Sir, this afternoon's witness is the Right Honourable George Osborne, please.
LORD JUSTICE LEVESON
Has the issue that was discussed before been resolved?
LORD JUSTICE LEVESON
Thank you. MR GEORGE OSBORNE (sworn) Question by MR JAY
Your full name, please?
A. George Gideon Oliver Osborne.
Q. Thank you. You've kindly provided us with two witness statements, the first dated 4 May, the second 11 May of this year, each with a statement of truth. Is this your formal evidence to our Inquiry?
A. Yes, it is.
Q. You, of course, are the Chancellor of the Exchequer and were Shadow Chancellor between 2005 and 2010; is that right?
LORD JUSTICE LEVESON
Mr Osborne, just one moment. First of all, thank you very much indeed for the obvious effort that you've put into these statements. I do want to clarify one fact or correct the misapprehension that's enters the public domain. For some people, I have made it clear that they will have to give evidence. For others, I've wanted to wait and see what they say before deciding whether they have to give evidence. It's quite wrong to suggest, as I know has been suggested, that you've been required to give evidence after the evidence of Mr Hunt. The fact is, as you know but I'm very keen the public should understand, some considerable time ago, having seen your statement, the view was taken that you ought to give evidence, you were perfectly content to do so, and arrangements were made accordingly. So I want to correct that.
A. Thank you.
May we start off with some introductory topics, paragraphs 2.5 to 2.7 of your statement, our page 04089. You speak, at our request, of the value of these interactions to you. I'm particularly interested in 2.7, where you say: "Sometimes these [that's the views of your interlocutors] will be presented as the personal view of the person speaking. On other occasions, it will be presented as the views of their readers." You will presumably know which. When they claim to present the views of their readers, do they speak with greater authority, in your view?
A. Well, in all my interactions with proprietors, editors, it's a conversation partly with an individual, who is either editing a newspaper or owns newspapers, or someone speaking on behalf of, or at least claiming to speak on behalf of, their readers. Now, I would say sometimes they are very clear about the distinction, so quite often when you're dealing with a proprietor, they will have large commercial interests, large business interests, not necessarily just the newspaper's, and they will speak as you might speak to the chairman of a FTSE company or anyone with broader business interests and have a general interest in the economy and in things related to that. Other times, there's a very specific readers' campaign or a campaign mounted by the newspaper, and sometimes, in private conversation, they will say, "Our readers are very concerned about this." Now, obviously I sometimes form my own judgment about whether they really are speaking for their readers or not, but quite often they purport to be.
Q. Do you think that disproportionate weight is given to the constituency they claim to represent, namely their readers?
A. I don't think so. I think that's their job. I think throughout all of this maybe we'll come on and talk about regulation of the press I would say there is a very important check in the system, which is these are commercial products that need to be sold to the public, and if they are not reflecting at least some view held by some part of the public, they're unlikely to sell their newspaper. So obviously it's up to them to judge whether they are correctly reflecting the views of their readers, but they certainly think they are.
Q. But do you feel that politicians give disproportionate weight to the views they claim to represent? That's the views the editor or the proprietor may be claiming to representment.
A. Well, I think that's up to the individual politician, frankly. I think politicians are also held to account ultimately through the ballot box in this country, and if politicians are seen to be entirely craven to newspapers, I think the public sense that and sniff it out. I think the public are much smarter in this whole process than is sometimes given credit for, and I would say there are moments where newspapers have fought campaigns which are not obviously of the highest interests to their readers but which they nevertheless think is very important. I could give you a couple of examples that came to mind, thinking about coming here: the Times' recent campaign on adoption. That's probably not towards the top of most Times' readers' concerns. The Daily Mail's campaign into the injustice around Stephen Lawrence. I doubt any survey of opinion of Mail readers would have revealed that as one of their leading concerns, but in both cases, the editors of those newspapers chose to make those campaigns. I guess they were, in the end, editorial judgments for those people.
Q. You refer to the astuteness of the public in being able to sniff it out, but do you think, until the events revealed by the Inquiry, this Inquiry, the public has had enough information to make the sort of judgment that you imply?
A. Well, I think my personal view about this is that they were always aware that the private lives of a lot of politicians and celebrities were being investigated by newspapers and they weren't actually overly perturbed about that. Why this issue suddenly became of such importance is because they saw an ordinary family, if I can put it like that, the Dowler family, suddenly exposed to what appears to be, anyway let's see what the legal proceedings reveal, but what appears to be illegal practices, totally outrageous intrusion, and that's when this whole issue became much more significant and I guess is one of the reasons we're all here today. And I think the politicians at the time, myself included, because I was party to the decision to suggest this Inquiry, were reflecting public concern about what they had learnt, whereas I think the public had probably suspected for a long time that all sorts of other practices were going on with celebrities and politicians, as I said.
Q. But aren't there two separate issues here, Mr Osborne? There may be public concern in press intrusion, but there might also be public concern in politicians getting too close to the press. They're separate issues and I think my question was: until this Inquiry, the public might not have had enough information to be able to assess that second concern, let alone the first concern. Would you agree with that?
A. Again, I think the public are probably smarter than people are giving them credit for. I mean, the public, I think, certainly over my lifetime, have become much more aware of the interaction between politics and the media. There have been all sorts of television dramas and films based around that interaction. Terms like "spin doctor" have become common parlance. So I think the public have become quite smart about the interaction and I think, as I say, the public judge when they think a politician is craven to particular interests or is trying to represent the national interests, and if they think they're not doing very well in representing the national interests, they kick them out.
Q. Do you feel, as some witnesses have felt, that the fusion of news and comment is an issue of particular concern?
A. My feeling is I think this is a bit of a blind alley for the Inquiry, personally. I think there are lots of things to concern us, lots of things we want to get right, and perhaps we'll come on and talk about how the press can better self-regulate itself. But I think if you are trying to distinguish between fact and comment and opinion, or at least set out in some more prescribed way some way of policing that, I think you're going to find that extremely difficult. Now, I know it is part of the PCC code but it's proved impossible to police under the PCC. I suspect it will prove impossible to police under whatever body replaces it, and ultimately, if you look over the history of politics and public opinion, the facts are very fiercely disputed and one person's fact, as I say, is another person's leading comment or opinion.
Q. So your diagnosis is not, is this right, that at the root of the problem and the deterioration in standards in the press is the fact that over the last generation there has been a fusion, so the argument runs, of fact and comment? Is that right? Have I correctly understood
A. I don't think there's been, over the last generation, a fusion. I think that has always existed in the British press. If you look right back to 18th century free sheets, they are very aggressive in promoting a particular opinion, which they state to be fact, and it's just a part of our written press by the way, it's part of our broadcast press, although, of course, the broadcasters are under particular rules about impartiality, which I think is reasonable, given that at least until the development of the internet, there's been a limited amount of spectrum that needs to be allocated in some way. There is no limit on the amount of free news sheet or not free news sheet you can produce in this country, provided you can get someone to pay for it.
Q. Do you feel, as some have said again, that the news agenda tends to be driven by the printed media and the BBC and other broadcasters follow suit, or do you feel it's the other way around or a mixture of the two?
A. I saw Tony Blair's evidence on this, and I think that might have been the case perhaps when he was Prime Minister. Speaking personally as someone active in front line politics today, I would say the broadcasters are incredibly important. It is not clear that they're always following a newspaper judgment. I would say the significance of a story is massively elevated if it is right at the top of one of the big news shows and that's often the judge of whether something is really going to have an impact in the political sphere. Now, quite often they will be picking up indeed stories from newspapers, but quite often they'll have their own investigations and quite often those you know, the BBC, for example and I'm a supporter of the BBC, so this is not I'm not seeking to criticise the entire institution, but they will run a special report, a Panorama report, then put that top of the Today programme and suddenly we're all expected to treat that as the most important thing happening in Britain that day. So I wouldn't say it's a straightforward process whereby the newspapers run a story and the journalists the broadcast journalists cover it. I think it's more complicated than that, and I think the power of the broadcasters is enormous. It is power exercised with responsibility, but nevertheless it's significant.
Q. Okay. We may come back to some of those themes at the end of your evidence when we deal with the future. Can I ask you now kindly to look at your table of interactions with media proprietors, et cetera, which is annex A of your evidence, under tab 2 of the bundle which has been prepared, which starts at 04061. Obviously there are two sections to this: the first period as Shadow Chancellor and the second period from the advent of the Coalition government, which was 11 May 2010. So that we're clear you cover this in your evidence how reliable is annex A when we're looking at the period when you were Shadow Chancellor?
A. We've been able to retrieve, at the request of this Inquiry so this was not something which we had readily available, but we have been able to retrieve my electronic diary from the period as Shadow Chancellor. It is accurate to the best of my knowledge, although I put a caveat on it that because I had a very small team compared to the office I now have as Chancellor of the Exchequer, if meetings were cancelled, I can't promise that those meetings were removed from the diary. They may remain. So it was not a diary that was kept accurate after the event, if I can put it like that. Phone conversations were never diarised in the way that they sometimes are in government, and there are one or two occasions, like party conferences and the Davos conferences, for example, where I've put a general holding because there simply were no diary references because we kept separate diaries. I've investigated this subsequently and they were just Word documents kept at the time while we were at a particular conference. But to the best of my knowledge, this is accurate.
