still huge frustration that Ofcom -- that they 3 thought that Ofcom were not going to address the issue 4 fairly, but I'm just speculating because I obviously 5 have no idea what was said in the conversation. 6 I suppose what I'm saying is I could imagine 7 Mr Michel downloading all his views about Ofcom and 8 trying to interpret the sort of odd grunt from Mr Smith 9 as being agreement with what he was saying. 10 Q. Okay, let's move on to another one, 01720, 11 February. 11 We know from the chronology we went through before 12 lunch that 11 February was indeed the date that you 13 received the reports from Ofcom and OFT. Do you recall 14 that, Mr Hunt? 15 A. Yes. 16 Q. But this appears to be some sort of advance preview, if 17 that isn't a tautology, of what those reports contain. 18 Both will recommend that he refers to CC, and that's 19 correct, it is what they both recommended, isn't it? 20 A. As I recall, they both said that they were broadly 21 satisfied with the UILs but they had some major 22 reservations and then they listed the major 23 reservations. 24 Q. And if those reservations were not met, and we can see 25 some of the reservations listed in the email, then there 71 1 would be a reference to the CC. 2 A. That's correct, yes. 3 Q. Had you in fact been given advance notice orally of what 4 the reports would contain? 5 A. I don't know if I had or not. It has to be said at this 6 stage of the process this was a pretty open -- under the 7 law, the negotiation was a negotiation between DCMS and 8 News Corp, but because I'd insisted on inserting this 9 double lock of Ofcom and the OFT into the process, they 10 were involved in these negotiations, but there was no 11 particular reason why there should be any secrecy about 12 anyone's positions. It was a general discussion between 13 News Corp, Ofcom, the OFT and DCMS, to see whether it 14 was possible to put the UILs into a position where they 15 satisfied plurality concerns. 16 Q. In this sort of situation, it's highly plausible, isn't 17 it, that you would be given advance notice of reports, 18 sort of a heads-up, in advance of receiving the formal 19 documents; that's right, isn't it? 20 A. Not necessarily. I had a number of other things that 21 I was doing as a Secretary of State at the time and 22 I could just as easily imagine my private secretary 23 bringing me in the actual letter and saying, "Here we've 24 got the letter from Ofcom and the OFT", but I may have 25 also been given a heads-up verbally as well, I don't 72 1 know. 2 Q. This is consistent with if you had been given the 3 heads-up verbally, and indeed it's sufficiently 4 consistent with what we know the reports to contain to 5 lead us to the conclusion that that's what happened in 6 this case. Would you accept that? 7 A. Well, this of course could be one of those situations 8 where we don't quite know what JH means. It could be 9 that Mr Smith knew a heads-up of what those reports 10 contained. I'm afraid I just don't know what it's 11 referring to here. 12 Q. And then five lines down a point is made which has been 13 made in previous emails: 14 "JH doesn't want this to go to the CC. He also said 15 his officials don't want this to go further as JH 16 believes it would kill the deal." 17 So it's at least the second time the point has been 18 made. Is it your evidence that it's therefore the 19 second time an error has been made as to what your 20 private thinking was? 21 A. It certainly wasn't my private thinking, but I think 22 there's a substantive point about this email, Mr Jay, if 23 I may point out, which is what I actually did, because 24 this is on 11 February, so we had discussions going on 25 about the UILs for two weeks or so, and there are 73 1 clearly some issues of difference, things that News Corp 2 are not prepared to concede, including the very 3 substantive one of whether James Murdoch continued to be 4 chairman of the spun-off Sky News. That was significant 5 because there was concern about media plurality, so 6 Ofcom and the OFT were saying that he should not be 7 allowed to be chairman. 8 And what I did when those issues bubbled to a head, 9 I thought we have to resolve them one way or the other, 10 and we were being given an indication in this email, 11 I guess, that News Corp were very unhappy with those. 12 I simply wrote to Mr Murdoch and I said, "You need to 13 back down on every substantive point within 24 hours", 14 so I think that indicates that I was not afraid of it 15 going to the CC, because if I had wanted to avoid it 16 going to the CC at all costs I would certainly not have 17 written a letter to Mr Murdoch saying, "We're not even 18 going to negotiate on this, I want you to back down on 19 every single point within 24 hours." 20 Q. Unless your assessment was, I suppose, that you knew he 21 would back down because he wanted the deal so much. 22 A. Well, I'm -- 23 Q. Was that it? 24 A. I don't think many people would assess a negotiation 25 with the Murdochs as the likely outcome being that they 74 1 would back down on every single point. 2 Q. We know from surrounding text messages which I've just 3 refreshed my memory about that the letters from Ofcom 4 and OFT didn't arrive that evening, and that Mr Smith 5 was waiting in the building to receive them, so he had 6 either received advance notice or you had received 7 advance notice. I don't think there are any other 8 possibilities. Do you see that? 9 A. If that's what it says, then that must be it. 10 Q. But you can't remember which it is; is that right? 11 A. I don't remember receiving advance notice of them. 12 Q. I think he stayed in the office until after 9 o'clock 13 waiting and they didn't eventually arrive that evening. 14 But there it is. 15 Can we move forward to 01744. This is the 3.25 in 16 the morning email, 3 March. It may be little turns on 17 this because you'll remember seeing the emails in the 18 file this morning which indicate that there was 19 discussion within the department as to whether News Corp 20 could be given advance notice, and your understanding 21 was that they could, and maybe a bit ahead of the game 22 Mr Smith is giving some form of advance notice to 23 Mr Michel, isn't he? 24 A. I'm not sure it's particularly ahead of the game. My 25 understanding is that you're allowed to let the 75 1 companies know well before, but this is at 3.25 in the 2 morning for an announcement that's going to be made at 3 7.30 the next morning, so it's not a great deal of 4 notice. 