A cabinet secretary suggested Jeremy Hunt take over the handling of News Corporation’s bid for BSkyB, George Osbone has told the Leveson Inquiry.
Hunt was given oversight of the bid in December 2010 after business secretary Vince Cable was secretly recorded saying he had “declared war” on Rupert Murdoch.
Osborne, Chancellor of the Exchequer, was present at an afternoon meeting with Number 10 on the day the comments were made public, and told the inquiry today it was decided in under an hour that Hunt should replace Cable in the quasi-judicial role following a suggestion from permanent secretary Jeremy Heywood.
He said it had been Heywood’s idea to pass responsibility from Cable to the Department of Culture, Media and Sport. Osborne sent a text message to Hunt, who had been in contact over Cable’s comments, shortly after the meeting saying: “I hope you like the solution!”
He dismissed a conspiracy theory that Hunt was allowed to handle the bid in News Corporation’s favour after Robert Jay QC, inquiry counsel, suggested the politicians present at the meeting were of the “same community of opinion” that News Corp should be allowed to buy up the remaining BSkyB shares in an £8 billion deal.
He said: “You have to be a real fantasist to believe that come these events, we had knowingly allowed Vince Cable to be secretly recorded, we knowingly allowed the Telegraph not to publish that information, that information then emerges in the middle of the afternoon and we then – all part of this cunning plan – put Mr Hunt in charge.
“It doesn’t stack up. We were following procedure, process, and I think Mr Hunt followed procedure and process as Secretary of State.”
Osborne told the inquiry today he thought the bid was a “political inconvenience” and assumed from speaking to David Cameron that the Prime Minister had the same view. He said Cable’s comments were wrong but did not merit his resignation or a Cabinet reshuffle.
He added: “It was pretty clear that there were a lot of people out there who were not going to be happy with the deal went through, and equally News International wouldn’t be happy if the bid didn’t go through, but there was nothing they could do or would want to do or should do to influence that process.”
Osborne denied his special adviser Rupert Harrison had lobbied the business department in November 2010, when Cable was still in charge of the bid, after contact with News Corp’s Frederic Michel. Adam Smith, adviser to Hunt, resigned last month over excessive contact with Michel before and after the culture secretary took over the role.
Michel sent Harrison a text message asking the chancellor to send Cable a letter on the proposed merger and its economic importance.
Osborne was also asked about the appointment of former News of the World editor Andy Coulson as director of communications for Number 10. The pair met in March 2007 to discuss the job.
Osborne told the inquiry: “What we were interested in hiring is someone who was going to do the job going forward. We thought he had the experience and the personality to do that.”
He said he knew hiring Coulson would be controversial and asked the former editor about phone hacking, before calling News International Rebekah Brooks for her professional opinion.
Osborne denied Coulson’s appointment was to obtain contacts or ensure the support of the Sun before the 2010 general election.
Coulson was asked last month whether he had underplayed allegations printed in the Sunday Mirror and the News of the World in 2005 that Osborne had taken drugs with dominatrix Natalie Rowe in the 1990s.
The former editor told the inquiry: “‘Top Tory, coke and the hooker’ I don’t think in any way can be described as career enhancing for George Osborne and the idea that we some way or other went easy on him I think it ridiculous when you look at the paper.”