Q. We can review the individual items, but it's clear from this material, as it's been clear from other witnesses, that you see effectively the whole gamut, and your calculation is that News International accounts for about a third of all the entries; is that right?
A. It's a very rough calculation. I basically added up all the entries and it was just over a third, which I think is roughly, again, their share of the newspaper market at the time.
Q. We see there there are one or two dinners, certainly in 2006, and those continue, with Mr James Murdoch. On 3 May 2006, at 04064, it's at his invitation, and then you reciprocate on 4 July; is that right?
A. Yes, that's right.
Q. It's impossible at this distance it's five or six years ago to recall exactly what was discussed on any particular occasion, but presumably political matters would be on the informal agenda; is that fair?
A. Yes, that would be fair. I think the independence of the United States was discussed, from memory, on 4 July.
Q. That's a reasonable inference. Were issues of media regulation, do you think, ever discussed with Mr James Murdoch on this sort of occasion?
A. Not to my recollection. I mean, there was one issue which he was concerned about which came up on occasion in conversations with him, which was the BBC and the licence fee, but it was never it was more of a complaint that we had in this country a taxpayer-funded state broadcaster, but I made clear to him then, as indeed I made clear to him subsequently when we came into government, that we were not going to change that, and indeed we haven't.
Q. Is that a topic on which he bent your ear on quite a few occasions?
A. He raised it on a number of occasions and indeed gave a number of speeches and interviews about it publicly. I would say he's not the only person in the media who is concerned about the funding of the BBC but that was a particular bugbear of his.
Q. Was another bugbear Ofcom?
A. To my recollection, he never raised Ofcom with me.
Q. Okay. Looking again at this schedule we're not going to alight on more than a few items if we were to look, for example, on 3 June 2008, which is page 04072, there's recorded there a dinner with Paul Dacre. Do you see that?
Q. Are we to deduce that that was a one-to-one occasion or not?
A. I can't remember precisely, although most of my dinners or times I met Mr Dacre, he would usually have with him his political editor, one of his leader writers, maybe a columnist. So they were almost like editorial boards. They weren't the full editorial board, but he would get a selection of people from the newspaper and then he would allow them to pick up the conversation, ask me things, and the like. There were a couple of occasions when I had social encounters with Mr Dacre, but normally that is how he would meet with me.
Q. These are sort of semi-structured occasions. Would they be regarded as off the record or not?
A. They were regarded as off the record, although, you know, I've always taken the view that you should be careful to say things off the record that you wouldn't want to see on the record, and certainly if there was a group of people, there is a bit of they have safety in numbers.
LORD JUSTICE LEVESON
I'm not so sure you quite mean that. I think you mean you've been careful not to say things off the record that you wouldn't be prepared to see on the record.
A. Sorry, that's
LORD JUSTICE LEVESON
You put it the other way around and I didn't think you meant what you actually said.
A. I certainly didn't mean that. Obviously, you can have a more informal conversation off the record, but I think you just have to be careful. Ultimately, if you're telling a journalist something that is so interesting that they feel bound in some way to report it, they will, and of course there are all sorts of conventions that exist between politicians and the lobby that allows people to say "sources close to the Shadow Chancellor" or "sources in the Conservative leadership" or whatever it happens to be. But as I say, I think as long as you are relatively careful not to say things you wouldn't be happy to see, Lord Justice Leveson, on the front pages of the newspaper, then I think you'll be okay.
Thank you. The summer of 2008, if I can just look at two entries there. It's page 04073. We've heard all about, from another witness or indeed two witnesses, the famous birthday celebration of Elisabeth Murdoch. I think it was her 40th birthday. I'm going to disappoint people by not asking you questions about that, unless you particularly want to cover it, but 6 September, we see there's dinner with Rebekah Wade, Elisabeth Murdoch, James Murdoch and Rupert Murdoch. Do you remember whether the Santorini visit was discussed on that occasion or not?
A. I think my trouble had come from another Greek island, Corfu, rather than Santorini, which is I think what the "summer" was referring to that you didn't want to bring up. So there was no mention of Santorini.
Q. Are you sure about that?
A. Pretty sure.
A. Or at least not with me. Maybe among other people.
Q. Okay. Then if we can go to December 2009, 04078, on the 19th, there's dinner with Rebekah Brooks, James Murdoch and Rupert Murdoch. It's at the invitation of Rebekah Brooks, so it's presumably at her home, is it?
A. Yes, I think so, yes.
Q. And a pre-Christmas celebration. Can you remember whether political matters may have been discussed on that occasion?
A. I'm sure political matters were discussed. I mean, they normally were. I don't remember any improper conversation or any conversation about the commercial interests of News Corp or News International. I think it was a general discussion about the political situation in Britain as we were heading into a General Election year and indeed the economic situation with the rest of the world. I mean, normally when Rupert Murdoch was at one of these events, the conversation was about the global economy and at the time, of course, we were right in the middle of the financial crisis.
Q. Yes. On 21 January, there's a drink with Rebekah Brooks and James Murdoch. On 28-30 January, the world economic forum. That's the annual meeting at Davos; is that right?
Q. Many people have suggested that there was a private meeting with News International executives at a chalet at Davos which you intended. Is that true?
A. No, it's not true. It's a good example, actually, of fact and comment getting blurred. There was I don't remember in fact, I'm certain I didn't meet Rupert Murdoch, who was not there. The only event I recollect is a semi-public event which was hosted by News International, which David Cameron spoke at and a US Senator called Lindsay Graham also spoke at, maybe for about 100 people in a restaurant. There was a meeting a year earlier in 2009 in a chalet with Rupert Murdoch and James Murdoch and Rebekah Brooks, which was also as part of a Davos conference, but obviously in 2009, unlike 2010, doesn't fit with some of the theories currently doing the rounds in certain newspapers.
Q. Okay. If we're looking at January 2009 rather than January 2010 being the date, can we be clear: there was a meeting in a private chalet and Rupert and James Murdoch were there. Have I correctly understood your evidence?
Q. Can you remember the subject matter of the discussions at that meeting?
A. First of all, the context was that as part of a Davos conference, people rent hotels and chalets and different news organisations do that, so it's not particularly unusual that it's in a chalet. I think it was just part of holding a conference in a ski resort. And the meeting was a lunch with David Cameron and myself, and Rupert and James Murdoch, Rebekah Brooks, and as I remember it, the conversation was partly about the domestic political situation but actually, the focus of the lunch was the global financial crisis, which in January of 2009 was raging, and actually, if anything, I remember that David Cameron and I were seeking to try and bring the conversation gently on to domestic politics and what the Conservative Party was doing to put itself in a position to win a General Election, which, of course, may well have been happening later that spring. It would have been a four-year Parliament. But Rupert Murdoch was more keen to talk about the international economic situation.
Q. So did you ever get around to discussing domestic politics and the virtues of the Conservative Party
A. Briefly, but in all these encounters, either with the Murdochs or other proprietors or other editors, we were trying to set out our stall and explain how we thought a change of government would be a good thing for the United Kingdom and we would use every opportunity to do that.
Q. Can you recall how the Murdochs responded to your pitch on that occasion?
A. As I say, Rupert Murdoch kept bringing the conversation back understandably, because frankly, at that point, the international economic crisis was probably of more interest to him and most of the world than what the Conservative Party wanted to say in a General Election, but he kept bringing the conversation back to the global economic situation, which of course was also what most of the conference was about as well.
Q. So are we to understand that you failed to get your message across as regards Conservative Party
A. I think we did our best.
Q. You didn't fail altogether; is that it?
A. Well, ultimately, of course, as no doubt you'll come onto, the Sun newspaper supported us, as indeed did the Times newspaper, but I don't think this lunch was the crucial encounter.
Q. But was it one step on the road, as it were, to the ultimate goal?
A. Well, I don't think that the decision of those newspapers to support the Conservative Party in the General Election was simply because we'd had quite a lot of lunches or dinners with the Murdoch family. As you've heard this morning and on previous encounters, our political opponents were having an awful lot of dinners and lunches with the Murdoch family, so if it was simply a question of outlunching them, I don't think we would have beaten New Labour.
Q. Okay. Can we move back to your witness statement now.
LORD JUSTICE LEVESON
Just before we move on from these meetings, I've tried to make it clear that politicians, like everybody else, are entitled to be friendly with whosoever they want. That's absolutely fundamental, as far as I'm concerned. The issue that just does concern me and it may not matter in opposition as much as in government, but I'd be interested in your view is how one prevents the perception of influence.
A. I wouldn't draw a huge distinction, Lord Justice Leveson, between opposition and government, because I think opposition, particularly, in this case, on the verge of becoming a government or part of a government the encounters an opposition has are important, and the thoughts it has are important. So I wouldn't draw a huge distinction between the two. I think in the end maybe I trust too much in the public but I think in the end the public has a sense of what motivates these people. Are they trying to pursue their idea of the national interest? And I think people understand that politicians hang out with journalists and people who own newspapers. The history books are littered with very close relationships between the owners of national newspapers and some of our most famous and successful politicians. So I think the public broadly understand that. I certainly think an improvement has been the decision last year to publish now the meetings between members of the government and journalists. That, of course, has been brought on by the events that this Inquiry has been looking at, so I'm not claiming that we were prescient in introducing that, but we have introduced that change and I think it will help. But in the end, you can have any amount of paragraphs in ministerial codes and PCC codes and any amount of websites publishing meetings. In the end, the public are going to make a judgment about the politician, and in the end the public are also, through the purchase of a newspaper, going to make a judgment about the newspaper. If the newspaper was holding back from criticism of a government and the government was unpopular, then I think the public would start to question why they were buying that newspaper.