5 Q. So you feel on this occasion Mr Smith is in fact obeying 6 whatever instructions he was given; is that right? 7 A. Absolutely. 8 Q. Can I ask you about 01756. 31 March. It's really the 9 last point: 10 "He debriefed on his meeting with the media 11 coalition. In a nutshell: they looked miserable, were 12 making competition arguments and know they have lost the 13 battle." 14 Is that a fair assessment of where you were at 15 following that meeting? 16 A. No. That meeting was -- that was an important meeting 17 and we discussed some quite substantive points. We'd 18 taken on board a lot of things that Slaughter & May had 19 said in the process, which actually found their way into 20 the UILs in a very significant way. And so no, I think 21 the meeting was an important meeting. 22 Q. I'm not saying it wasn't an important meeting, I'm just 23 saying whether the email accurately captures the 24 demeanour of those who attended it apart from the 25 department's demeanour, in other words fairly 76 1 crestfallen. Is that accurate or not? 2 A. I don't remember them being crestfallen or not, 3 actually. I don't even -- I just have no memory of it 4 at all. 5 Q. You can't assist us then as to whether that does 6 represent the state of mind or at least the 7 manifestation of the state of mind of those with whom 8 you were speaking on that occasion; is that right? 9 A. I suppose I can assist you in the sense that that 10 clearly wasn't my thought. I don't have any 11 recollection of the emotional state of the people that 12 I had that meeting with, so I think it's unlikely that 13 I ever had much thought about that. 14 Q. On this occasion there are two possibilities. Either 15 Mr Michel is exaggerating or fabricating or Mr Smith is 16 going too far. Are we agreed about that? 17 A. Well, either -- it may be that Mr Smith made a flippant 18 comment about the media coalition and maybe he noticed 19 that they were looking miserable. Maybe they did look 20 a bit miserable. And maybe he passed that on. Or maybe 21 it's been invented by Mr Michel. 22 Q. Okay. 01778, 20 May. 23 A. Mr Michel did talk, I think, about saying things 24 occasionally to boost the morale inside News Corp, so 25 I guess this could be one of the comments that -- 77 1 Q. The boosting of morale, I think to be fair to him, 2 related to the period when Dr Cable was in the saddle. 3 My recollection is not is not that he was doing that 4 after 22 December 2010, but if that last statement is 5 wrong, I will doubtless be corrected. 6 A. I was pointing out that that is something that he has in 7 the past thought was something that he might want to do 8 in an email, but I'm speculating. I think it's the 9 wrong track to go down because we just don't know. 10 Q. I think his position is that the morale was low for good 11 reason under Dr Cable but much higher for a different 12 reason under you, if you follow me. Okay. 01778. 13 There is a text message which antedates this email. 14 We're on 20 May. Mr Smith to Mr Michel: 15 "It wasn't a speech", this relates to your remarks 16 to journalists. "It was one remark to journalists and 17 doesn't say anything different to what I've said to you. 18 Will take as long as it takes and we need to get it 19 right." 20 Pausing there, that's something you might have said, 21 are we agreed? 22 A. Yes. And that was my position. 23 Q. Mr Michel back to Mr Smith: 24 "You did tell me by 24 June." There is mention of 25 that date in an email I think of 13 May. "I might need 78 1 JRM to call JH. Let's discuss." 2 And then Mr Smith to Mr Michel: 3 "And that hasn't changed but we can't tell 4 journalists that, can we?" 5 So 24 June is the date which hasn't changed and 6 which journalists cannot be told about. Is that sort of 7 conversation one you believe you're likely to have had 8 with Mr Smith? 9 A. I don't believe I did have that conversation with 10 Mr Smith. I don't believe that was really the level of 11 detail that I would have been involved in. I think 12 the -- I didn't want not to have target dates when 13 things would be completed by, because I thought 14 otherwise the process could just drag on and on for 15 years and years, so I wanted people to go about their 16 analysis and negotiations briskly, but I also wanted it 17 to take as long as it took. 18 So I think what Mr Smith is saying is there's 19 a target date, but it's not one we can say publicly 20 because if we say it publicly and we miss it then we'll 21 be putting ourselves under formal pressure to meet 22 a date and that wouldn't be appropriate, so I think 23 that's what he's saying. 24 Q. If that is what he's saying, he would have been 25 reflecting your view; is that correct? 79 1 A. It would certainly be my view that we shouldn't publish 2 a target date when we're hoping to complete all the 3 negotiations by, yes, because it might take longer. 4 Q. And might you have as well had a conversation with 5 Mr Smith along the lines that any target date was one 6 which could not be shared with the press? 7 A. Well, it's self-evident. If all the parties in 8 a negotiation are aiming to conclude the negotiation by 9 a certain date and we say "Let's try and get it 10 completed by this date", because we don't want it to go 11 on forever and ever, but we would say we aren't going to 12 publish this date because then it becomes an immovable 13 deadline and actually the discussions may take longer. 14 And so that was, you know, I don't know if I actually 15 said it but it's I think self-evident. 16 Q. So if you did say it, you weren't saying anything which 17 was at all remarkable. That's what it amounts to, is 18 it? 19 A. Correct. 20 Q. 01781, 3 June. I don't think there's evidence of text 21 messages before this email but there's evidence of phone 22 calls which lasted -- for the last one at 13.23 hours 23 lasted 19 minutes and 26 seconds. He refers to a "clear 24 blame game going on regarding the delay between lawyers, 25 the department and Ofcom". Now, if there were a blame 80 1 game, that's something that would come to your 2 attention; is that right? 