The transcripts of the official inquiry into the culture, practices and ethics of the press. More…

  • MR PETER BENJAMIN MANDELSON (affirmed).

  • You provided us with your full name in giving the affirmation. You've also kindly provided us with a detailed witness statement. The question I have isn't signed but that doesn't matter. Are you prepared to confirm this is your formal evidence to your Inquiry?

  • Lord Mandelson, thank you very much indeed. I've said this to a number of people, but it's heartfelt to each one. I'm very conscious that this has obviously taken a lot of time and I'm very grateful to you for the effort that you've put into preparing evidence for me. I also am fearful of a runaway train hurtling down the track towards me.

  • Yes. Well, I think you have a very difficult job.

  • I mean, to pick your way through this, all this, and arrive at a point where you can make recommendations that will command the confidence of the public and which the press can live with will not be easy, but there's I don't think ever been a time when it's more important to try to do it.

  • Lord Mandelson, may I provide the highlights of your career, if I may: 1985, appointed director of campaigns and communications for the Labour Party, and you managed the 1987 election campaign. 1992, elected Member of Parliament for Hartlepool. 1994, appointed by Mr Blair to manage the party's General Election campaign up to 1997. 1997, appointed Minister Without Portfolio in the Cabinet Office, and that included, in due course, responsibility for the Millennium Dome. 1998, Secretary of State for DTI. First resignation, 23 December 1998, but came back in 1999 as Secretary of State for Northern Ireland. Second resignation, 24 January 2001. Trade Commissioner for the European Union 2004 to 2008. In October 2008, you became a life peer in the House of Lords and appointed business secretary under Mr Brown's government, and then in 2009 appointed first Secretary of State and Lord President of the council. So you were effectively, but not in law, I suppose, Mr Brown's number two. Then obviously you left government in May 2010.

    Is that, broadly speaking, right?

  • Thank you. Can I deal first of all with some general topics. First of all, the bottom of our page 06898, where you deal with the transactional relationship with journalists. You place journalists in two categories, really, the objective and the subjective, and of course reasonable people will disagree as to who falls in each of those categories; is that right?

  • Yes, there are different sorts of journalists in how they do their jobs and how they, I think, exercise their responsibility and discharge their obligations both to their readers and to their editors and their proprietors. Politicians do things in different ways as well.

  • You say, about eight lines from the bottom of this page, that in relation to both of these categories, as a politician or party representative, you are engaging in a form of trade, help with stories in return for some hope of favourable treatment. Are you referring there to some sort of express deal or is this more an implied deal, Lord Mandelson?

  • No, it's a way of life. It's not -- I mean, I don't think that politicians and journalists would ever discuss the nature of their relationship as a trade, but that is in fact what they are engaged in a lot of the time, in the sense that what journalists want is information, news, inside track, favourable and so exclusive access to that quotes news, and politicians want to get their message across. They want the public to understand what they're doing and why and they want to come out of that in a good light. So that is, in a sense, the trade that exists.

  • So the terms of engagement are never expressly stated because it's so obvious it goes without saying; is that right?

  • I think so, but you will have a different relationship with different sorts of journalists. I mean, I have referred to what I used to say when I was -- started my job in the 1980s, which was that you can be friendly with journalists, but journalists are never your friends. And I think that journalists would probably say the same about politicians.

    Now, I have -- I could probably recall journalists who actually became friends, but that was rare, and I think the problem arises when journalists who expect some sort of exclusivity are disappointed because actually politicians have to talk to all journalists, and politicians become disappointed when they expect favourable treatment but that is sort of interchanged with, you know, unfavourable treatment as well. That's why I talk about the boundaries and when you overstep them and when things become complicated.

    I think it became particularly more complicated when, in the case of some politicians or those who are working for politicians -- press offices, communications directors -- the latter sort of felt that what they were getting from journalists was manufactured news, as they would put it, and probably journalists felt on many occasions that what they were getting from politicians was, as they would call it, spin. At that point, I think, the relationship starts breaking down because trust dissolved between the two parties to this relationship.