LORD JUSTICE LEVESON
Yes. It may be just a bit more subtle. I understand the point, that the public will see what's going on, provided they know what's going on, and therefore you're right when you say that publishing links makes it all the more transparent, but I was in part thinking about the evidence I think it was in Alastair Campbell. One of the criticisms that he makes is that the attitude of New Labour in opposition before the 1997 General Election was taken into government when perhaps it shouldn't have been, and the approach to the press should have been recalibrated for the fact they were then incumbent. You may not agree.
A. This is going to sound like talking my own book, but it also, I think, is genuinely the case. I think New Labour were very aggressive, when they became the government, in pursuing the media management techniques they had developed in opposition. And they had developed those techniques in opposition, to be fair to them, because of the way people like Neil Kinnock had been treated by all the press beforehand. Now, we learnt, in a way, from that. We were we came of political age myself, David Cameron and others during that political period, and we felt too that that government in its early years had been too obsessive about tomorrow's headline and tried to control every aspect of the media. That's not to say when we came into government, we didn't want to have a good and effective media operation, but we were more relaxed about fighting for every single headline or fighting for every news bulletin, and I think there is also partly an understanding on our behalf that in what has become, even over that period, a much more fragmented media, it is impossible to manage every single headline or fight for every headline. In the end, we had a belief that we came into government, we had to set out some difficult things we needed to do and we would trust ultimately to the judgment of the public but also trust to the judgment of the media, even if along the line you got some bad headlines. Certainly, I have been more relaxed as Chancellor of the Exchequer in that early period than I would have been as Shadow Chancellor about some the headlines we've had.
Paragraph 3.1 of your first statement now, Mr Osborne, our page 04090. You state you've never discussed with Rupert Murdoch Conservative Party or government policy in relation to BBC licence fee or Ofcom. The only discussion you can recall and I paraphrase is one with James Murdoch, which you think must have been after 20 October 2010. Can you recall whether that was in a meeting or by phone?
A. Well, I remember this was a very specifically about the BBC licence fee, rather than as I say, James Murdoch would often let us have his views in public as well as in private about his view about the BBC, but specifically about the licence fee and our decision in October 2010 to freeze the licence fee but not to dismantle it, and indeed to, in effect, continue for the next five or six years with the current structure of BBC funding. Now, as I say in this statement, I cannot remember exactly how this conversation took place, and it may well have been on the phone, because it's not obvious that there was a meeting where this would have had but I have a pretty clear memory of him being quite angry about our the decision we had taken, and I explained to him why I thought it was the right decision and why, in any case you know, we had always made it clear that we were not setting out to dismantle the BBC or radically cut the licence fee or distribute the licence fee in a different way, but he was clearly disappointed with that decision.
Q. I think you've interpreted the question as covering only the period in government from May 2010, because you've told us a quarter of an hour ago about discussions you had with Mr James Murdoch about the BBC licence fee beforehand; is that right?
A. There were discussions this is the only conversation I remember where it was very specifically about the licence fee, rather than the concept of a state-funded, licence-fee-funded what he would describe as a state broadcaster.
Q. Can I go back a year to August 2009 and the James Murdoch MacTaggart lecture. Did you have any conversations with him about the subject matter of the lecture before he gave it?
Q. Did you have any conversations with him about the lecture after he gave it?
A. To be honest, I'm not sure I've read the lecture. I've read the news reports of the lecture. I don't remember a conversation with him about it.
Q. If you've only read the news reports, this may not be that easy to answer, but what was your reaction to the lecture?
A. I thought it was I don't mean this in a pejorative sense. I mean, it was typical. It was what he thought and what he was telling anyone who wanted to listen to him at the time.
Q. "Typical" in the sense of what he thought, but what was your reaction to it?
A. I disagreed with him, basically, and certainly David Cameron also disagreed with him, and I think you know, he had been agitating for some dramatic change in the funding of the BBC or the structure of the BBC and he was not going to get that from the Conservatives.
Q. He was also agitating for the neutering, if not quite the dismantling, of Ofcom. Did that chime at all with your policy?
A. I never discussed with him Ofcom and I don't remember personally being involved in any great internal discussion within the Conservative Party about the future of Ofcom. There was a general concern that Ofcom had become, like many Quangos, rather bloated, but that was not a complaint about the function of Ofcom, just that like many parts of government, that there had not been a proper regard for cost.
Q. Do you know whether any analysis was done within the Conservative Party of the MacTaggart lecture and what your response to it should be?
A. I'm not aware of any.
Q. Okay. Paragraph 4.1 of your statement. We're in the middle of December 2010 now. You have dinner in New York, 17 December 2010. You're sure on that occasion there was no discussion of the BSkyB bid, the BBC, Ofcom or media regulation; is that right?
A. Yes, I'm very clear because and obviously, I would have remembered if the BSkyB bid had come up. It didn't, and I remember remarking to my wife as we left, noting the fact that it hadn't come up. And I was going to be very clear if he had raised it, I would have made very clear this was not my decision; it was a quasi-judicial decision. Mr Murdoch spent most of the time talking about his new online newspaper that he was launching in the United States, and we had a broader conversation it was a social conversation, my wife was there, and it was a social conversation about American politics, the Internet, how newspapers were changing. It was not specific about British politics and as I say, neither Ofcom nor BBC nor the BSkyB bid came up in conversation.
Q. You do remember the conversation or at least it was part of a conversation about that bid with Mr James Murdoch, the previous month, on 29 November 2010. Do you remember whether that was a meeting or a phone call?
A. That was a meeting.
Q. Do you know what other matters were discussed on that occasion?
A. I seem to remember it was, again, a broader conversation about the political situation. The government had been in office for some months then. We'd just had the spending review a month earlier. We were having an argument about tuition fees. So there were a whole range of things going on in politics. At this point, he at some point in the conversation he raised his frustration with how long, as he saw it, the process was taking. I made it very clear that that was not a process that I was involved in in any way.
Q. Was Mr Michel there on that occasion or not?
Q. Have you had meetings with him, either one-to-one or in a wider group?
A. I think the only time I think I've come across him is when at the party conferences, News International host dinners, one dinner at each conference, for a number of Shadow Cabinet or Cabinet members and a number of their editors, and I think Mr Michel was at at least one of those dinners.
Q. We know that there was some discussion about one aspect of the BSkyB bid with Mrs Brooks, which you were party to. It's reflected in an email we have under tab 9, Mr Osborne. It's the email of 14 December 2010, which is in the PROP file, page 01679. So you'll see that at the bottom right-hand side of the page. This relates to the Ofcom issues letter and Mrs Brooks emails Mr Michel and says: "Same from GO [that's obviously you]. Total bafflement at response." Her evidence was this bafflement was conveyed at a dinner the previous evidence, Monday, 13 December. Do you remember anything about that occasion?
A. Well, I certainly remember the dinner. It was a dinner with my wife and I, the Brookses and the Lewises in a restaurant. I don't have any recollection of the conversation, but I don't question that it took place. I'm not doubting what Mrs Brooks says. I noticed in her evidence to this Inquiry she said it was perhaps a three-minute conversation and that I'd looked slightly perplexed. I have read the Ofcom issues letter in preparation for appearing before you today and I think that is the first time I've ever read that letter. Certainly it jogs no memory and I've done a search of my private office of whether the Ofcom issues letter was brought to my attention, and there's no we can find no evidence that it was. So I'm perfectly prepared to accept that there was a conversation; I just have no memory of it, and perhaps the reason I was perplexed or baffled was because I hadn't actually read the Ofcom issues letter.
Q. You might have been given an oral gist of what the issues letter apparently said and you might have reacted to that gist. Is that possible?
A. Well, of course, I knew from the previous conversation we're talking about with James Murdoch that they were frustrated at the process, but I was always very clear that this was not a process I was involved in, it was a quasi-judicial process and was being handled by Vince Cable. So as I say, although I don't recollect this particular conversation, I'm sure I would have said. I have to say, at this time, all sorts of people were raising the BSkyB bid with me, usually people who were hostile. One or two exceptions, but on these occasions, people who were hostile. So it was just a topic of conversation. At drinks, parties, when you went to have coffee with a journalist, people would raise the because it was one of the main issues of the day and it was leading news bulletins and so on. So people would often raise it and I would always politely say it was something I wasn't involved in.
Q. It was one of the main political issues of the day. Aside from the fact it didn't fall within your jurisdiction, as it were, presumably you had a general opinion about it, didn't you?
A. I didn't have a strong view about its merits because as far as I could see, it was just going to cause us trouble one way or the other. Indeed, so it has proved to be, and I just thought it was either going to offend a group of newspapers and indeed broadcasters who we wanted to have good relations with if it was rejected sorry, if it was accepted, and if it was rejected, it was going to offend another bunch of people who we want to have good relations with. So I regarded the whole thing as a political inconvenience and something we just had to deal with and the best way to deal with it was to stick by the process.
Q. Aside from the inconvenience of all of it, surely your own political viewpoint might have informed, in general terms, your attitude to the bid, namely either you're going to be favourable to it or hostile towards it. Wouldn't you agree?
