Leveson Gets Political

In the aftermath of Vince Cable’s ‘declaration of war’ on the Murdoch empire, Jeremy Hunt seemed the ideal candidate to take on the role of arbiter of News Corp’s bid to take full control of BSkyB – intelligent, uncontroversial… a safe pair of hands. Evidence uncovered recently would suggest otherwise. Tomorrow, the Culture Secretary himself finally has his say.

Having moved on from arguing about what editors did and did not know about phone hacking, to examining the relationships between ministers and the media, the Leveson Inquiry has become explicitly political. And while some sessions have been relaxed and reflective – Monday’s soft examination of Tony Blair being a prime example – others have been highly-charged.

Last week it was the turn of the man who earlier this year was effectively sacrificed for the sake of his boss – Mr Hunt’s special adviser, Adam Smith. It was revelations about Mr Smith’s cosy email and text exchanges with Fred Michel, a representative of News Corporation, which first raised doubts about Mr Hunt’s suitability for the role.

Then, it was relatively easy to portray Mr Smith as a rogue, acting under guidance but not direct supervision from the Culture Secretary. Now, however, it turns out that Mr Hunt himself had written a memo to David Cameron before he was given responsibility for the decision, stating unequivocally – among other things – that the bid was beneficial to the media industry.

This piles the pressure not only on the minister but on the Prime Minister, too. If he was aware that Mr Hunt had backed up his nuanced public expressions of support for the bid with much stronger language in private, why did Mr Cameron choose to entrust him with the decision?

Tomorrow, Mr Hunt will no doubt point to another assertion in the memo – that “it would be totally wrong for the government to get involved in a competition issue which has to be decided at arm’s length” – as proof that his other remarks were merely observations designed to counter concerns raised about the proposed takeover’s impact on media plurality.

Nevertheless, Labour have so far been nothing if not persistent in their calls for the Culture Secretary to resign, and will almost certainly find more ammunition in tomorrow’s proceedings.

Though he is seen as a talented and valued member of the Cabinet, Jeremy Hunt’s post is not usually critical to the Prime Minister’s authority. But the extent to which Number 10 has already nailed its colours to the mast in its support for him does raise the stakes in this ongoing saga.

Mr Hunt has promised full disclosure to Leveson, including of communications between himself and his adviser, in lieu of presenting such evidence to Parliament (that this is the first week of a fortnight’s recess for the Jubilee may yet prove convenient by delaying such political scrutiny).

One of the Inquiry’s key features thus far has been the examination of wholly unseen, un-briefed, un-leaked documents. This makes for greater anticipation, better headlines, and most importantly more genuine testimony, as witnesses cannot prepare carefully-scripted responses in advance.

Of course, in a way, all this discussion has no real consequence, after the phone hacking scandal led to News Corp making Mr Hunt’s decision for him. But that might not be the last time that it wields its influence in this saga – this week saw yet another U-turn by the government, on some of its minor but irresistibly headline-friendly budget measures (allegedly brought about by a campaign by none other than The Sun); a ‘smoking gun’ tomorrow just might force another one.

Europe Back on the Brink

On the face of it, 2012 is a big year for elections. It just got off to an unsettling start.

Just under two weeks ago, the news agenda was dominated by the result of France’s presidential election run-off, and with some justification. The French, like many other nations, have a habit of sticking with their heads of state – one would expect that in a time of crisis and against a challenger who has never held ministerial office, the incumbent would walk an even smoother path to re-election than normal.

Yet somehow Francois Hollande’s victory is seen as unsurprising. The vote was less a response to austerity and recession than it was a rejection of the centre-right (the Socialists had been out of power for nearly two decades) and of Nicolas Sarkozy himself – a President who promised much but lost his way as his reign became overtaken by events. An electorate that stunned a continent by rejecting the EU Constitution a few years ago will have thought nothing of ousting him.

Apparently other European political leaders did not see it the same way, though. David Cameron refused to meet Hollande when he visited London to campaign for the votes of French expats there; Italy’s Mario Monti had no time for him; Angela Merkel might as well have run Sarkozy’s Berlin campaign branch. You could be forgiven for expecting humble pie to be on the menu at this weekend’s G8 summit.

But a different election, held on the same day, has already had far more significant ramifications and will completely dominate the gathering. Greece’s voters did not merely demonstrate their anger at a particular party or individual, but at their country’s entire political establishment and its pandering to external demands. For over a week, the plethora of factions (left-wing and right-wing) to whose representatives voters had turned tried in vain to form a credible government.

Their failure has resulted in the calling of fresh elections to be held next month, and has in the meantime plunged the Eurozone into yet more crippling uncertainty. Add to this a deterioration in confidence in Spain’s banking sector and Europe appears to be back on the brink.

Monsieur Hollande had better start making friends fast, but his determination to put economic growth at the top of the agenda flies in the face of Chancellor Merkel’s deep-rooted belief in the need for ruthless austerity as the cure for Europe’s ills. The new French President must also overcome Britain’s resistance to a financial transactions tax.

One ally whose support Hollande should be able to count on is President Obama, who backs his pro-growth doctrine, although his advisors have also declared, in typically diplomatic fashion, that this is a European crisis urgently requiring European answers. Mr Cameron sent a similar message, albeit in much starker language, in the House of Commons this week.

With so many divisions and so much at stake, the summit is almost certain not to deliver any substantial decisions or promises, but as always when the financial markets are involved, signs and signals will be key.

After all, nothing much has happened in the past fortnight that could not have been expected, but the simple fact that the ‘Merkozy’ double-act has been torn up, that Greece’s politics has been torn apart and that the pillars of Spain’s banking sector are being torn down – and moreover, the prospect of where these events might lead – has spooked Europe’s investors.

Uncertainty breeds uncertainty, reinforcing the vicious circle of financial crises. But it is mainly the political events that have sparked this latest episode. This is no time for humble pie.