George Osborne at Leveson as-it-happened

Alex Stevenson By

Review our live coverage as chancellor George Osborne answers questions at the Leveson inquiry.

13:50 - Well, good afternoon, one and all, and welcome to's 1,078th live blog from the Leveson inquiry. Hot on the heels of Gordon Brown's ever-so-slightly barmy evidence this morning we've got the chancellor of the exchequer up before Lord Justice Leveson this pm. Should be a fascinating session, as any slip-ups by Osborne will have major repercussions for Jeremy Hunt, David Cameron and the government more broadly. The stakes, in short, are high.

13:56 - After this week' schedule was announced on Friday I wrote up a preview piece of what we can expect from all the big names appearing at the Leveson inquiry this week - do have a read, it's rather mouth-watering. Still so much more to come, culminating with the PM on Thursday, of course. Here's what I wrote about Osborne:

The chancellor was originally only supposed to give written evidence to the inquiry, but his influence in a number of key issues has become increasingly clear.

First and foremost is his role in the handling of News Corp's takeover bid for BSkyB, after a Telegraph sting led to Vince Cable being stripped of responsibility. Last week it emerged he played a significant role in the decision to hand culture secretary Jeremy Hunt responsibility for the bid. He texted Hunt: "I hope you like our solution." This raises questions about whether Hunt, who was known to broadly favour the takeover, was appointed to please News Corp.

Then there are questions to be asked about the recruitment process in which former News of the World editor Andy Coulson became David Cameron's head of communications. Osborne had a key part in this, approaching Coulson for the job.

Mark Lewis, a solicitor representing victims of phone-hacking, has told the Leveson inquiry it may be that Osborne felt obliged to help Coulson after Coulson had done him a favour: specifically, putting a "gloss" on stories about former dominatrix Natalie Rowe claiming Osborne took cocaine in the 1990s.

13:58 - We're due to get underway in just a couple of minutes, but they went for lunch a bit late so don't be surprised if the start this afternoon is put back slightly...

14:08 - And we're off. George Osborne takes the oath and confirms his full name, 'George Gideon Oliver Osborne'. Leveson clarifies that Osborne was asked to give evidnece before the Jeremy Hunt row erupted, rather than afterwards, and then we get underway with some "introductory topics". Sounds like as good a way of any of getting underway.

14:10 - Question number one is about journalists' relationship with their readers. Osborne gives a very long answer, but isn't especially pugnacious. It's their job, he says. They've got to sell newspapers. Striking a very pragmatic tone here. Very reasonable, very balanced. Very relaxed.

14:14 - "The public are probably smarter than people give them credit for," Osborne says, when asked if they'd been kept in the dark before. He says they understand how the system works. They judge when a politician is "craven to a particular interest", he adds. An interesting claim. But is it borne out by the facts? Difficult to tell...

14:16 - Directly challenging Gordon Brown's evidence earlier today, Osborne argues that "one person's fact is another person's commentary or opinion." He goes all the way back to 18th century freesheets which were being partisan. "It's part of our written press," he says.

14:20 - Osborne is once again very balanced as he assesses whether broadcast or newspapers journalists rule the roost. It's a bit of both, he says. Significantly, he chooses to echo another of Brown's phrases, to put forward a point directly opposite to Brown's. "It is power exercised with responsibility," he says. The ex-New Labour leader used that exact phrase earlier today, and had used it repeatedly as a theme across government when he was in power.

14:24 - We're now getting into the nitty-gritty of Osborne's meetings with senior figures. In 2008, for example, Osborne met with Mail editor Paul Dacre and a number of other Mail journalists. "There are all sorts of conventions that exist between politicians and the lobby," Osborne explains. Too right, there are.

14:29 - Robert Jay, the inquiry counsel questioning Osborne, asks about a reference to 'trouble'. Was this something to do with Santorini, where Murdoch met senior Tories? No, Osborne says. "My trouble was with another Greek island, Corfu." That was another scandal entirely, from which he only escaped by the skin of his teeth. Here's our story from October 2008 on it - Osborne denies Corfu allegations. He gulps down some water nervously, obviously discomfited by the recollection of his ordeal.

14:31 - Now we're moving on to a lunch at the Murdochs' chalet in Davos in 2009. Osborne was with Cameron trying to get the conversation around to British domestic politics. "Rupert Murdoch was more keen to talk about the international economic situation," he says, so they only briefly were able to talk about British politics. "We were trying to set out our stall and explain how we thought a change of government would be a good thing for the United Kingdom. And we would use every opportunity to do that." Very frank, very revealing. Fascinating, actually.

14:35 - Osborne gets in a political jibe at the end, there: "In terms of outlunching them I don't think we would have beaten New Labour." That prompts an intervention from Leveson, who wants to know about when these meetings become about "influence". Osborne thinks it's very straightforward: "I think people understand politicians hang out with journalists," he says. It's normal! Everyone does it! "You can have any amount of paragraphs in minsterial codes and PCC codes. In the end the public are going to make a judgement about a politician, and in the end the public are going to make a judgement about a newspaper."