A. On the strict politics of it, as you put it, you had a couple of important Conservative-supporting newspapers who were vehemently against it and a couple of Conservative-supporting newspapers who were for it, and as far as I could see, it was difficult to find a common ground between them. So it was, as I say, a political inconvenience.
Q. That's a rather narrow way of looking at it, Mr Osborne.
A. Well, you said that I was not you know, since I was not involved in assessing the commercial merits of it or the plurality merits of it I was not involved in that process. I was merely, in that sense, within the government, an external observer of the process and my own personal view was that this is all politically inconvenient for us, and I think that judgment has been borne out by events.
Q. That no doubt is correct. People either seemed to be very strongly in favour of the bid or very strongly against it. That conclusion may have been drawn or based on purely political considerations or commercial considerations but there is also an ideological aspect here, and surely, your own view of the world would have caused you to be in favour of the bid, if I can put it that straightforwardly. Would you agree?
A. I'm not sure you can infer that, because as far as I could see, it was about increasing the shareholding in a company that most people would think they ran anyway. So it wasn't obviously, if you were commercially involved in that world, either as a rival or indeed as News Corp, you had strong views about it, but as a practising politician at the time, it was not clear to me that there was as I say, it was anything other than an inconvenience.
Q. If it was simply a question of increasing shareholding in a company of which they had control anyway, that would lead one to think that you were in favour of the bid going through, because that was exactly the position News Corp were taking publicly and privately with the decisionmaker. Do you see that?
A. As I say, I didn't have a view. I mean, the European Commission had made a ruling on the competition aspects. Ofcom and the Secretary of State were going to make judgments on the plurality aspects. But I didn't have a strong view on, as I say, the merits or demerits of the merger. It was what it was and it was causing trouble with various newspaper groups.
Q. It's rather unusual for someone to have such a lack of interest in an issue which everybody was talking about. Is that where you stood?
A. No, I didn't have I could see the political challenge it was posing us because you had, as I say, some of our supporters in newspapers very agitated about it and you had some of our supporters in newspapers promoting it, others writing to their own newspapers complaining about it. As I say, it was a political inconvenience. Since there was nothing I could do about it because I wasn't involved in the process there was a process, just let the process run. That was the way I approached it.
Q. We know you didn't have conversations with Dr Cable about it. Did you have conversations with Mr Hunt about it?
A. I had no specific conversations with either Dr Cable or Mr Hunt, and indeed I have, for the purposes of this Inquiry, searched both for any communication between the two departments there was no communication and also the minutes that were kept by the civil servants of my bilateral meetings with Dr Cable and Mr Hunt, and on no occasion have the civil servants recorded any substantive conversation. I do remember, as part of general conversations, both of them, both Dr Cable and Mr Hunt, saying well, just explaining what the process was and what had already happened, but as I say, there was no substantive discussion or else it would have been recorded.
Q. But before Mr Hunt acquired responsibility for the bid, which we know was on 21 December, he, by definition, wasn't occupying a quasi-judicial role. It would not have been inappropriate for you to have conversations with him privately and informally. Are you saying that you believe you had no such conversations?
A. I don't remember any such conversations. I mean, I think it was just the view certainly the view I took, certainly in my conversations with others the view was there's a process. There's a process under way at BIS with Dr Cable and we have other things, therefore, we need to be getting on with. Obviously at this point, in the autumn of 2010, there was a huge spending review, we had the controversial issue of tuition fees occupying a lot of time, so there was no point sitting around chewing the cud on the BSkyB bid because it was being dealt with by BIS.
Q. Did you know what his views were about the bid?
A. I was not aware of his view.
Q. Were you aware of Mr Cameron's view about the merits of the bid?
Q. Did you suspect what their views might be?
Q. So you assumed what, that they didn't have a view or that you simply were oblivious as to what it might be?
A. No, I assumed speaking about Mr Cameron that, like me, he thought the whole thing was, as I say, a political inconvenience. It was very clear to us that some important newspaper groups, from our point of view, like the Telegraph, like Associated and the Mail, were very hostile to it, as indeed was, I think rather extraordinarily, the Director General of the BBC. So it was pretty clear that there were a lot of people out there who were not going to be happy if the deal went through and equally, of course, News International wouldn't be happy if the bid didn't go through, but there was nothing we could do or would want to do or should do to influence that process. It was being handled in a quasi-judicial fashion by the business department.
Q. Apart from the one conversation you had with Mr James Murdoch which you refer to in your first witness statement, is it your evidence that there were no other communications with him by whatever means about the bid?
A. Not that I'm aware of.
Q. Can I ask you, please, to look at your supplementary witness statement now, please, which in the file we have under tab 3. At paragraph 5.3, there's evidence of an email Mr Michel sends to Mr James Murdoch on 9 November 2010 relating to a meeting he, Mr Michel, had with Rupert Harrison, who of course is one of your two special advisers; is that correct?
A. There are four special advisers. But he was one of them, yes.
Q. In terms of division of responsibilities between your special advisers, what, if anything, is he responsible for?
A. He is principally responsible for economic policy. He has a PhD in economics and he provides me with policy advice.
Q. The relevant email is under tab 9. In the PROP file, it's page 01665. Do you have it to hand, Mr Osborne?
A. I will do in a minute. Yes.
Q. It's dated, as I said, 9 November. You've had a conversation with Mr Harrison, is that correct, about what we see in this email? Can you tell us which part he agrees or does not agree?
A. Obviously the first either I saw of this email or indeed he saw of this email was when it was brought to the attention of this Inquiry, because it's an internal email. He says and I believe him that there was a general discussion that was not focused on the BSkyB bid. There is a reference in the email to making the case to BIS. He's checked and there is no contact that he's been able to see, and also the civil servants have been able to see, between the Treasury between Mr Harrison and the business department. So that certainly was not if it was raised, was not followed up. He makes the point to me that he wouldn't have known whether Dr Cable had read the legal advice or not, because he wouldn't have had a conversation with Dr Cable, and as I say, indeed, if I can I don't know whether you're coming onto it, but if you look at also the text exchanges between Mr Harrison and Mr Michel, I would say it's obvious that he is trying generally, in an implied way, to brush Mr Michel off with his various requests for interventions of various kinds. So for example, Mr Michel asks that I send a letter to Dr Cable. That was never done, never raised with me. If you look at the general tone of the text exchanges, they tend to be: "Well, I'll bring that up", or: "Sorry, I'm on paternity leave", or whatever. There's nowhere where he says, "Good idea, I will action that point", and Mr Harrison, I think, was doing his job of meeting people in representing important businesses but he was very careful not to promise things that we wouldn't have wanted to deliver.
Q. The reference to an ongoing dialogue in weeks to come, that's something which, aside from a few text messages, didn't occur; is that right?
A. As I say, we've done a search of the email system and of correspondence between the Treasury and BIS and there are no and indeed between the special advisers, and there is no evidence of such an ongoing dialogue and Mr Harrison's told me that no such ongoing dialogue happened.
Q. Are you able to help us at all with a reference to "the commitment" that's of News Corp to Scotland and "Alex Salmond's desire to support us"?
A. No, I can't, I'm afraid.
Q. Could Mr Harrison?
A. As I say, Mr Harrison didn't recognise when he looked at this email, said it didn't, he felt, reflect what was a pretty general conversation and when the bid came up, Mr Harrison made clear that it was subject to the quasi-judicial process that we weren't involved, and indeed, I think in Mr Michel's evidence to you, he talks about the meeting that this email purports to represent as being a general conversation.
Q. You refer, Mr Osborne, to some text messages. Indeed, there are a few, and we're going to look at four or five of them. They're under tab 15 in this bundle. The first one starts at page 13517 on 9 November. It says: "Rupert, [that's Mr Harrison] just spoke with James. It would be helpful if George were to send a letter to Vince on our Sky merger and its economic importance, separate from the Ofcom process. Do you think it's a possibility? I can, of course, help with the content. Best, Fred." And then the reply back: "Will have to discuss with G [that's you, of course] when he's back from China." Do you remember whether there was any discussion and, more importantly, whether there was any letter along the lines
A. There was certainly no letter and I have no memory of any discussion. I don't think a discussion took place. As I say, this is Mr Harrison exercising his diplomatic skills.
LORD JUSTICE LEVESON
One might ask Mr Harrison and I'm not suggesting it's necessary why on earth he didn't say, "This is a judicial process. We're not interfering. Be off with you."
A. Well, he was being diplomatic, Lord Justice Leveson.
LORD JUSTICE LEVESON
A. I think if you take the tone of all these exchanges, he's always you know, Mr Harrison is saying, "Okay, I hear what you say, but you know. He was not acting on any of these things, and truly the proof would be if there was any communication between him and the business department, which there wasn't, and indeed the only thing we've been able to come across in the department and after all, the correspondence between BIS and the Treasury is pretty voluminous. The only thing we've been able to come up with is a letter from all the people who were against the bid to the chief secretary, Danny Alexander, and I think what's instructive here is that the internal Treasury regulation team which would handle media regulation says, "This is a nil response. The issue is solely for the DCMS Secretary of State and the relevant competition authorities." In other words, the only internal evidence we have from the Treasury is when it's very clearly said that this is not an issue for the Treasury.
LORD JUSTICE LEVESON
My question was only to express slight surprise that everybody didn't understand what was going on here and that actually by doing this, either way, for or against, actually creates its own problems.
