Morning Hearing on 30 May 2012

Dr Vince Cable MP gave a statement at this hearing

Hearing Transcript

(10.00 am) LORD JUSTICE LEVESON Yes, Mr Jay. MR JAY Sir, the first witness today is the Right Honourable Dr Vince Cable, please. LORD JUSTICE LEVESON Thank you. DR JOHN VINCENT CABLE (sworn) Questions by MR JAY MR JAY Your full name, please, Dr Cable?
A. John Vincent Cable.
Q. Thank you. You kindly provided us with a witness statement dated 30 April, signed and dated under the standard statement of truth. Is this your formal evidence to the Inquiry?
A. Yes, it is. LORD JUSTICE LEVESON Dr Cable, thank you very much for the statement and the obvious work that's gone into preparing it. I'm conscious that you, as indeed many others, have other duties and this has been an unwelcome distraction from those duties. I'm grateful to you.
A. Thank you, sir. MR JAY Dr Cable, in terms of your career, you've enjoyed various careers in economics, then as a special adviser, then of course in politics. You're also a Fellow of Nuffield College, Oxford. You were, I think, a Glasgow city councillor, we'll touch on that, and currently you're the Secretary of State for Business, Innovation and Skills, and have been since 12 May 2010 in the Coalition government.
A. That's correct.
Q. In terms of your experience as a Glasgow city councillor, did you ever undertake any quasi-judicial functions?
A. Yes, I did. I was city councillor from, I think, 1971 to 74. I had a senior position in the it was then the Labour group of the council, but I did have planning responsibilities and I was conscious at that stage about what quasi-judicial responsibilities meant. I can enlarge a little on some of the lessons from that if you like, but that was the context in which I dealt with them.
Q. What were the core lessons that you learnt from your experience, in the context of quasi-judicial function, please?
A. Yes. I think, like other councillors involved in planning, and there are thousands up and down the country, I think we're conscious of the need there was at that time of the need to be independent, and to put aside one's views in order to make a fair decision based on evidence, and that context was quite a difficult one. There were well-known figures in the city, publicans and property developers, quite controversial, who made their views well known, and you had to navigate your way through that in order to make impartial decisions. I recall on one occasion feeling rather pressured and going along to see the council leader, explaining the difficulties, and he responded rather briskly, "Well, if you can't ride two horses at once, you shouldn't be in a circus", and I've always seen that as being a good definition of quasi-judicial decision-making, that on the one hand you have a political world and you have your views, often publicly expressed views, and the pressures that come from that, but on the other hand you set this aside when you have to make decisions and you judge on facts and evidence.
Q. Thank you. Before 21 December 2010, as Business Secretary, you had reserve powers, quasi-judicial functions, if you will, under the Enterprise Act 2002 as amended, and you explain those more specifically at paragraph 10 of your statement and following, Dr Cable. That's at 01353.
A. Yes. I think the starting point is that most mergers and takeovers do not involve a political process. They are dealt with by the competition authorities either at a national level or at a European level. There is one exception, which is in the case of public interest cases, and these are defined under I think the 2002 competition legislation and further amended in the 2003 Communications Act legislation, and these relate to national security, to financial stability, which was the case of HBOS Lloyds, and in relation to media, and there are several tests in relation to media, including, I think, broadcasting standards, but the one that was relevant in this case was plurality and my task in that context was to judge whether there was an issue in relation to plurality arising from the proposed takeover.
Q. Indeed, the specific issue is, if you look at the top of page 01354, the bullet point at the top of that page, I think that's the one we're alighting on: "The need in relation to every different audience in the UK, or in a particular area or locality of the UK, for a sufficient plurality of persons with control of media enterprises serving that audience." Is that the right one?
A. Yes, that is correct.
Q. I think that one is section 58(2C)(a) of the Enterprise Act. I think a few days ago I said the relevant one was section 58(2B), but that was an error, I think this is the right one, at least at the stage you were considering the matter. If you exercised the powers you did on 4 November 2010, to which point we'll come in a moment, expert advice is obtained from the OFT and Ofcom; is that correct?
A. Yes. If I judge that there is a threshold to be crossed, quite a low threshold, that there is potentially a plurality issue, I have the option of referring it to the regulator Ofcom. That was the decision that I had to make. That was the first stage of the process and that was the first decision I had to make.
Q. At the stage you were considering it, in legal parlance there's a double discretion, a double "may", which creates a low threshold to be attained, and you explain that in paragraph 14 of your statement, in particular two lines from the top of that page, 01355.
A. Yes.
Q. Have I correctly summarised it?
A. Yes, that's correct. There has to be a reasonable basis to suspect that a major situation may exist to which a specified public interest consideration may be relevant. There was some controversy in this case actually as to whether a low threshold or a high threshold applied. I understood that News Corp, through their lawyers Hogan Lovells, took the view that a high threshold had to be met, but the view I was advised to take, and I think subsequently corroborated by independent counsel, was that a low threshold was what was necessary.
Q. And that's correct, the low threshold arises for a number of reasons, but in particular the double "may" test.
A. Yes.
Q. Once the intervention notice is served, as it was on 4 November 2010, and Ofcom reports, you deal with this in paragraphs 15 and 16, that if Ofcom considers that a public interest consideration arises, then a discretion falls to the Secretary of State as to whether or not to refer the merger to the Competition Commission. At that stage, the threshold is a little higher, as you said, than at the first stage, which is the intervention notice stage?
A. That is my understanding, but I didn't deal with that stage
Q. You never got that far since the Ofcom report was 31 December?
A. That's correct.
Q. Which was 10 days after a relevant event. You also make the point and this may be relevant to tomorrow's evidence in paragraph 16: "If the Secretary of State decides there are grounds to refer a merger to the Competition Commission, it becomes possible to accept statutory undertakings in lieu of making such a reference." Was that the advice you received at the time, although of course it wasn't a decision which you ever came to make?
A. Yes, it was, but as you say, I wasn't involved in that stage of the process.
Q. Then the final stage, but this final stage was never attained in the events which happened, that if there is a reference to the Competition Commission, they then make a report, decide the public interest question, or at least advise on it, but the final decision would be for the Secretary of State on the basis of that advice?
A. That's correct.
Q. Is that your understanding? In terms of quasi-judicial, you expand on that, Dr Cable, at paragraph 19 of your statement.
A. Yes. I think the key phrase is that an intervention decision must be taken with an independent mind, and I have given illustrations earlier in my political career of having encountered quasi-judicial decision-making before. I think with an independent mind doesn't mean with a blank mind. Most people in public life have views, opinions. Probably if they're politicians, those opinions and views have been on the record, and the requirement on me and people in this position is to set those on one side for the sake of making this decision, to consider representations, the evidence, the facts, and decide on that and only on that.
Q. The concept of quasi-judicial probably also it does also entail the avoidance of an appearance of bias.
A. Yes.
Q. Save for arguably the possibility of cleansing your mind of all anterior political and policy views, which would be impossible, how would the appearance of bias otherwise be avoided?
A. Well, I think that situation arose in relation to any meetings or conversations with the parties, either those who favoured the takeover, News Corp, or those who were opposed to it. I don't know whether you wish me to explain this now or I can come to it later, the decisions I made as to who I should meet and who I should not meet, because any meeting would have to be circumscribed in terms of the content of the conversation, so that one shouldn't refer to it, refer to the merger explicitly, because if that happened, that would be perceived as bias.
Q. So there are certain procedural constraints which you felt operated to avoid precisely that vice, the appearance of bias
A. Yes. I think one of the key points about this process is that there are legal checks and balances built in at every stage. All my actions in the department were subject to advice from officials and departmental lawyers, because they were conscious that if a decision was made with bias or perceived bias, then legal action could be taken, in this case through a Competition Appeals Tribunal, the equivalent of judicial review.
Q. Thank you. Before we look at the detail of what happened between the relevant dates, there is some guidance to which you drew our attention on the operation of the public merger provisions in the Enterprise Act relating to newspaper and other media mergers. It's a guidance which came out of the previous administration in May 2004. It's under your tab 3, starts at our page 01375. There are only two paragraphs of the guidance which I think are relevant. They are not free from complexity, but we will look at them nonetheless. 01411, section 8, Dr Cable.
A. Section 8. Section 8 I have, yes.
Q. Under 8.2: "The Secretary of State's policy is that, save in exceptional circumstances, she will consider intervention only in cases where media ownership rules have been removed by the Communications Act 2003." Now, what was your understanding of that? Your statement covers this, but in your own words?
A. I think in common sense terms it's essentially there were previously mergers could have been subject to a public interest intervention under a variety of criteria, but there were new circumstances that arose as a result of the 2003 legislation, the new definition of media intervention, which were not covered by the previous legislation, and the criteria had to be met that exceptional circumstances applied in those.
Q. Thank you. And then there's a further gloss on exceptional circumstances in paragraph 8.8 on the next page, 01412: "In exceptional circumstances, the Secretary of State may consider it necessary to intervene in mergers in areas where there continue to be media ownership rules or where there have never been such rules. The Secretary of State will only consider intervening in such a merger where she believes that it may give rise to serious public interest concerns in relation to any of the three considerations. During Parliamentary debate of these provisions, ministers suggested that these might include circumstances where a large number of news or educational channels would be coming under single control And then a separate point. It's that last sentence which was relevant here, wasn't it?
A. Yes, because plurality was a new concept introduced by the 2003 Communications Act, and this paragraph gives some illustration about what plurality might mean as opposed to conventional definitions of monopoly.
Q. Thank you. Looking at the detail now of what happened, this is paragraph 27 of your statement, Dr Cable, 01357, the announcement of course came on 15 June 2010; did you receive any warning of it, save the conversation you had with Mr Murdoch on the day, to which we will come?
A. No. That was my first intimation that the takeover was to take place.
Q. So it triggered the EU merger regulation provisions, and therefore the parties were required to notify the European Commission, which they did. You then this is paragraph 28 in reaching a decision to intervene, you took into account the submissions and information received, advice of officials and counsel, and you did this during the period prior to the formal notification of the merger to the Commission by News Corp and BSkyB on 3 November 2010. Why did you do that before that notification?
A. Well, the and I had been notified by James Murdoch of his intention to proceed, and it seemed sensible to take submissions, but at the same time we took the view that there was no urgency about this process, that it was important to complete the European investigation before a decision was made on the intervention notice, because it may well have been that the European competition decision stopped the merger on competition grounds, in which case an Ofcom reference would have been superfluous, so that explains the timing.
Q. Thank you. During this period, which was about four months, five months, you were obtaining advice, you were receiving representations from a range of quarters, and as you explain in paragraph 29, the vast majority of those urged you to use the powers available to you under the Act to intervene on public interest grounds?
A. Yes. There were a large number of submissions and I think there were varying degrees of relevance. Some of them directly addressed the issue of plurality. Others were less focused. But there were a large number of submissions.
