Osborne says BSkyB bid move was a 'neat solution'

Tue, Jun 12, 2012, 01:00

THE TRANSFER of powers away from Liberal Democrats minister Vince Cable over News Corporation’s bid to buy all of satellite broadcaster BSkyB was proposed by a top civil servant, British chancellor of the exchequer George Osborne has said.

Mr Cable’s control of media regulation came under threat on December 21st, 2010 after he told undercover reporters he was “at war” with News Corporation chairman and CEO Rupert Murdoch.

Within hours, it was decided the powers should be transferred from Dr Cable to Conservative secretary of state for culture, media and sport Jeremy Hunt, who had publicly voiced support for the BSkyB bid.

The transfer, amid a media clamour, was suggested by the permanent secretary to prime minister David Cameron, Jeremy Heywood, during an hour-long meeting held within an hour of the controversy erupting.

Describing it as “a neat Whitehall” solution, Mr Osborne told the Leveson Inquiry into press standards legal advice was taken quickly to ensure the transfer to Mr Hunt was proper.

During two hours of questioning, Mr Osborne was rarely if ever under pressure, and insisted claims the Conservatives had been involved “in a vast conspiracy” to ensure News Corp won were “complete nonsense”.

The Conservatives, he said, had not known before the May 2010 election that News Corp intended to bid for the 61 per cent of BSkyB it did not own. Its bid failed following allegations of hacking of murder victim Milly Dowler’s phone.

If the Conservatives had been involved in a conspiracy they would be hardly likely to have agreed to appoint to Mr Cable to the department that controlled media regulation, said Mr Osborne. “It doesn’t stack up,” he said.

Insisting he had stood to one side during consideration of the BSkyB bid, he said he regarded it as “a political inconvenience” because the Conservatives were bound to upset those in favour of it or those against it.

The chancellor said he had been the one to approach former News of the World editor Andy Coulson to head up the Conservatives’ press operations during its last two years in opposition.

Few checks were done on his background, he acknowledged, but he said it was impossible to seek references from people for a job of such seniority because it attracted so much press attention.

Earlier, former Labour prime minister Gordon Brown insisted Rupert Murdoch’s claims to inquiry that he went into a rage after the Sun shifted its allegiances to the Conservatives were untrue.

Under oath, Mr Murdoch said Mr Brown had called him in October 2009 and threatened “to make war” on News International following the tabloid’s decision. “I don’t think he was in a very balanced state of mind,” said Murdoch of Brown.

However, Mr Brown said the conversation had simply not taken place. “This call did not happen. The threat was not made. I couldn’t be unbalanced on a call that I didn’t have and a threat that was not made,” he said.

Mr Brown said he found it “shocking and surprising” that Mr Murdoch had given such evidence under oath and that other News International executives had supported him. Last night, Mr Murdoch stood by his testimony.

Mr Brown rejected testimony given earlier by the former Sun editor Rebekah Brooks that he and his wife Sarah had co-operated in the publication of a story about their son Fraser having cystic fibrosis.

News International was intent on “maintaining the fiction” that the couple had co-operated, he said, before asking how any parent could have co-operated with such an invasion of privacy of a child.

Mr Brown said he did not believe the inquiry had any hope of mapping out a future for British press regulation until witnesses were prepared to accept the truth and to give testimony honestly.

Former Conservative prime minister John Major will give evidence to the inquiry tomorrow. Prime minister David Cameron will appear later in the week.