A. As I say, there were lots of people at the time saying either the bid should go ahead or the bid shouldn't go ahead, and people were transmitting that to us at drinks parties and encounters of various kinds and we were just politely absorbing that but not doing anything about it, or in the case of myself with Mr Murdoch, making very clear it was a quasi-judicial process, in the case of Mr Harrison in his actual meeting with Mr Michel, making clear it was not a process we were involved in.
Is this the accepted technique of dealing with pushy lobbyists?
A. On a bad day.
Q. In other words, effectively to fob them off rather than to tell them
A. When you're doing a job like mine or you're working as a special adviser for someone like myself, you get asked about a whole range of things the whole time. People are often trying to make the case for their company or their particular campaign or whatever. It happens on a daily basis. Obviously, you could go around being rather abrupt with everyone, but in this case, I think what Mr Harrison was doing is simply absorbing Mr Michel's texts, in this case, but the key thing is he doesn't raise it with me, he doesn't ask me to send a letter to Dr Cable and I don't send a letter to Dr Cable. So surely, I would argue, that's the material point.
Q. Is there any sense here at all of not wishing to antagonise Mr Michel, given who he represents?
A. I don't think it's a questions of antagonising or not. I think it's just he's sending these texts the question for me, since Mr Harrison's my special adviser, is: did Mr Harrison act properly? Did he, in any way, try to interfere with the bid process? Did he improperly make requests of me? The answer is no to all those things. He behaved, as far as I'm concerned, completely properly.
Q. May we move forward in time to 21 December 2010, in particular, the various emails or text messages, rather we have relating to that. I think they're under tab 20 of the bundle, our page 08159. We see here three text messages within a 50-minute period between you and Mr Hunt. Are you with me, Mr Osborne?
Q. Can we try and establish the chronology? First of all, approximately when were you first aware of Dr Cable's comments, which had been, as we know, tape-recorded?
A. I think about 3 o'clock. I mean, I discovered, like, I expect, the rest of Westminster, from Robert Peston's blog, I think it was, where he had put up that he had information that had not been published by the Telegraph that morning about what Dr Cable had said about the Murdochs.
Q. Did you have any discussion with anyone from News International or News Corp about it on that day?
Q. Did you have discussions with Downing Street about this issue on that day?
A. By "Downing Street", I take you to mean the Prime Minister. The answer is yes. Every day, at 4 o'clock, there is a Prime Ministerial meeting to review what's going on that day and look ahead, and I attend that meeting when I'm in London and my diary allows me to do so. So I was going over to Downing Street anyway. The meeting had, in effect, been cancelled and the meeting had become a discussion of what to do about Dr Cable's remarks, and I was part of that discussion, with the Prime Minister, his most senior civil servant and his political advisers. Would you like me to give an account of that meeting?
Q. Yes, but first of all, who else was there? Have you covered the personnel?
A. I can't remember the exact cast list, and I don't have the 10 Downing Street records of the meeting, but the my recollection is it was the Prime Minister, it was the Permanent Secretary at Number 10, Jeremy Heywood, and the Prime Minister's close political team and indeed the Prime Minister's private secretary as well.
Q. Could you tell us, please, the gist of what was discussed?
A. The principal concern in the meeting and certainly my principal concern, what I was seeking to say in the meeting was that this was not something which should lead to the resignation of Dr Cable. I thought what Dr Cable had said was wrong but I didn't think it merited his resignation, and frankly I also had concerns about the impact of such a resignation on the Coalition and the unity of the government. So I was looking for a solution, as indeed were other people in the room, that did not involve someone else becoming the Secretary of State for Business and Dr Cable leaving the government or indeed Dr Cable moving to another portfolio, because that would trigger a wider Cabinet reshuffle which was not something we felt, just before Christmas, with, as I say, the Coalition in its first year, something we wanted to see, and indeed we thought Dr Cable was doing a good job as business secretary, other than on this particular issue of what he'd said about the Murdochs. So we were looking for solutions that did not involve Dr Cable resigning or moving from business secretary, and Jeremy Heywood suggested the solution of moving the responsibility for media plurality to the department for culture, media and sport. So it was, in a way, a structural solution within Whitehall to the problem, and my recollection is once Mr Heywood had proposed that, we thought that was a good solution and would help keep Dr Cable in government whilst removing from him the responsibility for media plurality, and it, I think, also struck us all as rather commonsensical that it would move to the department that was, after all, called the department for media and already had responsibilities for media regulation.
Q. Was it Jeremy Heywood's ideas that it should go to DCMS, or was that someone else's idea?
A. My recollection is it was Jeremy Heywood's idea.
Q. It was certainly his idea, on your evidence, that the responsibilities be moved elsewhere, but I think the question is more focused on exactly where. Can you be sure about that?
A. I'm pretty sure. My recollection of the event was that he thought it was sensible to just remove responsibility for media plurality from BIS to DCMS. I've noted also what I think Gus O'Donnell has said in evidence to you he was, of course, the cabinet secretary at the time that, surprise, surprise, I think as he puts it, the media department was the obvious place to look when it came to a reallocation for responsibilities for media policy within government.
Q. How long did it take to agree to on that solution in principle?
A. Less than an hour, I would have thought.
Q. So when you texted Mr Hunt back at 16.58: "I hope you like the solution", that's obviously the solution we've just been discussing
Q. over the last five minutes; is that correct?
Q. So the decision in principle had been reached by then
A. Yes. I think his department had already been contacted at that point, certainly not by me but by the Prime Minister's private office, so that they were looking at this as a potential solution to the problems that Dr Cable's comments had caused.
Q. Did the two earlier texts arrive during the course of the meeting you were having with the Prime Minister?
A. According to the evidence submitted to your Inquiry, but I'm not certain that I saw them before I sent the reply. I suspect I mean, I didn't sit in the meeting looking agent my mobile phone, and I suspect when I got out of the meeting and I have a memory of it lasting about an hour that I would have looked at my mobile phone coming out of the meeting and seen those texts and sent my reply.
Q. Did anybody at the meeting express any concerns about the impartiality of Mr Hunt?
A. There was an issue about whether, because Mr Hunt had publicly expressed his support for or sympathy with the bid although he had said also in public, I think, that it was a non-issue for him, he wasn't involved in the process. I think the Prime Minister's view and the view of the civil servants was that they should seek legal advice about whether that was an impediment, but I was not involved in that seeking of legal advice and you would have to direct your questions to either the Cabinet Secretary or, I guess, the Prime Minister later this week.
Q. The legal advice we know was obtained after 16.58, which was the time of your text: "I hope you like the solution". Does that match with your recollection? You didn't have the legal advice in your hand, as it were, before the decision in principle was taken?
A. My recollection was that the decision had been taken in principle, subject to any problems the legal advice might throw up, that there was no expectation that it would throw up those problems but it was thought best to check.
Q. What did you mean by "I hope you like the solution"?
A. First of all, I thought he would like the fact that he was taking on additional responsibilities, and second, the "solution" refers to the fact that he was the "solution" refers to the problem we had with Dr Cable's remarks and that that had obviously caused a political storm that day. And again, my recollection is there was breathless coverage on the 24-hour news that this was a crisis for the improvement and I think the opposition at the time were calling for Dr Cable to resign. So my reference here is to the solution of that particular problem: Dr Cable's remarks.
Q. When reference was made to Mr Hunt's public expression of views, which were likely touched on in this meeting with the Prime Minister, were you surprised to hear those views?
A. I don't recollect being particularly surprised.
Q. It wouldn't really have been a matter of surprise to you, would it, if Mr Hunt was generally well disposed to the bid?
A. I think they had been reported in the press, I think.
Q. But to be frank, weren't those views shared by all the politicians present, all three of you, the same community of opinion which is generally favourable to the bid?
A. As I say, our focus, and indeed the exclusive conversation, was how to solve this problem, that a very senior Liberal Democrat, who was important to the unity of the government, had said remarks which some people, including the Labour opposition, said merited his resignation and we wanted to find a solution to that political problem and that's what took up the time in the discussion. And as I say, quite appropriately, the senior Civil Service provided a neat Whitehall solution.
Q. Why were you present at this meeting at all? Was it simply that you are one of Mr Cameron's leading advisers in government?
A. Well, I'm a regular attender at the 4 o'clock meeting that's held, and I'm a senior member of the government and senior Conservative.
Q. These 4 o'clock meetings, we don't have to know who's present on every indication, but are you present on every occasion?
A. When I'm in London and there's not some other pressing event.
Q. Why was there such a rush to get this sorted, in principle, at least, in less than one hour?
A. I think that on the day, I remember the pressure was enormous to do something about the political crisis that had been unleashed on the government out of the blue at 3 o'clock in the afternoon. Obviously, we had no idea that Dr Cable had said these things. They weren't in the Telegraph's report of the story that morning, which had itself caused some problems, and we had to deal with I mean, the pressure in government, in modern government, is to is you have to make sure you have answers to some the tough questions that the media are throwing at you, even if it comes in the middle of the afternoon, just as you're doing other things. We're going to come on, I suspect, to discussing the appointment of Andy Coulson, but I would just say this: in a modern political party and for a government, you have to be on the news management cycle. That doesn't mean you have to try and control every headline. You can be more relaxed about the ebb and flow of the news than some of my predecessors have been, but it's quite difficult when you have a situation where a Cabinet Minister has said something which makes it pretty clear to all concerned that he can't continue with those responsibilities and you have to provide the public and Parliament with an answer to what your solution to that problem is.