3 A. Yes. I don't particularly remember a blame game going 4 on. We're on 3 June now. 5 Q. 3 June. 6 A. Yes, so the consultation finished on 21 March, so we've 7 had a bit of March, the whole of April, the whole of 8 May, so we had 40,000 responses, mind you, to plough 9 through, so there was a lot of work to do. 10 LORD JUSTICE LEVESON: Were they 40,000 individual responses 11 or people signing petitions and that sort of thing? 12 A. I think there were a lot of responses that were exactly 13 the same in that, organised on the Internet, but it was 14 still -- you know, in terms of the number of 15 different -- I think Avaaz was responsible for nearly 16 40,000 alone, but there were still several hundred and 17 the several hundred that we had, some of them had very 18 substantive points. We had to go through every single 19 one of them to see and we did indeed find some 20 substantive points, such as the importance of making 21 sure that BSkyB continued to promote Sky News on its 22 other channels, which was what they currently do, as 23 a way of making sure that Sky News continued to get the 24 support that it needed to continue as an independent 25 entity, so quite important stuff came out of that 81 1 consultation. 2 Sorry, to get back to your point, I may well have 3 been frustrated at how long it was taking. 4 MR JAY: And given the delay and given human nature it's 5 possible that people were blaming one another perhaps 6 unfairly, do you accept that? 7 A. It's possible. I don't think I particularly got into 8 a sort of Spanish Inquisition about who's responsible 9 for the delay. I suspect that that is something that 10 was going on inside News Corp, from the tone of 11 Mr Michel's email. 12 Q. I'm sure it didn't reach that level of pain, Mr Hunt, 13 but it may be that you were getting quite impatient, 14 which is what the email says. Is that possible? 15 A. It's possible, yes. I'd say it's actually probably 16 quite likely that I was getting impatient at that stage 17 because it had been going on for a long time. 18 Q. Indeed some of the evidence we were looking at before 19 lunch in the emails indicates that overall people were 20 getting concerned by the delay within the department 21 without necessarily allocating blame for it. 22 What about the third point, though, that "he" -- 23 it's the same point always on the pronoun "he", who is 24 the "he"? 25 "He is politically very keen to get this done as 82 1 quickly as possible and understands the potential impact 2 this will have on the share price." 3 In political terms that was your thinking, wasn't 4 it? 5 A. No. I can't think of a political reason why I would 6 want to get the deal done quickly. I mean, obviously 7 I knew my advice that I shouldn't have political reasons 8 for doing anything in a quasi-judicial process, but, you 9 know, I think that because this was such a controversial 10 deal, the politics were actually quite similar to the 11 legal, which is that the only thing to do was to be 12 scrupulously impartial and so getting something done 13 more quickly than it should be done wouldn't have been 14 appropriate. 15 Q. I'm not sure that that's the message from paragraph 3, 16 that for all sorts of reasons the process had to follow 17 its course, otherwise you faced risk of judicial review. 18 Can we agree about that? 19 A. Yes. The process had to be legally robust, but the 20 reason that it was taking so long was because of the 21 involvement of Ofcom and the OFT and that wasn't 22 required by statute, so we could have had a much, much 23 shorter process if I had just decided to negotiate the 24 UILs myself directly with Mr Murdoch, and I chose not to 25 do that and that may indeed have been the reason why the 83 1 deal failed in the end, because the whole thing took so 2 long and by the time -- you know, by that time the phone 3 hacking allegations had emerged in much greater number. 4 Q. That was a supervening event which you couldn't 5 necessarily anticipate, but it's possible, though, to 6 imagine two parallel processes. One, the deal must take 7 as long as it takes to safeguard the department from the 8 possibility of judicial review and therefore there's no 9 choice but to go down this road and through all these 10 legal hoops. At the same time you could be thinking to 11 yourself and telling Mr Smith privately: politically we 12 want this to be done as quickly as possible, consistent 13 with the first and primary objective, and we understand 14 that the longer the delay the greater the impact on the 15 share price. Those aren't two inconsistent 16 propositions, are they? 17 A. With respect, I think they're both wrong. I can't see 18 what my political motive would be. This is a deal that 19 was incredibly unpopular with the whole of the rest of 20 the media, so politically it was an incredibly unpopular 21 thing. You talked about this as a hot potato in other 22 hearings; it certainly was. So I don't see what the 23 political motive would be to get it done quickly. 24 In terms of due process, of course we wanted to have 25 a legally robust process, but my concern was not that, 84 1 because I don't think that we needed to involve Ofcom 2 and the OFT to have a legally robust process. My 3 concern was that the public should be reassured that 4 this had been approached in an impartial way, and that 5 meant involving the OFT and Ofcom in a very substantive 6 way, a much more substantive way than was required by 7 the enterprise act, and that did indeed mean that it 8 needed to take as long as it took. 9 Q. But the reference to "politically", surely that harks 10 back to the memorandum of 19 November 2010, that it 11 chimed with you and your party's perception of what was 12 in policy terms desirable for the United Kingdom and it 13 chimed, at least in the first draft of the memorandum, 14 with the political objectives of your party. That's the 15 sense in which you were using the term here -- or rather 16 that's the sense in which we read it here. Would you 17 agree with that? 18 A. No. I certainly agree that I had those policy views in 19 the memorandum of 19 November, but, as I said, the 20 politics were complex -- to say they were complex is 21 a big understatement. 