  • I think all you're describing or may be describing is the implicit basis of the transactional relationship being taken to perhaps inevitable extreme. Because the nature of the relationship is built on very flaky trust, therefore mistrust increases and the more mistrust you have, arguably you have more spin on one side and manufacture on the other. Is that a fair analysis?

  • I'm not sure that I'd put it in quite those terms, no. I mean, look, depending on the media outlet, depending on the newsroom pressure, depending on the journalist you're dealing with, there, in my opinion, will be more or less manufactured news. If you open a newspaper -- invidious, I suppose, to choose one, but if you open a newspaper like the Financial Times, you do not expect to read manufactured news. There are other newspapers, perhaps more sensational, less scrupulous, wanting to go more for impact than fact, where manufacturing takes over from news.

    But to be fair to journalists and editors, they would probably say the same about politicians, that there are some politicians, you know, who you'll always get a straight answer from and those who you won't. That's what they would say about us, and that's in the nature of the relationship and those are the circumstances in which it can break down. And I think has broken down, actually, largely.

  • Over -- when I look back over my life, from the time I started, when I was appointed, at the age of 32, as the Labour Party's Director of Communications in 1985, to pretty much the present day, but I think that -- I mean, it's been a bit of a rollercoaster ride, you might say, but there were times probably where relations were calmer and more trusting and then there were other periods where there was significantly less trust and less respect for the roles that each was playing in this relationship.

  • Just one more question on that. You say a rollercoaster, and I understand exactly what you mean by that, but if I were to draw it as a graph, the graph may occasionally move upwards, but is it generally --

  • Oh no, it's heading downwards.

  • Yes, it may occasionally move upwards because that's part of the rollercoaster, but is the overall picture downwards?

  • No, the overall picture is downwards, in my view, over the period of my adult life. We may come onto this later when we discuss the role of proprietors. I know enough from history and what I have written that if you delved into Harold McMillan's diaries at the beginning of the 1960s, he would be complaining quite a lot about various proprietors and rather sort of high-minded editors who he didn't think were treating him or his government with respect, who were sort of delving into Conservative Party politics, who were giving vent to their prejudices as proprietors rather than allowing the news to be fairly and accurately reported.

    You could move on to Harold Wilson, who had a tempestuous relationship with editors and proprietors. He took his relations with those people extremely seriously. He was always fulling in and out of love with them, in a relationship that was sort of mediated at different stages by Arnold Goodman and Joe Haines.

    Margaret Thatcher, slightly different. She cultivated and honoured and nurtured editors and journalists very successfully. The relationship was, I think, relatively calm during her period. It might not have seemed so calm to her on all occasions but when you're looking at history -- and so it goes on.

    I think in our case, in Labour's case and Mr Blair's case, I would characterise relations with the press around about the 1992 General Election as pretty dire. I think Mr Blair then rescued and made good Labour's relations with the media. I think he was two or three years into government and they started taking a further dive, and climaxed, in a way, when they became their worst at the time of the Iraq war. Mr Brown comes in and he has rather good, easy relations with the media. It didn't last, as we know. It took a very significant dive.

    That's what I mean by the rollercoaster, but if I were to characterise over the entire period of my time in politics, I would say that the demands of the press for instant answers, instant information, instant explanation have got ever greater, yet their scepticism about what they're told and what they feel they can believe has deteriorated simultaneously over the same period.

  • You mean their scepticism has increased rather than deteriorated?

  • I think increased their scepticism and their trust in what they're being told as the truth has deteriorated.

  • You characterise that as an almost unbearable tension on the next page, which is the end point in the process. You stand by that, presumably?

  • I'd say it was fairly unbearable on occasions, yes. And generally, yes.

  • But it's actually therefore something that, for the good of society and the way in which our democratic government has to operate, we have to find some way of addressing, haven't we?

  • Of course, because democracy, government and politics is mediated by newspapers and other media. The public rely completely on the media for their knowledge and understanding of what's going on in government and politics and their ability to form judgments about the actions and the people and the events, and the politicians and ministers rely wholly on the media to get their message, their explanation, their rationale for their policies or their explanation of events through to the public. And if the relationship at its core has broken down, has become one of mutual recrimination, lack of trust or belief, then the people who are the greatest losers from that are undoubtedly the public, partly because -- I mean, in a sense, they're sort of casualties of this broken-down relationship. They don't know who or what to believe and often times they are misguided by the way in which news is presented or political information is communicated.