Q. Can I ask you though specifically, Dr Cable, to deal with paragraph 31 of your statement.
A. Mm.
Q. You say you actively sought the views of Liberal Democrat colleagues who had acted as spokespersons in this area of policy. May I ask you: why did you do that if this was a quasi-judicial decision for you?
A. Well, because I just wanted background understanding of the legislation and how it had originated. I had no background in media policy, I dealt with economic affairs before taking on this job. I didn't understand how this issue had originated in Parliament, what was the context, and I felt it was helpful to have background briefing, particularly Don Foster, who had been our media spokesman for some years and was a useful source. I wasn't seeking their opinion on whether the merger was good or bad or whether I should intervene, but I did think it was useful to have a background understanding of the kind of questions you have just been asking me.
Q. Can you explain the status of the LORD JUSTICE LEVESON That's just to understand not merely the history but also the rationale behind the policy?
A. Yes, exactly. LORD JUSTICE LEVESON To get your brain into the right place?
A. Yes, exactly, yes. MR JAY Yes, because media issues weren't sort of your shadow brief
A. Yes, I was a we call it a shadow chancellor. I dealt with Treasury, finance, tax, banking issues.
Q. The business advisory group presumably is an ad hoc group within the well, in your own words could you explain what it is?
A. I asked Lord Oakeshott just to assemble a group of people, a mixture of economists and people who were broadly sympathetic to my party with business backgrounds to give me general advice on economic and business-related policy. It had actually only just got under way. We actually had one formal meeting in that year before the group was dissolved. That was the purpose of it. It was an informal ad hoc arrangement.
Q. Although media issues generally were discussed and specifically their context within the Enterprise Act as amended, did you discuss the BSkyB bid specifically at this business advisory group?
A. No, it wasn't raised, and everybody present realised that it wasn't appropriate to discuss it so it wasn't discussed at all.
Q. I've been asked to put this to you, Dr Cable: did you speak to either Simon Hughes MP or Chris Huhne MP about these issues?
A. No, I didn't.
Q. Presumably for the same reasons?
A. Exactly. LORD JUSTICE LEVESON Could you explain, Dr Cable, what you felt your Liberal Democrat colleagues could give you, which you didn't feel your officials could give you?
A. Well, what I felt they could give me was an understanding of the context in which I think it was Lord Puttnam's amendment to the legislation was introduced. I think it was never envisaged that this amendment would come before Parliament by the government of the day. It was brought in as an amendment. I know my party had been active in the debates around it, and I just wanted to understand the context of what they were trying to achieve. MR JAY May I pick that up in this way: were you told anything by the business advisory group which you had not been told by your officials, which was relevant to the context?
A. Not about the BSky bid, no. I mean what we did discuss was the broader question of public interest intervention, in which I had an interest. I had a broad view that the public interest test should actually be widened, and there were what you might call economic and strategic activities which should perhaps be governed by a public interest test and I was interested in that aspect of policy and I didn't certainly wasn't talking to that group at the meeting we had about the BSkyB bid.
Q. So was it the view generally within the party that section 58 of the Enterprise Act should be broadened to include wider and different categories of intervention?
A. I don't think there was a party view. It was a personal view that I formed, mainly from economic analysis. I had seen the evidence that takeovers in general tended to have a deleterious effect on the economy and indeed reduce shareholder value in general, so I was sceptical of takeover activity in general, and I also judged, and increasingly I think having seen what happened over the last few years, that there were cases where valuable national technologies, for example, could be put at risk by takeovers and I was interested in exploring the idea of widening the public interest test in that domain.
Q. Although all this would be relevant to amending the law, but not necessarily
A. Correct.
Q. applying the law as you found it?
A. Yes, the issues of policy, which we're now discussing, I saw as quite separate from the quasi-judicial decision I had to make.
Q. Okay. In paragraph 32 you say you were approached by numerous people during this period who wanted to discuss the bid: "But I always maintained the view that I could not discuss it further." Without necessarily naming anybody, could you put them into categories of person for us, please?
A. Well, certainly I know I was aware that James Murdoch wished to meet me to discuss it. If you like, I'll explain why I chose not to.
Q. We'll come to that.
A. We'll come to that. But there were others. Lobby groups, I think 38 Degrees was one that specifically sought a meeting, which I declined in writing.
Q. Thank you. In terms of the representations you received, you pick this up first of all at paragraph 34 of your statement. It's fair to say that you received quite a few. The TUC, that's page 01431, we're not going to turn it up. There was a reply at 01460 from Enders, 01469 the Guardian, 01467 various other individuals or entities you identify in paragraph 35. In each case it's clear from the documents that a formal reply was furnished in your name, but presumably on the basis of advice you received from officials in your department, which was
A. That's correct.
Q. playing it, as it were, with the straight face of the bat?
A. But I did see the submissions.
Q. Thank you. In terms of we can take just one example, perhaps, to demonstrate this. The Enders reply is 01531. It should be under your tab 4. It's just an example because the replies are very similar in each case. Do you have this one? It's dated 31 August 2010.
A. Sorry, I'm on a different part of the yes, I have that.
Q. It speaks for itself. You say you're grateful for the submission: which I will take into account when considering whether to intervene in this case." You explain, I paraphrase, that your power to intervene is tightly constrained by the law. You refer to the guidance. Well, we've just seen the guidance. And then you refer to the fact that the matter is going to be notified under the ECMR, which took place on, I think, 3 November 2010. Have I broadly speaking correctly summarised this?
A. You have.
Q. As you said, some of the representations were more focused than others. This is inevitable in this sort of case. You explain in paragraph 37 that you received representations from a range of individuals, which raised quite broad concerns but did not necessarily always focus on the strict legal test which you were required to consider.
A. That's right. LORD JUSTICE LEVESON Presumably it's not merely that you need not take into account, but you should not take into account, because if you took into account irrelevant considerations, that itself would create a risk of potential challenge, either way.
A. That's correct. And indeed some of these submissions made broad political points or broad points about the economic benefits or otherwise of the merger, which were, as you say, sir, irrelevant. MR JAY In paragraph 38, Dr Cable, you explain that the advice initially from within your department was that an intervention appeared unlikely to be appropriate, and this flowed from the fact that BSkyB was already effectively controlled by News Corp, with the 39.1 per cent stake, but over the course of time, your view changed. As you put it, you began to believe there were genuine substantive concerns about the merger. These are set out in paragraph 40 of your statement, but in your own words, could you tell us what those two primary concerns were?
A. I can explain how my views evolved. I was aware that there was an argument which based on commentary in the Court of Appeal. I think it was in the case when BSkyB were acquiring a small shareholding in ITV, where I think the statement had been made that at that point BSkyB were controlled I think that was the word by News Corp. When I first heard this argument, I challenged it, not from a legal understanding, I'm not a lawyer, but it seemed to me to clash with basic common sense, that what we do know about company ownership is that once a company progresses to 50 per cent, the majority shareholders can replace the board. Once one progresses to 75 per cent, a special resolution can change the Articles of Association. Once you progress to 100 per cent, a fundamentally new situation arises, because the 100 per cent owner is responsible to the shareholders of the whole group and there are no more minority shareholders whose rights need to be considered. So I felt from the outset that, although I say I'm not a lawyer, it did seem to me that that argument about 39 per cent representing control seemed to be a very weak argument, and this was submitted to test but eventually, I think, the independent counsel agreed with the judgment that it was a change. Your question is: what was changed? I think there were a couple of respects in which 100 per cent-owned BSkyB would have presented a problem for plurality. One was that it simply reduced arithmetically the number of outlets under different owners. But I think the other argument, which is that once there were 100 per cent ownership it would have been possible for the new owners to replace the management, who in turn would have influenced the choice of editors, and in these two different ways plurality could be affected. So that seemed to me, taken together and with the benefit of legal advice, to merit the low threshold test which I had to apply.
Q. Thank you. The external advice, we have reference to it in the bundle. 01564. Still under tab 4. The advice is summarised under the third rubric: "Counsel confirms there would be no strong grounds to challenge a positive decision to issue an intervention notice in this case. This is in view of the low threshold for intervention which requires the Secretary of State only to have a reasonable basis for having a belief that the specified public interest consideration is or may be relevant to this merger." And there's plenty of discretion. "In reaching the above view, counsel noted in particular that the merger could be considered to fall within the scope of one of the exceptional circumstances expressly identified in the 2004 guidance on use of the power [we've seen that in 8.8] and that the guidance could not reasonably be considered to create a legitimate expectation that no intervention would be made in this case." And then the advice is unpacked further under the heading "Detail". Express reference is made to 8.8 on the next page. The issue on control, which you've touched on, is also dealt with under that bullet point. So that's the first piece of advice. There's further advice at 01576, Dr Cable. This is within a note of a conference with counsel which starts at 01573, where counsel stated in paragraph 17: "The possibility of News Corporation successfully challenging a decision to intervene at this stage cannot be ruled out, but it is more likely that they will not challenge a decision by the Secretary of State to intervene." And then she gives some reasons. And then in paragraph 20: "On the other hand there is a real possibility of BT or some other party challenging a decision not to intervene, particularly as such a decision would finally determine the question of media plurality insofar as it is relevant to this acquisition." And then she says at the end: "The chances of a decision not to intervene being successfully challenged are higher than the chances of the opposite decision being successfully challenged." That's giving you a pretty clear indication of where the legal balance falls, isn't it?
A. Yes. I mean I thought that particular conference was decisive on three grounds. One, the threshold test, secondly on exceptional circumstances, and thirdly on the balance of legal risk, and that clearly played a major part in my decision.
Q. Thank you. In terms of the substance, you in paragraphs 43, 44 and 45 give further detail as to your reasons. You've already succinctly provided us with the two core reasons, but is there anything in addition you would like to put before us?
A. I think there's a point made in I think it's paragraph 44 which is important when we're considering the concept of plurality, that BSkyB was an independent news generator, which wasn't just important in itself but it provided news to commercial radio and Channel 5, so that a change in ownership and editorial policy could have quite wide ramifications.
Q. So the decision you took on 4 November by an intervention notice which I think was issued under Section 42 of the Act, but the public interest consideration on which it's based is the section 58(2C)(a) consideration that we come to in paragraph 46 of your statement.
A. Right.
Q. I don't think we need see the notice itself, it's 01667, but you also provided reasons for your decision at 01720. You presumably were advised to do that, were you?
A. Yes. I mean, one element one key element of the transparency of the process is that the Secretary of State has to give good reason. My reasons have I have to be demonstrated to be reasonable, and by having a transparent publication of the reasons, this is open to challenge, should there be objection.
Q. May I address, though, paragraph 47, the third line: "In my opinion as a politician I also believe that the Murdochs' political influence exercised through their newspapers have become disproportionate." There are two points, really. First of all, was that a factor in the decision or not?
A. No. It most definitely wasn't. Going back to my original discussion on what was the meaning of a quasi-judicial decision, I'm acknowledging here frankly that I think like most people in public life I had views and opinions and I'm setting them out here.