22 You had two Conservative-supporting newspaper groups 23 bitterly and passionately against this deal and one 24 Conservative-supporting newspaper group strongly in 25 favour of this deal, so there wouldn't have been 85 1 a political reason to want this deal to go ahead. 2 Q. It may turn on how you define "politically" and whether 3 it's short term or long term or whether you limit it to 4 what different print titles were saying at particular 5 times, but certainly in political terms your party was 6 generally sympathetic to deals of this sort and this 7 particular deal. Can we agree about that? 8 A. No. I think -- in political terms, the politics are as 9 I've described. If I may say, Mr Jay, I don't think 10 Mr Smith even confirmed that he used the word 11 "politically". I'd be very, very surprised if he did 12 use the word "politically". It may well be that 13 Mr Michel believed that we might have had a political 14 motive, which we didn't have, and he was putting that 15 into his email, but I'd be just very surprised indeed if 16 Mr Smith used that, because it's not the sort of 17 language Mr Smith would use and it's not true. 18 Q. The last point on this email is paragraph 12: 19 "At the end he said that for him being able to 20 obtain a full green light on everything from 21 Ed Richards/Ofcom in the coming days was the easiest way 22 to clear the process and make a swift decision without 23 facing any credible legal challenge." 24 That bit is accurate, isn't it? 25 A. I don't think there's any surprise -- well, when you say 86 1 "he said", I don't know if I had had this conversation, 2 but it may well be that Mr Smith had said to Mr Michel, 3 "The Secretary of State is going to take into account 4 what Ofcom say very seriously indeed" and that would 5 have been something that I would have said on 20 January 6 when I had that difficult exchange with Mr Murdoch. 7 Q. Okay. Move forward to 01792, 30 June: 8 "Had a debrief with JH and his team tonight at 7pm 9 before he left to his constituency. He is very happy 10 with the way today went and especially with the 11 absolutely idiotic debates led by Watson and Prescott." 12 Is that the sort of characterisation of debate led 13 by those individuals which might reflect your viewpoint? 14 A. I can't remember what Mr Watson and Mr Prescott said in 15 those debates so I can't remember if I thought it was 16 idiotic or not. 17 Q. You might be able to tell us whether you're sure that's 18 something you wouldn't have said, maybe you can't go 19 quite that far, Mr Hunt. Can you assist us? 20 A. Well, as I recall, Mr Smith said that he didn't think 21 the debates were idiotic either, so I don't think either 22 of us recognise that language. 23 Q. So it completely grates in that sentence so we can put 24 it all to one side, is that it? 25 A. It is conceivable that I did see those debates and did 87 1 think they were idiotic. I think I might have 2 remembered if I had, and I don't recall it. 3 LORD JUSTICE LEVESON: Let's assume -- you're entitled to 4 think whatever you wish about your political opponents 5 or indeed your political friends, but would you expect 6 your special adviser to share that sort of comment? 7 A. That wasn't his role in this process, and it's possible 8 that there were one or two thoughts during the process 9 that I had about things in general, I don't say this in 10 particular, that, you know, he may have passed on to 11 Mr Michel. He may have said, for example, "Jeremy's 12 very frustrated the process is taking so long." I can't 13 find anything in here that if it was true is substantive 14 in terms of giving News Corp an unfair advantage in 15 terms of an insight into my thinking. 16 LORD JUSTICE LEVESON: Yes. It's not so much in relation to 17 the bid that I ask the question, but more in relation to 18 the relationship. 19 A. Yes. It does seem that there was such extensive contact 20 that, you know, there could have been chat along those 21 lines. 22 MR JAY: The last one we're going to look at, 01799, 7 July. 23 We know it's preceded by an 11 minute 8 second 24 conversation, Mr Smith/Mr Michel, within about half an 25 hour of this email. What Mr Michel appears to be doing 88 1 is referring to a meeting that you had with the 2 Prime Minister that day. First of all, was there 3 a meeting between you and the Prime Minister that day? 4 A. I did have a meeting with the Prime Minister to discuss 5 inquiries. I'm afraid I can't recall whether it was 6 that day. But I did have a meeting. We can certainly 7 find that information out for the Inquiry if that would 8 be helpful. 9 Q. At that stage was the policy thinking along these lines: 10 one of the inquiries would be into the police, led by 11 a judge; the other into media practices, not with 12 a judge and led by DCMS. Is that broadly speaking 13 right? 14 A. I think that we at that stage -- I'm just sort of 15 looking at the date here -- I think there were lots and 16 lots of options floating around at the time, and I don't 17 think that -- I don't believe that we had concluded -- 18 I seem to remember -- I'm sorry, I'm sort of trying to 19 remember here, but the Prime Minister made a statement 20 to Parliament, which I think was the day before, about 21 having an inquiry, and we should perhaps cross-reference 22 whether this was information that was in the 23 Prime Minister's statement. 24 Q. Yes, we think it was 8 July, the statement. 25 A. Oh right, okay. It could well be, if it was the day 89 1 before the Prime Minister's statement, that this was one 2 of the options that was being discussed. 3 Q. Therefore an option which you communicated to Mr Smith, 4 is that fair? 5 A. It's possible. 6 Q. Lower down: 7 "The closure of News of the World does not affect JH 8 decision and if anything help [should say helps] the 9 media plurality issue by weakening our voice." 10 Is that a view that you might have expressed to 11 Mr Smith? 