    So that's why I very strongly believe that the public are the losers in this. I mean, we can talk about unbearable tension in our lives, but then that's an occupation hazard, if you like, for politicians and journalists. It shouldn't be an occupational hazard for being an ordinary member of the public and a voter trying to make up their mind.

  • Yes. Well, we've started, Lord Mandelson, but we'll break now for one hour, if that's all right with you.

  • Thank you very much indeed.

  • (The luncheon adjournment)

  • Yes, Mr Jay.

  • Still on general matters, you say towards the bottom of page 06898, five lines from the bottom:

    "Given the media system, it is often crude and sometimes debasing but nonetheless unavoidable."

    In that sentence, who is being debased?

  • I suppose I was thinking selfishly, but for all I know it goes for some of the journalistic profession as well.

  • Because Lord Patten, I think, used a different adjective, "demeaning", vis-a-vis what he felt to be some of his colleagues' relationships with proprietors. Would you use that epithet or keep to "debasing" or what?

  • Yes, but I'm not just talking about proprietors. I'm talking about the whole profession, the whole, as it were, the whole transactional process that goes on.

    Look, I wouldn't want to create a misleading impression. I am not saying that every contact or every relationship or whatever is debasing or demeaning, but it can become so, and perhaps it is a feeling about that that is present on both sides of the relationship.

  • "Close or overcosy relations". This is the last paragraph of 06900.

  • The very last paragraph on the page, where you're identifying this at a high level of generality. You've made the point in the previous paragraphs that newspapers and their journalists tend to reflect the slant and inclinations of their proprietor and editors and I'm sure that's borne out of your experience.

    The last sentence on this page:

    "... and conversations with ministers and prime ministers that might indirectly affect proprietor's commercial interests should be held in appointed meetings with an official presence."

    So you're seeking some greater degree of formality, but can I ask you about "indirectly". What sort of conversations do you think might indirectly affect proprietors' commercial relationships?

  • Well, it depends on the content of them. I mean, if, in an informal conversation, you know, a suggestion is being made that perhaps, in respect of some public policy or piece of legislation, the government doesn't do what a proprietor would rather they didn't -- not just a proprietor but an editor -- they will make an argument, you know: "This would interfere with the freedom of the press or make our ability to do our jobs more difficult", or: "There may be an unintended consequence of this policy" -- it depends on the content.

    All I'm saying is that these conversations are best done with an official present, by which I mean a civil servant, not a political adviser.

  • So any conversation which might conceivably have an impact or might, as a matter of perception, have an impact should be formalised to the extent to which there should be an official present; is that what it amounts to?

  • That is normal. I mean, either an official present or, if it's a telephone conversation, an official private secretary listening in. As I say, that's normal for every other walk of life or sphere of activity for a minister or a prime minister, and I don't see why it shouldn't apply to editors and proprietors as well.

  • I'm sorry to dart about a bit, but I'm picking up general themes here. You refer on page 06899, in the fourth paragraph down, to what you identify as the loss of deference in society.

  • Is this statement numbered?

  • Yes, I have 6900. Where does it go from there?

  • No, no, it's Mr Jay. He can't read just from 1 to 2; he has to jump about a bit.

  • The paragraph which begins:

    "This whole changing relationship is also being driven by the loss of deference in society."

  • I think you told John Lloyd -- and this is noted in his book, "What the media are doing to our politics" -- you said this:

    "Everyone is now treated in the same way -- politicians, celebrities, sportspeople -- without discrimination. The standards of manners and courtesy have dropped. There's a lack of any kind of respect for achievement and status. There's no feeling for what is private in life. Politicians, it seems, are regarded as being for the use of the media purely and simply to be used and abused."

    Is that the sort of wider cultural issue which you are indirectly referring to here?

  • Yes, I think it is. Look, I don't want a society in which -- which is characterised by a hierarchy, in which everyone has to defer to the person on the next tier and so it goes on on upwards. I don't want that sort of society, but when I talk about a loss of deference, I mean a loss of almost preparedness to hear and listen to the other person's point of view, to treat them with respect and not assume that the worst motives can be attributed to them.

