Leveson Inquiry

Afternoon Hearing on 23 April 2012

Aidan Barclay and Evgeny Lebedev gave statements at this hearing

Hearing Transcript

(2.00 pm) LORD JUSTICE LEVESON Evidence for the rest of the week comes from witnesses who own or who have substantial family interests in connection with the ownership of various newspapers, and a number of questions have been addressed to the Inquiry as to the module into which their evidence fits. The question reveals a misunderstanding of the way in which I've sought to address the terms of reference. In order to ensure both orderly presentation of evidence and clarity, I divided the issues to be addressed into four modules: the press and the public, the press and the police, the press and politicians and the future, by which I mean in particular the regulatory regime. These modules are not self-contained, and elements of each have been raised at various different times and will continue to be. The proprietors, if I may colloquially describe them, essentially cross the modules. It so happened that Mr Richard Desmond conveniently fitted into the picture at or around the time that the Press Complaints Commission gave evidence and he was called at that time. We have also had to be aware of the availability of witnesses to give evidence, and there is at least one more to come. It is appropriate to make one other point, which I shall say rather more about before the start of Module 3: I understand the very real public interest in the issues that will be ventilated by the evidence. I also recognise the freedom that permits what is said to be discussed and the subject of comment in whatever way is thought fit, and I shall be interested to see how it is covered. For my part, I shall approach the relationship between the press and politicians from an entirely non-partisan judicial perspective, which I have no doubt is the reason that I was given this remit. I would hope that this approach will be made clear. Thank you. Yes, Ms Patry Hoskins? MS PATRY HOSKINS Thank you very much, sir. This afternoon, our first witness is Mr Lebedev. LORD JUSTICE LEVESON Thank you. MR EVGENY ALEXANDROVICH LEBEDEV (affirmed) Questions by MS PATRY HOSKINS MS PATRY HOSKINS Mr Lebedev, if you just sit down and make yourself comfortable. Could you please give us your full name, first of all?
A. Evgeny Alexandrovich Lebedev. LORD JUSTICE LEVESON Mr Lebedev, thank you very much indeed for the statement that you prepared and the obvious work that's gone into it, and indeed for the interest that you've shown in the subject matter of the Inquiry.
A. Thank you. A pleasure. MS PATRY HOSKINS Mr Lebedev, behind tab 1 of the bundle you should have in front of you, you will find your witness statement. The version I have is undated. It was sent to the Inquiry on 10 April 2012. Is this your formal evidence to the Inquiry?
A. Yes.
Q. Can you confirm, please, that the contents of it are true to the best of your knowledge and belief?
A. I confirm the truth from my knowledge and belief.
Q. Thank you. I'm going to start, please, with your career history. I just want to be clear about that. To start with, you explain that you were born in Russia, but you have spent large parts of your life in the UK?
A. That's correct.
Q. In terms of your commercial interests in the UK, you've set those out in response to question 1 in your witness statement on the very first page, but in terms of your newspaper interests, can we summarise it as follows: you acquired a controlling stake in the Evening Standard in early 2009?
A. That's correct.
Q. You then bought the Independent from Independent News and Media in March 2010. I should say that includes the Independent on Sunday; is that correct?
A. Yes.
Q. In your statement, you then cover a number of different issues. You're asked a number of different questions. I'm going to start with the questions on aims, objectives, philosophy and practice and the way in which your business interests in the UK are acquired and run. At paragraph 2 of your statement, you explain that your aim in running your newspapers is clear: to support and champion world class journalism, which is ethically sound, in the public interest and is an aid to Britain's democracy. You go on to say that the two newspapers that you own have different philosophies and political leanings but the one thing they have in common is that the journalism is accurate, fair and there's no muck-raking or sleaze. I'm just quoting back from your statement. Can you describe for us, please, the different philosophies and political leanings of the Evening Standard and the Independent?
A. Well, I think as the last General Election has illustrated, they do happen to have different political leanings, because the Evening Standard came out in support of the Conservative party in 2010 and the Independent came out in support of the Liberal Democrats, or rather, not came out in support of the Liberal Democrats but said very strategically to keep everyone else out, meaning vote Liberal Democrats. So that's the political leanings of those two newspapers.
Q. Is there any difference in their philosophy?
A. The Evening Standard happens to be a London newspaper, so its philosophy is its philosophy, as far as I'm concerned, is to talk about London, to celebrate London, to report on London stories, but at the same time still continuing to have serious comment and a bit of serious foreign reportage, but mainly it's a London paper. So it's all about London and as far as I see, London's the greatest city on earth. The Independent's philosophy is that it's famed for its brilliant journalism, its foreign reporting, its comment, its it's a newspaper that people trust because traditionally it's been independent. That's why it's called the Independent. So it's always been independent of everything, and it's never been afraid to say what it truly believes in. So I think these are the two different philosophies.
Q. It's clear from what you say in your statement that you have a particular vision for the newspapers. What I want to explore is how you achieve that aim, ie what personal influence you exercise in order to achieve the aims that you've set out. At the top of the second page of your statement there are no page numbers except in the bottom right-hand corner, where you should see 3080.
A. Mm-hm.
Q. You explain how you communicate your vision to your editors in certain ways. You say directly through conversations, board meetings and also pronouncements in speeches and articles. Then in response to question 4, you tell us about the more regular contact with your editors. If you look at the top of the third page, 3081, you explain that you have no day-to-day involvement in the running of the papers, you don't get involved in the selection or slant of stories, but that you do contact editorial staff and that varies. Can I ask you a little more about that. You tell us that your editors are essentially independent and free, for example, to support the political parties that they choose to. That's correct?
A. Yes, as I think was illustrated at the last General Election.
Q. You say they can ask your opinion on a particular policy, of course, and that you would tell them what your view was on that particular policy. Can I just test the limits of that, if I can
A. Sure.
Q. just by reference to a practical example. Imagine for a moment that there was a particular proposed governmental policy which affected, say, the interests of Londoners or which affected your commercial interests in some way it doesn't really matter and one of your editors wanted to discuss it with you. You've already told us that you would give your view on that freely. That's correct, isn't it? But what I want to understand is whether you would expect the editor or the newspapers to then go on and take that view into account or, going further than that, whether you would expect the editor or the newspaper to endorse that particular view that you hold?
A. Well, we certainly discuss policies, and I certainly expect it to be taken into account, but to answer your question, there have been many instances when we've discussed particular issues, stories, policies, and editors would have stuck with their original plan to write whatever they were planning to write.
Q. Do you have any particular example that springs to mind?
A. I can't think of policies, but I can think of stories that for example, you may or may not be aware that I do a bit of journalism myself and I've been to Ethiopia. Just recently, two weeks ago, I've been to Somalia and to Kabul to interview President Hamid Karzai. So I suggest these stories to the editors and they may or may not take them, in which case I take them elsewhere, so I don't expect them to take them for sure. For example, if it's a story that has no relevance to London, if I'm interviewing Hamid Karzai again, it has no relevance to London because I'm not interviewing him around a visit to London, then I don't really expect that story that interview to be taken for the Evening Standard.
Q. Might you expect that it would be taken up by the Independent?
A. If it's a good enough story, but if it's not, then not.
Q. Going back to that's taking up LORD JUSTICE LEVESON It would be a very strong editor that said he didn't think your story was good enough to get into your paper, wouldn't it?
A. Well, I think I expect him to take it on merit. So as I've been told by the editor that he felt it was it was a very good property to have because it was because Hamid Karzai hasn't been interviewed since 2009. LORD JUSTICE LEVESON Oh yes, I can understand why that story would be taken by anybody, but I think maybe the question goes a little bit further. Of course, ultimately you say your editors are independent of you, but ultimately, with the best will in the world, they're very conscious that you're the one that pays their salaries.
A. Well, it has happened that my stories have not been taken into either the Independent or the Evening Standard, so in which case I just put them elsewhere, maybe in, say, Vanity Fair. MS PATRY HOSKINS I understand. So that's your own personal writings. That's actually you taking up a story and going off to interview someone. What if it was something, a policy
A. I can't actually to be honest with you, I can't ever remember discussing a London policy that I felt really strongly about, that I felt that this we should say one thing or another. I really can't recall that because we may have had discussion but I've never felt strongly about something, to say that I think this is what we should do.
Q. What I'm asking you is: if there was something you felt very strongly about, do you think your editors would feel able to say to you
A. Yeah, absolutely.
Q. "I'm really sorry, but I disagree and the paper is going to express a contrary view."
A. Absolutely.
Q. Do you think they'd be able to say that?
A. Yes.
Q. How would you react to that?
A. I wouldn't be particularly happy, but I give my editors freedom to decide ultimately what it is that should or should not go into the papers.
Q. But you can't think of an example where that has happened?
A. Apart from putting my own journalism in, I can't actually think of any particular story that I felt so strongly about that I insisted that it should go in, or a policy.
Q. All right. In terms of process, though, how would you expect it to work? Would you expect them to come back to you and say, "Just to warn you, we are going to run this story and you might not like it", or would you expect them to publish without consultation with you?
A. Unfortunately I get a lot of angry people coming to me and saying, "You've run this, and why have you done this", and so on and so forth. So I don't actually know what's happening.
Q. You wouldn't expect them to come and tell you what's going to happen before
A. No, I find out, like everyone else, from the pages of the newspapers, most of the time. LORD JUSTICE LEVESON So the point is you've made a policy decision that the way you avoid angry people is to say, "I'm very sorry
A. "Editor, speak to the editor." Although, they still come. They don't quite believe it. LORD JUSTICE LEVESON That's probably why you're being asked about it now.
A. In Russia, it's much worse. There they definitely don't believe because they know they think that the owner directly tells the newspaper, because that's what happened traditionally from the 1990s. When there was first the beginning of the free press, basically press barons used it completely for their own purposes to fight competitors, et cetera, et cetera. So the fact that Novaya Gazeta, which is a newspaper in Russia, is run by the editor and he actually decides what should or should not go into it is something that completely baffles Russian politicians, Russian businessmen. They just don't believe it. MS PATRY HOSKINS I suppose the final question in this line of questioning is: do you ever pick up either of your newspapers and read something that you do disagree with?
A. Absolutely. All the time. Especially the Independent.
Q. Especially the Independent. I'll note that carefully. LORD JUSTICE LEVESON Mr Blackhurst will doubtless be very interested. MS PATRY HOSKINS You were asked, in the questions which were sent to you in advance of this, how often you were in contact with the editors of the various newspapers and you tell us in answer to that question, top of page 4 again, that you speak to editors once a week. Sometimes it rises much higher, other times you'll go a fortnight without speaking to them. Mr Greig, who was the then editor of the Standard, is reported as saying that you speak every day. Would you agree or
A. It probably is true, but Mr Greig is a personal friend. We were friends before he became the editor of the Standard, so
Q. Does that mean that you wouldn't necessarily speak to him about newspaper-related matters?
A. Yes, absolutely, absolutely. We probably spoke once or twice a week on newspaper-related matters and then we just spoke about other things.
Q. You obviously have a new editor now, Ms Sams. How often do you speak with her?
A. Well, she just literally is about to begin, but I expect I would speak to her once or twice a week, if that. It all depends if I'm in the country or there's something particular to speak about. It's sort of on a need-to-speak basis.
Q. I understand. Let me move on to ask you now about personal involvement with politicians, if I can. Can we start with London, please, given that the Evening Standard, as you've described, is a London newspaper. Behind tab 5 in this bundle you should find an article which is an extract from the New Statesman published 1 July 2011.
A. Mm-hm.
Q. On page 6 of 7 the top right-hand corner has page numbers. You should find 6 of 7 towards the end of that tab.
A. Yeah.
Q. Second paragraph down well, right at the start of this page there's a heading, "Renaissance man". Then it goes on to describe the fact that you're steeped in Russian culture, and you're asked about David Cameron. For the moment, let's park that in terms of the second paragraph. There's this quote: "'I am proud to call him a friend and a Londoner,' gushes London's mayor, Boris Johnson, when asked for his thoughts on Lebedev. 'This great city of ours would be a lot poorer without him and the vibrant creative Russian community who contribute so much.'" He goes on to comment in this way: "Johnson does not spell out the financial dimension of that contribution." Now, can I ask you this, first of all: would you consider Boris Johnson he describes you as a friend. Would you consider him a friend?
