News Corp and the Rt Hon Alex Salmond MSP

¶6.1 The lobbying of Adam Smith was not the only way in which Mr Michel hoped to influence Mr

Hunt. One of the conduits which Mr Michel sought to exploit calls for examination. Its roots lay in the period before Mr Hunt took over responsibility for the bid.

¶6.2 During the autumn of 2010, Mr Michel had been in touch with the First Minister for Scotland,

the Rt Hon Alex Salmond MSP. By this stage, Mr Salmond was forging a close relationship with Rupert Murdoch and News Corp which is discussed more fully elsewhere in this Report.465 In particular, he was hoping to secure the support of The Scottish Sun in the then forthcoming 2011 Scottish Parliament election. Mr Salmond saw advantage for Scotland in the bid's success because News Corp is a big employer in Scotland. He was more than ready to try and encourage a successful outcome for the bid. An email from Mr Michel to James Murdoch dated 1 November 2010 records Mr Salmond's position and that of another unnamed politician466 with a political interest in the bid's success:467

"Mission accomplished. –Libdem MP, former Sky employee, with major Sky customer centres in his constituency I and around, will contact Vince Cable to ask him to bear in mind the economic / investment point of view rather than getting influenced by political games, especially in times of austerity and very difficult economic environment for those areas. He will also emphasise the opportunity for Cable to show the maturity of the Libdems as coalition partners, working for the long-term, and will draw from the Coalition

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government experience lib-dems have had in Scotland. He agrees with the need for this to be looked at by Brussels rather than scrutinised again on plurality ground in the UK [sic] –Alex Salmond is very keen to also put these issues across to Cable and have a call with you tomorrow or Wednesday. His team will also brief the Scottish press on the economic importance of News Corp for Scotland."(emphasis added)

¶6.3 Mr Salmond did not quarrel with the thrust of that email and confirmed that he had not only

spoken to James Murdoch about the bid but also gone on to meet him in London in January 2011 to discuss the bid and other matters. Mr Salmond explained the importance of the bid to Scotland in these terms:468

"It should be understood, I mean, BSkyB is a huge employer in Scotland. We're talking about more than 6,000 full-time jobs in addition to the 2,000 outsourcing jobs and temporary jobs. It's vital in Dumfirmline, Livingston, Uddingston. Some 36 per cent of BSkyB's total global employment is in Scotland. They are in the top 10 of Scottish private sector employers. So it's a matter of great importance and the argument being forward by Mr Murdoch was that an expansion of the digital platform on a European-wide basis would result in additional investment and that Scotland would be well placed in that context to benefit, given the strength of the Scottish offer in terms of competitiveness, to benefit from that additional investment."

¶6.4 Mr Salmond confirmed that when he had spoken to James Murdoch by telephone the bid

had been mentioned and that he wanted to discuss the bid with Mr Murdoch when he met him:469

"Q. You refer, though, to the impact of consolidation of BSkyB ownership, so plainly you had in contemplation at that stage the BSkyB bid; is that right? A. That's correct. Prior to this, it had been indicated I think in a phone call – I'm sure in a phone call, actually, because I wanted to meet Mr Murdoch to discuss this in particular. This was one of the key things I wanted to discuss, to understand better the argument that the consolidation of ownership would result in additional investment and that Scotland was well placed. To be fair – well, I'm going to be more than fair, they can speak with a great deal of authority, if a company has 36 per cent of its global workforce in Scotland, then they speak from a position of some credibility."(emphasis added)

¶6.5 He regarded it as his duty to pursue jobs and investment for Scotland and denied any responsibility for plurality in the press. He had been prepared to put forward those arguments I to the relevant Secretary of State but, as things turned out, the opportunity to do so never arose:470

"Q. I think it's fairly clear from what you've just said, Mr Salmond, that certainly from the date of this meeting with Mr James Murdoch you were in favour of the bid. Is that right? A. Yes. I was in favour of what benefited the Scottish economy. Remember, I have no responsibility for broadcasting policy, I have no responsibility for plurality in the press,

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but I do have a responsibility for jobs and investment in Scotland. That is my statutory responsibility. Indeed, it's reflected not just in the fact it's my responsibility, it's actually reflected in our Ministerial Code in Scotland that it is one of the responsibilities that you must pursue. So I would tend to put an emphasis on the jobs and investment aspects of this. It was for others to consider other matters. And specifically what I was prepared to do and said I was prepared to do would have been to speak to the relevant Secretary of State to say jobs and investment are going to be a consideration along with other things that they had to consider when these matters were brought to decision at the appropriate time. As circumstances turned out, that appropriate time never arose, but I was certainly prepared to argue for that and I would certainly say that's entirely a legitimate preoccupation and argument that the First Minister of Scotland or any Scottish minister should put forward." (emphasis added)