14:38 - The Tory leadership in opposition felt New Labour had been "too obsessive" about fighting for headlines, Osborne says. That came from the belief that it was impossible to "fight for every headline", and better to hope that the overall quality of coverage was positive in a broader, general sense.

14:40 - On the question of the BBC's licence fee, which was frozen in October 2010 but not dismantled, Osborne says James Murdoch had some pretty strong views. He's talking about a conversation which took place. James M had been "pretty angry" with the decision, Osborne says. "He was clearly disappointed with that decision."

14:48 - The only time Osborne ever came across News Corp's chief lobbyist Fred Michel was at one of News International's dinners at a Conservative party conference, Osborne says. We're looking at the final months of 2010 now, and starting to get into tricky questions about Osborne's role in the handling of the BSkyB bid. Osborne can't remember much about a December 13th 2010 discussion, in which Brooks remembers Osborne appearing "slightly perplexed" about a question on the role of regulatory Ofcom. He hadn't read the Ofcom issues letter, Osborne says, so he can't remember anything about it. That was probably why he appeared baffled though, he claims, but Jay isn't accepting this so easily. "At this time all sorts of people were raising the BSkyB bid with me - usually people who were hostile," he adds.

14:50 - Osborne says he didn't have much of a view on the BSkyB bid either way. "It was just going to cause us truoble one way or the other. And indeed, [laughing], so it has proved to be." He adds: "I regarded it as a political convenience... the best way to deal with it was to stick to the process." Osborne the politician, there, but Jay says this was a "rather narrow way of looking at it". Osborne says he wasn't involved in the policy, so didn't have to think about it too deeply.

14:54 - There was no communication between the Treasury and either Vince Cable or Jeremy Hunt's departments at all, Osborne suggests. Really? Only some general discussions, he says, but nothing "substantive". He the denies having any knowledge of David Cameron's opinion on the merits of the bid. It seems astonishing, doesn't it - that's the least credible thing he's said so far.

15:00 - After the first hour, I can't help but be extremely impressed by Osborne's performance. He is coming across as assured, relaxed, pragmatic, straightforward. But as the difficult questions start to come a bit more quickly that impression is just starting to be eroded... let's see what's to follow.

15:04 - Rupert Harrison, the chancellor's adviser on economic policy, is now being assessed. Leveson wonders why he didn't just say "be off with you" to those trying to interfere. Osborne says he was trying to be "diplomatic". Which was very diplomatically put. There was lots of lobbying going on, Osborne says, saying it was all being "absorbed" but nothing was actually being done about it.

15:09 - December 21st 2010 (when responsibility for the bid was shifted from Cable to Hunt), and Jay asks Osborne about three text messages between Hunt and Osborne. It's officially tricky question time. He says he did have discussions with Cameron about the events of the day, in a meeting with the PM at 4pm. It had turned into a discussion about what to do about Dr Cable's remarks. At this meeting, Osborne says, the PM was present alongside Jeremy Heywood, No 10's permanent secretary, and his "close political team". This is fascinating...

15:11 - Osborne was concerned that Cable should not resign. He was worried about the impact of such a resignation on "the unity of the government". So they were looking for another "solution". He adds as an afterthought that they thought Cable was doing a "good job". Heywood suggested the solution of moving responisiblity for media plurality to Jeremy Hunt. Significant that it was a civil servant - certainly convenient - who came up with the idea. This was judged to be a "good solution". It was "rather commonsensical" that the bid would move to DCMS (the Department for Culture, Media and Sport).

15:13 - The meeting lasted about an hour. Osborne texted Hunt after the meeting had wrapped up, he claims.

15:15 - What did you mean by 'I hope you like the solution?', Jay asks? That, of course, was what Osborne texted Hunt. Osborne replies: "I thought he would like the fact he was taking on additional responsiblities."

15:16 - Jay is fishing around to get Osborne to say all the politicians involved - Cameron, Hunt, Osborne - were favourable to the bid. Osborne resists this, saying the problem wasn't about BSkyB - it was about the unity of the government. A little more obfuscatory, there.

15:18 - "The pressure was enormous to do something about the political crisis that had been unleashed on the government," he continues. "We had to deal with the problem." He extends the point by explaining that the government had to have answers to any question the media throws at politicians - even if it happens "in the middle of the afternoon"! Politicians are supposed to be governing then, he appears to be suggesting.

15:20 - Osborne rejects a "vast conspiracy where the Conservative party knows before the general election that News International is going to bid for Sky... it is complete nonsense and the facts simply don't bear it out... you have to be a real fantastist that come these events we knowingly allowed Vince Cable to be secretly recorded..." As Osborne and everyone else knows, the subtle realities of the situation are much more complex.

15:22 - A brief break taking place now... we'll be back again shortly. Meanwhile, it's obvious that the conspiracy line will be the news story of the day. Probably.