A. Well, I think there are probably various degrees of friendships, but yes, I would consider him as a friend.
Q. What's the extent of your contact with him, Mr Lebedev?
A. I mean, the reason why I said there are different degrees of friendships is not I wouldn't speak to him every day, as I did with Jody Greig, who is a close friend, but I suppose I probably see him maybe every three, four months, something like that.
Q. Is that a friendship or do you see him because of your position and the fact that he is Mayor of London?
A. I think it's
Q. Do you see him socially?
A. I think it's a combination. Bit of both. Sometimes we see each other socially, sometimes we you know, we may talk about London issues when we see each other socially.
Q. Leaving aside the social conversations or meetings that you have with him, when you're meeting with him in a more formal context or for a more formal reason, why do you meet with him? What is the reason behind the decision to have regular meetings with him as Mayor of London?
A. Well, because he's Mayor of London and I own the London paper. I think there's lots of things we discuss. Basically, London issues. I mean, one of the issues that he helped me with was I was setting up a London-based Russian season of culture, which was basically going to be a season celebrating Russian culture across various London institutions, to include the Tate Gallery, the Victoria and Albert Museum, South Bank Centre, et cetera. About 25 institutions were involved and I had the support of the Town Hall and Boris Johnson in particular. So just to give you an example, that's one of the things we discussed.
Q. All right. What's the value of the relationship you have with him in your eyes?
A. Well, for this particular issue, it was great to have the support of the Mayor of London and also because then I was going to and I still am working on this, so it's not something that's completely parked to the side, and the idea was to have the Moscow Mayor also involved, so there could be great exchange created between the two cities and have sort of a flow of contemporary art going backwards and forwards, from theatre to film to visual artists, culture, et cetera. So that was one of the values. But also just having knowledge from the horse's mouth, so to say, about the London issues. As far as the Mayor is concerned, he is very valuable, so it's very valuable for me to talk to him and discuss with him whatever it may be, from transport to crime, and find out where he's going and what he's planning to do.
Q. You've described the fact that you've had social interaction with him. You also have interaction with him in order to acquire knowledge about London issues and also cultural issues. You've described the cultural interaction that you have.
A. Mm.
Q. So to what extent is political support, either for him as a Mayoral candidate or for his party, ever discussed at these meetings?
A. Well, I'll answer this question very simply: I've never been asked by any politician to give political support by any newspaper. So I've never been directly told sorry, not told, but asked, "Would you support us on a particular issue or at an election?" It's never happened.
Q. Let me unpick that. I understand you may never have been directly been asked those are your words but to what extent has the mayoral complain or the issue of Mr Johnson standing as Mayor to what extent have issues like that been discussed at all in such meetings?
A. It's only been discussed as far as I was interested what it is that the Mayor of London has done for London up to now and what it is that he's planning to do, but I guess that's what any Londoner would be interested in, and I consider myself a Londoner. So I wouldn't that's as far as the conversation on the interest as far as I'm concerned.
Q. Have you ever raised with Mr Johnson the issue of the Standard's support for any particular mayoral candidate? So the flipside of that. You say he's never directly asked you for support, but have you ever spoken to him about the Standard's plans for who it may wish to support in any mayoral election?
A. Well, the Standard I mean, as I've said before, I leave that up to the editor. So the editor would decide who the Standard supports.
Q. So is the answer to that question no, that you have not discussed that?
A. Yeah, because it's up to the editor.
Q. Have you met any of the other mayoral candidates personally, either in the run-up to this election or at all?
A. I have met Brian Paddick.
Q. Is that because he's a mayoral candidate or in some other context?
A. Yeah, because he's a mayoral candidate.
Q. Again, was the reason behind that meeting trying to understand
A. Yeah.
Q. as you've explained with Mr Johnson, trying to understand what he would want to do for London?
A. Absolutely, what he is proposing to do.
Q. Have you met any of the other mayoral candidates personally?
A. I haven't actually. s.
Q. Has anyone advising you met with any of the other mayoral candidates as far as you're aware?
A. No.
Q. Have you discussed the Evening Standard's support for any candidate with the editor of the Standard?
A. I have asked the editor of the Standard who she would support
Q. You don't have to tell us anything.
A. That was the extent of that conversation. So of course I'm interested in who the Standard will come out for, so I've certainly discussed it.
Q. Let's move on to other politicians if we can, please.
A. Okay.
Q. Your responses to question 5 in your statement deal with this. Turn back to your statement and then you can refresh your memory. At the bottom of page 4, I think it is, 3081 in the bottom right-hand corner, you were asked a number of questions about your personal involvement with prime ministers and other ministers. If we could just go through that. Let's start with prime ministers. You tell us that you met with Gordon Brown when he was prime minister and you've stayed in touch with him since. Is that a personal or professional continuing relationship?
A. It's well, the original meeting was actually to inform him just a sort of courtesy meeting to inform him of the purchase of the Evening Standard, and then subsequently, yes, I would say it's remained a personal relationship and we see each other every so often, him and his wife.
Q. You then say you've met David Cameron four times, once since he became prime minister.
A. That's correct.
Q. Is that still the most current position? You haven't met him since preparing your statement?
A. No.
Q. Just give me one moment. (Pause) What I want to understand, just focusing on prime ministers for the moment: as a new arrival into the newspaper industry, what's the value of a meeting with a prime minister? What is it that you're trying to achieve by meeting with a prime minister?
A. Well, the Prime Minister is the head of the British government, so for me, again, as with the Mayor of London I think we occupy the same sphere of existence, so it's very interesting, I think it's a symbiotic relationship for myself and for a politician to find out politicians are finding out from me what's going on in the media world and we, as proprietors or I am, in particular, anyway I'm not sure about others find out from politicians about the workings of the party, about the workings of Westminster and about the policy. I'll just point out that actually I've met various politicians of various ranks, from younger politicians to elder statesmen, and I've met it's not just the Tory party politicians that I've met. I've met Nigel Farage of the UKIP party and I'm just about to meet George Galloway way, the newest arrival at Westminster. So I just have an interest in politics and I have very diverse interests so I'm interested in finding out what people think of different issues. One issue that particularly interests me is Russia, because I'm Russian and because I still have very strong links with Russia. My family is in Russia. So with the Prime Minister, for example, that's an interesting point for me to discuss, on his views on Russia, what's happening in Russia, and, you know in particular, I remember we had a conversation before his trip to Russia, which was he was finding out from me my views of what's happening there and I was interested to hear his views, because it was something that interests me greatly.
Q. I understand what you say. You're interested in a number of different topics and it's always good to find out what the Prime Minister of the day is thinking on those issues and also to communicate to him issues that are of importance to you, of course. But what I want to understand is when you first acquire your title and you're meeting with the Prime Minister, what's going through your head? Do you come into the meeting thinking: "Right, this is going to be very interesting. I'm looking forward to finding out what he has to say about X, Y and Z subject"? Or are you thinking: "Now wait a minute, there's something I want to get across here, I want to get across who I am, how important my interests are, I need to get over a position of strength"? Is there any validity behind that kind of agenda? Is there something that you would try and promote or is it simply just an interest or a curiosity?
A. I think it depends who you are. For me
Q. Yes, for you.
A. For me, it's the latter, it's curiosity. For some you might be seeing in the next few days, it's the former. So I think I've never it's never been I think the difficulty with all of this, with the whole one of the biggest issues that the Inquiry is looking at, as far as I can see, is the influence, the influence that newspapers and newspaper proprietors are able to exert over politicians and I think as far as I can see, I don't see any problem with politicians and proprietors having contact, having conversations, having meetings, because I think it's just unfeasible to erect Chinese walls between proprietors or between editors and politicians because we occupy the same sphere of existence. But I think where problems begin is when proprietors, because of the power of their media organisations, start exerting influence over politicians and trying to affect country's policy. That's where I think the problems begin. I certainly have never attempted or tried to do that.
Q. That's a very important answer and we'll come back to that, but I just want to ask you a few additional questions about other meetings with ministers and then I promise we'll come back to that.
A. Mm.
Q. You've explained, I think, what the value is of the meetings to you. Much the same question as I asked you in respect of Boris Johnson, is the support of the Independent or the Evening Standard for political parties ever discussed when you have a meeting with a Prime Minister, for example? Is that something which is ever raised?
A. Yeah, of course it's discussed, and I get you know, I maybe get disappointed politicians, Tory politicians who are disappointed about the Independent's coverage of Tory policy or I get disappointed Labour party politicians with the coverage that the Evening Standard might be giving to a proposal by the Labour party. But, you know, it's certainly not you know, as I've illustrated previously, the newspaper the newspaper portfolio that I own is so diverse and different, you know. It's the London paper and that's the sort of as far as I see it, the national aspect of the newspaper portfolio, and then that's the Evening Standard, and then the Independent is a great international brand. So I think together they come into a really interesting company, but they're so diverse because of the parties they support and the policy they support and the sort of leanings that there will be, of course, upset people on both sides.
Q. Let me ask you the question this way: has a prime minister actually ever asked you whether you would support them politically?
A. No.
Q. Let me ask you now about LORD JUSTICE LEVESON What about policies? Have you been asked to think about supporting a particular policy?
A. No. I think what may have happened is I was told about a policy and explained why it's a good policy for the country, but that was it. There was never ever any discussion of support for the policy. LORD JUSTICE LEVESON So part of the value is that you get a personal explanation of why
A. Yes, exactly, absolutely. LORD JUSTICE LEVESON a particular idea is good and, although unstated, should be supported?
A. Yes, although, as I mentioned before, it will still be left up to the editor of whether the policy is supported or not. LORD JUSTICE LEVESON I understand. MS PATRY HOSKINS I was going to ask you now about meetings with the opposition. You explain that you met with David Cameron three times when he was in opposition and you have met with Ed Miliband twice since he became Labour leader. What's the purpose here of meeting with someone who is not in government, who is in opposition? There's an intriguing phrase in your statement. You say that you like discovering new political talent. What does that mean and with what aim?
A. I am just I'm a great fan of discovering new talent anywhere. As may be clear from the newspapers, I'm always keen on promoting younger journalists. We just made a 29-year-old deputy editor on the Independent, and as far as young politicians, I'm interested in young and upcoming politicians, people who have just literately entered Parliament. The reason, again, is interest. I may be looking for somebody who could be a good writer or a good contributor for one of the newspapers, or it's interesting to hear fresh, young ideas, something that I've always been very keen on. I'm just about to set up a debating campaigning website called Independent Voices, which I will actually I will be the editor-in-chief of myself, but there will be a young editor, who is actually sitting over there, who is 28? Yes. And there will be a team of about five or six 20 to 25-year-old people, young individuals, working on this. So I'm just very keen on promoting-out.
Q. I understand. Perhaps I can guess your answer from your previous answers, but in meetings with opposition leaders or politicians, to what extent do they ever ask for, either explicitly or implicitly, your newspapers' support, either for policies or for their particular party?
A. No.
Q. They don't? Is that ever discussed?
A. As far as I mean, it depends on how you see asking for support. I think, as you've said, there may be an implicit in explaining policy to me, but that's as far as it goes and then in the end it's always left to the editors.
Q. Do you report back to your editors? First of all, do your editors attend with you these meetings?
A. It's happened. It's happened before.
Q. But not always?
A. Not always. So, for example, the meeting with Ed Miliband was attended by Simon Kelner, who was at the time the editor of the Independent, but not always.
Q. If they're not there with you, do you report back as a matter of course what has been discussed during the course of that meeting?
A. I think, again, it depends. Sometimes I do, sometimes I don't. Not as a not sort of ongoing.
Q. Not as a general rule?
A. Yeah, not in a general rule.
Q. So if a particular politician was trying to impress the merits of a particular policy on you, it may not even reach the editor?
A. It may not. I think generally, going further, I would say I think politicians generally overestimate the influence newspapers have on the political process in this country. Really overestimate.
Q. All right. Do you want to say more about that?