12 A. Well, it's just wrong. I mean, the closure of the News 13 of the World directly influenced my thinking because it 14 made me have a very real concern about corporate 15 governance issues at News Corp, which led me to write to 16 Ofcom the following Monday to ask them if they stood by 17 their earlier advice. 18 Q. "The Cabinet divisions reported in the press are much 19 more to do with the hacking saga than the deal itself." 20 Is that accurate or not? 21 A. Well, I think Mr Smith says he wouldn't have known about 22 the Cabinet divisions, and here Mr Michel is talking 23 about them being reported in the press, and it may well 24 be that the reports in the press made clear that it was 25 about the hacking saga. I just -- I'm afraid I just 90 1 don't know. 2 Q. But I think you would know what the Cabinet divisions 3 were or weren't, and I think the simple question is -- 4 there are two questions: (a) were there Cabinet 5 divisions and if so were they to do more with the 6 hacking saga than the deal itself? 7 A. I don't remember any particular Cabinet divisions. 8 There may have been discussions. I don't believe that 9 it was discussed in Cabinet, although I may have got 10 that wrong. We certainly wouldn't have discussed the 11 deal at Cabinet because that was a quasi-judicial 12 process. The Milly Dowler story broke on Monday the 4th 13 and there would have been a Cabinet meeting the 14 following Tuesday morning and I don't remember it being 15 on the Cabinet agenda that morning. But the 16 Prime Minister was obviously very aware of it and made 17 a statement later on that week. 18 I think it is fair to say that the concerns that 19 were generally being expressed by people were about the 20 phone hacking rather than about the BSkyB bid. I think 21 that's where the public outrage was, and that's what, 22 you know, people were thinking about. 23 Q. What about the last point: 24 "Feels that both BBC and Guardian have been 25 extremely helpful in reporting accurately that he has no 91 1 room in his decision." 2 Did that represent a sentiment which either emanated 3 from you or which you shared? 4 A. I think that we had made progress at that point and it 5 had been a lot of hard work in trying to get everyone to 6 understand the constraints under which the decision 7 I was taking were taken and the fact that it could only 8 be about media plurality and it wasn't a competition 9 issue and I couldn't, you know, automatically include 10 phone hacking in the considerations except on the narrow 11 basis that we'd been advised. 12 I think we were quite pleased that around that time, 13 but I can't remember exactly when, that this had been 14 reflected in the BBC and the Guardian. 15 Q. May I move away from KRM 18 now. I haven't taken you to 16 each and every email there, we've done more than taste 17 them, to use Mr Rupert Murdoch's terms, but we certainly 18 haven't looked at all of them but the conclusions can be 19 drawn one way or another from your evidence about it. 20 Can I move forward to 24 April 2012. I think you 21 had a drink with Mr Smith that evening; is that correct? 22 A. Yes. 23 Q. And Mr Smith tells us at paragraph 262 of his statement 24 that he said that if the pressure became so great that 25 it would help if he resigned then he would not hesitate 92 1 to do so. Did he say words to that effect? 2 A. Yes. 3 Q. Did you reply along the lines that it would not come to 4 that? 5 A. I may well have said something along those lines, yes. 6 Q. Then there was a meeting the following morning, 7 according to Mr Smith, where presumably you met with, 8 amongst others, the Permanent Secretary; is that 9 correct? 10 A. Yes. 11 Q. And what was the -- we've heard Mr Stephens' account. 12 What view was taken at that meeting? 13 A. Well, I'd come in early that morning. There was -- 14 there was obviously a big storm going on, and Adam Smith 15 had again offered to resign if that became necessary, 16 and it was still very much my hope that it wouldn't come 17 to that, and discussions continued during the course of 18 the morning and, you know, one of the challenges we had 19 was that there was a huge volume of information, as you 20 know, and we knew there was some exaggeration but we did 21 also know that there were examples of text messages that 22 Adam had sent where the language was inappropriate, and 23 we didn't know as much as we know now about how much of 24 KRM 18 appears to have had an element of exaggeration, 25 but we knew there was some language that was 93 1 inappropriate, and I think we came to the conclusion 2 with very, very heavy hearts that we were going to have 3 to accept his offer to resign. 4 Q. Did you say to him at about 9.30 in the morning, 5 "Everyone here thinks you need to go"? 6 A. Yes. I wasn't particularly including myself in that 7 description of "everyone", I was just talking about -- 8 I mean, I think I personally found the whole thing 9 incredibly difficult. This was someone I'd been working 10 incredibly closely with for nearly six years, someone of 11 whom I had the highest opinion, someone I felt 12 responsible for and someone who is very decent and 13 honourable, and it seemed terribly unfair but the 14 pressure was such that it did seem that it was 15 inevitable. 16 Q. Although the person responsible for his discipline, if 17 I can use that term, was you, not the Civil Service, 18 wasn't it? 19 A. Well, he reported to me, yes. 20 Q. So if something had gone wrong, I'm not saying that it 21 follows that you were responsible for that, it's not for 22 me to suggest that or put that question to you, but 23 theoretically it fell within your responsibility, didn't 24 it? 25 A. You know, I do have responsibility for what he does. 94 1 I actually have responsibility for whatever everyone in 2 my department does, but I have more direct 3 responsibility for the people who are my direct reports. 4 Q. Mm. May I put to you this question, which I've 5 obviously seen somewhere: did you originally believe 6 that Mr Smith had done nothing wrong and tell friends 7 that you would resign yourself rather than let a junior 8 official go, or words to that effect? 