Q. Thank you. What was the evidential basis for that statement, Dr Cable?
A. Well, I wasn't submitting evidence because this wasn't relevant to the decision. I was expressing an opinion, which is loosely based on observing what was happening in political life and what had happened in my 12 years in Parliament, and my views about this company were actually quite nuanced, and then I did think, as I've said here, that there was disproportionate political influence and I thought leaders of major parties had got too close to them, but at the same time I'd never had any bad experiences myself with the News Corporation newspapers and I had some recognition of the economic importance of their company. That's partly why I never publicly expressed any views before I became a minister in the department. But to go back to your central point, this was not a factor in my decision.
Q. It may bear more widely on the Inquiry's consideration of one of its terms of reference. I mean, you make it clear in the fourth line from the end that the perception that both parties had shown excessive deference to their views well, the existence of perception may be a matter of opinion but are you seeking to put it any higher than that?
A. No, I'm not, no.
Q. Thank you. The other circumstance in which an intervention on public interest grounds was considered was in relation to the acquisition of Channel 5 by Northern Shell. Is there any aspect of that case which you wish to draw to our attention which is relevant to the present narrative or shall we just take that as read?
A. Well, it had some parallels. It involved cross-media ownership. It did involve a controversial company. And I had to look at the evidence as I had on the BSkyB takeover. I mean, the crucial factor here was that the share of Northern Shell in its media ownership was significantly smaller. The company which it was proposing to take over, which was Channel 5, was not an independent generator of news, so that the impact on plurality was significantly less, and given that that was the test, I went in the other direction and took the view that there was no justification for an intervention notice.
Q. Thank you. At paragraph 54, which is our page 01364, you address first of all a conversation you had with Mr James Murdoch on the morning of 15 June 2010. I think there is a note of that at 01427, still under tab 4. Can you explain to us how these conversations work? Your officials listen in to the call, that's standard practice, is it?
A. That is. I think several officials listened in to the call. It was I was clear when I received the call that this was a courtesy call, I was in listening mode, and that it was very important that I made no comment which would indicate prejudice in either direction.
Q. So the note we see is evidently taken by an official and presumably typed up fairly soon thereafter. We can look at the note carefully, but there doesn't appear to be anything in there you expressing a view one way or the other.
A. That's correct.
Q. Do you remember expressing even an off-the-cuff view about this or not?
A. No, the conversation was very carefully thought through in advance, what I could and couldn't say, and there was no off-the-cuff opinion on the merger, no.
Q. Thank you. You say in paragraph 54 as well that you were invited to a News International drinks reception the following night, but you thought it inappropriate to attend, on reflection.
A. I did, yes.
Q. And then you say you understand that Frederic Michel's office called your private secretary on a number of occasions to try and arrange a meeting, but after considering advice, I decided to decline any meeting." So that's information which your private secretary is giving you for the purpose of this statement. Were you told at the time that Mr Michel was trying to get in touch with you?
A. Well, the name Frederic Michel didn't register on my radar, but I was aware that there was a request to have a meeting, and I didn't wish to pursue it for a variety of reasons. I mean, I didn't wish to be disrespectful to Mr Murdoch. I do meet major investors. But in this case I thought there were compelling reasons not to meet him. First of all, there was a legal risk because the subject which he clearly wished to talk about was something I couldn't talk about, that if I did meet him this might be perceived by other parties to be partial in his direction, and I would therefore have to see them, and there were a lot of them, so potentially very large numbers of meetings which, by definition, couldn't have any substance, and but I think the key reason was I didn't actually think it was necessary, because they had an opportunity to, through Hogan Lovells, to put their opinions in writing, their submissions. They did so on several occasions. My office had a line of communication to News Corp and made it very clear we were willing to listen to any representations they made.
Q. So you knew his name at the time. Did you know what his status was, his role was within the company?
A. No, I'm sorry, I said at the time I didn't register who Mr Frederic Michel was. I knew who James Murdoch was.
Q. My apologies. But you did have a meeting with Mr Harding on 9 December 2010, which you refer to in paragraph 55. That's under tab 14.
A. Yes.
Q. Which is also noted. It's our page 03270.
A. Right.
Q. There was a brief mention of your intervention, which of course by that stage was five weeks extant; is that right?
A. That's correct.
Q. What was the purpose of discussing these matters at all with Mr Harding?
A. Well, I didn't meet him as a News Corp representative, I met him as the editor of the Times, and I have a general policy of trying to meet newspaper editors not frequently but occasionally and I met him in that capacity. As you quite rightly say, the intervention notice had been issued five weeks previously and I merely stated at the beginning of the meeting that I couldn't enter discussion on the substantive issues, but I described the formal position and he responded by explaining that he wished to meet me to talk about wider political questions and not about the merits or otherwise of the merger.
Q. In paragraph 56, Dr Cable, you deal with the fact that Mr James Murdoch asked for a meeting with you but you declined. Can you remember when such request or such requests were made?
A. Not precisely. I think in his conversation I think he made general reference to the desirability of meeting and I didn't respond to it as far as I remember, I can't remember every word of the conversation. And I discovered that he had been seeking a meeting through my officials, but that was I've explained how I responded to that. LORD JUSTICE LEVESON Could I just ask, just for interest, and I'm not in any sense expressing opinion: you'd obviously got a lot of written representations. Were these exchanged? In other words, did News Corp have the chance to make representations on what the opponents were saying and vice versa or not? Just you were considering them at face value without getting competing contentions?
A. I honestly don't know how free my officials were in exchanging these submissions. I don't know the answer to that question. LORD JUSTICE LEVESON Fair enough.
A. I do know that there was an iterative process, because I do remember that Hogan Lovells made a legal submission responding to the views of Enders. That may be that Enders' comments had been in the public domain and they were responding to that, I simply don't know. LORD JUSTICE LEVESON I remember seeing something that they got hold of it in some way.
A. That's correct. LORD JUSTICE LEVESON But you didn't initiate the process?
A. No, I didn't. LORD JUSTICE LEVESON You were prepared to consider what people said and reach your own views?
A. Correct. LORD JUSTICE LEVESON Yes. MR JAY At this time, particularly in November 2010, rumours were abounding that you had met with the coalition against the bid. Were those rumours correct or not?
A. No, they were completely incorrect.
Q. I've been asked to put to you this point, Dr Cable: given the scale of the bid and the apparent delay, why not accede to a meeting with the relevant parties, including News Corporation, principally to offer reassurance to them and that their points were being fully considered and had been taken on board by you?
A. I think there are several points in that question. There is the issue of delay, but I didn't actually delay a decision. The decision to issue the intervention notice was made very promptly once the European Commission had completed its deliberations, which they would have had to do in any event. I've explained to you already the reasons why I thought a meeting was inappropriate, although I did give it careful thought. As I say, I didn't wish to be disrespectful to Mr Murdoch.
Q. Thank you. In paragraph 58, you state that: "In all my interactions I sought to uphold the principle and perception of an impartial and fair process." And I think it's implicit in your last answer that part of that principle and perception of fairness was not to meet with the parties for and against the transaction; is that right?
A. That's right.
Q. We may come to other aspects of that fair process as well. It came to your attention that a meeting had taken place at the request of James Murdoch and Fred Michel with Lord Oakeshott in the House of Lords on 26 November. Can we be clear, who to your understanding were parties to that meeting?
A. I'm not totally clear. Because Lord Oakeshott had the formal role which I described to you, he did feel it necessary to notify me and I think my officials that he was going to have that meeting, and I think it included James Murdoch and Mr Michel, but I'm not totally sure.
Q. Once that came to your attention, you explain that the business advisory group that Lord Oakeshott chaired should be disbanded, and that took place on 20 December 2010; is that correct?
A. That's correct. Because when we had the report back from the meeting, although Lord Oakeshott had quite properly said that he was speaking entirely in his own personal capacity, I could see and my officials could see that any views he expressed could have been interpreted as mine, and they weren't, but in order to remove any suggestion that they were, we felt it better to discontinue the formal arrangement.
Q. Were any attempts made by any of your partners in Coalition to contact you and express an opinion about media policy generally or the merits of this bid in particular?
A. No, none at all.
Q. Would you have thought it appropriate proactively to discuss the matter with Mr Jeremy Hunt, who was Secretary of State for the media, amongst other things?
A. No, I didn't think it was appropriate because I wasn't formulating a government policy. I was formulating an independent judgment which the law required and which rested in me as an individual.
Q. But you were not aware of any attempt by him if there was such an attempt to speak to you?
A. No.
Q. May I understand, please, now, Dr Cable, we're going to look at some other documents. The role of your special advisers now. How many did you have at this stage?
A. I had two: Giles Wilkes, who was an economist, and Katie Waring, who was a special adviser and helped me particularly in dealings with the media, but with journalists, not in a business sense.
Q. So would Mr Wilkes be the lead adviser in the context of this bid?
A. There was no lead adviser, and he was not involved in the process. There was no question of designating somebody as lead adviser.
Q. I should have asked this general question first. What, if any, were Mr Wilkes' responsibilities in relation to the BSkyB bid?
A. Well, he didn't have any. I certainly didn't give him any responsibilities in that respect. He was aware, as Katie Waring was also, of the sensitivity of the issue, I mean he'd attended meetings in my office, he saw the correspondence of our officials, and I believe my private secretary Richard Abel at that time spoke to him and explained that this was a politically very not politically, legally sensitive issue and they should approach their dealings with great care.
Q. Is this the position: given the nature of the quasi-judicial role invested in you, it followed that special advisers did have no responsibility in this area because they should not have done?
A. Well, they had no responsibility to speak for me in this issue, although of course on other issues they did. That's why they were there.
Q. Did you know of any interaction that Mr Wilkes had with Mr Michel in the relevant period, particularly November 2010?
A. Well, I was aware that towards the end of the period when the department was responsible, Mr Michel had introduced himself I think by email and had sought through Mr Wilkes to set up an interview, and Giles Wilkes had declined, knowing my views on the matter.
Q. There's documentary evidence of that declining, as it were. Were you told at the time that Mr Wilkes had declined on your behalf?
A. I don't recall being told the detail, no. LORD JUSTICE LEVESON Presumably it appears there are a number of similar quasi-judicial functions which you have to operate. Have there been any in the period since you'd assumed office?
A. Well, the Northern Shell was the other case, but it was a comparable case. LORD JUSTICE LEVESON But nothing outside
A. Nothing outside. But there was a long history in the department. The department had been dealing with competition legislation for many years, and so the officials' lawyers were very attuned to the procedures which needed to be observed. MR JAY For how long, approximately, had Mr Wilkes been your special adviser?
A. Well, he joined as I recall at the end of May, shortly after we came into government.
Q. Had he been working with you in opposition?
A. Not directly. He was an economist who was working for one of the think tanks called CentreForum and I knew his work and had a high regard for his work, which is why I asked him, but he hadn't worked for me before.