A. Well, I just think that okay. Going back to the question of politicians meeting proprietors, I think we are in danger of building a society where every institution, every element of democracy becomes too feeble. So politicians become too feeble, police becomes too feeble, the country itself becomes too feeble. If the press also becomes feeble, then what we get is what I would call a tyranny of consensus, and everyone is afraid or thinks twice or has to check twice before a step they make, a comment they make, and I think one of the extraordinary things about this country is a very robust and diverse press, and I think that has to be protected. Without, of course those who have created who have committed crimes, sorry, should be punished and punished according to the law. But I think the robustness of the press in this country should be protected because otherwise, as I mentioned earlier, I've been recently going on trips to countries where there is no freedom of the press. I've just come back from Ethiopia and there are journalists there that have been charged with terrorism, with genocide. Some might be put to death. Countries like that, when you visit them and you see what the lack of the freedom of the press has on the effects on the government and the state, and also, as far as I'm concerned, I come from I was born in the Soviet Union, I come from Russia, and I can see the effects of not having a free press is having on Russia. In fact, if anyone bothered to have a look on my father's website, he posted a letter on Friday in which he explains how over US$300 billion have been siphoned out of Russia for various companies, various fake bank accounts. A lot of those individuals who siphoned them off are here in London, hiding under the pretence of being politically persecuted, but actually they've just siphoned an extraordinary amount of money here in this country. Where is that money going? It may be going to fund terrorism or anywhere else. So that's the effects of not having a free press. LORD JUSTICE LEVESON But this isn't a binary issue, is it? Of course one needs a robust, free press prepared to take a stance, prepared to hold power to account, which is a phrase that has been oft quoted at me during the course of the last few months.
A. Mm-hm. LORD JUSTICE LEVESON But and this may be something that Ms Patry Hoskins will come onto, I'm sure there must be, must there not, some limit on what they can do? You yourself mention the criminal law. You might also include some ethical limits, because you've spoken about the ethics of your own newspapers. Would you agree with all that?
A. Absolutely. I think as we've seen in recent revelations, there's been extraordinary abuse of power by the press and I think that should be that shouldn't happen again, and what the outcome of the Inquiry would be should prevent that from ever happening again. LORD JUSTICE LEVESON Well, we'll doubtless come onto that later, but I'll be very interested to hear your views on that.
A. Okay. LORD JUSTICE LEVESON Thank you. MS PATRY HOSKINS Touching on other contact with politicians, it's clear from the disclosure by Nick Clegg, the Deputy Prime Minister, that you've met with him also on a number of occasions and you've also met with Mr Osbourne, Mr Gove, other government ministers and so on. Is there anything else that you need to say about your meetings with them that hasn't already been covered by your previous answers?
A. No.
Q. Okay.
A. I think that's it.
Q. Can I now ask you then about contact that other news organisations have with politicians.
A. (Nods head)
Q. It's probably not escaped your notice that the lists of meetings disclosed by David Cameron, Nick Clegg, other ministers, not to mention special advisers, show that News International, News Corporation, proprietors, editors, executives, for example, were meeting with government and opposition far more frequently than you were, or indeed any other newspaper organisation was.
A. (Nods head)
Q. If you look behind tab 7 which you don't need to turn up and you look down the meetings of David Cameron, for example, you can see many meetings with editors, executives and so on. I appreciate that News International in the UK have more titles than you, but how do you feel about the fact that there have been significantly more meetings between Prime Minister, government ministers, than there have been with you, and is it appropriate for there to be a difference between the numbers of meetings that, say, you have I probably asked two questions in one there. Do you feel able to answer that question? Is it appropriate?
A. Appropriate about the number of meetings?
Q. Is it appropriate that one newspaper organisation has more meetings with prime ministers and other ministers than any other?
A. Well, I think I would say that it depends on the relationship. Again, if they've had personal relationships, then no, but the question is: was there an attempt to influence policy or was policy influenced through those meetings? I think that's the crucial question. So, you know, I don't mind how many times who met who. It's just whether that key is being whether there's been policy influence.
Q. I understand. So it's not about the number of meetings?
A. Yeah.
Q. It's about what's discussed during those meetings?
A. Exactly. LORD JUSTICE LEVESON You used the phrase a few minutes ago "the sphere of existence". "We occupy the same sphere of existence." Would you say that's the same for all newspapers and, in any event, elaborate on what you mean, please, by the phrase "sphere of existence".
A. Well, I think we politicians even though I did say that they overestimate the influence of newspapers, and I think they do, and it does make them more feeble because and I think that is the downside of the press, but it's a small price to pay for having the freedom of expression and for holding those in power to account, but I think they pay too much attention to what the press say and hence not always say what it is they truly think and what they believe in. But we do occupy the same orbit, so to speak. We sort of circulate as satellites around the same planet politicians, the editors, the media owners, et cetera, so I'm not sure I'm making myself clear enough, am I? LORD JUSTICE LEVESON Well, I understand that you might be interested in the same things.
A. Mm-hm. LORD JUSTICE LEVESON And in the same way that you're interested in providing news for your readers, so they're interested in influencing what your readers, ie the public, think about them. But that actually runs straight into your issue about policy, doesn't it?
A. Mm-hm. LORD JUSTICE LEVESON And the extent to which there's an exchange of views about policy and whether that influence becomes too great.
A. I think that's more as far as politicians, that's more could be said about Westminster journalists. So that's the relationship there and there's a real symbiotic relationship. I think as far as I'm concerned, anyway, as far as proprietors and politicians are concerned, we just are interested to find out about each other's so I'm interested in finding out government policy. I'm interested in finding out what's happening with the government, and in particular, the position on Russia, and I think politicians are interested in finding out what's going on in the media in the media world. MS PATRY HOSKINS I asked you whether or not you thought there was a problem with the number of meetings. You said no. Does that mean that you wouldn't support a change to the way the system works so that access to government is more limited?
A. But what happens then if, say, there are personal relationships? Would you then say, "You cannot be friends with somebody, you can't see somebody you have a personal relationship with, because of that reason"? So I think that's what I was trying to say. There's a creation of this sort of of a system where everything is so regulated that you have to think twice about everything you do in life, in your personal relationships and your everyday way of life. I think that creates a problem. That creates that tyranny of consensus I was talking about.
Q. You say in response to question 6 that you support greater transparency in respect to these meetings. You say it would be impractical for all meetings between journalists and politicians to be recorded but you're happy for all meetings between proprietors and politicians and editors and politicians to be publicly declared: "How 'senior staff' is defined will dictate my views on that matter." What do you mean by that? Why is it practical to at the time set out meetings between proprietors and politicians, editors and politicians, but for it to stop there?
A. Sorry, let me just
Q. Do you see third paragraph from the bottom?
A. Yes.
Q. On page 3082. Do you have that?
A. Mm-hm. To be really honest with you, I can't remember now what I was referring to by "senior staff". I apologise for that.
Q. As a matter of principle, I think the point you're making here is that you don't think it could be practical for all meetings between journalists and politicians to be recorded?
A. Yes. I think I think because then, again, it completely changes the whole balance of how things work in Westminster, because politicians and journalists speak off the record, they leak stories, they some politicians have better relationships with some journalists, depending on what newspapers they are, and I think if it's overregulated, I think it completely changes the whole process of how Westminster works but also prevents newspapers from getting those scoops, getting those stories from politicians who may want to leak them. LORD JUSTICE LEVESON Is the point you're trying to make here that it's part of the discourse of politics that journalists will meet with politicians all the time and put issues to the politicians and the politicians will provide stories to the journalists. That's the stuff of political life?
A. Absolutely. LORD JUSTICE LEVESON But that there is a difference if you go up a rung to editors or proprietors who may very well be discussing policy and the impact of ideas at a level which might give rise to the suggestion that there is influence one way or the other?
A. Yes. LORD JUSTICE LEVESON Is that the distinction you're trying to draw?
A. Yes, absolutely. MS PATRY HOSKINS So knows LORD JUSTICE LEVESON I'll come and give the evidence, if you like.
A. Thank you very much for making that clearer than I could possibly. MS PATRY HOSKINS So those meetings ought to be recorded, as they are?
A. By "recorded", meaning just kept of record of?
Q. Yes.
A. Yes.
Q. Would you go any further than that? If you look down the list, for example, of David Cameron's disclosure, a typical entry will be: "Rupert Murdoch, chairman, News Corporation, general discussion." And that will be it, nothing further. Would you support greater transparency than that, ie a fuller understanding of what was discussed, or is that going too far?
A. I think that's going too far because that, again, goes to a place where we can't have an open exchange of ideas. Because okay, I'll give you an example. If I saw the Prime Minister and we discussed Russia, we would talk about it in one way. If there was somebody sitting there and taking notes, we would talk about it in a different way, because there may be sensitive issues back home that I wouldn't want to be on record.
Q. Would it make a difference if what was being discussed was a policy that affected an organisation's commercial interests? Should there be greater transparency in that?
A. I think there should be, but I don't think keeping records would be the best way. I can't tell you what yeah, you're absolutely right. I think there should be a way of preventing influence on governmental policy by media organisations, but I'm not sure. I might be able to think about that. I might try and think about that and write back to you. LORD JUSTICE LEVESON Please. MS PATRY HOSKINS Really, two other headings: your views on ethical practices and then press regulation more generally, and we can come back to some of the ideas that you might have about the future of press regulation. You were asked about the cultural and ethical practices of the press. You set out your views in various articles which we don't need to explore now. I just want to touch on a couple of subjects if I can very briefly. You're asked about two things. You're asked about the Information Commissioner's office and the Operation Motorman reports and you're asked about phone hacking, and you're asked what you've done in respect of the practices, if anything, that took place. You describe that you've firstly sought assurances that these practices either never took place and never happened in the first place, or alternatively that they've been discontinued, and you've secondly ensured that new codes of conduct are in place, particularly in respect of the Evening Standard. That's the case, as I understand it; is that correct?
A. Yes, absolutely.
Q. When you say that you've "sought assurances" that these practices never took place, for example, in relation to phone hacking, what does that actually mean? Does that mean that you've asked for an investigation to take place or you've sought assurances from your editor that these practices didn't take place?
A. I went further than just speaking to the editors. I asked Andreas Whittam Smith, who is the founder and the first editor of the Independent newspaper, to carry out investigations in both the Evening Standard and the Independent titles, which he did conduct and came back with a clear no findings of any wrongdoings of any sort. So that was how we dealt with it, and as a result came the new code of conduct.
Q. Is that in respect of not just illegal accessing of voicemails but of the Operation Motorman type practices?
A. Yes, of any practices. I can confidently say that at least on my watch, since I've acquired the Evening Standard in 2009 and the Independent in 2010, none of the journalists have been getting up to any illegal activity.
Q. You were finally asked about your views of press regulation. You say that, first of all, in a democracy self-regulation is preferable to statutory regulation. You say that in respect of it's on the second-last and last page of your statement. As a matter of principle, can I just explore that? Does this mean that any kind of statutory backstop would be unacceptable to you or do you simply mean that full statutory regulation in its traditional sense would not be acceptable to you?
A. No, I think I'm not averse to statutory backstop, because I think there needs to be a way of making sure that everyone in the industry is part of this regulation, regulatory body, signed up to it, and that includes online as well. I don't see why there should be a distinction between news that's printed on dead trees and news that comes up on a digital screen. I don't mean blogs, because that's going to be impossible, but those online news sites that want to be part of a respected news source world, they should be part of this regulation. So I don't see any problem with giving some sort of statutory underpinning. LORD JUSTICE LEVESON That's an interesting distinction. Might the line be drawn at anyone who is publishing content for reward? In other words, the blog you mentioned very difficult when one gets down to tweets, but blogs that simply people put up are one thing, but once you've started doing something and perhaps taking revenue from advertising or the rest, then that should be the other side of the line? Is that the distinction