15:33 - We're back, and Jay is asking Osborne about his involvement in the recruitment of ex-News of the World editor Andy Coulson as David Cameron's director of communications. About three or four candidates were considered, Osborne says. The Tories wanted someone who could handle "problems thrown at us" on an hour-by-hour basis. Osborne explains this is very tricky. We've all watched The West Wing, George, we know what you're talking about.

15:35 - Osborne had met Coulson a few times, "though never one on one". He thought Coulson had Conservative views, though. Is there some sort of Con-dar the rest of us don't know about?

15:37 - Coulson's links with News International weren't really relevant, Osborne says. It was his experience which was important. "We hired him because we thought he had the experience and the personality. I would suggest to you... no one had mounted a serious complaint about the way he... handled himself in the job of communications director," he adds.

15:39 - We haven't seen too much of Jay not-letting-go so far today, but he's pressing on here with a large number of questions on this. Now he wants to know whether Coulson's contacts with Brooks was a plus. Not really, Osborne says. Again, that's rather hard to believe. Osborne concedes he was aware that Coulson was friendly with Brooks. "You must have assessed this was not likely to be a hindrance in the future," Jay says. "If anything, of course, we knew it was going to be controversial," Osborne declares. What a politician he is.

15:41 - This Tory sixth sense which Osborne appears to have is quite fascinating. "I thought he had a particular talent and ability I had detected in him," he said. The right-wingness is very strong in him, he must have thought.

15:43 - The phone-hacking issue was confronted when Osborne was sounding Coulson out. They were just having an informal drink at the time.He asked "in a general sense" whether there was more that was going to come out of the phone-hacking story after just one reporter had been jailed. Coulson, of course, said no. I bet Osborne remembers that very well indeed. He says he "assumed" that because there'd been a criminal court case everything that had come out had alraedy come out...

15:46 - Osborne suggests that his approach was to hire someone because they were good for the job rather than because of their connections, as he develops this point about the controversial nature of the appointment. Making that controversy a future based on meritocracy is a very deft line.

15:50 - Next Osborne is is downplaying mode, cutting the significance of the Sun's endorsement of the Conservative party down to size. It became "almost mythical", he says. A Sun endorsement wouldn't lead to a general election win, he points out. What he doesn't mention, of course, is that the Sun endorsement DIDN'T lead to a general election overall majority for the Tory party.

15:56 - Jay has now moved on to discuss Osborne's relationship with Danny Finkelstein, the Times columnist. They're palsy, but sadly they haven't been able to talk for a year or so. Leveson intervenes: he wants to know if there's a line that should be crossed, but says ultimately "sensible judgement" has to be relied on. Osborne agrees.

15:59 - Moving on, as the two-hour mark approaches, to media regulation issues. Another half-hour to go, I think. Jay wants to know how important Osborne thinks the issue of "individual harm and collective harm" weigh against freedom of speech. "My instinct is to err on the side of freedom of speech," he says. Er, err? Well, anyway, the point is made: he doesn't want this important civil liberty to be curbed. "If you try and construct some public interest test... you are in quite difficult territory." He says the Press Complaints Commission needs a "complete overhaul", however.

16:03 - Osborne says the courts don't really provide a remedy for people who are libelled. Not for most people, anyway, because they're so expensive. He will no doubt be aware that the government is currently moving to overhaul the defamation law, rendering his remarks here fairly limited in value. He is just being a coalition spokesperson, in short.

16:07 - Osborne says the "national broadcasters" have to be taken into consideration when issues of editorial bias are talked about. Ten years ago, he says, it was considered eccentric to be eurosceptic. They "found their voice" through newspaper campaigns - no thanks to the BBC. Osborne says the decision not to join the euro was critical. But Leveson doesn't seem convinced.

16:10 - A code for newspapers strays into the territory of determining what is in the nation's interest, Osborne says. Leveson seems to agree. Osborne replies: "The work you're asking people's opinions on to replace the PCC, that it should have teeth, it should be more than just reactive to complaints and set broader standards - those are all very good things. All of this has to be future-proof." He wants a new set of regulations here which is "relevant to the internet age". All of a sudden this sounds a lot like Osborne is telling Leveson how to do his job. "I understand the point," Leveson says, underlining this. He then adds: "That's not to say I know the answer."

16:16 - Meanwhile, Scotland Yard has handed the files of five journalists to the Crown Prosecution Service in relation to Operation Weeting, which is investigating phone-hacking.

16:18 - This was a very confident performance from Osborne, who has not taken a step out of line throughout that two-hour questioning session. I'm going to write up a news story shortly, so had better wrap up this live blog for now. I think those covering this for tomorrow will be more interested in Gordon Brown's evidence from this morning. The contrast between Osborne and Brown's styles, of course, is especially fascinating. Tomorrow we've got Sir John Major, Ed Miliband and Harriet Harman. The main question has to be: how far will Miliband go in echoing Brown's calls for radical reform of regulation? We'll find out tomorrow afternoon... 

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