Q. Outside the area of quasi-judicial functions, would you expect your special advisers to be, to use metaphors, your eyes and ears and your buffer?
A. Yes, I think that is a good description, to be eyes and ears and also to speak for me. There is a long history of the role of special advisers in government. I was one of the first, as it happens, and the role has evolved, but it is to take account of those responsibilities of ministers which are political, party political, and where civil servants quite properly don't wish to engage, and in a Coalition government there is a lot of discussion between special advisers because they come from different parties, trying to reach common positions. They also act as a challenge. I mean, I encourage my two special advisers to challenge me, to challenge officials, in order to think through the implications of policy.
Q. But in their engagement with third parties, as you said, they are speaking for you?
A. Correct.
Q. How and why does that come about?
A. Well, in the case of detailed discussions with another government minister to try to arbitrage, to come to a common position on a policy, this will often be dealt with at official level, but quite often an example would be immigration policy, where ministers from different parties would have a different political view, and then the SpAds, the special advisers, would be engaged in order to try to find common political ground, so they would have quite an important role in the decision-making. LORD JUSTICE LEVESON So they have to have a very clear understanding of where you are on every issue with which they have to deal?
A. Very much so. LORD JUSTICE LEVESON Because otherwise
A. They are actually part of my private office with the officials. They sit together, it's an open plan situation, and we're interacting continually through the day, as I am with my civil servant private office. MR JAY Thank you. Now, in the exhibit KRM 18, which you have in this bundle I think under tab 1, I have somewhere else, there are some documents which appear to relate to BIS and it's those documents only which I'm going to take you to. The first one, in the file PROP, is 01642.
A. Right.
Q. Which relates back to the conference call on 15 June. We'd seen your official's note of that call. Mr Michel's report of it was: "Vince Cable call went very well. He did say he thought 'there would not be policy issue in this case'. We should have recorded him." Now, I'd just invite you to comment on that, Dr Cable.
A. Well, I almost certainly didn't say that, and I'm confident that I didn't say it because, as I've explained to you earlier, there was several officials listening in to the call. They would have made notes of that, and almost certainly they would have taken me to task if I had said it.
Q. Yes. 01645. LORD JUSTICE LEVESON Before we go past 42: "He didn't see much on top of it, he'd seen the newspapers but not the announcement." That might mean no more than you won't say much about it, which is rather different.
A. Yes. LORD JUSTICE LEVESON "JRM told him re size of our group. UK jobs growth Cable appreciated. JRM indicated he would get back to his team to debrief them on the details. We discussed it would not be necessary for him to see Cable too soon Cable said he was coming as planned tomorrow evening." Would that be right?
A. I think I he did ask if I was going to the reception and I think I said I probably would. I hadn't at that stage thought through LORD JUSTICE LEVESON I understand. I'm merely getting to grips with whether the rest of this email is a fair reflection, from their perspective obviously
A. Yes, yes. LORD JUSTICE LEVESON of the conversation.
A. Yes, I think the rest of it is broadly correct, but there's a quote which is not. LORD JUSTICE LEVESON No, I've got the point. MR JAY 01645: "I had discussions this morning with people very close to VC." I didn't ask Mr Michel, I believe, to identify who those people were, so I'm afraid we're in the dark, Dr Cable. But what is attributed to those people in the sense of as well being your view: "He is keen to be seen as the most pro-competition SoS and as we know he is very much anti-regulation. On our particular issue, he strongly believes the deal doesn't change the market situation or would have any impact on media plurality." Do you have any comment on that?
A. Well, the first statement is a caricature, but not wholly wrong. The second is wrong. There was absolutely no reason why anybody should have come to that judgment at that stage. Would you just allow me to make a general comment on this reference to people close to me, because there's are continued references to so-called advisers, people who are close to me. I have no idea who these people are. Nobody was authorised to speak on my behalf, and there are whole sets of comments like this which I don't recognise, so just so I don't have to repeat that in response to every question. LORD JUSTICE LEVESON It's not unimportant, Dr Cable, because I'm sure you will appreciate that there are emails addressed to other people in which statements are made which are said not to represent concluded views, and you know precisely what I'm talking about, so it's quite important to test the accuracy of those emails, which are not now as it were at the very core, just to see what we think about this method of reportage.
A. No, I understand the reason why you're asking me and I'm happy to answer. I'm just saying that my answers may be a bit representative. LORD JUSTICE LEVESON I can live with that.
A. Okay. MR JAY There are about a dozen of these, that's all, but it is important that we go through them for several reasons.
A. Sure.
Q. 01646. There's a report through Robert Peston of the BBC you can see there: "James Murdoch's hopes of keeping News Corporation's planned takeover 100 per cent of British Sky Broadcasting away from the scrutiny of the media regulator Ofcom looks set to be dashed. I have learned that the Business Secretary Vince Cable is likely to issue what's known as an intervention It's cut off, but it's "intervention notice". Mr Peston is purporting to report on something either you or someone close to him told him. Taking it in stages, did that happen?
A. Not to my knowledge. I have no idea what his sources are. There was a great deal of media speculation amongst business correspondents at the time about what the decision would be, and I wouldn't actually attach a great deal of importance to it.
Q. At best it's a rumour, but at that point your view was evolving?
A. Yes, correct.
Q. And you've told us with reference to the chronology we've looked at?
A. I think at that stage, for example, I hadn't yet seen the independent counsel's judgments.
Q. 01648. Maybe, sorry, we should look at 01647 as well. I don't know whether you have a comment on that. Mr Michel is claiming to have had a conversation with Don Foster, who is the DCMS spokesman for Lib Dems, "this morning. Very relaxed about the bid and can't see plurality review taking place."
A. I don't really have anything to say. I know that Don Foster was a very knowledgeable commentator and spokesman for the party on media issues, but of course he wasn't involved in the bid decision, so whether or not he was relaxed about it, I don't know. LORD JUSTICE LEVESON And didn't care?
A. Not yes, indeed. LORD JUSTICE LEVESON Judicially didn't care.
A. Didn't care, no. MR JAY 01648. So this email, I'm afraid, is out of sequence chronologically. It should have been earlier in this bundle, because it's dated 23 June 2010, so we're only eight days after the announcement of the bid. It says: "Vince has been advised by his team it would be better to meet with you once things have settled down on the Sky process in order to avoid any media questions on the purpose/content of the meeting. Vince is keen to meet for a catch-up as you both discussed on the phone. Let me know if that's okay with you." Well, the last sentence is not something you can comment on, but the earlier sentences, can you assist us on those?
A. I can't assist you beyond repeating what I said earlier about my approach to meetings with Mr Murdoch. LORD JUSTICE LEVESON But would you have been interested put BSkyB entirely to one side. Were there aspects of your remit which would have meant that it would be sensible to meet somebody like Mr Murdoch in the course of your work?
A. Yes. If the whole issue of the takeover had been settled and I wasn't dealing with it, he was a major investor, there were other areas of common interest, including broadband policy and potentially copyright, which I would have been very happy to talk to him about. MR JAY 01649 now, Dr Cable, email of 27 September 2010. This relates to a conversation Mr Michel told us he had with Lord Oakeshott. That's in the transcript, Day 77, am, page 72, line 23. First of all, was the fact of that conversation ever communicated back to you by Lord Oakeshott at about this time?
A. Yes, I think it is Lord Oakeshott, but he wasn't my main economic adviser. It could also be a composite of a discussion with him and Lord Newby, who was our main economic spokesman in the House of Lords and who they also spoke to.
Q. The second bullet point LORD JUSTICE LEVESON Before you get to the second bullet point, was either Lord Newby or indeed Lord Oakeshott leading on this for you?
A. No. No, they weren't. They were clear I certainly, when I spoke to Lord Oakeshott, he made it very clear he was speaking entirely in a personal capacity. MR JAY I should deal with the first bullet point: "He doesn't see any strong competition issue feels it should be looked at by the EU he knows where his officials stand on it and is aligned with Hunt's view." Do you have any comment on that?
A. I didn't know what Mr Hunt's view was, so I don't know where that came from.
Q. "He is thinking through the media plurality aspects of the transaction, influenced by three main issues which are colouring his judgment: [first] the way Sky News handled the General Election coverage and the quality of the news debate." Of course, that may or may not be Lord Oakeshott's view, but you're not party to this conversation, but to the extent to which it might indicate that this is also your view, was that your view?
A. Well, as I said earlier, there are issues on which I have views, and I think I did mention this in a general sense, but that was quite different from my exercising my decision-making function. LORD JUSTICE LEVESON It's not merely quite different, it's 100 per cent wrong, because you've told me that your general political views, which might include the way Sky News handled the General Election coverage, were absolutely not part of the judgment.
A. Yes, they were not part of the judgment. As I've just reread that passage, actually I don't think anybody I don't know if you're going to my views as opposed to my quasi-judicial role I don't think anybody had any quarrel with Sky News, as such. There were problems with News International newspapers, but Sky News was a politically neutral television channel. MR JAY What about the second point?
A. As I've said earlier, that was simply wrong. I wasn't briefed by Simon Hughes or Chris Huhne, let along on a daily basis.
Q. And the third point?
A. Well, I think this probably goes into the broad political context in which this whole debate was taking place, but it is quite separate, different, from my quasi-judicial functions.
Q. The reference to constructive discussions with the Deputy Prime Minister, again it's unclear whether those are Lord Oakeshott's discussions or your discussions, but it may be intended to embrace your discussions. Were there any such discussions, constructive or otherwise?
A. I didn't discuss the merits of the merger with Nick Clegg, but I certainly briefed him on the process because there was clearly a great deal of interest, he was my party leader and I needed to give him an appropriate level of briefing.
Q. Then there's reference to you seeing the Financial Times leader on Monday morning at the conference, and you apparently saying it was very unhelpful as you didn't think they would join the bandwagon on it. Do you have any evidence you can give us about that which may be relevant?
A. I don't recall this at all, actually. I think the Financial Times was critical of the takeover, but I don't remember expressing a view on that. And that's certainly not in the terms expressed here.
Q. And the final point, he, this is Mr Michel apparently, was told there is absolutely no reason to believe he would want a referral. We are keeping lines of communication open in coming weeks and I am sharing with him our arguments." That may be an inference, perhaps an incorrect one, rather than anything more than that. Is there anything you would like to say about that?
A. No, I can't say anything to that. LORD JUSTICE LEVESON Although it may be no more than Mr Michel is saying to Mr Murdoch, "I'm going to keep in contact with the main economic adviser", whether it be Lord Oakeshott he's talking about or Lord Newby, and therefore he's hoping to feed arguments in to them which he hopes in turn will be passed through to Dr Cable.
A. Mm. LORD JUSTICE LEVESON All right. MR JAY 01651 now, 8 October 2010. The adviser that's referred to wasn't identified by Mr Michel, so we're left in the dark as to who he might be, but could you assist us from your own inquiries?