  • "Respect" is the word, isn't it?

  • "Respect" is the word, but it doesn't mean to say that, having shown somebody respect, you then have to choose to either believe everything they've said or excuse everything that they've done, but to give them an opportunity, as it were, to have their day in court before a presumption is made that they're guilty as accused, need to be thrown out of the highest window, their reputations trashed and their careers ruined before anyone has an opportunity to establish the facts.

  • There are echoes, in what you say, of a number of things I have said in the course of the last few months.

  • I don't think it's unfair or unreasonable to expect the media to operate on that basis. It doesn't mean to say that they should always operate on a presumption that all politicians are, you know, holy and untouchable. I'm not suggesting that. The media has to be challenging. It has to enquire into wrongdoing. It's just that, as I think others have said sitting here, every journalist, it seems, want to turn themselves into a Woodward or a Bernstein, and they have to accept that sometimes people haven't done wrong, or that the line of enquiry they're pursuing is in fact a cul de sac or that actually the facts of the matter are different from those that they initially apprehended or assumed.

    It's about standards of journalism.

  • In that context, you make a separate but related point on the next page again. This is 06900, exactly level with the upper hole punch. I'll read it out you say:

    "The shift, widely and better described by others, from conventional news to a pre-occupation with celebrity, scandal, gossip and sexual revelation was pioneered by News International titles but by no means limited to them."

    Why do you say "pioneered by News International titles"? And secondly, who else are you bringing into this net?

  • It's possible that those with a greater historical than I have would say, "Oh no, you're overlooking what the Daily Mail was like in the 1930s", or some other newspaper, the Daily Sketch in the 1950s. I don't know. I just have a sense that during the course of my adult life, sensationalism, going for what is salacious, particularly in relation to household names or those who are not household names but are rapidly turned into them as a result of a newspaper's desire to create the maximum impact with a story that they have, true or otherwise -- and I think it's almost the sort of default place for newspapers to go if they are in fear of losing readers, if they're worried about their circulation. It is -- if I were to use a general term, it could be described as the tabloidisation of the media, in which there are barely any broadsheets left, figuratively or literally.

  • Okay. May I move off those general matters and move into politics now. In particular, the period probably 1985 to 1992, culminating in the election campaign of 1992. You characterise that period as "horrible and bloody". I know you regard it as important for what happened in the subsequent period, but would you like to expand on "horrible and bloody"?

  • I think what I meant by that is that, you know, there has been a longer standing trend in the press to mix reporting with comment, and it didn't simply revolve around that period in the 1980s and the 1992 election. I think that what took this sort of merging of comment and reporting to a higher level was the more lethal cocktail, which I believe that the Labour Party was exposed to, and that was a sort of mixture of aggression and inaccuracy, and I think that the Labour Party generally and its leader, Mr Kinnock, in particular, were the victims of that. I think that the press took their gloves off. I think there was a sort of lack of scruple or restraint in the reporting of the Labour Party in those years.

    Now, I also quite honestly observe in my witness statement that, you know, a lot of the damage the Labour Party had done to itself in the early part of the 1980s. We weren't exactly making it easy for people to report us positively or warmly, given the vote-losing policies, the divisions, the entries into the Labour Party by the far left.

    But by the end of the 1980s, by the time we got to the 1992 General Election, a great deal -- I would say the bulk of that swamp had been emptied, and that the Labour Party had changed and I don't think we were given the credit for those changes, and I think Mr Kinnock in particular was on the receiving end of treatment by the media, notably but not only News International titles, that was not warranted and was not fair.

  • Someone else has described the strategy from 1994 or thereabouts as being a neutralisation strategy. You probably recall that evidence, but he said that they did rather better than that. Did part of the strategy inevitably entail cultivation of particular journalists in opposition so that your message could be got across in the most favourable light?