¶6.6 He said that a purpose of his meeting with James Murdoch in January 2011 had been better

to understand the potential consequences of James Murdoch's plans for a European digital platform for Scotland:471

"MR JAY: Mr Salmond, before January 2011, were you a supporter of the BSkyB bid or not? A. What I'd said was that I'd be prepared to argue to the Secretary of State, initially Vince Cable, or advance to the Secretary of State the argument that jobs and investment should be taken into account along with other factors, which were their responsibility. I never got the opportunity with Mr Cable, because he disappeared from the scene for reasons you know about, and as it happens, I didn't get the opportunity with Mr Hunt either, but I was certainly of a mind that I wanted to put forward the position that jobs and investment was an important criteria which should be taken into account, and the meeting with Mr Murdoch in January which followed on a phone call in November, I don't have a date for it, was because I wanted to hear in more detail the connection between the European digital platform investment argument and what the consequences might be for Scotland in that respect. So I was prepared to make that argument and if the circumstances had arisen, then I would have made it."

¶6.7 To return to the question of Mr Salmond's understanding of his role and duty, he made clear

that he accepted that he knew that Dr Cable and then Mr Hunt were fulfilling a quasi-judicial role and had to make their decision insulated from the considerations which Mr Salmond had intended to raise. Even this knowledge would not have stopped him from trying to advance considerations which would have led the decision maker into error had they been heeded:472 I "Q. Were you advised that Dr Cable was occupying a quasi-judicial role and that he had to make the decision insulated from the sort of considerations you might have wished to bend his ear about? A. Yes. He was; I wasn't. Interestingly, as I said earlier, I don't have responsibility for competition, I don't have responsibility for plurality in the media. I do have responsibility for jobs and investment in Scotland, and the ministerial code, which

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we may discuss later in terms of politicians and their inter reaction with businesses in Scotland. 9.29 of the Ministerial Code of Scotland actually makes the point exactly: However, nothing in this code should be taken as preventing ministers from fulfilling their proper function of encouraging investment and economic activity for the benefit and prosperity of the people of Scotland." Because within the terms of our remit and responsibilities, what is my responsibility, the government's responsibility obviously takes pre-eminence. And across a whole range of issues, whether it be banking reform or oil taxation would be another issue where we don't currently at least have competence, we nonetheless make an argument from the Scottish interest, and while Mr Cable or Mr Hunt, however they understood it, and I'm sure they did, were in a quasi-judicial capacity, I wasn't. My capacity was quite clear and my ability to represent was also quite clear. Q. I hadn't considered that provision in the Scottish Ministerial Code before but I question, Mr Salmond, whether a very general provision of that nature would entitle you, if I may say so, to interfere with a quasi-judicial function which fell to the duty of the Secretary of State in London to discharge. A. Well, in that case, can I give you a different example entirely where – a very controversial well-known example, where my colleague Mr MacAskill, the Justice Secretary of Scotland, was taking a quasi-judicial decision on the compassionate release of Mr al-Megrahi, and indeed on the application for prisoner transfer, where although he was in a quasi-judicial role he invited opinion and evidence, including opinion and evidence from the United Kingdom government. In the event, they for their own reasons decided not to submit it, but our understanding certainly in Scotland, and I'm actually pretty certain it's the same here, is that people are able within their responsibilities to make representation. It is for the Secretary of State or the politician concerned who is operating in that capacity to make sure that they stay within the bounds of their responsibilities."

¶6.8 Paragraph 9.29 of the Scottish Ministerial Code, 2011 edition, is a part of a section on "Travel

by Ministers" and falls under the subheading "Contact with Commercial Companies". It concerns the promotion of products and services by association and attempts to influence public sector procurement and falls to be read in that context. It states:473

"Ministers should also avoid promoting an individual company's products or services by association. They should also bear in mind public sector procurement procedures

¶I and resist any attempt to influence them in favour of particular products or services.

If such attempts are experienced, Ministers should report these to the Director of Procurement. However, nothing in this Code should be taken as preventing Ministers from fulfilling their proper function of encouraging investment in economic activity to the benefit and prosperity of the people of Scotland."

¶6.9 The Scottish Ministerial Code starts with the following two paragraphs concerning General

¶Principle and Ministerial Conduct:474

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"Scottish Ministers are expected to behave in a way that upholds the highest standards of propriety. The Ministerial Code should be read against the background of the overarching duty on Ministers to comply with the law, including international law and treaty obligation, and to uphold the administration of justice and to protect the integrity of public life."

