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
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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
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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
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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,
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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
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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.
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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)
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