9 A. I did think about my own position, but I -- I had 10 conducted the bid scrupulously fairly throughout every 11 stage, and I believed it was possible to demonstrate 12 that, and I decided that it wouldn't be appropriate for 13 me to go, but it was with an incredibly heavy heart that 14 I felt that we just didn't have any choice but to accept 15 Adam's resignation. 16 Q. Do you feel, Mr Hunt, looking at this more widely, that 17 you were given a task which, in the event, was too 18 difficult, too toxic, given the views that you'd 19 expressed publicly, given some of the views we've seen 20 you were expressing privately right up to just before 21 1.00 in the afternoon of 20 December 2010, that simply 22 these are decisions which should not be taken by 23 politicians such as you? 24 A. Well, I think it's something that we should consider. 25 I do believe that I conducted the bid totally fairly. 95 1 I do believe that I was completely able to put aside my 2 opinions of policy merits of the bid, put those on one 3 side, and I was able to construct a process where there 4 was a double lock that could reassure the public, 5 because of the involvement of independent regulators, so 6 I do feel in this case that the bid was conducted 7 completely fairly. 8 But I also feel that what we didn't predict was the 9 pressure that Adam Smith was going to come under, and 10 I do think that in terms of thinking about how one could 11 do these things better in the future, I think the point 12 that we discussed earlier about whether special advisers 13 are more susceptible because they might have 14 a pre-existing relationship with people who are 15 involved, I think that's something that we need to think 16 about. 17 I think also the volume of communication was huge. 18 It wasn't something that we knew about until all this 19 evidence came out, and I think that might have meant 20 that, you know, as I mentioned earlier, even someone as 21 straight and brilliant and diligent as Adam found 22 himself getting sucked into inappropriate language, and 23 that might have been a factor. 24 So I think there are lots of things one can learn. 25 LORD JUSTICE LEVESON: But your double lock: I will take 96 1 every step with legal advice, with Ofcom's advice and 2 with the OFT's advice, so to that extent it's triple, 3 lawyers, Ofcom, OFT, and I will do exactly what they 4 recommend, actually means that on one reading of it, you 5 are dropping out of the decision because you're going to 6 rely on what the experts say, yet you are the one that 7 is going to take the flak for all the decision. 8 A. Well, I wasn't dropping out of the decision, because 9 I always viewed it as my decision and I was going to 10 take the advice that I got very seriously, but I tried 11 to create a structure where I didn't have, if I can use 12 a phrase that we've had earlier, any political wriggle 13 room, so that my political discretion was zero, so that 14 the public could see that the weight was being given to 15 legal and independent regulator advice. 16 But in the end I had to take responsibility, I had 17 to make the choice whether I was going to accept the 18 Ofcom and the OFT advice, and that was my role 19 constitutionally, and yes, I would have to defend that, 20 but I think perhaps it's easier to defend a decision 21 that is necessarily going to be controversial one way or 22 the other if you can point to a very strict process that 23 you followed and you can demonstrate that you've been 24 fair, which I believe we were. 25 LORD JUSTICE LEVESON: But if you've removed all political 97 1 wriggle room, and you're going to follow the advice, if 2 you say, "I'm retaining the decision because I might not 3 choose to follow the advice", you are retaining your 4 wriggle room. 5 A. I think there's -- if I could say, I think what I'm 6 really saying there is that I was removing the political 7 wriggle room. I didn't have any political discretion. 8 The way I structured it was that when I made my decision 9 on each occasion, I published the independent advice at 10 the same time, so it would have been completely free to 11 me to take a different view to the independent advice, 12 one way or the other. But the way I constructed it 13 meant that I would have to justify that publicly so 14 there would have had to be a very good reason to do it, 15 and providing I believed that I had a good reason, then 16 I could make that case. 17 LORD JUSTICE LEVESON: But once you've done that, politics 18 have walked straight back into it, haven't they? 19 A. I think it depends what the reason is. If you had 20 a political reason, that would not be a good reason and 21 therefore it wouldn't stand up and you wouldn't be able 22 to do it, but you might have another reason. I don't 23 know. As it happened, I never found a reason to 24 disagree with that independent advice. 25 But I think, just to address Mr Jay's earlier 98 1 question, and following on from what you said, sir, you 2 could ask, well, if you're giving so much weight to 3 independent regulators at every stage and you're 4 removing your discretion to a very large degree, if not 5 entirely, why not just give the whole decision to 6 independent regulators? That's what we do in 7 competition law. It used to be in competition law that 8 those decisions were made also by secretaries of state 9 and we removed that and gave that to independent 10 regulators. You've had different witnesses who have 11 expressed different views on that. 12 I do have some sympathy with that view, because even 13 though the decision I took was totally impartial, 14 I always felt there were going to be elements of the 15 public that would never believe it was. 16 LORD JUSTICE LEVESON: But that's precisely the point. And 17 ultimately, this is slap bang in the middle of the terms 18 of reference, the concern is that it's not only the 19 perception perhaps of the public, perhaps of those 20 who've opposed whatever decision you actually make, 21 there's also a slightly different problem, that in the 22 context of your work you are dealing with these very 23 self-same people across a wide range of issues, and as 24 you yourself have said, you will have to continue 25 dealing with them across a wide range of issues. 