Pressure mounts on Cameron over Hunt’s role in Murdoch’s BSkyB bid

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By a Newsnet reporter

Evidence presented at the Levenson Inquiry on Thursday revealed that Culture Secretary Jeremy Hunt had lobbied PM David Cameron in support of News Corporation’s bid to take over BSkyB before the Prime Minister gave him responsibility for deciding the issue. 

The revelations put further pressure on the embattled Culture Secretary to clarify his role in the takeover bid, and raise new questions about Mr Cameron’s judgement.  Fallout from the phone hacking scandal prompted the Murdochs to withdraw their bid last year.

 

Mr Hunt’s job is under threat following revelations at previous hearings of the Leveson Inquiry into media ethics that Mr Fred Michel, a lobbyist working for the Murdochs’ company, wrote 164 pages of emails to James Murdoch, which apparently suggested that the Culture Secretary was secretly supportive of the £8 billion Murdoch bid.

Mr Hunt was meant to be impartially overseeing the bid process and has denied that he was biased in favour of the News Corp bid or that he had inappropriate contacts with the Murdochs’ representatives.

However it has now come to light that less than two months before Mr Cameron appointed him to the quasi-judicial role in determining whether the BSkyB bid could go ahead, Mr Hunt sent a memo to Mr Cameron warning that broadcasting would suffer for years if the Murdoch bid for BSkyB did not succeed.   

Mr Hunt said in the memo that James Murdoch hoped that his company’s bid would shake up Britain’s media industry the same way his father had done in the 1980s.  He went on to tell Mr Cameron that James Murdoch was “furious” over the government’s handling of the bidding process.

At the time the memo was sent, the bidding process was being dealt with at government level by Lib Dem Business Secretary Vince Cable, who was privately opposed to the News Corp takeover.

Mr Hunt wrote:  

“He doesn’t think he will get a fair hearing from Ofcom. I am privately concerned about this because News Corp are very litigious and we could end up in the wrong place in terms of media policy. Essentially, what James Murdoch wants to do is repeat what his father did with the move to Wapping [where he broke union strangle-holds on newspapers to introduce new technology] and create the world’s first multi-platform operator, available from paper to web to TV to iPhone to iPad. Isn’t this what all media companies have to do ultimately?  And, if so, we must be very careful that any attempt to block it is done on plurality grounds and not as a result of lobbying by competitors.”

Then Mr Hunt gave his backing to the controversial £8 billion bid, writing:

“The UK has the chance to lead the way on this as we did in the 80s with the Wapping move, but if we block it, our media sector will suffer for years.  In the end, I am sure, sensible controls can be put into any merger to ensure plurality, but I think it would be totally wrong to cave into the [BBC and Guardian] line that this represents a substantial change of control given that we all know Sky is controlled by News Corp now anyway.”

Within two months of sending the memo to Mr Cameron, the Prime Minister appointed Mr Hunt to oversee the bidding process.  Mr Hunt’s appointment came after the Prime Minister removed Business Secretary Vince Cable from the role after Mr Cable was recorded by a reporter voicing his private opposition to the Murdoch bid.

Whether Mr Hunt was indeed impartial has been called into question by a mass of emails and texts that suggest his office was bending over backward to help the Murdochs – for example by slipping News Corp’s top European lobbyist Frederic Michel intelligence on the progress of the potentially lucrative bid, requests for opponents’ documents, and giving advice on how to tackle the regulator Ofcom.

The Levenson Inquiry also heard that in the space of less than one year Mr Michel exchanged 191 phone calls, 158 emails and over 800 texts with Mr Hunt’s office.  The contacts continued even after Mr Hunt had been appointed to the quasi-judicial role overseeing the bidding process and was obliged to refrain from direct contact with the bidders.  The sheer volume and scope of the contacts place Mr Hunt in a very difficult position.  

In his defence, the Culture Secretary has claimed his special adviser, Adam Smith, went rogue, sharing too much information with the lobbyist without proper authorisation. Mr Smith resigned when the evidence was made public.

Opposition parties have called on the Culture Secretary to resign.  Critics point out that either Mr Hunt knew about, and was complicit, in his adviser’s inappropriate contacts, or he was catastrophically negligent in managing his own staff.

However the Prime Minister now faces bigger questions.  Given his own close and numerous contacts with the Murdochs, the Prime Minister must answer those who suspect that Mr Cable was removed in order to be replaced with someone the Murdochs found more malleable.  

After removing Mr Cable from the role overseeing the bidding process due to the bias Mr Cable expressed in private, Mr Cameron must explain why he appointed Jeremy Hunt to the role despite knowing that Mr Hunt was equally biased in the opposite direction.  The Prime Minister must have been aware of the sensitive nature of the bid and the growing opposition to it as the phone hacking scandal came to light.