Q. Was there any sense at the meeting that you were moving from one difficulty, potentially, to another? You had an appearance of bias from Dr Cable but you had the equal and opposite problem with Mr Hunt. Was that ever considered?
A. Not to my recollection, no.
Q. Do you feel that it should have been?
A. Well, we received, I thought later, good legal advice that it wasn't an impediment, and I would say there is a difference between someone who is acting in a quasi-judicial fashion and saying, in very colourful terms, "I'm going to go to war with the Murdoch", or whatever exactly he said, but the gist was that, and the way Mr Hunt then sought to conduct himself, which was to take independent advice and follow that independent advice. I mean, if I can make a broader point, Mr Jay. The claim is, principally by our political opponents but also others, that there is some vast conspiracy where the Conservative Party knows before the General Election that News International wants to bid for more of Sky, that we sign up to some deal in return for their support as expressed through the endorsement of the Sun and then, when we get into office, we hand over BSkyB. That is what the previous person at this Inquiry has alleged this morning. It is complete nonsense, and the facts simply don't bear it out. We had no idea that they wanted to bid for Sky before the General Election. When the General Election had happened, Dr Vincent Cable, a Liberal Democrat, is put in charge, and 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 as part of this cunning plan, put Mr Hunt in charge. It doesn't stack up. We were following proper process and I think Mr Hunt followed proper process as Secretary of State.
Q. I've been asked to put these two questions to you: are you aware of any communications in relation to the BSkyB bid between your special adviser, Mr Harrison, and Mr Graham McWilliam, who is the head of corporate affairs at BSkyB?
A. I'm not aware of any such communication.
Q. And any communications between Mr Harrison and Matthew Anderson, who is Mr Murdoch's adviser?
A. I'm not aware of any.
I'm going to move on now to another topic.
LORD JUSTICE LEVESON
We have a break, Mr Osborne, just for the shorthand writer, who works quite hard as well. Just a few minutes. Thank you. (3.18 pm) (A short break) (3.28 pm)
Mr Osborne, may we move back to paragraph 7 of your first witness statement, please. This is page 04092. We're dealing now with the recruitment of Mr Coulson. Are you with me? First of all, you tell us in paragraph 7.1 that you discussed with David Cameron who the potential candidates might be, and then, a bit later, one name you suggested worth considering was Andy Coulson; is that right?
A. That's right.
Q. It's going to be invidious to identify the other potential candidates for obvious reasons. Can you give us an idea, please, however, of how many there were?
A. There were probably, from memory, three or four that we had identified, one of whom, I think, has been identified or identified himself, Guto Harri, who subsequently worked for the Mayor of London. There were a couple of other people we considered, one of whom we met and talked to. This other person did not work for News International, to my knowledge never has worked for News International, and they are still working in the press and I don't think it would be fair to identify them. But we were considering a number of candidates and I thought Andy Coulson, as recently resigned editor of News of the World, would be a very strong candidate.
Q. What in particular were the qualities he possessed which attracted him to you?
A. I thought it was a couple of things. First of all, he had been the editor of a major national newspaper, so he had an enormous amount of professional experience, and what we needed was someone who was going to be able to handle the communications of a large organisation, the Conservative Party, and develop a media strategy, but also be able to handle, on an hour by hour basis, the problems that were thrown at us. As I was saying earlier, in politics I'd like to say modern politics, although I suspect there have been features of this which have been common to political systems for thousands of years, but things can be thrown at you very quickly and you need to be able to react very quickly. A story can break late at night. It can involve an individual, it can involve a policy. I would suggest that if I suggest the way actually sometimes evidence from this Inquiry has suddenly been picked up and within 20 minutes, the government has to have an answer or at least a holding answer, you know, shows I think everyone involved in this Inquiry how quickly things can move, how quickly the government has to be able to react and indeed an opposition has to be able to react, and I thought that Andy Coulson had that experience, as someone who had run a large newsroom, was used to the pressure of dealing with fast-changing stories. I thought, secondly it wasn't just that he was experienced. I had met him a few times, although never one-on-one, and he had struck me as someone who had Conservative views, had shared my Conservative values, and I thought would bring that as well to the party. So I thought there were a number of reasons why I thought he was potentially a very good person to do the job.
Q. Are you saying that his associations with or contacts with News International were not relevant factors at all?
A. They were not relevant as far as I was concerned, or certainly, as far as I'm aware, David Cameron was concerned. The fact that he had edited a big newspaper was the relevant fact, and as I say, the other candidates we considered were not people who were working for News International. I think if Mr Coulson had, for example, been editing the Mail on Sunday, then we would have also hired him. So I think it wasn't relevant that he was a News International ex-employee.
LORD JUSTICE LEVESON
But relevant that he was very experienced in the ways of the press?
A. That was the relevance, sir. I mean, I have seen people suggest that the reason we hired him was because of his connections with the Murdochs or Rebekah Brooks or his knowledge of the internal workings of News International. I can tell you that was not a consideration. What we were interested in hiring is someone who was going to do the job going forward. I think if you had just hired someone, or only hired someone, or this was a key consideration, because of the connections he had, I think we would have been making a mistake. We were hiring an individual to do a very important job for us and we hired him because we thought he had the experience and the personality to do that job, and I would suggest to you that everything that's happened since no one has ever mounted a serious complaint about the way he was the Director of Communications for the Conservative Party or subsequently for the government. There have been lots of arguments about his time at editor of News of the World, but no complaints about the way he handled himself in the job of Communications Director, which is, frankly, one of the most controversial jobs in Britain.
LORD JUSTICE LEVESON
Well, is it more that actually he brought skills which you'd seen evidenced by New Labour in Mr Campbell?
A. I think it is undoubtedly the case that Tony Blair had seen that hiring someone from the media would bring an added dimension to the communications effort, and the Conservative Party had, in opposition, hired a number of people subsequently who had been journalists, indeed one person who had been an editor of the paper. So that was true, but I don't think that Mr Coulson and Mr Campbell are cut from the same cloth, I would suggest. Alastair Campbell was a political editor. I thought Andy Coulson brought a broader experience, as an editor of a paper, so managing a large newsroom, and as I say, I think subsequently the way he did the job shows that he was very well qualified to do that job.
I suppose he might be said to have been attuned to a particular brand of Conservative thinking, which you and Mr Cameron did not wholly exemplify; is that fair?
A. Well, I think he brought a whole range of experiences and values to the job. If you're referring to the fact that I think he started his career on a Basildon newspaper, Basildon beats close to the heart of the Conservative Party.
Q. Out of interest, was he of any use to you subsequently in terms of his contacts with News International and Mrs Brooks?
A. I don't think they were particularly of value. We already had some of these contacts; it's not like we had to establish contact for the first time with these people. So I don't think he as I say, there was a particular thing he brought to the party. He was and remains a very experienced individual, understanding different aspects of the media, and actually one of things he transformed for us was our interaction with broadcast media, which had been, I think, quite weak until that point. So he hadn't, to my knowledge, been working for a broadcaster previously.
Q. Were you aware that he was close friends with Mrs Brooks?
A. Well, I certainly was aware that he was friendly with Mrs Brooks and obviously knew the owners of the News of the World.
Q. You must have assessed that this was not likely to be a hindrance in the future. Is that fair?
A. If anything, of course, we knew it was going to be controversial hiring somebody who had resigned from being editor of the News of the World. We, so certainly had to consider that issue, as I've set out in my written evidence. But as I say, if he'd been the editor of the Mail on Sunday or some other newspaper, then we would have hired him. I use the Mail on Sunday just because it's a Sunday mid-market page with a Conservative leaning. So as I say, it was not a consideration: let's hire the ex-News International man. It was: let's hire this very experience ex-newspaper editor. It's not like there were a load of other ex-newspaper editors ready to be employed and I thought he had a particular talent and ability that I had detected in my dealings with him and my conversations with him as Shadow Chancellor. So of course, that was not my decision to hire him. I suggested that and Mr Cameron had met him, as editor of the News of the World, and Mr Cameron spoke to him, as did a number of other Conservatives before he was hired.
Q. Okay. You met him, as you tell us in paragraph 7.4, for a drink on 15 March 2007. Mr Coulson's evidence was to like effect, and at paragraph 7.6 you also told us you asked him whether he was a Conservative supporter and he confirmed that he was; is that right?
A. Yes, that's right. I mean, obviously, I suspected he was and one of the things that you develop in my job is you have a reasonable sense, not always accurate, about how people might vote, but of course his paper had actually supported the Labour Party in the previous election, so it was worth asking him the question, because, as I say, he had, as the editor, supported the Labour Party at the previous election.
Q. Can you remember the precise terms of the question you asked him about phone hacking? You deal with it towards the end of paragraph 7.6.
A. The way I've put it here is to the best of my recollection. This was not an interrogation. This was a drink where I was sounding him out to see if he was interested. I wasn't offering him the job. I was just finding out whether he was interested. Until that point, we had no idea whether he was interested, what other things he had on offer or whether he had already accepted some other job. So I asked him, in a general sense, as you might do in a social encounter, whether there was more in the phone hacking story that was going to come out that was not already public that we needed to know about and he said no. And of course, the phone hacking story had been the Mulcaire/Goodman court case and subsequent convictions.