99 1 Therefore the risk becomes that it's going to get in the 2 way. 3 I appreciate it's particularly poignant here because 4 you were never going to have this problem. This was 5 actually for another Secretary of State. But that only 6 serves to underline how difficult it is where the 7 subject matter is one which (a) involves the media and 8 (b) involves extremely difficult and potentially 9 controversial issues. 10 A. Well, I have a great deal of sympathy for that view. 11 I still believe it's perfectly possible for politicians 12 to set aside their views and take decisions in 13 a quasi-judicial impartial way, but I do think that you 14 have to try very hard, because you know that some of the 15 decisions you make could have an impact on future 16 relationships and you have to set all that consideration 17 aside, so that's an additional thing that needs to 18 happen. 19 I think it can be done, but I agree with you 20 entirely, it adds to the difficulty of the situation. 21 MR JAY: The structure you mentioned, which has two 22 attributes, might I suggest: no legal wriggle room but 23 creating political space, that would be my gloss upon 24 it, is that not the structure which we see coming 25 through the messages Mr Smith imparted to Mr Michel in 100 1 some of the emails? 2 A. No. First of all, I don't think there was any political 3 space. If you mean by political space was there any 4 room for me to take a different decision to the 5 regulators, yes there was, because in the end it was my 6 decision, not their decision. But if you mean there was 7 space for me to take a decision on party political 8 grounds, there was none at all. It would have been 9 completely transparent to the whole world that's what 10 I was doing and the structure I set up made it, I would 11 say, impossible to do that and deliberately so. 12 So I don't believe that Mr Smith used the phrase 13 "political space". I think that it was probably 14 Mr Michel's gloss on why we were making News Corp go 15 through a much more difficult process than statute 16 required." 17 Q. But when he used the term "space", he didn't say 18 "political space", he said "space". You remember the 19 text message? 20 A. Mm. I mean he may just have meant time. I think one 21 would have to ask him. You know, this was a thorough 22 process that was taking time. 23 Q. The other aspect of this is the appearance of bias in 24 the context of the quasi-judicial decision because we 25 have Dr Cable who is removed from his responsibilities 101 1 in this regard on 21 December because he's made remarks 2 which create, he accepted, a perception of bias, 3 although as it happens, on analysis, those remarks 4 didn't relate directly to the decision he was being 5 asked to make, they related more widely to his view of 6 News International and the Murdoch press. You 7 understand that. We then have Mr James Murdoch 8 characterising that to you as acute bias, and then you 9 acquiring the bid on the evening of 21 December having 10 in fact expressed private views to the Prime Minister on 11 19 November and in other materials which do relate 12 expressly to the bid. So we have a sort of irony here, 13 don't we, and a request perhaps by others to you which 14 with hindsight perhaps you might say ought not to have 15 occurred. Do you accept that? 16 A. I don't accept it because I had views on the bid which 17 were public, but I set them to one side, and I set up 18 a process that meant that I had to set them to one side, 19 and I think I've demonstrated that the process was 20 totally impartial. 21 Q. But on that argument, apparent bias could never be 22 established, could it? 23 A. Well, there are aspects of some of the language that 24 Mr Smith uses in his texts which, taken in isolation, 25 appear to demonstrate bias, but actually I think if you 102 1 look at the process as a whole, including the decisions 2 I took and the way that I took them, it's clear that 3 there was no bias. 4 Q. But that would be the case even if you had said 5 categorically, "I'm 100 per cent in favour of this bid 6 in every respect". If you'd said that one minute before 7 you acquired the bid, you could have put in place on 8 your argument exactly the same process which gave you 9 little or no legal wriggle room and on your argument 10 there would be no possible means of challenging what you 11 did. Do you see the logic of that? 12 A. Yes, but that wasn't what I said. What I had said was 13 that I respected the fact that we had to follow due 14 process, I'd said that we mustn't second-guess the 15 regulators, and that was exactly what I did when I took 16 responsibility for the bid. 17 Q. May we move finally to the more general questions you 18 address at the end of your statement. Given the time, 19 the extent to which we want to go into the detail of 20 these is going to lead to Lord Justice Leveson to guide 21 me. 22 You have helpfully said in paragraph 73 that you've 23 asked Ofcom to look specifically at the options for 24 measuring media plurality and they are due to report to 25 you in June 2012. Was this with a view really to 103 1 assisting the Inquiry's thinking on one of the aspects 2 of its terms of reference? 3 A. Yes. I think measuring media plurality is an incredibly 4 complicated thing to do. Ofcom has clearly given some 5 thought to that in the past, in other work they've done, 6 and I thought it might be helpful to the Inquiry if they 7 could see Ofcom's thinking about whether it is actually 8 possible to measure someone's market share of news 9 across different technology platforms. It's a complex 10 process. So that was the reason why I asked them to 11 give me a view on that. 12 LORD JUSTICE LEVESON: Speaking for myself, I'm sure it 13 would be, but I'd be grateful if you could convey to 14 Ofcom that the train isn't stopping and their deadline 15 is not really extendable because obviously if I'm to 16 consider it, I have to show it to people so that they 17 can make representations on it. I'm sure you'll 18 understand that. 19 A. I'll happily pass that message on. 20 MR JAY: The other general question goes to the future of 21 press regulation. Obviously you're one of the two 22 sponsoring ministers of this Inquiry, so you might be 23 entitled to say, well, that's the Inquiry's problem, not 24 yours, at least until the Inquiry reports, but are you 25 able to assist the Inquiry's thinking as to where you 104 1 stand at the moment on this critical question? 