A. No idea.
Q. Some of the points are repetition of earlier points, so I don't think it's necessary to look at those again, but about the fifth bullet point down: "It was made clear to me that the good thing about VC is that he takes competition issues very seriously and will get some straight official advice." So that part you don't
A. Well, that's a correct statement, but this wasn't a competition issue. As we discussed earlier, plurality public interest decisions are distinct from conventional competition policy but as a statement that seems fair.
Q. A couple of points later down: "The adviser was very clear that if we try to aggressively push Cable, it will have a negative impact. But changing the narrative in the main media would help him politically a lot and help him inside the Cabinet." Is there anything one might make of that or not?
A. I don't know what it means. I mean, the quasi-judicial decision was never discussed in the Cabinet, and I can't imagine circumstances in which it ever would be, and I wasn't following the media narrative in any event.
Q. I'm not sure you can really help us with the rest, because a lot of it is comment, a lot of it it's unclear what the source might be. LORD JUSTICE LEVESON But do I gather you don't recognise any of this I'm not talking about you identify who he might have been talking to, but you don't recognise any of this as part of the material that was going through your mind at the time?
A. Well, not in formulating the quasi-judicial decision, no. I mean, some of the comments like the one you've quoted are both anodyne and reasonably correct. LORD JUSTICE LEVESON Oh yes, yes. MR JAY 01657, Dr Cable, is the next relevant email. We're on 12 October 2010. Again: "Just spoke to Vince's main adviser." I can't help you with who that might be. Could you help us?
A. No, I don't know.
Q. Apparently: "They are completely stuffed with the CSR, tuition fees and the rebellion, et cetera." First of all, apart from explaining CSR, does that represent a sentiment which you can recognise?
A. Well, it does, actually, yes, and the main preoccupations at that time were the comprehensive spending review, which is what CSR means, and with the whole tuition fee debate, and then it was coming to a peak at that time. LORD JUSTICE LEVESON Political issues?
A. Mm. MR JAY The third bullet point down doesn't take it very much further: "He is aware of our desire to make sure Vince/JRM speak at the right time and also to get detailed update briefing from the team in coming weeks." That may or may not be so but it doesn't take us anywhere. "He had one strong advice (as mentioned previously): the most influential person for Vince now is Lord Oakeshott." Pausing there, is that correct or not?
A. Not on this issue, no. I consulted him on other issues, banking for example, but certainly not on this issue.
Q. But on other issues, would that be a correct characterisation of Lord Oakeshott or not?
A. Sorry, what would be correct?
Q. The most influential person.
A. No, I don't think so. He's one of several people I rely on for general advice.
Q. Whether or not he's a difficult character is not something I'm going to ask you to comment on. "He hates lobbying (and doesn't like our empire either)." From your own knowledge is that correct or not?
A. He has been publicly critical of both, I think.
Q. One factor, one fact, if it's a true one, which Mr Michel wouldn't know unless he was told: and he talks to [you] more than ten times a day." Is that factually right or not?
A. No, it's wildly inaccurate.
Q. Penultimate bullet point: "The referral decision will be a political one, especially if tuition fees debate gets nasty in [your] party."
A. It did.
Q. It did but was the referral
A. It wasn't relevant to this issue.
Q. It wasn't relevant. "He also recommended to keep briefing senior Lib Dems and key Cabinet members as we have started to do, to push things with Vince."
A. Well, there was a lot of this going on, and I was going to come on to that later in explaining what happened in my constituency office, but I have nothing to add on that at this stage. MR JAY Might that be time for a short pause? LORD JUSTICE LEVESON Oh, certainly. We have a break to allow the shorthand writer to recover.
A. Sure. LORD JUSTICE LEVESON Thank you. (11.23 am) (A short break) (11.34 am) MR JAY 01658 now, Dr Cable, apparently refers to a meeting with Lord Clement-Jones, described as the treasurer of the Lib Dems and culture/media spokesman at the Lords.
A. Sorry, could you just give me a second to catch up?
Q. Sorry.
A. So the number was what, sorry?
Q. 01658.
A. I have it. Thank you.
Q. That's an accurate description of Lord Clement-Jones' status, is it?
A. Yes, that's correct. I think he was treasurer at the time.
Q. About eight lines down: confirms it is impossible for us to make people understand that this is a News Corp deal and not News International. We had a good chat in relation to the key influencers around Cable. He has a little set of people around him he will call to ask for opinion and many Lib Dem/Labour MPs will be writing to him to apply further pressure." Do you recognise that statement?
A. No, I don't think any Lib Dem or Labour MPs wrote to me about this subject.
Q. And the little set of people around you to ask for an opinion?
A. Well, I mean on this particular issue, the set of people were my officials and lawyers.
Q. Yes. 01659. LORD JUSTICE LEVESON Is this legitimate in general lobbying? I'm not talking about the quasi-judicial side of this responsibility, and it may be a real question that the whole approach is misconceived because the responsibility you're exercising is a judicial one, set out by statute, but have you experience of this type of approach from various different people for general lobbying purposes?
A. Yes. I mean, lots of this happens, and one just has to learn to recognise it for what it is. But yes, I and part of my role as being Secretary of State is to be open to people with opinions, and to engage with them. LORD JUSTICE LEVESON Because one of the I mean, in part what's going on here is a subset of the issue of lobbying. I'm not trying to increase the terms of my reference, but it is, isn't it? Have I understood that correctly?
A. Yes, I think that is correct, and I suppose Mr Michel was an example of a lobbyist at work. I'm not making judgments about him and how he operated, but that is commercial lobbying indeed. MR JAY 01659. This refers to a conversation Mr Michel says he had with a Liberal Democrat MP, a former Sky employee. Do you know who that might be?
A. I dont, actually. I didn't realise we had one.
Q. Besides what is attributed to that individual, did you have any conversation with anybody after 1 November 2010 which might chime with what we read here?
A. No, I certainly don't recognise that, nor did I speak to Alex Salmond, who is also referred to.
Q. 01660, the next page, still on 1 November: "His adviser [again that person hasn't been identified in evidence] has just suggested I send him all the relevant documents for him to read on Wednesday and he will probably want to meet us later this week on Monday. He asked me when we were going to file, I said very shortly." The filing was actually on 3 November, this is filing in Europe, Dr Cable, so that bit is probably right. But what about the meeting later this week or Monday? Can you help us on that?
A. No, I certainly gave no indication I was preparing to have a meeting. The same considerations apply as I referred to earlier. LORD JUSTICE LEVESON I don't actually think that means that you were to have a meeting. What it seems to be suggesting is that somebody who is advising you is asking that he, Michel, send him, the adviser, the relevant documents, so that he, the adviser, can read it all and meet up.
A. Well, I don't know who the adviser is and I don't know who we're referring to here, so I'm really baffled, as I think you are, by it. LORD JUSTICE LEVESON But as I understand your evidence, and I appreciate that it is becoming repetitive, don't mind about that, it is that there was nobody at all who was fulfilling a role of being your adviser or confidante on the issue of the bid?
A. Unless he's referring to the department's lawyers and officials who did engage with News Corp. LORD JUSTICE LEVESON Of course, of course.
A. It may be that officials and political people are being mixed up here, I don't know. MR JAY That interpretation of the email is borne out by the next one, 01662: "Vince adviser just called me unprompted. We discussed the state of the process. He promised to make sure he has read the BIS submissions by Thursday. He will then schedule a face-to-face chat." That suggests a face-to-face chat between Mr Michel and the adviser, I think.
A. Yes, although I'm totally mystified as to who this is.
Q. There is a text message the next page, 01663, attributed to the adviser: "Put a very strong case which will stand you in good stead on this." Can you assist us at all on that message?
A. No, but whoever was trying to help Mr Michel wasn't being very helpful because that was the day I issued the intervention notice.
Q. Hm. 01664. "Just had a private call with Vince's main adviser." Mr Michel was asked about this email and can confirm that this was a special adviser. Day 77 in the morning, page 75, line 18. But what we read here may not cause any difficulty: "He said he believed there were huge risks for me to meet with him to talk about anything that has to do with the Ofcom business, which he rules out completely. Too much scrutiny. They also want to be able to say they took an independent view. Asked me to be in touch regularly in coming weeks, if only to provide him with any evidence/materials we would like Vince/him to read." Do you have any comment on that?
A. Well, that seems very consistent with the role which my two special advisers played, and I think was borne out with earlier comment that they were not authorising or facilitating meetings with themselves or with me. LORD JUSTICE LEVESON But it rather looks as though, given the preceding emails, that there is a consistency of approach. The adviser asks to see stuff, he says he'll look at it, and then he's using the same phrase, "main adviser". Now, you're confident that your special advisers were not involved in this sort of access? I'm not going to inquire into it further.
A. Well, they were not I'm quite confident they were consistently saying that they did not wish to meet or wish me to meet, but it seems entirely plausible that they said to Michel, if he was in contact with them, "Look, if you have anything to say, put it in writing and we'll look at it." I'm sure that was the message. MR JAY 01670. Reading forwards in time to 01669, these are a series of emails between Mr Wilkes and Mr Michel, where Mr Michel was seeking a meeting and Mr Wilkes was telling him there can't be a meeting.
A. Yes. Mr Wilkes is behaving entirely consistently and properly, as I would have expected him to do.
Q. 01672, Dr Cable. Mr Michel didn't confirm this was Mr Wilkes, although he's using the same terminology throughout, your "main adviser": regarding meetings they might have had with the complainants to the transaction, given rumours we hear. He said that as it happens, he doesn't think he has talked about this issue with any of the complainants." Is that right or not?
A. That is correct. I did meet a couple of them, not for this purpose, but as I think I gave in my personal evidence, I had dinner at party conference with a senior team from the Telegraph and they did raise this issue and I said, "I am sorry, I can't discuss it." I think that was the only face-to-face contact I had with any of the other parties.
Q. And then towards the end: "He said he was very keen for me to keep our agreement that we are both equally interested in staying within the bounds of proper conduct during the process, keeping each other closely informed and forgive his caution but Vince is very disciplined about this."
A. Well, I like to think I was, and it's very clear that whoever he was talking to understood the constraints under which we were operating.
Q. "I told him I was happy to take his words but we were hearing otherwise." The hearing otherwise is the rumours that you were speaking behind the scenes to the coalition and your special adviser denied that?
A. I had no meetings with the coalition, and the only face-to-face contact is the one I've just described.
Q. 01679, Dr Cable. I'm not sure you can assist too much on this, save for the email at the top, a reference to seeing Mr Foster. LORD JUSTICE LEVESON Sorry, I've just seen something which I hadn't previously noticed. It's abundantly clear that when we're talking about "main adviser" we are talking about Mr Wilkes, because on 2 November, 16.71, it is an email to Mr Wilkes sending him the documents, which is, of course, what the subject matter of the earlier emails was. MR JAY (Nods head). LORD JUSTICE LEVESON All right. Well, I understand. MR JAY I'm not sure that 01679 needs a comment from you, Dr Cable. 01680: "Just spoke to Vince's main adviser [we're now on 14 December]. Neither date I put forward for a meeting with Vince (7 or 10 January) is likely to work. Vince is out of the country at that time, on current plans." Do you recognise that part of this email?