A. Yes, absolutely, and then there could be the penalties could be imposed. You give sort of a badge of honour for those who are part of it, and then the ones that are not part of it, advertisers just don't choose to advertise on. LORD JUSTICE LEVESON There's the problem in a free country of preventing people doing what they want to do.
A. Yes, absolutely, but advertisers, as far as I can see, would like to be part of that because it creates a community in which you know that the ethics of journalism are adhered to. MS PATRY HOSKINS You say this at the bottom of page 3083, which is the second-last page of your statement: that your two criteria are that self-regulation should be transparent and understandable to the public, and you say that by "transparent" you mean that all the workings of any regulatory body should be open and known across the industry: "There cannot be any lingering sense of an old boys' club or a point that's being made in an inexplicable manner." What did you mean by I don't want to put would words in your mouth. I think I understand what you mean. What do you mean by "the old boys' club or a point that's being made in an inexplicable manner"? Is that referring to the membership of any future press regulatory body or is that something else?
A. Well, I think it was referring to the way appointments were made to the PCC, because they were done very untransparent manner and nobody the public certainly don't know, but even I didn't know how the appointments were made. So I think it needs to be done in a way that's understandable, at least to the industry and to those members of the public who care to find out. So it needs to be appointed not by the industry, so to make it independent of the industry, because as far as I understand, the present chairman is appointed by well, I know he is appointed by the industry LORD JUSTICE LEVESON It's PressBoF.
A. Yes. LORD JUSTICE LEVESON The board of finance.
A. But also he/she feels beholden to those who appoint them because they may hire or fire him at any point. So it's a sort of a simple detail, but I think there should be a tenure given to the person who is appointed to any future body that may be created, that they don't feel beholden to those who have appointed him. But on the other points, I think it needs to be whether it's whatever it may be, it just needs to feel like it's independent. It's independent of the government but most importantly it's independent of the industry, of those who it's trying to regulate. Because it's very difficult to regulate something that you're not independent of, that you're in some way dependent on. MS PATRY HOSKINS Does that mean that you wouldn't want sitting editors to be appointed?
A. No, I think they shouldn't be sitting editors. I think other individuals in this Inquiry have previously said that there should be journalistic experience and I agree with that, but I think the way to overcome that is they should be ex-editors or recently retired editors who should sit on this board.
Q. And by "understandable to the public", you say, you mean self-regulation should not be shrouded in impenetrable jargon and that punishment for breaches of the code of conduct should be clearly visible to consumers of the press. The example you give is greater prominence for corrections and heavy/better publicised fines for offenders. They're both worthy options. Have you given any further thought to those?
A. I think they are I think that those are the most simple and yet most effective way. Coming from the newspaper industry myself, I understand and I see that those would be the most effective, because editors loathe making apologies, especially in the same place where the victim was wronged, so if it was made on the front page, it should be on the front page. As far as fines are concerned, again, if there's a hefty fine, I think whoever is writing their story, whoever is responsible for putting the story in, will think twice about putting it in if there's any doubt about the truth behind it.
Q. You then say there are two major problems. The second of those is how to regulate the Internet, but I think you've discussed that now with Lord Justice Evgeny Leveson. It seems that you may have given thought to that. The first it is how to ensure that every media group participates in self-regulation. I think I heard you say earlier that that might be dealt with by way of some kind of statutory backstop?
A. Yes, absolutely. I'm not averse by any means. I have nothing against statutory backstop because I think everybody in the industry has to be part of this new future body in order for it to work.
Q. All right. There's an awful lot more I could ask about your views on press regulation, but is there anything in particular we've explored some the issues. Is there anything else you would like to say about the future of press regulation or anything else that Lord Justice Leveson has to ask you? I'll ask him in a minute.
A. I think the only thing I would like to say is that it needs to make sure that the freedom of the press remains, especially of the press that holds those in power to account, because celebrity gossip, tittle tattle, is actually readily available in Russia. It's readily available in Ethiopia and it's readily available in Afghanistan. It's everywhere. So that's easy to come by. But the important stuff that holds those in power to account, that's what needs to be preserved and saved and cherished, because as far as I can see, this country has one of the most sophisticated systems, one of the most sophisticated democracies in the world, and whenever anyone criticises anything here, starting from the weather to the way government works, to the way the press works, I always say to them: "Go try living in Russia and you'll see you will really start valuing everything here." LORD JUSTICE LEVESON Your speech on press freedom makes that point very, very clear, that some of the things that have caused us concern are tiny compared to the sorts of concern that you might express in other countries, and I'm sure that's right, but you've also recognised that's not to say that therefore it doesn't matter.
A. Absolutely. I think what has been happening is absolutely criminal and outrageous, and I think those responsible those who have committed those crimes should be punished. Because, you know, again the flipside of that, what was committed is also expected of those organisations in Russia. So and I think it's also important to point out that it's not just the distinction between broadsheets, the quality papers and the tabloids. It goes as will become apparent, it goes far beyond that. And actually, it did take the job that was meant to be done by the police was eventually done by the Guardian and latterly the Independent newspaper, so I think it's very important that that ability of those newspapers to investigate, to conduct investigative journalism is LORD JUSTICE LEVESON Yes, provided the guardians do guard the guardians.
A. Absolutely. LORD JUSTICE LEVESON I'm not talking about the newspaper. Then that's fine. The trouble is when nobody really checks up on what the organ that is looking after all of us, that is looking at what judges are doing, looking at what politicians are doing, look at what all sorts of other people are doing, actually aren't examining what they themselves are doing.
A. I think you're absolutely right. I think whatever the future body is, it needs to be robust, it needs to have teeth and it needs to be able to do its job in a way that would keep newspapers making sure that those crimes that have been committed are never committed again. LORD JUSTICE LEVESON Yes. Do you think that I should be paying any attention to the problems that have been mentioned to me about the commerciality of print journalism?
A. The only thing I would say about that is that the two newspapers that I just mentioned that actually exposed this whole scandal, and the Times, between them, are losing more than ?100 million a year, and I think that's something we should seriously think about, because there may come a time when there won't be anyone, there won't be wealthy individuals, charitable trusts, that will be willing to fund this journalism and that's the scary moment because what happens then? Just to give one statistic, I have spent over 75 million Lebedev money over the last three years funding the Evening Standard and the Independent. So it's a really expensive it's a really expensive element of British democracy that needs to be preserved at any cost. LORD JUSTICE LEVESON Well, I agree, and I recognise that you are right that ultimately the source of funding of non-profitable operations may dry up, but what then, pray, is the answer to that?
A. I think, for the time being at least, making sure that those newspapers can carry on and carry out legitimate investigative journalism and legitimate investigations. I don't have the answer to that. I don't have the answer to what happens then. I mean, you know, newspapers are slowly migrating to online, and I think the answer the answer to that, as far as my personal company the companies that I run are concerned are trying to be innovative and trying to be imaginative. So take the Evening Standard. It was losing almost ?30 million annually. Now it's about to break even. So the way that's been achieved is through changing the business model, by taking it free. So there are ways of imaginative ways of going forward and there are ways of still staying in print and still trying to make money, because what we've done on the Independent is we've launched a new newspaper, which is called the I, which is now outselling the Guardian. It's a completely new product that's 20 pence and it's a very brief briefing of the daily news but in a very concise way. So again, that's been a huge boost to the business model of the Independent, and together you know, these are not global solutions. I couldn't possibly answer your question, but these are just small examples of what could be done. LORD JUSTICE LEVESON All right. MS PATRY HOSKINS I have to pick you up on just one answer you gave earlier, just because it's something I think Lord Justice Leveson would want me to pick up on. You were asked about phone hacking and you say: "I think what has been happening is absolutely criminal and outrageous, and I think those responsible those who have committed those crimes should be punished. Because, you know, again the flipside of that, what was committed is also expected of those organisations in Russia." And then you say this: "I think it's also important to point out that it's not just the distinction between broadsheets, the quality papers and the tabloids. It goes as will become apparent, it goes far beyond that." What did you mean by that?
A. There's certain stories that circulate that I haven't got any proof for, but I think with time this evidence will come out and it probably will come out during the time of this Inquiry. LORD JUSTICE LEVESON Well, whatever might emerge, we'll see, but I understood your answer to mean that there are examples of practices with which you disapprove that come from all sections of the press. That's how I read your answer.
A. Yes. LORD JUSTICE LEVESON But whatever else emerges during the course of the next period, then we wait to see. MS PATRY HOSKINS Indeed. Those are all my questions. Mr Lebedev, is there anything else that you wish to add?
A. I think probably that's it. Apart from, once again, just saying that it's something that needs to be treasured and valued because I've seen the other side and now, at the moment, every day I speak to my father, who is constantly under attack because of the reporting of Novaya Gazeta, and it's not it's just it's all around. It's all around all across the board. So it's not coming from the top, it's not coming from the government; it's just the corruption all across the board and because that corruption is exposed in on a daily basis by my newspaper, the Lebedev interests, the Lebedev companies, are being constantly attacked on a daily basis. For example, the bank accounts that are used to fund British newspapers have been checked out by people who have been conducting checks on our banks because of because there's no tolerance for that. So I think it needs to be valued and cherished, but, as you rightly pointed out, all the issues that have happened and all the issues that have been exposed by this Inquiry have to be addressed. LORD JUSTICE LEVESON Mr Lebedev, your perspective is very valuable, coming from a slightly different angle to many others. There are a couple of things that you've said you'd like to think about, and you're very welcome to write to me about that or any of the other ideas for the future. I am very keen to ensure that whatever comes out of the Inquiry works for everybody. You may have heard me say this before, but it bears repetition. It has to work for the industry, and I'm very conscious of the commercial problems the industry faces, but it does have to work for everybody else as well.
A. Absolutely. LORD JUSTICE LEVESON And therefore any thoughts that you have in that regard or perceptions that you could offer I'd be very grateful to receive during the currency of my sittings.
A. Thank you very much. I will do my best on that. LORD JUSTICE LEVESON Thank you very much. MS PATRY HOSKINS Thank you very much. LORD JUSTICE LEVESON Right. We'll take a short break. (3.14 pm) (A short break) (3.21 pm) LORD JUSTICE LEVESON Yes, Mr Barr. MR BARR Thank you, sir. Our last witness this afternoon is Mr Aidan Barclay. LORD JUSTICE LEVESON Thank you very much indeed. MR AIDAN STUART BARCLAY (sworn) Questions by MR BARR MR BARR Mr Barclay, when you've made yourself comfortable, could you confirm your full name, please?
A. Yes. Aidan Stuart Barclay. LORD JUSTICE LEVESON Mr Barclay, can I start by thanking you for the obvious effort that you put into the statement and the interest that you've expressed in the subject matter of the Inquiry.
A. Thank you. MR BARR Mr Barclay, can I ask you: are the contents of that witness statement true and correct to the best of your knowledge and belief?
A. Yes, they are.
Q. You are the chairman of the Telegraph Media Group Limited, and you've been the chairman of I shall call it TMG from now on since July of 2004?
A. That's correct.
Q. The commercial interests of your family are diverse and include not only newspapers and magazines but also hotels and leisure, logistic operations, retailing and property; is that right?
A. That's correct.
Q. I'm going very briefly to get a feel for breadth of those commercial interests. In the hotel and leisure field you tell us that your family owns the Ritz Hotel, a stake in the Intercontinental Hotel group and also a rather larger stake in the company which owns Claridges, the Connaught and the Barclay Hotels?
A. That's correct, except the Intercontinental stake was sold subsequently to that note.
Q. Was it?
A. Yes.
Q. I see. And within the Ritz, ownings are the Ritz casino?
A. Correct.
Q. In the retailing sector, you own the Shop Direct group, which is, is it right, the largest internet retailing business in this country?
A. Probably, other than Amazon, yes.
Q. On the newspaper side of things, TMG includes, of course, the Daily Telegraph, the Sunday Telegraph, the weekly Telegraph, Telegraph.co.uk and you also own the Spectator and Apollo magazines?
A. Correct.
Q. You used to own the Scotsman, but that has now been sold?
A. Yes. I think it was 2005, the end of 2005.