2 A. Well, I have been quite encouraged -- I mean, first of 3 all, I think we can take it as a given that everyone is 4 strongly in favour of freedom of expression and no one 5 wants to undermine that, but I've also been encouraged 6 by the degree of consensus around the need for an 7 independent press regulator that is independent of 8 course of politicians, because one of the main jobs of 9 the press is to hold politicians to account, but needs 10 a greater degree of independence from serving editors 11 than the PCC currently has, so that in particular 12 I think it needs to have a credible sanction making 13 power and we need to solve what in loose parlance is 14 called the Desmond problem, the fact that everyone has 15 to be part of it, because obviously if someone can just 16 walk away from it, then that undermines the ability of 17 sanctions to have an effect. 18 I think there's actual a surprising degree of 19 consensus. How the mechanics will work on that is 20 obviously something that you will be giving a great deal 21 of thought to and we look forward to those thoughts. 22 I think I would just make two other brief 23 observations at the end of, I know, a long week for the 24 Inquiry. 25 I think the first is that a lot of the problems that 105 1 concern the public are actually a matter of law. So 2 phone hacking, payment of police, payment of witnesses, 3 harassment. There are laws against all of these things. 4 And to a certain extent, as the law takes its course 5 because of the three police operations that are 6 currently happening, there will be an element to which 7 these problems are self-correcting, because practice 8 will evolve and processes will be put in place. 9 I think the question therefore is: how did it 10 happen? How did we create a situation where these kind 11 of practices happen, because the vast majority of 12 journalists are incredibly professional and do 13 a fantastic job and, you know, are ashamed by some of 14 the practices that have emerged. 15 I think if there was a way that the successor body 16 to the PCC could be a champion of press freedom and 17 a champion of press standards as well as a complaints 18 body when things have gone wrong, I think that would be 19 a positive thing for the entire press industry, and that 20 might perhaps mean in the future that we could avoid 21 these problems happening. That would be my first point. 22 My second point is that one of the real problems for 23 the press, we all say how much we value an independent, 24 vibrant press. You've said so in your introduction to 25 this section, Mr Jay. But there is a very fundamental 106 1 problem, which is that the business model of the press 2 is slowly dying on its feet as the world becomes 3 electronic and people consume their news on iPads and 4 iPods and so on, and advertising, which is so important 5 to the press model, is less easy to raise in those 6 electronic media and it's less easy to get people to pay 7 large sums of money for subscription. 8 I think the opportunity of the work the Inquiry is 9 doing is to try and find a new model for press 10 regulation that works across different technology 11 platforms, because I -- and I know that -- I'm 12 sensing -- 13 LORD JUSTICE LEVESON: No, I entirely agree. I'm hoping you 14 have at least an idea as to how that could be done. 15 A. Well, I think that if the -- if the press are willing to 16 support a structure of independent self-regulation, 17 which commands the confidence of the public and 18 therefore does have the distance from serving editors as 19 well as proper distance from politicians, if such a body 20 could be set up, then I think the government could 21 consider whether that could -- the regulatory structures 22 and the rules could be made similar for products that go 23 out online and on video on demand and the other types of 24 things the press will be doing. 25 I think we should see if we can simplify the 107 1 structures the press operate under so that they're not 2 dealing with massively different regulatory structures, 3 depending on whether their output is being viewed on TV 4 or on a mobile phone or in a newspaper. And I think in 5 the end the newspaper industry is going to move into 6 being a news industry, and we need to try and find 7 a regulatory structure that matches that. 8 LORD JUSTICE LEVESON: Just one correction in what you're 9 saying: in fact, payments to witnesses are not criminal. 10 They're certainly contrary to the code, but the 11 consideration to making it criminal following the trial 12 of Rosemary West was that the code would be sufficient. 13 Whether that's so is something which may have to be 14 thought about, but it's not in fact presently criminal. 15 A. I stand corrected. 16 LORD JUSTICE LEVESON: All right. Is there anything else 17 that you'd like to say about this aspect of the work? 18 I appreciate that you're entitled to await my view, but 19 obviously these are issues that you've thought about, 20 and if you do have any views as to what such a structure 21 might look like, then I'd be very interested to receive 22 them, if not now then in writing. You've had a long day 23 as well, so it may not be fair to ask you to elaborate 24 at this stage, but if you have, I'd be grateful to 25 receive them. 108 1 A. Thank you. 2 LORD JUSTICE LEVESON: Anything else? Right. 3 Well, Mr Hunt, thank you very much. 4 A. Thank you. (Pause). 5 LORD JUSTICE LEVESON: Right. There are apparently eight 6 pages that need redactions, spread across three bundles 7 of documents. Everything else will be published now. 8 We're now seeing whether we can publish the last three 9 bundles with those redactions and how long it will take 10 them. I'd be very keen to seek to persuade somebody to 11 be able to do that tonight. 12 MR WHITE: Thank you. 13 LORD JUSTICE LEVESON: Thank you. Mr Jay, is that now 14 Monday week? Thank you very much indeed. 10 o'clock on 15 Monday week. 16 (5.00 pm) 17 (The hearing adjourned until 10 o'clock 18 on Monday, 11 June 2012) 19 20 21 22 23 24 25 109