David Cameron was aware Jeremy Hunt supported the News Corporation BSkyB takeover weeks before he was appointed to oversee the bid, the Leveson Inquiry has heard.
The inquiry was shown a memo from Hunt to Cameron, sent in November 2010, in which the Culture Secretary championed News Corporation’s bid for the remaining shares in BSkyB.
Adam Smith, Hunt’s special adviser who stepped down over the controversy last month, and News Corp lobbyist Frederic Michel were both giving evidence today on whether the news organisation had an inappropriate backchannel to Hunt through Smith. The inquiry was first shown messages between the two when James Murdoch gave evidence last month.
In the memo, Hunt suggested a meeting with Cameron, Nick Clegg and Business Secretary Vince Cable – then in charge of the bid – to discuss policy issues around the proposed takeover.
He added: “The UK has the chance to lead the way on this as we did in the 80s with the Wapping move but if we block it out media sector will suffer for years.
“In the end I am sure sensible controls can be put into any merger to ensure there is plurality, but I think it would be totally wrong to cave in to the Mark Thompson/Channel 4/Guardian line that this represents a substantial change of control given that we all know Sky is controlled by News Corp now anyway.”
Earlier today the inquiry heard how Michel – News Corp’s director of public affairs for Europe – believed Hunt was “probably in favour” of the takeover by December 2010. Michel exchanged over 1,000 text messages with Hunt’s department during the bid, mostly with Smith.
He said: “I think there’s two or three events when I probably had the.. impression that some of the feedback I was being given had been discussed with the Secretary of State before it was given to me.”
He said the Department for Culture, Media and Sport had been more willing to hear arguments from News Corp about plurality concerns than Vince Cable’s team. The business secretary was removed from his post overseeing the bid after reporters secretly recorded him saying he had declared war on Rupert Murdoch.
The inquiry were shown text messages sent between Hunt and Michel, including several where the lobbyist praised the Culture Secretary for his public speaking. He said the messages to Hunt and his team were appropriate but apologised for some of them being “too jokey”.
Robert Jay QC, inquiry counsel, said there were 191 telephone calls, 158 emails and 799 text messages between Michel and the DCMS, and Smith had sent 257 text messages to Michel between November 2010 and July 2011 along with emails from his personal account.
Michel denied exaggerating his contact with Hunt to senior figures at News Corp – including James Murdoch – but admitted his was “trying to keep the morale up internally” after the company failed to win over Cable.
Emails between Smith and Hunt showed the culture secretary had been impressed by commercially-sensitive briefing documents sent by News Corp to his special advisor by Michel in October 2010 – referring to them as “very powerful”. Michel then told colleagues Hunt had found the company’s arguments persuasive.
He added: “My view is that Jeremy Hunt was probably supportive of some of the arguments we were putting forward and he has made that public on plurality.”
Michel defended his contact with Smith but admitted he “took comfort” that the company had a good chance of success on the bid after submitting undertakings in lieu.
The email contact and telephone contact suggests Michel was given a preview of Hunt’s statement on the bid – delivered to Parliament in March 2011 – four hours before it was made public.
Michel said: “They were encouraging us to stay in the game, but I wouldn’t say they were parti pris.”
He said he had offered to brief Hunt’s department and others on phone hacking after the Milly Dowler story was published in the Guardian in July 2011. Smith has denied this, but Michel said it was welcomed at the time.
Smith told the inquiry he did not believe Hunt was close to News Corp, saying he did not exactly have a relationship with Rupert and James Murdoch, or Rebekah Brooks. The special adviser said he was given no direct instructions on what he was allowed to do when corresponding over BSkyB.
Asked if he also supported the bid, Smith said: “Smith: “Very broadly. I didn’t, to be honest with you, particularly mind either way where it happened or not. In a funny sort of way I couldn’t quite see why everyone was getting quite so worked up about, but broadly speaking, yes.”
Adam Smith will continue giving evidence to the inquiry tomorrow, when Jonathan Stephens, Permanent Secretary at the DCMS, will also appear.