¶6.10 On 11 February 2011 Mr Michel met with Mr Salmond's adviser. The resulting report from

Mr Michel to James Murdoch is consistent with Mr Salmond's evidence that he was standing ready to speak to Mr Hunt. It also indicates that newspaper coverage and the potential for a televised First Ministerial debate were discussed on the same occasion. The email read:475

"I met with Alex Salmond's adviser today He will call Hunt whenever we need him to 1 – He noticed a major change in the Sun's coverage recently. The Daily Record is running a very personal campaign against him 2 – He believes the time has come to organise a First Ministerial debate between him and Ian Gray [Labour leader], who are the two only possible FM candidates. He would be very keen for Sky News to organise it with Adam. There is a timing issue as it would have to be organised before dissolution on 22nd March." (emphasis added)

¶6.11 Asked about the reference to the Sun's coverage in the above email, Mr Salmond pointed out

that The Sun did not commit to support the SNP until March 2011, although he seemed to accept that there had been something of a change in The Sun's coverage. His evidence was:476

"Q. Does that reflect an underlying reality that the Sun was more favourably disposed to you and your party at about this time? A. I don't know. Certainly they weren't – I think the new editor had probably come in by this time. The Sun had not declared for the SNP at that time..."

¶and:

"Q. I think the gist of your evidence is you wouldn't disassociate yourself from the perception at least Mr Aberdain [Mr Salmond's adviser] had about the Sun's coverage; is that right?" A. I think we did feel that the new editor was treating things a bit differently, but certainly at that stage there was no commitment from the editor to support the SNP in the election, because that I'm sure came later. In fact, it came in March." I

¶6.12 The third and final of three emails from Mr Michel to Mr Murdoch to refer to Mr Salmond

in the context of the bid is dated 2 March 2011, the day before Mr Hunt announced that he was minded to accept the UIL in their then form and consequently began the first statutory consultation. It records Mr Salmond expressly seeking help to ensure that The Sun did support the SNP at the then forthcoming election. It also confirms Mr Salmond's continuing willingness to support the bid. Insofar as is relevant, it read:477

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"Alex Salmond called. He had a very good dinner with the Editor of the Sun in Scotland yesterday. The Sun is now keen to back the SNP at the election. The Editor will make his pitch to the Editorial team tomorrow. Alex wanted to see whether we could help smooth the way for the process. ... He also asked whether we could go for dinner at Bute House before the election campaign kicks off on the 22nd March. On the Sky bid, he will make himself available to support the debate if consultation is launched."(emphasis added)

¶6.13 Mr Salmond confirmed that he had called Mr Michel. The meal to which he referred was

one of two meetings which he had had with the editor of The Sun. He had gone to see the editor following his meeting with James Murdoch in January (at which he had met Mr Michel for the first time). When seeking support on that occasion he had been told to "go and see the editor". He said that what is recorded in the email as a request to smooth things over was in fact a plea to prevent London vetoing the Scottish editor's wish to support the SNP: "All I wanted was a lack of influence. I wanted – the editorial team were well up for the cup". He denied that discussion of both the bid and political support for the SNP in the same conversation amounted to a subtle and reciprocal exchange of favours.478

¶6.14 The history of Mr Salmond's readiness to intervene in the bid, on News Corp's behalf, is of

real interest. He stood ready to lobby first Dr Cable and later Mr Hunt, prepared to argue that it would be good for Scotland and Scottish jobs. Had he done so he would have been seeking to persuade a quasi-judicial decision maker to take into account a factor which was irrelevant to the statutory plurality test. Plurality was the only consideration which could legitimately have been taken into account by the Secretary of State. Acceding to Mr Salmond's argument would have rendered the decision unlawful.

¶6.15 Mr Salmond adamantly believed that he was entitled to make his case and that responsibility

for ensuring that the decision was properly taken rested entirely with the Secretary of State. Mr Salmond is right that legal responsibility for taking the decision lawfully rested with the Secretary of State. But it does not follow that he was entirely at liberty to seek to persuade the Secretary of State into error (particularly, if successful, it could potentially have had the effect of giving rise to grounds for challenge). Neither do I understand how a section of the Scottish Ministerial Code dealing with public sector procurement assists. Mr Salmond's duty to promote the Scottish economy and Scottish jobs cannot sensibly be understood as

¶I requiring irrelevant submissions to be made to a quasi-judicial decision maker.

¶6.16 The evidence does not go so far as to show either an express or an implied deal between Mr

Salmond and James Murdoch trading newspaper support for assistance with the bid. What it did reveal was the way in which Mr Salmond was expressly seeking the support of The Sun in the same conversation as he was repeating an offer to assist with the bid. That occurred in the context of a relationship between Mr Salmond and News Corp which had been warming since 2007 and was continuing to do so. Mr Salmond's readiness, when the subject was first raised in November 2010 and thereafter, to stand ready to assist News Corp is striking.