Q. In the field of deliveries and logistics, you own the Yodel delivery business. In property and real estate, there is a holding company, Trenport Investment Limited, which has a portfolio the development properties and also manages the property interests within your group of companies?
A. That's right, yes.
Q. If we move now to your business model
A. Yes.
Q. you tell us that as a family you believe in stewardship?
A. Yes.
Q. And you give as examples of that the commitment to keep going and to nurture great iconic companies such as the Telegraph and the Ritz?
A. That's right.
Q. When you took over TMG, you tell us that you appointed Murdoch MacLennan, who was then the group managing director of Associated Newspapers, to help you to run TMG?
A. Yes, absolutely.
Q. And your efforts, which obviously not only included that appointment but many other labours, have borne fruit because you tell us that at the end of March 2012, the group reported pre-tax profits of ?55.7 million for the 2011 financial year?
A. Yes, fortunately, I should say, yes.
Q. And that is, of course, against the background of very tough economic conditions and continued investment in the digital sector?
A. Yes, that's correct. The newspaper business has, I think, lost about 40 per cent of its circulation in the last ten years, so the background is tough.
Q. You tell us that you make clear to all of your CEOs that you expect the highest standards of governance and ethical behaviour, as would be expected from a public company, but that you try to avoid micromanagement and you stand back on a day-to-day basis?
A. Yes, indeed. For two good reasons: first of all, there's not enough time to micromanage everything that goes on and secondly, I believe that people should be entitled to do their job correctly as much as possible, and so I tend not to micromanage on a day-to-day basis.
Q. So if I've understood your witness statement correctly, what that means is that you are based in an office of Ellerman Investments Limited in London and from there you set the governance frameworks and you also keep in touch through an established management chain, through points of contact with your CEOs and from there down the chain?
A. It's supposed to be both a formal and regular flow of contact and information and, laid on top of that, an informal one as well.
Q. And you give us an example of the sort of contact you might have with your CEOs: weekly video conferences and often calls at the end of the week to keep a finger on the pulse of what is going on.
A. Correct.
Q. You tell us, on the subject of press freedom and public interest, that you believe a free press is fundamental to the proper functioning of a democratic society and it's necessary to scrutinise those in positions of influence and power and to report in the public interest.
A. Absolutely fundamental.
Q. And in relation to the Telegraph, you point to the very well-known example of the exposure of the MPs' expenses story.
A. Yes.
Q. And also well-known stories such as those about the exam boards and abortion clinics and to campaigns run by the Telegraph on, amongst other things, reforming planning laws, the forestry sell-off and the lest we forget initiative?
A. And those are fairly recent examples. Yes, indeed.
Q. So far as potential conflicts between your commercial interests and the public interest in free and independent reporting, you tell us that the policy adopted is not to interfere in the editorial content of newspapers and magazines, and where your various businesses deal with one another
A. Yes.
Q. to ensure that they pay for the services that they obtain from each other?
A. Correct. I think that's an important discipline so that you understand how both companies are behaving. We operate an arm's length principle.
Q. In terms of editorial governance and independence, you tell us that editors working for the Telegraph have the freedom to edit their newspapers as they think fit and make all editorial decisions. So the final decision rests with the editor; is that right?
A. Yes, absolutely, and that's been the case ever since I've been involved.
Q. As to the appointment of the editors, that, you tell us, is not actually a matter for you but for the CEO
A. Murdoch MacLennan; that's correct.
Q. Do you get consulted or informed about editorial appointments?
A. Well, it's a pretty big event. If there's an editorial change, then I would expect to know about it. I'm not necessarily informed prior to, but I would expect to be told about it as we go along, that we're going to make the following change or Murdoch's going to make the following change. So I would certainly expect to know about it.
Q. So far as your relationship with editors is concerned, you tell us that you always make clear to them that you regard this relationship and any expression of views as being those of an avid reader.
A. Yes.
Q. I'm going to come back later to explore some of your interactions with your editors, and we can look at that in more detail, but that is the point of view that you would like to be seen from?
A. Yes. I mean, first of all, I've always been a good newspaper reader anyway, and I'm a particularly obviously good Telegraph reader these days, and the driving principle for me is that the editor should follow his readers, because that's what's more likely to make the Telegraph or any newspaper a success. So I always characterise that the relationship with the editors, that you have to serve your readers first and do what you think is correct for them, rather than my particular view on something.
Q. Coming to the political standpoint of the Telegraph, it's well-known and you say so clearly in terms that the Telegraph has been a paper which has supported and continues to support the Conservative party, and is conservative with both a small and a capital "C".
A. Yes, that's correct, and has been since before we came along, so nothing's changed in that sense.
Q. Amongst the documents that you've disclosed to the Inquiry and I'm looking now at the supplementary bundle of documents, tab 1D, page 40
A. Yes.
Q. We have a handwritten letter from Murdoch MacLennan to David Cameron dated 9 February 2010, so a few months before the last General Election. Looking at the middle paragraph of that letter, which is a thank you letter for a dinner: "As I said when we sat down for dinner, we desperately want there to be a Conservative government and you to be our next Prime Minister. We'll do all we can to bring that about and to give you great support in the gruelling months ahead, and as we are no fairweathered friend, we'll be there with you too when you're in Downing Street." Does that, in a nutshell, encapsulate the political standpoint of the Telegraph?
A. Of the Telegraph, yes.
Q. Moving now to some particular examples, can we start off, first of all, with some evidence that was given by Mr Dominic Lawson about coverage of a story involving David Blunkett.
A. Yes.
Q. I don't think we need go into any detail about the content of the story. What I'm interested in asking you about is your interactions with Mr Lawson in relation to it. I'm going, first of all, to take you to what Mr Lawson said in the Select Committee about your interactions, and then I'd like you to tell us what your reaction is. The account is found at tab 7 of the main bundle, page 3 of 5 in that tab.
A. Yes, I have it.
Q. The background is that Mr Lawson had made clear that it was extraordinarily rare for you to seek to get involved in any editorial matter.
A. Yes.
Q. I'm looking now at question 930, a question put by the Bishop of Manchester, in the larger of the two paragraphs, about halfway down: "It was under the Barclays' ownership. We had sort of hounded David Blunkett out of office, in effect, and we were pursuing the matter and it was a story to do with him [and I won't go into the detail]." Then he goes on to say: "And Aidan Barclay asked me not to run the story and I asked him: was there a commercial reason? And he said and I remember it because it was rather surprising: "David [and that is not Mr] Blunkett is a very important man and will be around for some time", and I replied that what we do is write about important people who might be around for some time and if I could not do that then I could not do the job. He backed down and the story was run." What's your recollection of that conversation?
A. Well, first of all, this is against a background where I think at least, as you say, four people are on record for saying that actually I don't have the habit of interfering with editorial matters.
Q. Indeed.
A. I think you had here Tony Gallagher, Ian McGregor, Fraser Nelson, I think previously, and Andrew Neil at some point have all confirmed that. This was a complete one-off. For some reason, I rang him. I can't remember why. In fact, he may have rang me. It was just part of a chit-chat and he said to me that: "We're running another story on David Blunkett", and from recollection it was about the fourth full-page weekly attack on David Blunkett or expose on David Blunkett, and I simply said in passing: "Do you think we might have had enough of that?" and he said, "No", for whatever reason it was. I'm pretty sure I wouldn't have said, "He's a very important man, that's a reason not to run it", because that's not the way I would think and I recognise that that's what newspapers do all the time. So the conversation moved on and in any event he published it, so that was the end of it. I certainly didn't insist that he didn't publish it. That wouldn't be my style.
Q. In your mind, were you coming to that conversation from the standpoint of the avid reader?
A. Yes.
Q. Who you've described before?
A. Yes.
Q. Do you think, though, that the reality that you're not an ordinary reader but the reader who owns the whole newspaper group means that the editor listening to you is going to perhaps hang on to your every word in a way in which he wouldn't in relation to the words of an ordinary reader?
A. Well, that's entirely possible, but I usually finish my conversations quite religiously with most of the editors and say, "Listen, this is a matter for you. You're in charge, you're the editor. You do as you see fit." But I think there were four weeks as I said, four pages, and I just thought myself it was a rehash of the same thing we read three weeks beforehand. LORD JUSTICE LEVESON It doesn't seem to have stopped Mr Lawson in any event.
A. Indeed, sir, he carried on. LORD JUSTICE LEVESON But, of course, if it did, if you were to cross your own line, then at least that would be clear to the editor.
A. Yes. LORD JUSTICE LEVESON But you have put Mr MacLennan in between you and the editor in any event.
A. Correct. MR BARR Going back to the transcript of the Select Committee, there's another passage which I think it would be right to allow you to comment upon. Again, tab 7, page 4 of 524 this time. Mr Lawson, responding to a question from Baroness Thornton I am going to read the second half of his reply: "I think the Barclay brothers want a quiet life, do not want any aggro, want it all to be nice and smooth and that is all very well but you should not own a newspaper if you do not want any aggravation. It is the wrong line of business. That is an intuitive judgment. It is very hard for me to say more than that." What's your response to Mr Lawson's opinion?
A. I don't think there's any evidence of that over the last few years. The newspaper's created plenty of trouble, particularly on the MPs' expenses that you raised, and the newspaper, as far as I'm concerned, is doing its job properly and that's what it's there for.
Q. Moving on now to another example where it's certainly been said that there might have been an influence in the editorial line, the story about Mr Cable.
A. Yes.
Q. The right honourable Vince Cable. Can we start with a little bit of background? It's right, isn't it, that the Telegraph Media Group was not supportive of the News Corporation proposed takeover of BSkyB?
A. Yes, I think that's correct, but I think you have to make a distinction. I think the stance of the Telegraph was that not that it was necessarily against it, but there were a number of fundamental issues which need to be examined. That's separate and detached from my own personal views on anything because I would not be involved in the submission or the meetings that were taking place by the Telegraph to put forward their case.
Q. I'll come to your personal involvement in a moment. I think we'll need to take this step by step. I got the words "not supportive" from a letter that you'd written to James Murdoch.
A. Yes.
Q. The Telegraph here not you personally, but the Telegraph had been a leading opponent of News Corporation's attempt to acquire the whole of BSkyB to the extent that Mr MacLennan had signed a letter, along with other executives, indeed from a very broad church of media groups
A. Yes.
Q. asking Mr Cable to consider blocking the takeover. Were you aware of the active opposition of the Telegraph Group campaigning against the takeover?
A. Certainly at a high level, yes. As I say, I was not involved in the meetings or the submissions, nor did I read the documents that were submitted.
Q. From your personal point of view, what was your concern about the prospective takeover?
A. Well, looking at it purely from the Telegraph point of view, there were potential two areas that would have concerned me. One was the possibility of the cross-sell advertising, which is across television and newspapers; in other words, bundled advertising that we wouldn't be able to do, and that would give them an advantage. And the second thing was Sky has about 10 million subscribers and there were lots of debates going on at the time and indeed now about how newspapers are going to deliver their content digitally to their readers, and I was concerned that Sky had a lock on 10 million subscribers that could receive solely News International title information and therefore also Telegraph would be excluded. Those were the two areas that concerned me.
Q. So essentially matters of commercial competition?
A. Correct.
Q. Against that background, can I take you to the story and the coverage of a conversation that was secretly recorded by Telegraph journalists of Mr Cable speaking to people he thought were his constituents? That story was initially published in December 2010, with the headline "I could bring the coalition down". It was immediately the subject of criticism. If I take you to tab 15 of the main bundle, we see the criticism covered in an article. What happened, isn't it, is that Mr Robert Peston went online with the article that you see at tab 15, because he'd been contacted by a whistle-blower
A. Yes.
Q. who was saying, "Well, in fact the Telegraph is sitting on rather more than it has published", and in particular Mr Peston drew attention, through the whistle-blower, to the text which is set out in inverted commas in that article, and says that: "What had not been published in that first article were the comments: 'I am picking my fights, some of which you have seen, some of which you may haven't seen, and I don't know if you've been following what has been happening with the Murdoch press where I have declared war on Mr Murdoch and I think we're going to win.'" And then further down, there is Mr Cable saying: "I have blocked it [that's the takeover] using the powers that I have got, and they are legal powers that I have got. I can't politicise it but from the people that know what is happening, this is a big, big thing. His whole empire is now under attack. So there are things like that that we to in government that we can't do. All we can do in opposition is protest." I have a number of questions arising out of that, but can I ask, first of all: did you have any knowledge before the first story was printed on 21 December 2010 that that story was going to be broken by the Telegraph?