A. Well, I had a winter break, but I mean, I think we're talking here about attempts to arrange a meeting subsequent to the issuing of the Ofcom report, and it's hardly likely that I would have agreed to set up a meeting until I knew the outcome.
Q. But had the outcome been as it was, would you have set up a meeting in due course with anybody?
A. Well, I'd have sought advice, but I would have imagined that the advice would have been the same. We're further down the road and I hadn't yet gone to the stage of seeking specific advice on how to handle that process.
Q. I understand. So before 21 December 2010, did you have any conversations about the merits of the BSkyB bid with either or any of Mr Hunt, Mr Osborne, Mr Clegg, Mr Cameron?
A. Not about the merits, no. In fact, the three Conservatives had no discussion with me at all on this subject, and as I explained earlier, I briefed Mr Clegg on the process and the timing, but we didn't discuss the pros and cons of the takeover itself.
Q. Thank you. May we go back now to your witness statement and the Telegraph sting operation of 21 December 2010. What you are reported as having said this is at 01366 the circumstances are well-known and set out in your statement: "'You may wonder what is happening with the Murdoch press I've declared war on Mr Murdoch and I think we're going to win' and 'I didn't politicise it because it's a legal question, but he is trying to take over BSkyB, you probably know that He has minority shares And he wants a majority. And the majority control will give him a massive stake. I have blocked it, using the powers that I have got. And they are legal powers that I have got. I can't politicise it, but for the people who know what is happening, this is the big thing. His whole empire is now under attack. So there are things like that being in government All we can do in opposition is protest'." I mean, those comments you accept you made; is that correct?
A. I did, but that is, I think, an edited version of quite a long conversation based on a disembodied voice out of context, but I don't dispute that I said those things.
Q. In terms of the background context, you say in paragraph 64, and I invite you now to put this in your own words, that there were two factors which were bearing on your mind at the time; is that correct, Dr Cable?
A. That is correct. Would you like me to develop it?
Q. Please.
A. I think it needs in order to explain the rather emotional way in which I dealt with this and the very strong language, I think it is important to understand there was, I think, a near riot taking place outside my constituency office, people were trying to force entry, we had the police present trying to calm the situation. In order to prevent the disorder getting out of control, I invited in some of the protesters into my office. We had a very long discussion, very angry people upbraiding me about Afghanistan and Palestine and student fees and capitalism and other things, and somebody was waving a camcorder in my face, a few inches from my face, so I was struggling to keep my temper in this situation. So at the end of that interview, when I'd finally seen them out, I was in an extremely tense and emotional frame of mind, and the two women, who I thought were constituents coming to see me about a constituency problem, were the next people that I saw. As I've tried to explain here I'm normally very calm in dealing with different situations I did offload onto them a lot of pent-up feelings, not just about the BSkyB case that I was dealing with, but about my colleagues in government and a variety of other issues in language that I wouldn't normally use, in what I thought was a private, confidential conversation.
Q. The second point you make under paragraph 64b is you refer to reports coming back to you of how News Corporation representatives had been approaching several of your Liberal Democrat colleagues in a way you judged to be inappropriate, in the sense they were either trying to influence your views or seeking material which might be used to challenge any adverse ruling you might make. Can we be clear, what was the source of those reports?
A. Well, perhaps preface my answer by saying I was describing the the interview in my office took place a month after the intervention notice, and I was describing a series of reports I'd had from colleagues, often second or third-hand, but nonetheless plausible reports, of significant numbers of my Parliamentary colleagues in the Lords and in the Commons having had interviews with Mr Michel and possibly others, and I was concerned, indeed I was more than concerned, I was angry, which is what came out in my response, at the way this was being dealt with. I was concerned on two levels. First, there was a systematic attempt to politicise the process, to imply that somehow or other the whole process was governed by the Liberal Democrats, which it wasn't, and I think in his email exchange, Jonny Oates it is there, I think 1681 does describe his own interpretation of what was going on as a systematic attempt by News International representatives to politicise the process. And secondly, and actually more seriously, I had heard directly and indirectly from colleagues that there had been veiled threats that if I made the wrong decision from their point of view of the company, my party would be I think somebody used the phrase "done over" in the News International press, and I took those things seriously, I was very concerned. I had myself tried to deal with the process entirely properly and impartially, and I discovered that this was happening in the background. I frankly stored up my anger at what was taking place, but in that very special and tense situation, I rather offloaded my feelings.
Q. So the veiled threats that your party would be done over in the News International press, I mean, are you able to identify who made that threat?
A. I believe it was in conversations with Mr Michel, but I can't be absolutely certain.
Q. Was Mr Michel's name expressly mentioned to you or not?
A. It was at that stage, yes, indeed.
Q. When you said, "I have declared war on Mr Murdoch and I think we're going to win", what were you going to win?
A. Well, I think I mean, we're trying to deconstruct language in a rather unusual circumstance that I described. I think what I meant by "winning" in this context was that I had, by carrying out my legal duties impartially, I had referred the matter to the independent regulators, which the News Corp were so anxious to avoid.
Q. So "win" in the sense of not succumbing to the veiled threats that you've referred to. Is that a correct interpretation?
A. Yes, I think that is fair. I was not being intimidated.
Q. "His whole empire now is under attack". What did you mean by that?
A. Well, I think I was describing a factual situation that there was a great deal of controversy at that time around the company and the way it operated.
Q. Does that go wider than the specific context of the BSkyB bid, the attack on his whole empire?
A. Yes. As I say, deconstructing individual sentences is difficult. It was something I wasn't giving a considered policy statement at the time, but I think that is a sensible explanation of what I meant at the time.
Q. Was that just your personal view or was it a view shared by others within your party in government?
A. Well, again we're not talking here about the decision, we're talking about the wider context, and yes, I mean, there was clearly a very somewhat febrile debate going on in my party and more widely, stirred up by this controversy.
Q. Are you able to identify the individual who communicated the veiled threat?
A. No, and I certainly know one individual, but he told me in confidence and I don't want to breach that confidence. There was a separate reference in an article in the Observer, which I know you have tabbed here, which refers to a Cabinet Minister, but I don't know who that is. LORD JUSTICE LEVESON You've just referred to 1681.
A. That's correct. LORD JUSTICE LEVESON There was a systematic attempt to politicise, which it wasn't, and I think in his email exchange, Jonny Oates it's there, I think, 1681.
A. Yes. LORD JUSTICE LEVESON I'd just like to pick that up while we're talking about that. Where is this?
A. Yes, the sentence I was referring to, 1681, which Jonny Oates, who was the director of communications for the I can't remember his exact role, but he was a central figure in our team, he: said he was unclear why News Corp is seeking out the views of people who have no locus in the decision-making process and thinking that their views indicate that the decision will be political. For him, senior Lib Dems who are going around giving us advice and recommendations are not representative of Vince's mindset and way of making decisions." So he's in a sense explaining how I operate but nonetheless pointing out that the News Corp representatives were trying to build up a case that it was politically motivated and were doing this by systematically going around my colleagues, maybe seeking their views or putting words in their mouths. LORD JUSTICE LEVESON Actually there's a phrase there that I'd not focused on: "Contrary to my assertion, he said And this is Mr Michel to Mr Murdoch. So Mr Michel is there is he there conceding that he is asserting that it's political?
A. Well, he is asserting. He clearly believed it was. LORD JUSTICE LEVESON Yes. MR JAY Can I ask you, please, now to move on to paragraph 69 of your statement, page 01369. You acknowledged "the language was excessive and reflected the context". "I did however consider that by intervening I had acted in a way that might ultimately prove significant in halting the takeover (as indeed proved to be the case, albeit in ways which I did not anticipate)." I mean, was it your intention to halt the takeover?
A. No. My intention was to have the matter properly reviewed by the regulator because I judged that under the process which I had, it satisfied the necessary test for an intervention. So it wasn't my intention. I was constrained by the press and I fully accepted that, and had acted entirely properly. What I'm describing in this sentence is naturally simply a matter of fact, that by acting properly and impartially, I had put the matter in the hands of the regulator. As it happens, although I was no longer part of the process, the regulator, Ofcom, did conclude that there were issues of substance in relation to plurality LORD JUSTICE LEVESON Is that sentence really what you mean, Dr Cable? Because I'm not sure it actually says that. The sentence appears to me to read that you did consider, ie at the time, that by intervening you had acted in a way that might ultimately prove significant in halting the takeover.
A. No, that well, maybe this sentence written in evidence doesn't convey what I really wanted to say, that I was concerned at all times that I should act properly, and did so, but I was also conscious that by putting the matter into the hands of independent regulators, this was contrary to the interests of News Corp, and indeed what they wanted, and would have repercussions. MR JAY You're entitled to point out that the view of the independent regulator expressed on 31 December vindicated ex post facto the issue by you of the notice, because if they were applying a slightly higher test than you, it follows by definition that your notice was issued on a correct basis. Is that right?
A. Yes, that's how I interpreted it, and I think that is fair.
Q. Can I try and analyse the point in a slightly different way, Dr Cable? You've explained to us that you followed an impartial and fair process and came to a decision on the legal merits, which, as I've just pointed out, was vindicated by Ofcom, but that decision, as it happens, the legal one that you were taking, also married up with your private view, your political view, of what was more widely desirable in the public interest. Is that a fair characterisation?
A. Well, I was quite deliberately and consciously keeping my private view separate from the decision I had to make, and if the legal advice had been different, I would not have made the intervention notice, whatever my private views about News Corp. I would have followed the advice I was given.
Q. But the decision you made did not, as it were, grate with your private view, did it?
A. It didn't, but sorry, at the risk of being boring and repetitive, I was conscious of the need to keep the two things separate.
Q. Thank you. In relation to the sting operation, there was a complaint, as we know from evidence we've heard already, to the PCC, and the PCC upheld the complaint, which was brought by, I think, the chairman of your party, or rather maybe the party as a whole, it doesn't really matter who.
A. Yes.
Q. But it wasn't a complaint made by you. We have the decision in the adjudication under tab 6. I don't think it's necessary to look at, but they consider the issues and conclude that this was in the nature of a fishing expedition, because there wasn't enough evidence to suggest that this was your private view, which it was necessary therefore to obtain by subterfuge.
A. That's correct.
Q. I grossly summarise what is in fact a more complicated ruling. LORD JUSTICE LEVESON But do we know what the consequence of the adverse adjudication was, if any? MR JAY Published on the front page of the Daily Telegraph. Nothing more than that.