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¶6.17 I have absolutely no doubt that Mr Salmond was motivated by an anxiety to help Scottish

employment and to benefit Scotland generally: that is entirely laudable and exactly what is the expectation and proper function of the First Minister. How far that should be taken, however, is another matter. He appreciated that employment whether in Scotland or elsewhere was not a relevant consideration for the Minister and, in fact, he never contacted either Dr Cable or Mr Hunt to argue the contrary. Judged by what he did, as opposed to what he said he was prepared to do, therefore, he cannot be criticised.

¶Conclusion 6.18 The handling of News Corp's 2010 bid for BSkyB proved to be an illuminating case study,

highlighting the difficulties which politicians face when dealing with acutely sensitive media issues, in this instance a plurality decision. The picture which emerged, at a macro level, is of a swing from the clear perception of bias against News Corp on the part of Dr Cable in the comments he made to his 'constituents' to a highly unsatisfactory course of communications between Mr Michel and Mr Smith on Mr Hunt's watch which itself risked a finding of apparent bias in favour of News Corp. It involved political lobbying by News Corp, wholly without regard to the restricted ambit of the plurality test, and at least one politician expressing himself to be 'standing ready' to lobby on grounds that he was aware were legally irrelevant but served his (entirely legitimate) political interests. Had the bid not failed for other reasons, Mr Michel's activities, of which James Murdoch was aware, would have put at risk a favourable decision, had one materialised. In that respect not only was their activity misguided, it was also ultimately contrary to the interests of News Corp.

¶6.19 It is also highly material to issues concerning the relationship between the development of

policy (where we depend on the democratically elected politicians and Government) and those who are in a position to use their powerful megaphones to advance causes which they support, namely the press (not, of course, constrained by the requirements of impartiality imposed on broadcasters). As I have made clear, dialogue between politicians and the press is greatly to the benefit of our democracy and entirely in the public interest. Where the public interest and private media interests can collide, however, care must be taken to ensure that the former prevails and the latter is recognised for what it is.

¶6.20 The difficulties which the politicians concerned had with this bid gives pause for thought

as to whether and, if so, in what capacity politicians ought to be involved in media plurality decisions. It is a question on which the Inquiry heard the views of both Dr Cable and Mr Hunt. Dr Cable thought it right that politicians ought to be involved.479 Mr Hunt believed that it was possible to set aside political and personal views but believed that, by taking and publishing advice, he had applied a valuable lock to the process with which to help safeguard it. He could, in practice, only depart from the advice if he could convincingly and publicly explain why.480 I

¶6.21 A detailed consideration of the issues relevant to plurality is described elsewhere in the

Report481 and the issue is not, therefore, taken further in the concluding part of the analysis of the bid by News Corp for the remaining shares in BSkyB. What this analysis does reveal, however, is that a new approach is essential. Repetition of the problems which arose on this bid is undeniably not in the public interest.

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CHAPTER FURTHER POLITICAL PERSPECTIVES ON RELATIONSHIPS WITH THE PRESS

Introduction

¶1.1 Having briefly reflected on relationships between politicians and the press from the

perspectives of our last five Prime Ministers and brought the narrative up to the present, I turn in this Chapter to the viewpoint of a number of politicians currently occupying senior positions in UK national life, whose perspectives were of particular interest to the work of the Inquiry. The evidence of the Rt Hon Theresa May MP, the Home Secretary, is covered in Part G of the Report.

¶1.2 Having concluded the last chapter with the perspective of the current Prime Minister, I turn

next to the views of the Deputy Prime Minister, the Leader of the Liberal Democrat party, before moving on to consider the views of the Leader of the Opposition and of the First Minister of Scotland. The section concludes with the evidence of a number of contemporary Cabinet Members about their relationships with senior figures in the press.

¶1.3 The Inquiry benefited greatly from all of these unique perspectives. As set out below, the

personal experiences and approaches of some of these witnesses to handling relationships with the press were of particular interest in themselves.

¶1.4 It is inevitable that I have been highly selective (although, I hope, fair) in highlighting a very

few aspects of the evidence which appear to me to be of particular interest for the purposes of the Inquiry. I have also largely confined myself to the words of the witnesses, rather than upon any commentary or debate about their perspectives either as received by the Inquiry or which have emerged elsewhere. Again, there is no need for me to do so, and there are other places (not least Parliament and the press) in which the contest of perspectives about these matters can be seen and understood more fully by the public than in the pages of this Report.