A. Certainly not.
Q. What was the first that you knew of it?
A. Probably I read in the paper on the first day that it came out, and certainly knew nothing about it beforehand.
Q. At what stage did you become aware that Robert Peston had been told by a whistle-blower that the Telegraph had not published everything that it had recorded?
A. Probably the first time that it was released, a BBC or whatever it was press release. I would have been aware of it then. But it's not my habit to know about these things before they hit the press and I would have read about it like everybody else.
Q. The article goes on to point out the unhappy fact that the online version of the story was representing what had been published as a full transcript. You'll see that on the second page of the article.
A. Yes.
Q. I think there's no dispute that that must have been that that was not accurate. Are you able to help us with how that inaccuracy arose?
A. Without wishing to be unhelpful, no, I am not. You'll have to talk to Tony Gallagher about it, who was the editor at the time.
Q. It's been said that not publishing initially those comments had the affect of protecting, albeit, as things turned out, for a very short period of time, Mr Cable from the fate that became him and his removal from the decision-making process, and that keeping him in the decision-making process was in the Telegraph Media Group's interest because it's plain, like the Telegraph, he was against the takeover.
A. Mm.
Q. From your conversations with the managers concerned, are you able to help us with whether that was in fact the motivation from withholding the comments from the first story?
A. No, I'm not, I'm sorry.
Q. Have you spoken to them about it?
A. Well, it was a fairly big story at the time, so no doubt I did at the time, but it was an editorial decision and I didn't question it.
Q. Do you know how long the Telegraph had had the information before they published it?
A. No, I couldn't help you. I'm sorry.
Q. Can we move now to a further story, and that's the MPs' expenses.
A. Yes. LORD JUSTICE LEVESON Can you think of a reason why the Telegraph would have done this whole exercise if the purpose was simply to withhold some part of what they learnt?
A. It seems slightly counterintuitive to me, sir, but still. MR BARR Moving to the question of MPs' expenses.
A. Yes.
Q. When that story broke, had you been forewarned that was going to happen?
A. No, not at all.
Q. Can we move now to your relationships with politicians
A. Can I just say that the two questions you've asked me I don't believe it's in the editor's interest, in trying to do his job properly, that he's obliged to tell me exactly what's going on with some of these stories. I believe it's his responsibility to do these things in the interests of the paper and the interests of the reader. So it's not unusual that I wouldn't necessarily know about it. LORD JUSTICE LEVESON That is an interesting issue, isn't it, because the MPs' expenses cost your group a very, very substantial amount of money?
A. Indeed, yes, sir. LORD JUSTICE LEVESON It undeniably had risks associated with it.
A. Yes. LORD JUSTICE LEVESON And nobody had thought it appropriate or necessary, in the light of the way in which you conduct your paper
A. Yes. LORD JUSTICE LEVESON to at least alert you to the fact that this was coming down the line?
A. Murdoch McClellan must have known about it, obviously. LORD JUSTICE LEVESON No, I'm not suggesting he didn't know.
A. No. Certainly I didn't, sir. MR BARR Moving on to your personal relationships with politicians, you tell us at page 11, paragraph 37 of your witness statement, that you believe that all businessmen need to be aware of the political environment, and you point out the sheer number of people who are economically dependent upon your group alone. Does that paint the backdrop to all of your dealings with politicians, that what you're really concerned to do is to understand what they're doing and to communicate to them matters which are of concern to you from a business perspective?
A. Absolutely. Just to put it in some context, we have about 20,000 people working for us in various businesses in the UK, about 1,000 of those in the Telegraph. It seemed to me it was always my duty and is indeed my duty, as I think it is of most businessmen to get to know the politicians that make rules and regulations that affect their businesses, and so that's been my philosophy: to make sure I try and understand the drift and the ideas and what motivates the politicians who are making rules and regulations that change our lives, as business people, primarily.
Q. You make it clear at paragraph 38 that no prime minister or opposition leader has ever asked you for a favour and you say that you've never asked for one. You also make the point that neither you nor any of your family businesses have donated money to a political party, at least in the last 25 years.
A. That's correct.
Q. Can I ask now generally about your approach and dealings with politicians: to what extent do you use hospitality?
A. Sorry, what do you mean by "hospitality"? Go out and offer them breakfast, for example?
Q. If we start with that. Drinks and meals
A. Yes, I have entertained them for breakfast, yes, and dinner on a few occasions, yes.
Q. Do you go beyond that?
A. In what incidence?
Q. To hospitality that might, f you were to put a financial value on it, be more valuable than a good meal out at one of your hotels?
A. No, it's not. I don't go beyond that, no.
Q. Gifts?
A. A plant at Christmas or of that nature, but it's no more than that.
Q. I'm not suggesting any of this is improper, but I just want to know how it happens and what's done. Where you see an opportunity for one of your companies commercially in dealing with government, would you contact the government about that?
A. Only as part of a process which I've been advised is the correct way to go about things. So, for example, if we had a transaction that involved the DTI, I would seek advice as to which departments need to be informed or contacted or there needs to be meetings, and I would fall into that process. I last went through a Competition Commission Inquiry in 2003, and as part of that process, I was obviously advised to write to a number of government departments, to go and see various people, and I would do so as part of a process, yes.
Q. Moving now to more particular matters, you tell us in your statement a little about your relationship with each of our last three prime ministers. Starting with Mr Blair, you tell us that you saw him on a number of occasions. You describe those as relaxed and social, and say he was interested in the press but you don't recall him ever raising specific editorial matters with you or suggesting that Telegraph titles might adopt a different political stance. How would you best describe the way in which you interacted with Mr Blair?
A. Well, it was some years ago now, but it was fairly relaxed, I would say. Inevitably, if it was a meeting, he had somebody with him, so he was not often on his own, and I remember having dinner with him once or twice and it was fairly informal, a semi-social occasion.
Q. If we move now to Mr Brown. You tell us there, again, that you had a number of meetings with him, and that a feature of those was his well-known interest in the granular detail of economic policy and economic theories and the state of British business. We've got the benefit of disclosure of documents showing communications between you, your office and Mr Brown and his office, and the theme is very much economic, isn't it? It seems that you, for example, very often would send him articles about economic matters; that is right, isn't it?
A. Correct, yes.
Q. And he, in turn, did the same
A. With me.
Q. and send to you
A. Yes.
Q. books about economics matters.
A. I always thought, funnily enough, it was beholden sometimes on business people to bring things to the attention of politicians, who perhaps may not see these close hand or these experiences close hand, and as you say, Gordon Brown was well-known for wishing to understand the minutiae of economic policy and I had a number of chats with him about economics. I gave him a very well-known book in the end of 2008 about the history of American monetary policy. It's written by Milton Friedman and Anna Schwartz and there's a famous chapter in there called "The great contraction" chapter 7, I think and it goes on to what happened to the US economy in 1929 and 1930, and it was very relevant in 2008 when Gordon Brown was facing these unprecedented economic waves.
Q. Did you, in dealing with these two Labour prime ministers, ever feel that you were in any difficulty because you were also the proprietor of a well-known and solidly Conservative-supporting newspaper group?
A. No, I didn't feel any difficulty whatsoever. I always made it clear to everybody that the editor was doing the job of editing the paper, and if they had any issues, they should pick it up with him, but I was never asked to do anything. All the politicians I met, particularly the prime ministers, have always been fascinated about the changing media scene. To what extent is newspaper circulation declining, to what extent are people going online, how can you make money out of the Internet, where is the advertising going? So I had that conversation with all of them about newspapers. Sometimes they would say to me: "Well, how do you think the economy is going?", that kind of conversation, but no, to answer your question, they never asked me anything of that nature. LORD JUSTICE LEVESON So actually, the process is two-way. You've said that as a businessman you need to be aware of the political environment.
A. Yes. LORD JUSTICE LEVESON And you need to get to know politicians to understand their ideas and what motivates them.
A. Yes. LORD JUSTICE LEVESON And equally, it's an opportunity for it to happen the other way around.
A. Indeed, sir. LORD JUSTICE LEVESON For them to get to know you and what motivates you.
A. Yes. LORD JUSTICE LEVESON In particular, in the context of this Inquiry and I appreciate that your interests are far more diverse than this the sort of issues that are facing the media.
A. Absolutely. LORD JUSTICE LEVESON So you have, to that extent, a route in
A. Yes. LORD JUSTICE LEVESON to high political thinking so that at least they understand where you're coming from.
A. That's certainly true, sir, but I do also remember talking to them at various times about other things other than media. I mean, that's obviously come up, but I mean, I've complained to George Osbourne fairly recently about the burden of business regulation in this country. I've talked about the difficulties, for example, of Chinese people getting visas in the UK, because wearing my hat as a hotel proprietor, Chinese people get a great deal of difficulty getting visas to visit the UK as tourists. So there are broader conversations LORD JUSTICE LEVESON You have enormous interests across a range of industries and businesses
A. Correct. LORD JUSTICE LEVESON all of which will or may be impacted by regulation?
A. Absolutely. LORD JUSTICE LEVESON But that is an advantage, then. You learn from the politicians what they're thinking about, but equally they learn what is happening at the coalface?
A. I think that's certainly true, and that's often struck me. When they ask me questions, it's often struck me that obviously they're operating at a much higher level than I am, and somewhat removed from the sort of day-to-day experiences that I have, so I've always seen it as an opportunity to explain certain things that are going on that have come across my desk, for example. LORD JUSTICE LEVESON But do you think you get that opportunity to explain what's happening at the coalface in part, at least, because of your media interests?
A. I don't know exactly the answer to the question LORD JUSTICE LEVESON No, I appreciate it's
A. But I think look, if I can say that if I was running a sort of FTSE 100 company it doesn't matter what industry was involved I would think it was my duty and in fact I'd be derelict in my duty if I didn't make an effort to go around and see the politician or the Prime Minister that was in charge of regulation for my area, and so I'm assuming that a lot of people do it. Now, it may be that I'm more fortunate than others, but I think that other people should be doing it if they're not. LORD JUSTICE LEVESON Well, I understand that. The question is where the balance lies and whether the media have had a particularly fortunate route into very significant political players, whether government or opposition, that hasn't been perhaps as transparent as it could be.
A. That's entirely possible, sir, yeah. LORD JUSTICE LEVESON And actually that's what I'm required to think about, I think.
A. That's entirely possible, yes, sir. MR BARR Amongst the documents that you've disclosed are a series of documents which deal with the way in which the Telegraph has covered some Labour government policy, and in particular it follows a theme of whether that coverage is fair and balanced. Can I take you to that, please? If we start in the supplementary bundle, tab 2B, page 101. You should have there a memo from Will Lewis, managing director and digital editor-in-chief, to a number of editors in the TMG group.
A. Yes.
Q. It's dated 8 January 2010. All the documents in this series are in 2010 and straddle the General Election. Mr Lewis is briefing the editors following a meeting that he has had with Mr Brown, and he says: "As you are aware, the Prime Minister has expressed concern that the Telegraph, among others, has, in recent weeks, carried content which he believes to be unfair and unbalanced. While I believe that much of his criticism is misplaced, I also think it is incumbent upon us to ensure we maintain our very high standards of balance and fairness in our political reporting and comment " Forgive me, it may have been my mistake, but it was not economic but political reporting. Then he goes on, in essence, to exhort his editors to be firm but fair in their coverage of such matters. Were you aware of Mr Brown's concerns at the time?
A. No, I don't believe so.
Q. Are you supportive of the exhortation that was given by Mr Lewis to be firm, fair and balanced?
A. Absolutely.
Q. We see next at page 109 an email from Mr Gallagher to the executive office. So that's addressed to you from Mr Gallagher. It says that Mr Brown's foreign affairs adviser and a key Number 10 aide had gone out of his way to praise your fairness and balance that's not you personally but the paper during the election campaign when he visited last week, saying: "You carried more policy stories than anyone else over the last three weeks. We've got no complaints." And then praising your paper's political correspondent. Does that fairly represent the understanding of the way in which your paper had covered matters and the way in which the Labour party perceived that matters had been covered?
A. I think so. It was certainly obviously the view of the person who wrote it and I'd like to think the Telegraph did a good job and was fair indeed, yes.
Q. Do you know of anything to the contrary, that was out of kilter with that particular piece of praise?
A. No, I don't.