Q. Why do you think you asked that question?
A. Well, because obviously it was an issue, that he had resigned because of what had happened at the News of the World. Certainly I was aware and we'd discussed it beforehand internally before approaching him that hiring him would attract come controversy because of the circumstances of his resignation. On the other hand, if he hadn't resigned, he wouldn't have been available for the job, I suspect. As I say, I asked it in this in the way that I have put down here, to the best of my recollection, and you know, I think it's also worth noting that the Press Complaints Commission subsequently, before we formally appointed him, said there was no evidence of anyone else at the News of the World involved. The former Prime Minister, in his evidence to this Inquiry, has said that he believed Mr Coulson when he was the first politician, as I understand it, to phone Mr Coulson after his resignation, and I guess I also had assumed that because there had been a criminal court case in a court and all these things had been investigated by the police, that there was nothing else. But I asked him.
Q. So you you asked him to exclude the possibility that there might be something else; is that it?
A. I asked him because I wanted to find out from him whether there was some as yet undisclosed part of his involvement in the Goodman/Mulcaire case that we were not aware of, and he said no.
Q. And then in paragraph 8.1, after Mr Coulson, a few days later, confirmed that he was interested in the job, you had a conversation with Mr Cameron about it; is that correct?
A. Yes. I think I spoke to him pretty soon, actually, David Cameron. My recollection is that I probably spoke to him on the way back from the drink I'd had with Mr Coulson on the telephone.
Q. So by that point, you were presumably already quite impressed with him, or maybe more than quite impressed. He, from your perspective, was the man for the job, subject to his expressing an interest; is that
A. I was very impressed by him, and it had confirmed my instinct that I thought he would be a very good candidate for the job. Also, I had discovered that he was at least prepared to consider the job, although I stress that on that occasion, he simply said he would think about it, he hadn't thought about it. He was somewhat surprised, by the way, that I'd turned up and asked him. So I knew we had a good person for our shortlist. I wouldn't say that we had made a decision there and then to hire him, but we had someone who we could put on a shortlist.
Q. I think you told us that you knew that this would be a controversial appointment, particularly if it was going to be him; is that right?
Q. Why did you run that risk?
A. Because I thought in the end, the balance was that it was worth hiring someone with real talent and ability and weathering the adverse publicity that appointing someone who had had to resign from the News of the World would bring. I guess what I had thought was and I'd been involved from a very junior level in Conservative politics since 2004 sorry, 1994. You know, over a long period, I'd seen oppositions try and hire people just because of who they were and maybe the connections they brought and so on, and I and this had sometimes gone wrong. Not always, but sometimes gone wrong, and it was better to hire someone which you thought was going to be good for the job in hand, rather than because of where they came from. So if you were going on simply a hiring someone that was not going to attract any publicity, you wouldn't have hired Mr Coulson, but we hired Mr Coulson because certainly my assessment was he was the best candidate for the job.
Q. Can you remember when you spoke to Mrs Brooks to get her professional opinion about him, as you put it?
A. Well, I spoke to her after I'd seen Mr Coulson and after we'd been considering it for a couple of weeks, and I don't recollect the precise day or anything like that, but I remember a conversation where I asked her: "Tell me about Andy Coulson. Tell me, is he a good person? Is he a good person to work with? What do you think of him?" It was never a question about: "Is he going to bring his News International connections?" or: "Tell me more about the circumstances of Andy's resignation." I was just simply asking her opinion of him as a professional.
Q. Did she express any surprise that you were interested in hiring him?
A. Not particularly because I think she knew I think Mr Coulson had himself told her that we were interested. I mean, I don't want to overstate the importance of this I've just put it in here for completeness. It was a pretty brief conversation, as I remember. There was no formal meeting with her or anything like that.
Q. I suppose it would be difficult to take references in this sort of situation and this was the best you could do; is that right?
A. Well, yes. One of the problems we had and indeed we had appointing his successor is that it's such a high profile appointment and there's such a lot of interest in who you're going to appoint that it's quite difficult to do this without attracting a lot of media attention. So we had to tread carefully and you're right that we couldn't formally request references or anything like that.
Q. I think subsequently you passed out of the picture, as it were, since we know that Mr Cameron then had a conversation with Mr Coulson and the job was offered, but in terms of his subsequent work for the Conservative Party, to what extent was he helpful in the overall process of bringing the Sun newspaper on side?
A. Well, he was helpful because he was the director of communications, but I think the endorsement of the Sun has been elevated to almost mythical status. It was just one of a whole range of things we felt we had to get right in the run-up to a General Election, and ultimately, if we had not had the endorsement of the Sun I think we still would have gone on and done well in the General Election. I remember also that it was significant we had the endorsement of the Financial Times and the Economist, both publications I think previously at various points had supported the Labour Party. They don't have mass readerships, but they bring a different kind of cache. So I think in all this process, and I think maybe it stems back to the 1992 election and some of the mythology around that there is this feeling that the Sun endorsement is all you need to win a general election, and I would say it is far from that, and I certainly think you could win an election without the endorsement of the Sun.
Q. But was Mr Coulson able to give advice as to how best to obtain the Sun's support, even if, as you say, it was far less important than many commentators have claimed?
A. Well, I think his advice was how to handle our communications effort. Yes, how to talk to proprietors and editors and so on, but you would have to ask the indeed you have the editor of the Sun and Rebekah Brooks and the Murdochs. But in the end, they supported the Conservative Party I think for the same reasons that many other previously Labour-supporting people and organisations and newspapers switched their support, which is they felt the Labour government had run out of steam and we wanted a new government. So I didn't as I was saying before the break, I don't think there was some kind of conspiracy that fused the endorsement of the Sun with the commercial interests of News International and that this was ever discussed or even hinted at or that there was some silent understanding. It's just complete nonsense. We were trying to make the merits of the Conservative case clear to all, including those who edited the Sun but above all those who read the Sun.
Q. If you put the term "conspiracy" to one side for one moment I understand why you do that and instead use the term "strategy", a far more neutral term. Surely you had a strategy Mr Cameron, Mr Coulson, you yourself may well have been involved in it as to how to win over the Sun? It would be unthinkable that you didn't approach an important issue without having a strategy. Are we agreed?
A. I don't think it was a particular strategy for the Sun newspaper. It was a strategy for the newspapers. We wanted the full throttled support of Conservative-leaning papers like the Telegraph and the Mail. We wanted to win over some of those more neutral broadsheets like the Times and the FT. We didn't have much hope of the Mirror and the Guardian, and obviously we wanted to win the support of the Sun. But it was a general media strategy and it mainly consisted of setting out our argument about why the Labour government had forfeited the right to remain in office and why we thought a Conservative government would be better for Britain. So we were making in private exactly the same arguments that we were making in public.
Q. But for the papers in the News International stable, did you not have some sort of strategy as to how specifically to win them over, aside from the overall strategy to do the best you can to win support from everywhere you might choose to look?
A. I don't remember. I'm certain there was not some specific Sun strategy. As I say, we were certainly aware that the endorsement of the Sun was important because of the role it's played in British politics or the role people think it plays in British politics, but our own personal view was it was not going to be anything like a deciding factor or even a hugely significant factor. It was important but it was just one of a whole range of things we had he to do to try and win a General Election.
Q. You also say in your statement that over time you became a personal friend of Mr Coulson; is that right?
A. Yes, and remain a friend of his, although sadly I've not been able to speak to him for a year.
Q. Okay. May I ask you now about something else? Are you also a friend of Mr Daniel Finklestein of the Times?
Q. Does he act for you as a sort of unpaid adviser and/or speech writer?
A. No, he's just a very good friend. I've known him for many years. We worked together when he was the director of research at the Conservative Party. We stood for Parliament in the same General Election, but he was unsuccessful. He and his wife Nicky are very good friends of my wife and I.
Q. Has he ever assisted you in the drafting of your statements and speeches?
A. Well, he I talk to him about politics, like I do my other friends, and he occasionally provides good one-lines and jokes. It is a function those who know Mr Finklestein know he's been performing this function for about 20 years for a whole succession of Conservative politicians.
Q. As a form of quid pro quo, do you assist him in any way with providing material information for his stories in the Times?
A. Well, we no, is the if you're suggesting there's something improper in that. We have political conversations. I have other very good personal friends who are journalists and involved in the media and obviously we talk about politics, but part of the job of a columnist and I don't think, by the way, anyone who reads Mr Finklestein's excellent columns would be under no illusion that he's a Conservative, because he quite often references the fact that he worked in the Conservative central office and was a Parliamentary candidate. You know, he is seeking to explain the thinking of the Conservative Party and no doubt he's informed by the conversations he has with me and many other senior Conservatives. I would also point out he is friends with many, many senior Conservatives, not just myself.
LORD JUSTICE LEVESON
Actually, you make the very point that I was making to before, that people have to be able to have social relationships with whosoever they want. The question is: is there a line, and if there is, how you define it. You may be right that you can set it out, but ultimately you depend upon the people who were exercising responsibility and power to use sensible judgment.
A. I would agree with that. In the end, there's the judgment of the editor of the newspaper, there's the judgment of the public about whether they buy that newspaper and there's the judgment of the electorate about whether they elect someone to office.
There's one further meeting I have been asked to raise with you. It's on 5 April 2011. It's referenced in your annex, which remains under tab 2 at page 04085. A dinner with Rebekah Brooks, Will Lewis and James Murdoch, which I think was the night of the press awards. Do you remember that one, Mr Osborne?