A. That's correct. MR JAY Mr Gallagher gave us some short evidence about it. LORD JUSTICE LEVESON Yes. MR JAY Do you have a view more generally as to whether these are appropriate decisions for politicians?
A. Yes, I do. I think it's right that politicians are involved elected politicians are involved in the process. As we described the first stage of my interview, there is a series of checks and balances built in, there is a major role for the regulators, but elected politicians, ministers, have a role in the process, and I think that's absolutely right. I think it's right because when we're talking about matters of public interest, we're making qualitative judgments. We're not following a sort of quantitative metric, which is what one would normally do with, say, a competition case, and I think it's right that those decisions be made by people who are have legitimacy through the democratic process, who are accountable to Parliament, as I was, and, you know, I think there is a we hear this in many other contexts, that when controversial, difficult issues are involved, it's often said, why don't we take this out of the hands of the politicians? I think that's in a way intellectually lazy. I think where we do have a genuine public interest choice to make, I think it is appropriate in a democracy that we involve the politicians rather than some kind of platonic guardians who are in some sense isolated from the political process.
Q. Given the controversial nature of these issues and the particular circumstances of this case, which added to the controversy, would you agree that politicians are likely to have a strong view one way or the other?
A. A strong view on?
Q. On the wider policy considerations which might feed into the legal merits.
A. I'm not sure I totally follow you. So you're implying that politicians might be biased because they have a policy view? Is that the question?
Q. Yes.
A. Well, it does require self-discipline, and the necessity to put this put one's personal views about the policy on one side. As I said earlier on, this was an unusual and very important case, but there are thousands of local councillors up and down the country who are making quasi-judicial decisions every day, and I don't think anybody would seriously suggest that a choice about planning, which is quasi-judicial, should be wholly removed from democratic decision-making simply because councillors have a view about their neighbourhoods. I think that would be wrong. I think there's everything to be said for having elected officials, councillors or MPs, as ministers making decisions in public interest cases. LORD JUSTICE LEVESON I think there's a great deal in what you say, but could I test it in this way, Dr Cable? Let me start from not a quasi-judicial position but a judicial position, because I'm rather familiar with that territory. I might have a view on wind farms or nuclear energy or a whole range of topics, on approach to terrorism, yet that view is a view simply as a member of the public, as somebody who reads newspapers, watches the television, lives in our society. When I come into court and consider by way of judicial review the exercise of my judicial responsibilities, then I am focusing on a set of tramlines which are very constrained, and my personal view, whatever some newspapers might think about why judges decide cases, is neither here nor there. There is room to consider are the right considerations taken into account, the whole Wednesbury business, but that's an exercise that's entirely feasible. Now, if I take your planning example, I could well understand that local authorities and councillors who are responsible for their city or their neighbourhood would be able to take a holistic view against a planning policy about a particular development, but I have no doubt that if a councillor lived on a housing estate that might be specifically affected by a particular decision, the councillor would probably say, "Maybe I should be involved in that decision"; would that be right?
A. That is correct. There is a process in place it's a long time since I was in local government by which councillors I think the phrase is recuse themselves if they have a personal interest. I think having a personal interest is different from having an opinion. LORD JUSTICE LEVESON Yes, but I wonder whether it's not a bit more nuanced than that, because having a personal interest is clear, and if somebody came in front of me who I knew or who in some way was linked to issues that I was personally involved in, then I would recuse myself and there's plenty of authority for circumstances where judges haven't and then later have been criticised for not recusing themselves. But what concerns me about this type of decision is that it can be mixed up where, say, the press are involved, because everybody will have not merely just a dispassionate view as a member of the public about, say, News Corp, or one might take a different issue, when it becomes extremely difficult to separate out the, if you like, evisceral view from the purely judicial. Now, it may have been that this decision could have had to be made by a minister whose party had either been supported, vigorously, by News Corp, or opposed vigorously. I just wonder whether we're not asking rather too much of our politicians, who have gone through the fire of political campaigning and had to cope with this sort of publicity, to be able wholly to put aside the evisceral reaction when deciding the matter judicially. The reason I ask you about it is because some may say that for all sorts of reasons, and I understand your evidence, what you came out with on 21 December was an evisceral reaction, which could have remained hidden, but does in fact then create concern. Somebody has said I think in this Inquiry, "Well, where will you find a politician who doesn't have a view about Rupert Murdoch, either vigorously against him", and I've heard some politicians who have spoken to that effect from that seat, "or vigorously for him", and I've heard politicians who have spoken from that perspective. So that's why I'd be very concerned to hear your view, not in the general run of cases, which I'm sure you're right about, but in the specific case where politicians inevitably will have strong views and may have been affected personally by issues such as this. That's a long speech, but do you get the concern I'm trying to raise with you?
A. I do, yes. I have two responses to it. I think what you're saying does suggest the importance of politicians with major decisions having considerable self-discipline in putting aside those visceral reactions, and I think mine broke down momentarily in that interview but otherwise was maintained, I think. But the other answer to your question, I think, is in your first sentence, where you said that there are tramlines. There is a very clearly prescribed process which the politicians have to follow, they are subject to legal advice at every stage, they are aware that they can be challenged if those visceral views were public or had been expressed. There is ample protection for the parties in the case to bring subsequent action if the politician had behaved unreasonably, and I think that, you know, I was dealing with a process that has a mixture of political input, which I think is important and legitimate, and legal protection, and I wouldn't be comfortable with simply abandoning this quite complex arrangement for something that seeks artificial comfort in a purely well, bureaucratic or purely judicial mechanism. LORD JUSTICE LEVESON I'm certainly not encouraging anybody to go the judicial route. We have more than enough work to do. But another possibility may be and I raise it for you to consider that the politicians provide their policy view in the area that is relevant to the consideration then being taken, but in an open, transparent and clear way, so that that concern, to such extent as it is relevant, can be applied by those who are experts in the field in this case the Competition Commission, perhaps, or Ofcom; I'm not trying to decide who but thereby excludes any risk of what I might call subterranean influence.
A. Well, I think the direction of policy in the last over the last generation has been in that direction, and politicians have been progressively removed from competition policy decisions, but there is a small residue where there is a genuine issue of what one could call national of public interest. Let me just take the example which has never been subject to test in practice, which is national security. It's difficult to imagine how one could construct a set of guidelines for people who are totally outside of the political domain and are not accountable to Parliament to make a qualitative judgment about the national interest in cases of security, and I'd have thought that there was, you know so in practice, I think the issue is whether we have chosen the right areas to ringfence for semi-political processes. LORD JUSTICE LEVESON Although in relation to national security we do in fact have such a process. The national security implications in relation to certain decisions about a particular cleric are articulated and asserted and then ultimately fall for decision by CIAC.
A. I'm not familiar with that process as you are. LORD JUSTICE LEVESON So be it.
A. But I think in most of these cases a minister does become involved. I may be wrong in that case, but I think there has to be a role for the democratically elected representative. LORD JUSTICE LEVESON I entirely agree
A. But you're suggesting that this should simply be in framing the rules and I can see that LORD JUSTICE LEVESON No, I'm going further that that. I'm going further than that. What I'm asking you about and I'm not suggesting it, I'm merely seeking to address the terms of reference that I was given, which require me to make recommendations for how future concerns about, among other things, regulation and cross-media ownership should be dealt with by all the relevant authorities, including parliament, government, the prosecuting authorities and the police. So I'm simply trying to do what I've been asked to do. What I'm asking you is not that you should merely frame the questions or the rules, but that you should indeed have an ability to make the strongest representations as to the policy considerations that are in your view as a politician important, and then the way in which that fits into the framework of the legal decision is then open and transparent. So the decision may be made by somebody else, but it's made based upon such relevant policy considerations as the minister has articulated and which everybody can see.
A. Yes. LORD JUSTICE LEVESON I'm not suggesting that's necessarily the right answer, I'm merely asking for your view.
A. No, I can see the argument you're making, and I can see that in certain circumstances that could produce I don't know how to put the correct phrase, but good quality decisions, but I think you may well achieve that objective, but you would lose another, which is that in making an important public policy decision, the politician is ultimately accountable to Parliament. In this particular case I wasn't, as it happened, I hadn't reached that stage I could be called to Parliament to explain my behaviour. I could be called to the Prime Minister to explain my behaviour as a member of his government. And that does seem to me to represent a valuable democratic source of checks and balances in the system, which your process would lose, although I can see the advantages. LORD JUSTICE LEVESON I don't know it would necessarily lose it, because the articulation of policy in relation to any challenge to a decision, had you gone the whole way and made the decision, then questions could still be asked about how you framed your policy, and of course the decision could or may be challenged judicially. As I say, I'm not looking for more work, but I am seeking to try to if you like, to some extent protect those who are responsible for government, those in high office, from the challenge of subterranean decision-making. That on the face of it you've ticked all the boxes, but in reality something else has happened entirely. There it is.
A. I think the last phrase is a slightly pejorative way of describing it. LORD JUSTICE LEVESON Oh no, no, no. From the allegation. I'm not in any sense suggesting that that's what happened, either in this case or indeed happens in any case. But what's going through this entire correspondence is suggestions that other influences are playing on the decision, and it's quite difficult to see how you deal with that, other than saying, "They didn't!" That's the point. Whereas the idea, if there's anything in it, can mean that you've set out all your policy concerns, they're there, and therefore nobody can pretend that there's anything that's not on the face of what I've thought. I'm not saying that's where I am, but because this is I think you're probably the first witness that I've had to deal with this particular issue with. But given your own experience, your view would be very valuable to me.
A. Well, thank you. And I certainly understand and respect that argument. But I think what you're trying to achieve can be achieved if there are appropriate checks and balances and legal protections built into the system. I know this is taking the conversation in a slightly different direction, but the major area where I've had to confront the dilemmas you describe is in terms of economic policy and whether or not the Bank of England should be an independent body, separate from politicians, determining interest rates, and I was one of the people who argued for that independence when it was established 12 years ago. But I think what we are now discovering is that there are you know, a very different economic environment, that there are very big decisions which probably are political rather than technical, which the politicians are no longer able to make, because they have handed over decision-making to an independent arbiter constrained with rules, which were devised, as you say, to reflect the policy environment of that time. LORD JUSTICE LEVESON I'm very pleased that you felt able to move the analogy from one with which I am comfortable to one with which you are comfortable, but I take the point entirely.
A. Thank you. MR JAY Dr Cable, is this right, that your position would amount to this, that ordinarily people would understand that politicians could keep their private or publicly expressed views of a political nature away from a legal decision of this sort; is that right?
A. Yes. And I think we must assert that.
Q. So, to put it in more legal terms, an appearance of bias doesn't arise because the public understand, as the reasonable person in the street, as it were, that this segregation can occur and ordinarily does occur, is that fair?
A. Yes, I would hope that we would get to a world where that was generally understood, but it if it's not understood, it's important that there are legal protections built in for the parties, as is the case at present.