Q. Finally to page 110, there is an email from someone at the Telegraph, again to the executive office. It's a draft letter. It's dated 10 November, and what it seems to deal with is some point it's not clear from the disclosure what on which there had been a parting of the ways between Mr Brown and people at TMG, and what is being proposed to try and deal with matters is that there is tea for Mr Brown with both Mr Gallagher and Mr McGregor as well as Murdoch MacLennan to discuss the matter. Then it says: "Aidan feels, as I do, that you should be afforded the proper respect shown to a former prime minister in every sense and whenever we get it wrong, we should be quick to apologise and correct any mistakes."
A. Yes.
Q. Can you help us with whether or not there was ever the meeting that was proposed?
A. Well, I certainly didn't attend it if there was one. Certainly the penultimate paragraph that you just read out certainly would be my standards of operation, that the former prime minister in every sense, we should be quick to apologise and correct any mistakes. That certainly would be my philosophy.
Q. Can we move now from Mr Brown to your relations with Mr Cameron. Again, you've given disclosure which shows that you similarly built up a relationship with him. You tell us that he has a background in the media and that you've always found him to be knowledgeable about and interested in the way the newspaper industry works and is developing, and like his predecessors, he also always has been interested in general economic and business discussion. But it's right, isn't it, that the subjects on which you seem to have communicated and the ways in which you've communicated have been different, haven't they?
A. Yes, they have been slightly different because I think Gordon Brown was particularly interested, given his background, in economics, so it tended to have a very sort of economic flavour to it. The current prime minister is not quite as interested in the minutiae of that.
Q. Amongst the other things that we have, we have a series of text messages between yourself and Mr Cameron.
A. Mm.
Q. So it follows from that that you have each other's mobile phone numbers and, on occasion, exchanged text messages?
A. That's correct.
Q. Looking at the supplementary bundle at tab 1(b), the first of the text messages that we have is sent by you to Mr Cameron. It's dated 23 March, 2010 and it says: "David, good to see you. Congratulations to you both on the prospect of an addition to the family. Spoken to Tony G Is that Tony Gallagher?
A. It is indeed, yes.
Q. and repeated out conversation. Asked him to be in touch to arrange daily call during campaign as discussed." Is that a reference to the forthcoming election campaign?
A. Yes, I believe it was.
Q. And the daily call that's referred to, who is the call to be between?
A. Well, as you probably realise, in any large organisation sometimes you have difficulty communicating a message across to the right person, particularly if it gets passed down the line, and so I suggested to the Prime Minister that if he wanted to get the attention of the editor and wanted to get his message across in the most efficient manner, he should make a habit of phoning him on a daily basis and I recommended that's what they should do.
Q. Sorry, is it the Prime Minister calling
A. It's whichever way around it was, but there should be a daily call
Q. Between the editor and the Prime Minister?
A. Yes. LORD JUSTICE LEVESON He wasn't the Prime Minister then; he was then the leader of the opposition. MR BARR Yes, sorry.
A. Sorry.
Q. Okay. And as far as you know, did that happen?
A. Well, I know it started, but to be honest, I didn't check it on a daily basis.
Q. There are a number of text messages which are simply arranging various contacts, but there are a couple which are more substantive. Can we go, first of all, please, to page 24, where we have a text message of 24 May 2011, so some time later, where you are texting: "Suggest, therefore, Bank of England announce extension to liquidity scheme. Allow banks, say, five years to implement Basel III, and if you can scrap talk at bank tax. Other countries won't go along with it anyway. Best, Aidan." So in other words, in a nutshell, in a couple of lines you're communicating to Mr Cameron your economic thoughts?
A. Yes, absolutely.
Q. And there's a similar text which is over the page, seven minutes later in time, where you say: "David, I'm sure you're aware that the credit markets are not good and are likely to get worse, as they all err on the side of caution faced with combination of more regulation Basel III, more liquidity losses from sovereign debt, the end of Bank of England support and potential tax, all at the wrong time for economy given also government cuts. I hope you don't mind be mentioning it. Regards Aidan." Then over the page there's a text from Mr Cameron sorry, it's from you about Mr Cameron: "David, did you ring me? I've had a missed call from your mobile number. Aidan." So that string of messages seems to suggest that you were keen to speak to him and to communicate to him economic thoughts at a particular point in time; is that right?
A. Absolutely. This is kind of an extension of what we were talking about earlier on with Prime Minister Brown, where if I came across something I thought was of use, I would pass it on, and this was an extraordinary period of time where the sort of banking system was grinding to a halt, so I was busy sending some text messages in the hope that they would be useful.
Q. Before we move from the text messages, can I ask you: in terms of being a medium for communicating your perspective to the Prime Minister himself, how useful has having text contact been?
A. You can see there hasn't been a lot of them over time. I'd like to think it's more useful because it goes directly to the recipient, rather than sometimes get lost in the system. That's been useful occasionally. I can't say it's extraordinarily useful. Could I equally send an email? Probably. LORD JUSTICE LEVESON Interesting question, of course, which you can't answer, is: to what extent is the development of this relationship because of the respect in which your very diverse interests are held, and therefore you bring value to those who are making decisions because you're involved in so many pies, and to what extent is it because you obviously have a view which may be reflective of your press interests, which also is of value? It's quite difficult to unpick those.
A. I understand that, sir, yes. MR BARR As with Mr Brown, you've sent Mr Cameron articles, although in this case the articles that you've sent him there are two that you've disclosed. The first concerns a European matter and the second tax. If we look at the first one, it's at tab 1D, page 35. It's an article that had been published by the Telegraph about European policy and the Conservative party, and which essentially drew attention to what the Germans were doing and the concept of constitutional identity, essentially having lines which the EU would not cross on constitutional matters within member states. Why was it that you sent that article to Mr Cameron?
A. Probably simply because it was topical at the time. You know, there was EU issues going on at the time which were being reported, probably negotiations by the government, and I thought this was a fascinating piece written by a Professor of European law at the London School of Economics, and I thought it might be interesting for the Prime Minister to see it. I don't think politicians have got time to read the newspapers, and certainly occasionally when I've sent articles, they've said to me: "I wouldn't have read it unless you'd brought it to my attention."
Q. Were there any collateral communications, conversations, telephone calls, where you expressed an opinion as to whether constitutional identity was a good idea or a bad idea?
A. No, there weren't any specific conversations on it. It may have come up over dinner vaguely, but it wasn't attached to anything else specific, if that's what you're asking me.
Q. No, the covering note is decidedly neutral.
A. Yes.
Q. In relation to the tax article, at page 45 is a covering email and 46 is the article. Again, the covering note is very short. It just says: "Mr Barclay has asked if you could please bring this to the Prime Minister's attention. He looks forward to seeing him again on Thursday evening." The gist of the article is that taxing high earners is counter-productive because they will just leave. Again, could I ask why it was that you decided to send that article to Mr Cameron?
A. I can't recall the background to it, but it was probably, again, a topical subject at the time and there was a great debate going on about whether actually the sort of laugher(?) curve of taxation actually applies, whether if you increase taxation you actually collect less money or vice versa. There was an interesting article on it by Fraser Nelson and I thought it might be of interest.
Q. Would it be right to say that you are against the concept of high taxation of high earners?
A. Well, to be honest with you, I've never I'm against it, yes, but I've never heard the answer to this question which is posed in this article, about whether high taxation does or doesn't produce any more money for the chancellor. It's quite a fascinating subject.
Q. The example given in the article is Michael Caine, who, after leaving the country, went on to do rather well financially.
A. Yes, that's correct.
Q. There is other correspondence in the bundle, and we can deal with it, I think, quite shortly. When the Prime Minister did form a government, you sent him flowers and wished him well, and he wrote back thanking you for your huge support, and there is similar correspondence between him and Mr MacLennan. Is that sort of representative of the sort of relationship that you've sought to establish with Mr Cameron?
A. Well, I think it's shall I say a cordial, businesslike relationship? "Huge support" is a word that or a phrase that seemed to have cropped up a number of times. I don't think that was necessarily aimed at me, but, yes, cordial, friendly relationship.
Q. Thank you. I think that's all I need deal with on the particular correspondence, but perhaps we could now go in the main bundle to the disclosure you've given about meetings you've had with senior politicians, tab 5 of the main bundle. I'm not going to ask you about all of these, but can I just ask you about a selection. First of all, at the start of the list, you tell us that in April 2004 you met Tony Blair at a dinner at Lord Levy's home and on 24 June 2004 you met with chancellor, as he then was, Gordon Brown at the Treasury. Now, that was, in both cases, not along before at the July 2004 acquisition of the Telegraph group. Was that forthcoming acquisition mentioned at either of these occasions?
A. Well, if it was, it was very, very what's the cord? cursory, because the regulatory advice that we got prior to the purchase of the Telegraph was that there were no substantive competition or public interest issues. Secondly, we were in an auction process to bid for the Telegraph, and up until the day of signing, there were at least three bidders in the process, and we were obliged to bid, as indeed was everybody, on an unconditional basis; in other words, take the risk that there was no regulatory issues. So at both of those meetings, I didn't know whether we were the successful bidder or not of the Telegraph, and secondly, there weren't any regulatory issues to be concerned about. So could I say it certainly didn't come up? No, I can't, but it was very, very cursory, as I say, if it did.
Q. Moving to 23 November 2005, where you had dinner with Tony and Cherie Blair at your home, that was not long before the January 2006 sale of the Scotsman to the Johnston Press. Was that forthcoming disposition raised at the dinner as far as you can recall?
A. No, not at all.
Q. On 11 October 2006, Tony Blair attended a party for the business at the Mandarin Oriental. Can you help us at all with why it was that a sitting Prime Minister attending a party for a publication?
A. Well, I didn't invite them. There were several a couple of hundred people there from memory, and he was on the guest list and he turned up. It's certainly nothing to do with me.
Q. Then can I move to the end of the chronology? There are four meetings with David Cameron in the 12 months before December 2010. In November 2009, you have dinner as a guest of David and Samantha Cameron at their home. On 22 March 2010, you have breakfast with David Cameron at the Ritz. On 6 July, you meet David Cameron at Number 10, followed by a drinks reception, and on 18 November 2010, you have dinner with David and Samantha Cameron at Number 10. Thoughout that period, the question of the BSkyB takeover was in the background. Was that ever discussed or raised in any way at all in any of those four meetings?
A. I think, from recollection, at the dinner I had in their private apartment, I think the Prime Minister said, "Have you got a view on this BSkyB situation?" and I said, much like I said to you earlier on, that I had a view and I had some concerns about it for the two reasons that I've spoken about. But as it was a dinner where spouses were included, that was the end of the conversation and somebody interrupted or something else happened and the conversation moved on.
Q. So would it be fair to summarise that as that in very brief and informal circumstances you were able to communicate your views to the Prime Minister?
A. Well, first of all, he asked me, and secondly, he didn't comment on what I said. It was kind of a grunt and the conversation moved on.
Q. Are you able to help us with whatever other lobbying steps you might have taken? I use that word perhaps rather grandly, given what you've told us, but lobbying perhaps of sorts. What other steps did you take too get your point of view across about the BSkyB takeover?
A. None whatsoever. I've met nobody else and haven't discussed it with any other minister.
Q. I've been asked to ask you as well: what part did Lord Black play in lobbying or trying to communicate the Telegraph Media Group's position on that takeover bid?
A. I think you'd have to ask Lord Black for that. He obviously works at the Telegraph and he was involved in what was going on with the newspaper organisation and the other newspapers involved. I don't know, is the answer.
Q. Moving away now from prime ministers and former prime ministers to candidates for the Conservative leadership, rewinding back to 2005. You tell us on page 14 at paragraph 45 of your witness statement that you also met, as well as Mr Cameron, two of the other candidates in that contest, Mr Davis and Dr Fox, in both cases, at their request; is that right?
A. That's absolutely correct.
Q. I'd like to explore with you why it was that they were keen to come to see you. Some might surmise that as the owner of a Conservative-leaning newspaper which presumably has a lot of Conservative-minded readers, your newspapers would be a very important source of opinion, agenda setting and influence in that leadership race. Do you think that that might have influenced their desire to want to come and see you?
A. Well, that's entirely possible, but first of all, they asked for the meeting. I didn't ask for them to come and see me. Secondly, I don't quite know what was in their mind, and I couldn't possibly tell you, even half an hour after they left, exactly what they wanted. And thirdly, I would have been meticulous, as I am usually, with saying, "That's very interesting. Would you please talk to the editor? Here's his phone number."
