Culture secretary wrote memo to David Cameron supporting family’s £8bn bid, despite being warned he should not intervene
Jeremy Hunt’s grip on ministerial office looked increasingly precarious after the Leveson inquiry heard that he had written an outspoken memo for David Cameron, staunchly supporting the Murdoch family’s £8bn bid for BSkyB, a month before he was handed the task of adjudicating on whether to approve the media merger in an apolitical, “quasi-judicial” manner.
The culture secretary also demanded that the prime minister intervene to rein in Vince Cable, who was at the time responsible for the BSkyB bid – a request that explicitly contradicts a statement Hunt gave to parliament last month, in which he told MPs that he made “absolutely no interventions” to put pressure on the business secretary to wave the controversial takeover through.
It also raised fresh questions about the judgment of the prime minister and in particular his then cabinet secretary, Lord O’Donnell, who had ruled that Hunt would not prejudge the £8bn takeover even though he had publicly supported the bid. Cameron did not tell O’Donnell of the memo, but No 10 insisted the memo was “entirely consistent” with Hunt’s previous public statements that the Murdoch’s bid for BSkyB raised no media plurality issues.
The inquiry heard that the culture secretary drafted the email on his private Gmail account on 19 November 2010 despite being warned by his officials that he should not intervene because the decision was being taken exclusively by Cable. In the memo he voiced concern that Cable, the business secretary, had referred the takeover to media regulator Ofcom, warning him that James Murdoch was “pretty furious” and that the government “could end up in the wrong place in terms of media policy as a result”.
Hunt wrote enthusiastically about the bid, saying Murdoch wanted to combine Sky television with the Sun and the Times to create a company spanning “from paper to web to TV to iPhone to iPad” and would revolutionise the media in the same way that James’s father Rupert transformed newspapers by crushing the print unions at Wapping – although there was widespread opposition to a takeover that would have brought the largest broadcaster and the largest newspaper group together.
The News Corp bid was opposed by the rest of Fleet Street, including the owners of the Daily Mail and the Daily Telegraph as well as the publishers of the Guardian and the Daily Mirror, and briefly by the BBC – but in his memo Hunt chose to characterise the deal’s opponents in nakedly political terms, saying: “I think it would be totally wrong to cave into the Mark Thompson/Channel 4/Guardian line.”
At the time, formal responsibility for adjudicating on the bid rested with Cable, who was stripped of the role by Cameron in December 2010 after it emerged that he had been secretly recorded by two reporters working for the Daily Telegraph saying that he had declared “war on Murdoch”. Cable was deemed unable to rule fairly on the bid in the light of his remarks.
In the memo Hunt also requested that Cameron organise a meeting with himself, Nick Clegg and Cable, who was refusing to meet Murdoch, “to discuss the policy issues that are thrown up as a result” – although the sole legal responsibility for determining whether the bid should be approved rested with Cable. No such meeting took place.
Last month, however, Hunt denied to MPs that he sought to lobby against Cable. Speaking in the Commons Hunt said: “I made absolutely no interventions seeking to influence a quasi-judicial decision that was at that time the responsibility of the secretary of state for business. However, it is my responsibility to understand what is going on in the media industry and the impact of this very important sector, which employs thousands of people. That is why I was interested to find out what was going on.”
It is a breach of the ministerial code to fail to tell the truth to parliament and the shadow culture secretary, Harriet Harman, said it was clear from evidence that Cameron gave responsibility to Hunt for ruling on the BSkyB bid when he knew only too well that the culture secretary was actively supporting it. “The prime minister should never have given him the job. It is clear Jeremy Hunt was not the impartial arbiter he was required to be, and he should already have resigned.”
No 10 hit back, claiming: “Hunt’s note is entirely consistent with his public statements on the BSkyB bid prior to taking on the quasi-judicial role. It also makes clear that ‘it would be totally wrong for the government to get involved in a competition issue which has to be decided at arms length’. The PM has made clear throughout that he recused himself from decisions relating to BSkyB and did not seek to influence the process in any way.”
Hunt was not himself at Leveson, which heard evidence from his former special adviser Adam Smith, who resigned last month after it emerged he had been in repeated contact with James Murdoch’s chief lobbyist, Frédéric Michel, during the year-long bid approval process. The inquiry heard that Smith had been in contact with Michel more than 1,000 times by text, phone or email in the year after the Sky bid was launched in June 2010, with the two men sometimes speaking as often as four times a day. On one occasion Michel texted Hunt: “You were great at the Commons today” and Hunt replied: “Merci. Large drink tonight!”
Michel was repeatedly asked whether he thought that Smith was speaking for the minister. The inquiry counsel Robert Jay QC asked Michel: “You don’t appear very willing to tell us, Mr Michel, whether Mr Hunt was supportive [of the Sky bid] or not … or are you frankly not assisting us? Can we be clear?” Michel replied: “My view is that Jeremy Hunt was probably supportive of some of the arguments.”
The Hunt memo was drafted by him and Smith to be sent to Cameron as part of a process of providing him with fortnightly political updates. Downing Street confirmed that Cameron received the memo dated four days after Hunt had a phone conversation with James Murdoch – a telephone call that was necessary because the minister had been banned from meeting the media mogul by his permanent secretary Jonathan Stephens.
Downing Street was further embarrassed yesterday when it emerged that Cameron’s press secretary Craig Oliver met Michel for a “discreet” dinner in July 2011 two days after the Guardian broke the story about the hacking of Milly Dowler’s phone.
Draft of Jeremy Hunt’s letter to David Cameron, November 2010
James Murdoch is pretty furious at Vince [Cable]’s referral to Ofcom [of News Corp’s bid to take full control of BSkyB]. He doesn’t think he will get a fair hearing from Ofcom. I am privately concerned about this because News Corp are very litigious and we could end up in the wrong place in terms of media policy. Essentially what James Murdoch wants to do is to repeat what his father did with the move to Wapping and create the world’s first multi-platform media operator available from paper to web to TV to iPhone to iPad. Isn’t this what all media companies have to do ultimately? … we must be very careful that any attempt to block it is done on plurality grounds …
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 our media sector will suffer for years … I think it would be totally wrong to cave into 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… It would be totally wrong for the government to get involved in a competition issue which has to be decided at arm’s length. However I do think you, I, Vince and [Nick Clegg] should meet to discuss the policy issues that are thrown up as a result.
Jeremy Hunt to MPs, 25 April 2012
I made absolutely no interventions seeking to influence a quasi-judicial decision that was at that time [Cable’s] responsibility … However, it is my responsibility to understand what is going on in the media industry and the impact of this very important sector, which employs thousands of people. That is why I was interested to find out what was going on.