Vince Cable has claimed News Corporation made “veiled threats” against the Liberal Democrat Party over the BSkyB bid.
The business secretary – in charge of overseeing the proposed takeover until December 2010 – told the Leveson Inquiry today colleagues had approached him claiming his party would be “done over” by News International newspapers if the bid was rejected.
He said he believed the Murdoch’s political influence had become disproportionate. He intervened in the bid on public interest grounds on November 4, 2010 after deciding a change in ownership at BSkyB could have wide ramifications on other companies.
He said: “I had heard directly and indirectly from colleagues that there had been veiled threats that if I made the wrong decision from the point of view of the company [News Corp], my party would be – I think somebody used the phrase ‘done over’ in the News International press and I took those things seriously, I was very concerned.”
He later added: “I was concerned at all times that I should act properly, and did so, but I was also conscious that by putting the matter in the hands of independent regulators, this was contrary to the interests of News Corp and indeed what they wanted, and would have repercussions.”
Cable, who refused to name the politicians he had spoken to, said he believed the threats came from News Corp lobbyist Frederic Michel, but was not certain. He said he discovered it was “happening in the background” as he dealt with the bid process.
The inquiry heard how Michel tried to set up a meeting with Cable, but was refused. He referred to conversations with advisors to the business secretary in several emails to News Corp – including James Murdoch – during 2010. Lord Justice Leveson pointed out the emails were likely to refer to Giles Wilkes, Cable’s special advisor.
Cable said he was “quite confident” Wilkes and fellow advisor Katie Waring consistently told Michel neither he or they could meet with News Corp. He said neither had been given responsibility to speak for Cable on the bid, because of the legal sensitivity around the quasi-judicial process.
He added: “The name Fred Michel didn’t register on my radar [at the time] but I was aware that there was a request to have a meeting, and I didn’t wish to pursue it for a variety of reasons. I didn’t wish to be disrespectful to Mr Murdoch, I do meet major investors. But in this case I thought there were compelling reasons not to meet him.
“First of all, there was a legal risk because the subject which he clearly wished to talk about was something I couldn’t talk about, that if I did meet him this might be perceived by other parties to be partial in this direction and I would therefore have to see them, and there were a lot of them, so potentially very large numbers of meeting which by definition, could not have any substance.
“I think the key reason was I didn’t actually think it was necessary because they had an opportunity to, through [their lawyers] to put their opinions in writing as submissions.”
In December 2010, Cable was removed from his post overseeing the bid when two Telegraph journalists secretly recorded him saying he had “declared war” on Rupert Murdoch. The proposed takeover was handed over to culture secretary Jeremy Hunt, who will be questioned at the inquiry tomorrow over his office’s contact with Michel on the bid. He held the position until the bid fell through in July 2011 over the News of the World phone hacking scandal.
The inquiry had already heard from Adam Smith, Hunt’s special advisor who resigned last month over the controversy, and Michel, who claimed he did not exaggerate his contact with politicians and their offices during the process.
Cable said his self discipline had “broken down momentarily” when talking to two women he believed to be constituents, who were actually undercover reporters.
He said his state of mind was altered because he felt “under siege” from News Corp and was dealing with protestors causing a disturbance outside the office.
He was recorded by the two reporters saying: “I don’t know if you have been following what has been happening with the Murdoch press, where I have declared war on Mr Murdoch and I think we are going to win.”
He told Leveson: “I was extremely tense and emotional frame of mind, and the two women, who I thought were constituents coming to see me about a constituency problem…as I explain I’m normally very calm in dealing with difficult situations.
“I did offload onto them a lot of pent-up feelings not just about the BSkyB case that I was dealing with, but about my colleagues in government and a variety of other issues in language that I wouldn’t normally use, in what I thought was a private, confidential conversation.”
He told the inquiry his reference to “war” was to make it clear he would not be intimidated by Murdoch’s empire but admitted his remarks created a perception of bias, forcing David Cameron to remove him from the bid.
He added: “The Telegraph, like several other newspapers, was very hostile to the Coalition. They didn’t want a coalition government they wanted a Conservative government and felt that the Liberal Democrats were compromising their true Conservative values, and so all the Liberal Democrat minsters in the government, not just me, were subject to this intervention ins out private conversations with constituents.”
Cable said he was determined to remain impartial in his quasi-judicial role and refused to meet with James Murdoch, and other interested parties outside of News Corp, to discuss the bid. He said during a phone call with Murdoch on June 15, 2010, he was careful not to express an opinion and the call was noted by an official.
He added: “My views about [News Corp] were actually quite nuanced. I did think there was disproportionate political influence and some politicians got too close to them. But I never had a bad experience myself at the hands of News International newspapers.”
He denied trying to halt the takeover: “My intention was to have the matter properly reviewed by the regulator because I judged that, under the process that I had, it satisfied the necessary tests for an intervention.
“So it wasn’t my intention, I was constrained by the process and I fully accepted that, so I acted entirely properly.”
Cable said he did not tell Michel there would “not be policy issue” on the bid during a June 15, 2010, and said officials were listening in on the conversation and would have taken him to task if it had been said.
Rhodri Davies QC, representing News International and News Corp at the inquiry, said Cable’s allegations News International threatened the Liberal Democrats had little evidence to back them up.
Cable replied: “I’m trying to explain the context in which I made my own comments in a private and confidential conversation, and what it was that made me seriously disturbed by the way News International was operating … I’m not trying to build up a case against Mr Michel, just trying to explain what I was thinking.”
When asked about future regulation, he told Lord Justice Leveson self-regulation has not worked well and advocated a “hybrid structure” with a statutory framework.