A. I do remember it, though not in great detail.
Q. Two issues I've been asked to raise with you. First, were Mr Michel and Matthew Anderson present on that occasion?
A. I don't think so, no. Well no.
Q. So the names listed here represent the only relevant individuals from News International/News Corp who were there; is that correct?
A. To the best of my recollection. If I've got that wrong, I will certainly write to correct it but I don't remember anyone else being there.
Q. The second question is: was the BSkyB bid raised on that occasion?
A. I don't think it was, no.
Q. Can you remember what was discussed in general terms on that occasion?
A. I think, again, it was a general discussion about the political situation and what the government was up to at the time.
Q. Okay. I move on then to issues of media regulation, Mr Osborne.
Q. A number of issues. The balance between freedom of the press, free speech, and responsibility and the rights of others. How do you see the issue of individual harm and collective harm and how heavily do they way in the balance against the important rights of freedom of speech?
A. My instinct is to err on the side of freedom of speech, just because I think when you try and construct some test of some other public interest, you are at risk of muzzling free comment in a democratic society, and there are plenty of occasions in our history when newspapers stood out against the general consensus, would have been accused of harming the public good, and yet were proved right by events afterwards, and I think if you try and construct some public interest test that you sit alongside freedom of speech, you are in quite difficult territory. That doesn't mean that there aren't rights of individuals, and I would certainly maybe we're going to come on to this. I would certainly agree that the PCC needs a complete overhaul and changing, and I think there needs to be a better right of redress for individuals who are harmed in some way by the press in an unfair way, but I think if you try and construct some test of general harm, then you are in difficult territory because a powerful politician will always invoke the national security or economic national interest as some defence why an inconvenient story shouldn't be published.
Q. If we focused on the individual harm rather than general harm. I'm not sure anybody's going so far as to suggest general harm. Why does the same concern arrive in the context of the correct desire to continue to foster free speech in a democratic society?
A. I think this is more the territory of yourself and Lord Justice Leveson, but I think the courts and the defamation laws don't really provide much of a remedy for most citizens in this country if they are in some way libeled. It's too expensive to take a libel action and whilst the Press Complaints Commission has done some good and I've used it on occasion myself it has lacked teeth, it has lacked independence, and I think but I've only reflected on this because of this Inquiry I think it is also too reactive to individual complaints rather than trying to foster a broader set of standards and an ethos which I think would benefit the whole process.
Q. That sounds as if you favour a strengthened body which would be able to assess damage to individual rights and therefore there isn't an objection to those matters being properly addressed, even in a democratic society where we all believe in free speech. Is that not correct?
A. I think if there's an individual who is not a prominent politician or a celebrity who's actively courted the media if there's an individual who has a gross intrusion of their privacy by the press that is unjustified and I'll many come on to say how you make that determination but I don't think at the moment they have very many options available to them. They can go to the Press Complaints Commission and sometimes that works but I think it's generally the view that when the remedies are arrived at, they tend to be much the apology or the correction is tiny compared to the size of the original story, and for ordinary citizens whose lives can be harmed in this way, there is not an obvious route to go down. So I would hope that perhaps coming out of this will be some recommendations about how you can help those ordinary citizens, which, after all, was the origins of this entire Inquiry was the harm visited on ordinary citizens, not on politicians or celebrities. If you can find a cheaper, more effective, more straightforward remedy for those people, I think that would be fantastic, but I think in doing so you have to be careful not to stray into my personal view issues like the blurring between comment and fact, which has featured in these enquiries, because I think that is a broader issue where personally speaking, again I think you'll find it impossible to find some remedy, and if you do empower some independent body with some investigative rights in this area, you could be crossing over a line which ends up with a restriction on free speech which would be damaging to democracy.
LORD JUSTICE LEVESON
We have to break that down a bit. If one takes the first bit, the PCC does require separation of fact and comment and if you have an appropriate mechanism at least to be able to review that where it's gone horribly wrong and I'm not talking about political issues which I see in a different light; I understand the point that you're making there that may help. The second bit is investigative rights, and again, it depends what sort of investigation you permit and who's doing it. The trouble is that there's a risk, it seems to me but I'd be interested in your comment in defaulting to the position: "Well, the police are there, they should do it", because the police have their own priorities and their own problems and one would hope that the press in some way should be able to cope with issues that are so outwith a reasonable response that somebody ought to say something about it. That's really what we're grappling with; is that not fair?
A. Well, sir, I think from what I've heard you say about trying to get a more independent body that is also independent of the government, that provides an easier means of redress for I put it like this ordinary citizens, and I think that is all very well and good and all power to your elbow. I just would question when I hear the discussion stray into a complaint about sometimes the virulence of the press or the anger of the press, that is part of the colour of a free press in our society and it actually makes our press, I think, more effective at holding politicians to account than the media in some other countries, and you know I've heard, for example, what Alastair Campbell suggest league tables for accuracy and there's been some talk of kite marks. I would just be quite sceptical of getting into that territory. One person's fact is are another's opinion, certainly in the political world. So maybe there are other worlds where there needs to be a clearer line, but I think in politics you'll find it very difficult to find that line, but you yourself acknowledged it.
LORD JUSTICE LEVESON
I understand the point entirely, but let me just share with you another group I'd be interested in your comments, and these are now voluntary, these questions, so you're perfectly entitled to say, "Thank you very much, I'll pass on that." I've heard evidence from groups that feel very, very disadvantaged by the way they're continually portrayed in the press, and of course the PCC requires an individual complaint, but if the material is about a group of people and there have been submissions from disabled groups, immigrant groups, transgender group, from women's groups they fall into a slightly different category from the politicians, who, of course, have different dynamics within which they have to operate. Would you agree?
A. Well, up to a point (inaudible), I think is my answer to that. I think, yes, of course you have to respect the dignity of people and particularly you know, there are laws to prevent racial discrimination or sexual discrimination or sexual orientation discrimination. You mentioned immigrant groups and they are obviously sometimes the most vulnerable people in our society. Equally, there is a huge concern out there amongst the public about immigration controls, not about particular immigrants, and if that is not allowed to be aired, then I think you stifle public debate and actually, since you've got me on the subject here, I think it's one of the issues for our national broadcasters as well. I think let's take the issue which is very hot at the moment, the European issue and the euro zone. I remember a decade ago it was regarded as faintly eccentric to be against Britain's membership of the euro and the campaign launched by the Daily Mail and the Sun and the Daily Telegraph to keep Britain out of the euro was regarded a faintly marginal by the establishment and the government at the time, and the CBI and the TC and everyone else. Now, actually, they found that Eurosceptic movement found its voice through those newspaper campaigns and they didn't get much help, may I add, from the BBC at the time, although I think the BBC has acknowledged now it made a mistake, and yet we can now see, with hindsight, particularly today of all days, that that was one of the most important economic and political decisions this country has ever faced.
LORD JUSTICE LEVESON
A. So I would just be yes, by all means respect the right and dignity of individual groups, but if that prevents you airing issues that large numbers of people in this country have quite strong views about, then I think you are in difficult territory.
LORD JUSTICE LEVESON
I don't find it personally difficult to draw the line between what you've just said justifies protection and what you have equally said absolutely must be open in a free democratic society for free speech.
A. But if you, for example, cut to the budget, the government funding to perhaps one of the groups that you mentioned, that can be represented as an attack on that group and you never hear on the Today programme a person saying, "By the way, I'm a taxpayer. It's not that I'm particularly against that group; it's just that this country is spending too much." I'm just saying that if you elevate certain groups as having particular status that need particular protection, you are starting to make judgments about what's in the public interest and I think that is quite a slippery slope. We have very good laws, which you would know better than me, sir, to protect the abuse against individuals and discrimination against individuals, but once you start going beyond those laws with some kind of code for newspapers, then I think you are straying into the territory of determining what's in the national interest and I would personally stay away from that territory.
LORD JUSTICE LEVESON
You certainly need to stray away from determining what's in the public interest. That's ultimately going to be a decision for the press.
A. And the public.
LORD JUSTICE LEVESON
And the public. The question is where, in relation to any specific example, the balance lies.
A. Yes. I would say from having followed your proceedings that the work that you are asking people's opinions on, to create a more independent replacement to the PCC that is independent of government but more independent of the newspapers, that it should have teeth, that it should be more than just reactive to complaints, it should try and set broader standards, I think those are all very good things. One final point I'd make and I've not had a chance to make yet is of course all of this has to be future-proof. What we don't want to come up with is a system for the production of illuminated manuscripts. We have to have something that is relevant for the Internet age. I have a 10 year old and an 8 year old child. I doubt they will ever buy a paper newspaper in their lives. They will consume news, they do consume news, but they consume news in different ways to the way that I've done over my life, and if we come up with something that just targets on one particular part of the media, then I'm afraid we'll all have been wasting our time.
LORD JUSTICE LEVESON
You could equally have added the concern about economics of print journalism as well. I understand the point. That's not to say I know the answer, but I understand the point.
Well, thank you very much, Mr Osborne.
LORD JUSTICE LEVESON
Mr Osborne, thank you very much.
A. Thank you.
LORD JUSTICE LEVESON
There's nothing else for me to deal with? Right, tomorrow morning, 10 o'clock. (4.10 pm) (The hearing adjourned until 10 o'clock the following day)