Q. Shall we start with David Davis. Can you remember saying that to him?
A. I can't remember exactly, but that's pretty much how it would have went.
Q. And if I ask you the same question in respect of Dr Fox?
A. Yes, absolutely. I don't believe I've met either of them since, by the way.
Q. Did they ask you for anything in particular, either of them?
A. No, not at all.
Q. So I'm getting the impression that they simply wanted to show their faces?
A. I think that would be a
Q. Is that fair?
A. Yes.
Q. You tell us that you've not in fact met Ed Miliband or Nick Clegg. Is that still the case?
A. That's correct.
Q. In relation to other senior politicians, you tell us that you do meet other cabinet ministers and very occasionally shadow cabinet ministers. From the documents that have been disclosed, would it be fair to say that your dealings with Mr Osbourne have been predominantly to do with economic matters?
A. Yes, in some ways I've sort of picked up the conversations that I had with Gordon Brown with George Osbourne. So I tended to try and see him a couple of times a year and bring forward some of those sort of economic/business type conversations.
Q. The documents we have also show not only meetings between you and politicians but also those of many of your subordinates, and meetings between not only them and politicians but also meetings between them and special advisers. Can I ask you: in general terms, are you aware that there is periodic contact between your executives and politicians?
A. Yes. I'm aware that it goes on, of course. I'm not aware of every particular example that it goes on and nor am I necessarily notified before it happens.
Q. Are salient communications arising from those meetings passed up the chain to you?
A. Not necessarily. They could be it depends. I think if there's anything that's of particular interest, it might be passed on but if not, not at all.
Q. And are you in favour of that sort of contact?
A. I think from a journalistic point of view, obviously that's very important. They need to do their job. I think, wearing my Telegraph hat and responsibility at the Telegraph, it's very important to me that the Telegraph is involved in everything that goes on, because that's the best way it can do its job properly. And in 2004, when we arrived at the Telegraph, the Telegraph had managed to get itself in a situation where it never spoke to the Labour party and had fallen out with the Conservative party, and I thought that was a daft position to be in for a market-leading broadsheet Conservative paper. So to the extent that anybody asked me, I would insist that they are in touch on a regular basis with politicians right across the board, because that enables them to do their job properly.
Q. You sum up this section of your witness statement at page 15, paragraph 49, where you say that you have no problem in principle with greater transparency in the relationships between politicians and those involved in the media business, but enhanced transparency should not compromise confidential sources of information or, in a commercial context, undermine the normal rules of commercial confidentiality. You also make the point that you don't think the position should be any different for publishing businesses as opposed to other companies. On that question of transparency then, against the background of your acceptance in principle that there should be transparency, can I ask you: how much transparency do you think is appropriate?
A. Well, assuming that, as I understand it now, that the politicians are obliged to publish I don't know what the frequency is, but they're obliged to publish their meetings. That's a certain degree of transparency, assuming that's going to be commonplace going forward, but I think it would be not difficult for me to say that civil servants should be present and a note of the meeting should be taken. So that kind of transparency would give me no difficulty whatsoever.
Q. What do you envisage should be done with the note? Is that note going to remain on file in case there is some controversy or is that note going to be published, with suitable redactions to preserve commercial confidences and so on?
A. Yes. I mean, it could be published. I think obviously there are sensitivities, particularly where journalists might be doing their job, but I think the mere fact that somebody else is present and taking notes tends to make people more cautious, perhaps.
Q. Yes, indeed. I'd be interested in your view. The last witness was obviously concerned that there might be some chilling effect on free discourse. Do you share that concern or not?
A. Personally, for the kind of things I've ever talked to a politician about, it wouldn't have the made any difference. But I can understand how people would feel cautious about it.
Q. So am I to take it that what you're really saying is there's no problem in principle with publishing a minute with suitable redactions, as long as you have a mechanism, in particular cases of sensitivity
A. Correct.
Q. where it would be appropriate, for quite proper reasons, not to publish the document?
A. Correct.
Q. We move now to LORD JUSTICE LEVESON Just before we do, while we're dealing with this topic, I wonder whether you're right to say that there is no difference between other business, the FTSE 100 type business, and those that publish newspapers, for this reason I'd welcome your view that those that run businesses will, of course, have a view to provide the Prime Minister or the minister, whoever they're seeing, of their industry.
A. Yes. LORD JUSTICE LEVESON They would be able to learn, as you do, from the minister. But there is nothing that they have to offer, in one sense. Whereas with the best will in the world and you may have put into place all sorts of protective measures so that it doesn't apply to you the press do have something to offer. Not necessarily outright support; it can be much, much more subtle than that, and it would be foolish not to recognise that politicians must understand that. Giving their policies a fair wind, perhaps being not quite as critical as otherwise they might be do you see that there is that scope which doesn't exist, for example, if you were just representing a hotel business?
A. I agree. There is obviously a distinction, yes. There's a distinction in terms of I mean, the press has got a privileged position in that sense, and other industries don't necessarily have that. Other industries can be equally as important in a different sort of way. I mean, if I was bidding for an international contract and I needed political support, that would be very important, and I start from the basis that I wouldn't necessarily want all the meetings kind of necessarily transparent if I was trying to win a contract or something. LORD JUSTICE LEVESON I understand that.
A. So I think the answer to your question is: yes, the press does have a different and unusual position. LORD JUSTICE LEVESON But in your example where you're bidding for a contract, you're still seeking some assistance
A. Correct. LORD JUSTICE LEVESON from the government
A. Politicians. LORD JUSTICE LEVESON from politicians, and you're not really, by definition, offering anything in return or giving the perception that you may be able to provide something in return.
A. I think that's an important distinction and I agree with you, yes. LORD JUSTICE LEVESON What concerns me is: how that problem and that perception should be addressed. Let me make it abundantly clear: you and indeed anybody else is entitled to be a friend of anybody whom you wish to be a friend of, and equally politicians are entitled to be friends with whomsoever they wish, but what I think I'm asked to consider within the terms of reference that I've been set is how one seeks to distinguish between that, on the one hand, and the potential, at least, perception of influence that might work both ways on the other.
A. Yes. LORD JUSTICE LEVESON If you have any views on that if not now then considered views over the next month or so I'd be very interested to receive them.
A. Could I think about it and write to you, sir? LORD JUSTICE LEVESON You certainly could.
A. Okay, good. LORD JUSTICE LEVESON Thank you. But I'm not barking up a tree that
A. No, you're correct. LORD JUSTICE LEVESON Thank you. MR BARR The final section of your witness statement deals with culture, practices and ethics of the press, and you point out that even though the Operation Motorman leak table published by the Information Commissioner contained no entries in relation to any TMG publication, that your organisation nevertheless took internal steps to confirm that no journalists had been involved in making payments for information to private detectives; is that right?
A. That's correct.
Q. On the question of future regulation of the press, you tell us at paragraph 53 of your witness statement that you've met Lord Hunt of Wirrell, and discussed plans for changes to self-regulation to produce a tougher system of regulation and you're supportive of his direction of travel. You also tell us that the Telegraph is able and committed to financing its share of press regulation; is that right?
A. That's true, but can I just make a comment? To put this into context, I find it very difficult to volunteer for more regulation because I think we're over-regulated in a business sense in this country, anyway. Secondly, the Telegraph addressing the media section, the media has about 13 different inquiries going on at the moment into aspects of its operations, including three from the police. The Telegraph has not been involved in some of the alleged practices that have been going on. The media industry employs about 250,000 people in this country, and the indiscretions or alleged indiscretions are a relatively small number of people, and I think the newspaper industry, as I said earlier on, has lost about 40 per cent of its circulation in the last ten years and has some very serious issues to face over the next few years. So I think the balance here is about, of course, trying to ensure there are some standards of operations, but I think in the context, we don't want to destroy an industry through overregulation, and there is such a thing called regulation creep, which means that a set of regulations in isolation don't ruin a business, but actually step back over a number of years, layer on top of layer, does have a cumulative effect, and I am concerned that we don't go too far in the proposals.
Q. Can I take from that that what you're saying is you're not against regulatory change
A. Yes.
Q. but you're urging the chairman to be very careful to devise recommendations which will not harm the industry economically?
A. Absolutely. LORD JUSTICE LEVESON Well, I have no difficulty with that. My problem is to find a solution that satisfies what I consider to be legitimate public concern and indeed I think only one person has given evidence and supported the present PCC
A. Yes. LORD JUSTICE LEVESON in the entirety of the evidence that I've received which at the same time provides a mechanism that works for the industry.
A. Yes. LORD JUSTICE LEVESON You may be aware that I have asked people about a system that also encourages much swifter resolution of a number of the sorts of issues that can arise, including privacy
A. Yes. LORD JUSTICE LEVESON and even but this is a big ask some mechanism to resolve arguments about defamation.
A. Yes. LORD JUSTICE LEVESON The trick is to create a system that is not overly bureaucratic, that can work speedily and efficiently, but that can command public confidence. I hope that none of those would be a difference between us.
A. I agree entirely with your direction, sir. LORD JUSTICE LEVESON The problem is that I have a concern that what has been called the horror of statutory regulation may misunderstand the value of an Irish-type statutory framework, which then leaves the regulation entirely independent but provides an element of independence which I'm not sure otherwise will be forthcoming. Do you understand the point?
A. I do. LORD JUSTICE LEVESON Do you have an issue about that?
A. I don't have an issue with the direction that Lord Hunt is heading in. I'm not sure whether statutory is necessarily the right way. I'm personally a believer in self-regulation. I also think we have to be careful that there's a lot of other people involved in the media today in its broadest sense that weren't factors ten years ago, and so I think we have to be careful about selecting only newspapers for this regulatory framework LORD JUSTICE LEVESON I agree. Mr Lebedev put it earlier this afternoon when he sought to remove the distinction between issuing on dead trees
A. Yes. LORD JUSTICE LEVESON or digitally, and I understand the point entirely. But one of the problems, therefore, becomes how you bring everybody into the tent, and with the best will in the world, getting everybody both from the dead tree brigade and the digital brigade into the same tent may be a quest too far for a contractual solution.
A. I understand the problem and I understand the question, too. I think it does need to include everybody. I'm not so bold at this moment in time to say it needs to be statutory, but I understand the problem. LORD JUSTICE LEVESON I'm not saying it's statutory; I'm merely saying that the framework, what is an acceptable solution could actually I'm not there yet, but could be set in a statute and then let everybody get on with it. The issue may be the extent to which it is seen as truly independent, if it's being financed through all the proprietors, and you don't need my me to identify the issues.
A. No, no, I understand that. Look, I'm not an expert on statutory contracts and statute, but I'm just urging caution. I understand the issues and I understand where you're trying to get to, and I certainly support the notion that everybody should be included and should be somehow obliged to be included. I don't understand how we solve the problem. That's what I'm LORD JUSTICE LEVESON I love that. "Somehow obliged", yes. All right. MR BARR I think I'm very happy to leave it at "somehow obliged", Mr Barclay. Thank you very much.
A. Thank you. LORD JUSTICE LEVESON Mr Barclay, you've said there are a couple of things that you'd like to think about and indeed, if there is anything in the future that you further would like to offer, I'd be grateful to have the benefit of your views.
A. Thank you so much. LORD JUSTICE LEVESON Thank you very much indeed for coming.
A. Thank you, sir. LORD JUSTICE LEVESON Thank you. Right, 10 o'clock tomorrow morning. (4.56 pm)

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Witnesses

Aidan Barclay

Journalist & Media

Gave a statement at the hearing on 23 April 2012 (PM) ; and submitted 20 pieces of evidence

Chairman of Telegraph Media Group, a subsidiary of Press Holdings and responsible for The Daily Telegraph and The Sunday Telegraph. He told the Inquiry he believed in “self-regulation”.

Evgeny Lebedev

Journalist & Media

Gave a statement at the hearing on 23 April 2012 (PM) ; and submitted 5 pieces of evidence

Born 1980. Billionaire Russian-British owner of Lebedev Holdings Ltd, which owns the London Evening Standard, The Independent and the TV channel, London Live. Gave evidence to the Inquiry on his perception of the importance of a free press.

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Afternoon Hearing on 23 April 2012

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