Q. Presumably you would not wish to comment whether in your particular case the private view, which entered the public domain in certain circumstances, might give rise to the perception of bias because of the way in which you expressed yourself; is that right?
A. No, I do understand in my case that the remarks I made did create a perception of bias and therefore made it difficult for me to continue. I fully understand that. It doesn't mean to say I would have been biased; I wouldn't have been. But nonetheless there was a perception issue and that had to be taken into account by the Prime Minister.
Q. Because public lawyers fully understand the difference between a perception of bias and actual bias?
A. Correct.
Q. And we know very few cases where actual bias is ever established. They succeed, if they succeed at all, at a much lower level of proof of a perception of bias, which is part and parcel of the concept of quasi-judicial, I believe indeed, I know. Do you have any observations to make on the, as it were, transfer of responsibilities to another department or not?
A. Well, I was angry with myself at what had happened, but given what you just said about perception of bias, I understood that there was no alternative in this case. LORD JUSTICE LEVESON Why did you think why do you think the Telegraph came after you and your colleagues?
A. I don't think that's difficult to understand. The Telegraph, like several other newspapers, was very hostile to the Coalition. They didn't want a Coalition government, they wanted a Conservative government, and felt that the Liberal Democrats were compromising their true Conservative values, and so all the Liberal Democrat ministers in the government, not just me, were subject to this intervention in our private and confidential conversations with constituents. MR JAY Paragraphs 76 to 78 now, Dr Cable. This deals with the quite complex question of whether the present competition arrangements applicable to media ownership are sufficient and whether there might be improvements. Are you able to summarise for us your position on that, please?
A. Well, I think in that paragraph I'm trying to move a little bit in the direction that I think Judge Leveson has just described as to whether it with be helpful to set out the policy framework more clearly and explicitly before decisions are made, and one way of doing that would be in the case of cross-media ownership to establish a metric against which plurality as well as competition could be governed. I recognise that's difficult, and there is this very, very considerable difficulty of the new media and how far they're to be counted in or counted out of such a measurement, but partly because I do understand the point that Judge Leveson made earlier, that it's helpful to have a framework within which decisions are made, I rather cautiously suggest one way in which it could move.
Q. Dr Cable, you've provided us with information as to your interactions with proprietors, editors and senior media executives over the period 11 May 2010 to 15 July 2011. It's under tab 23. They're not on the copious end of the scale, I think it may be fair to observe.
A. No. As I said earlier, I try as a matter of good practice to meet, albeit infrequently, the main editors and occasionally proprietors, but I don't want to make a habit of it.
Q. And that's because?
A. Well, because I think it's important that I know who they are and they know who I am, but I don't want to be in a position where I'm dependent on them or they're dependent on me.
Q. Do you feel, putting it bluntly, that you are at a disadvantage here compared with those in other parties whose lists of a similar sort might be said to demonstrate a more frequent level of interaction with proprietors and editors?
A. Well, my party hasn't had terribly good treatment over the years, and one can speculate as to the variety of reasons for that, but I think this level of engagement, which is positive, we're not avoiding senior decision-makers in the press, but nonetheless, but infrequent, I believe that's the right one, and I'm now a minister rather than an opposition politician and I intend to maintain that tempo.
Q. In terms of resetting or recalibrating the relationship between politicians and the press, aside from general words of recommendation, and counselling as to good behaviour, as it were, is there anything specific which you would wish to ask us to consider?
A. I'm not an expert on media and media policy, so I approach this with some reserve, but I do have a view on the shape that I think the future media regulation should take, and I think the way I would approach it would be to say that there are two kind of archetypes. One is a kind of state-regulated system, like Ofcom, but applied to the press, and I think I would take the view that that is too intrusive and would compromise press freedom and the freedom of people to pursue investigative journalism. I wouldn't want to go down that road. But equally, a wholly permissive system presents problems of its own and I guess the reason why you're having this Inquiry is partly because a very permissive self-regulatory system has not worked well, and that what we're ideally looking for is somewhere between those two extreme archetypes, and I did suggest very cautiously, because I don't have a strong basis of my own, that my party's view had something to commend it, and that broadly is that you have a statutory architecture, possibly by analogy with, say, the medical profession, under which you have a legal framework in which it's possible to apply disciplinary sanction, but within that framework the profession, in this case the industry, is self-regulating, and it's trying to capture some the advantages of regulation and self-regulation. I'm not sure I can pursue that argument in great I've seen similar types of models operating in Western Europe, Germany has a similar kind of model, but their whole legal system is quite different, so I wouldn't push that too far. It's clear that there are issues that do need addressing at present. I would advocate, for example, that if people are defamed, that rather than go through our complex legal system, that they have the right of reply, would be the kind of innovation I'd like to see. I think a hybrid structure with a statutory framework and a self-regulating professional system within it seems to me to make broad sense. LORD JUSTICE LEVESON On a number of occasions over the last few months I've suggested similar ideas, meeting different responses. MR JAY Thank you very much, Dr Cable.
A. Thank you. LORD JUSTICE LEVESON Dr Cable, thank you. MR DAVIES I'm sorry, I wonder if I might ask these arise out of the evidence Dr Cable has given rather than out of what was in his statement. LORD JUSTICE LEVESON Right. What are the topics? MR DAVIES I wanted to ask him something about meeting with News Corp and then about what he said about politicisation and what he said about Mr Michel. LORD JUSTICE LEVESON All right. Questions by MR DAVIES MR DAVIES Dr Cable, my name is Rhodri Davies and I act for News International and for News Corporation. To start with the question of meetings for the moment, as I understood your evidence this morning, your understanding was that you could not have a meeting with News Corporation which was specifically about the bid; is that right?
A. That was let me repeat what I said. There were no fundamental objections to having a meeting, but the advice I had received from officials was that it would be inappropriate to discuss the bid.
Q. Yes. So if the bid was on the agenda, you could not discuss it?
A. Indeed, and both with parties who were in favour there were occasions when I met parties who were against the bid, and I specifically excluded that subject from the agenda.
Q. Yes, I understand that. So can I just explore that for a moment, because it's easy to understand that it would be quite wrong for you to have a meeting in which you expressed a concluded view as to what you were going to do, but would it really be wrong, and was it against your advice, to have a meeting in which you listened to the arguments to make sure that you understood them and indeed to give the party who was very closely affected the reassurance that you did understand the arguments and that you had the points on board?
A. Well, as I think I said in my evidence, there's nothing wrong with that argument in principle, but if I were to do that, there would be a perception of bias and I would have to have meetings with all the other parties who may well take a very different view, and I was confident of my ability to understand the written documentation and feel it was unnecessary to have a face-to-face meeting.
Q. Of course the risk in a transaction like this of not having a face-to-face meeting is that a lot of speculation may build up as to what is going through your mind.
A. Well, there would have been a lot of speculation if I had met one party and not others.
Q. But to do that, Dr Cable, you can have the meeting and you can have civil servants present and it can be minuted and you can publish the minutes. Does that not
A. That's quite right, no, and I didn't rule that out. I merely said that if I had conceded that to one party, I would have, in the interests of fairness and impartiality, had to concede it to others, and there were a lot of people who potentially wished to talk to me.
Q. You mentioned in the context of the remarks you made on 3 December the politicisation of the process. Would you agree that News Corp's preference at the beginning of this exercise was that it did not want the bid politicised?
A. I had no idea what their preference was.
Q. Well, Mr James Murdoch gave, I think, very clear evidence to this Inquiry that his position and News Corp's position was that they had a very strong argument on the statutory tests, and that that was the way they wanted it decided.
A. That is the way I approached it also.
Q. Yes. And you have no reason to think that that was not accurate evidence by Mr Murdoch and that was the way News Corp wanted to approach it?
A. I had no reason to disbelieve him. My reference to politicisation related to a particular phase of the process, where the reports came back to me of the conversations which Mr Michel in particular had had with my Liberal Democrat colleagues, and I was responding to that.
Q. Yes. On that, we have seen this morning as Mr Jay took you to it, and I'm just taking one of the emails, this one is 27 September 2010. If you want to look at it, it's your tab 12, and the reference is 01649. That is the one where Mr Michel is recording a talk with your main economic adviser, who I think we identified as Lord Oakeshott, and what Mr Michel says halfway down is that one of the things influencing you is a very strong pure political pressure from Lib Dems and Labour. So what one sees there is that News Corp are being told, rightly or wrongly, that the issue is being politicised.
A. Well, if you'll just allow me to go back, I did explain I'm not totally sure who this was. It could have been a composite of two people or it could have been one. They may have been told that, and I made it very clear in my reply earlier that that was not how I was judging the case.
Q. Yes.
A. And that is what is relevant.
Q. I understand that. All I'm asking you to agree, Dr Cable, is that there's no indication here that News Corp wanted this bid politicised. They were being told it was, but that wasn't what they wanted to hear.
A. That may be the way the thoughts going through their mind. I can't comment on that. I wasn't dealing with them myself and I just had to deal with the facts as they presented themselves.
Q. All right. You went on to say that you had received reports that Mr Michel had made veiled threats to, I think, Liberal Democrat politicians, and you said there was one case where you received that report directly; is that right?
A. That's correct.
Q. Do I have this right, you are not prepared to identify the source of that report to you?
A. That's correct.
Q. Are you willing to say when you received that report?
A. No, because I don't have a record of the meeting and I treat it in that way. No, but it occurred within that period.
Q. Within what period?
A. The period after the intervention notice. It was in I think we're talking here about November, probably.
Q. That's between 4 November and 3 December?
A. Mm. I didn't make a note of the date, so I can't confirm that absolutely.
Q. Are you willing or able to say when the threat is supposed to have been made?
A. Well, it was in the context of the conversation that my colleague had had.
Q. Yes, but do we know when that was?
A. Well, I've just told you I didn't know when that was.
Q. Sorry, I thought you were I hope this isn't confused. I thought you were explaining when you came to hear of it.
A. Yes.
Q. And that, as I understand it, was between the intervention notice and the discussion you had with the Telegraph journalists?
A. But I don't know when the meeting was that my colleague had.
Q. But you understand, I'm sure, Dr Cable, that without knowing who is supposed to have been threatened and when, it's extremely difficult for Mr Michel or anyone else to respond to the allegation?
A. Correct. I think if I take you back, I'm trying to explain the context in which I made my own comments in a private and confidential conversation, and what it was that had made me seriously disturbed about the way News International were operating. I was explaining my own reactions and not seeking to build up a case against Mr Michel. I'm merely explaining how I reacted and when I reacted.
Q. Because of course as you've explained, you yourself, I think, were never in receipt of any such improper conduct?
A. No, because I never met the parties concerned. MR DAVIES Thank you very much. Thank you, sir. LORD JUSTICE LEVESON Thank you, Dr Cable.
A. Thank you. LORD JUSTICE LEVESON 2 o'clock. (12.45 pm)


Gave a statement at the hearing on 30 May 2012 (AM) ; and submitted 8 pieces of evidence


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