  • Yes. Of course you identified opportunities and people and events -- it was certainly my job when I was Director of Communications -- that would put the Labour Party in a better light and would receive favourable reporting. Of course we did that. Given where we were starting from, it was hardly surprise. The Labour Party in the 1980s had a sort of near death experience and the process of recovery from that, of change and what we became, I would say from 1985/87 to 1995/97, was one in which we had continuously to present what we were doing, the changes that we were making in the most favourable light.

    I mean, I don't know who described it as a neutralisation strategy. I would call it a strategy of reassurance. I mean, in a sense, reassurance of the public, of the voters, and neutralisation of what had been a very hostile media.

    I remember in the 1990s I came back to -- in a sense, to the Labour Party headquarters after Mr Blair became leader and I was put in charge of the preparations for the 1997 election. I remember saying to my people: "Never ever forget the three Rs", and my three Rs were: remind -- remind people of what the Tories had done to their country and their record -- reward -- always tell people what our policies are and what we will do, if elected, for them and their families -- and the third was reassure, reassure people that we weren't the same Labour Party of the 70s and 1980s, that we had changed and that people could have very different expectations from us if we were elected.

    And that strategy of reassurance was absolutely central to what we were doing and what we were saying at the time, and part of that was a reassurance not just of business, big and small, or middle class people who were concerned about taxes and spending or indeed normal ordinary working people, many of whom had parted company with -- from us as well. Reassuring the south of England or the rural areas, again, where swathes of voters had parted company with the Labour Party.

    Now, part of that was to reassure the media that we weren't the same Labour Party, and that, in a sense, in trying to persuade them that we were no longer the toxic brand of the 1980s you could describe as an attempt to sort of neutralise, to sort of take the roughest edges off their hostility to us.

  • So much of what you're describing was taking place fully in the public domain. We understand that --

  • By definition. It couldn't be done in secret.

  • Yes, I'm trying to identify cultivation of particular journalists and whether the transactional relationship you refer to ever came to the point of being a collusive relationship.

  • Collusive? I don't know. I remember journalists on newspapers and in broadcast media who felt that the Labour Party hadn't been treated fairly and thought that this should change. I remember journalists who were more sympathetic to the Labour cause, felt that they were coming under pressure from their news desks and editors to distort how they reported politics and wanted to help us. I'm not sure that I'd be able to count them on the fingers of more than one hand, or possibly two, but there were such people. I wouldn't describe that as collusion, however.

  • Okay. I'll probably be coming back to that issue.

  • One of the consequences of what you've just been talking about, a long-standing trend to mix reporting with comment and the consequence to the Labour Party, does bring into focus paragraph 1(iii) of the press complaints code, the Editors' Code, which says:

    "The press, while free to be partisan, must distinguish clearly between comment, conjecture and fact."

    So do I gather from what you're saying that what was spectacularly absent in what you've just described was an appropriate distinction between comment, conjecture and fact?

  • I think in the case of most newspapers it barely existed.

  • In the case of most papers, that barely existed. It was observed in the breach, not the honouring of that part of the code. But not in the case of all journalists or all newspapers. I mean, I -- I remember journalists working for clearly right wing Tory-supporting newspapers who wanted to report straightly and factually what the Labour Party were saying or doing or how it was changing and they did, often. But if you're asking me to generalise or characterise, I would say that that particular feature of the PCC code was not very prominent.

  • That was actually my point, because while discussing the development of the handling of Labour policies to the electorate, as we shall and as you discuss in your statement, I am still going back to one of my terms of reference, which is to see how effective the mechanism that was supposed to -- and I'll put the word "regulate" in inverted commas -- the press operated.

  • The press was not regulated through the PCC or its code. It was a system of non-regulation. There was no ability of the PCC to uphold standards, enforce decisions or bring about change. It was not a system, in my view, of regulation, self or otherwise. We can come back to that, but that is my view.

  • I think we probably shall, but it just struck me that as you were describing how you saw the reporting of the Labour Party in the 1980s to 1992, which of course is some time ago, the words of the code seemed very, very distant from that description. That was all.

  • I think in all my dealings with journalists and the contretemps I had and the fisticuffs I went through, if I had gone to a journalist and said, "'Ere, 'ere, you know, item clause (ii) of the PCC code suggests that you should not be mixing opinion and comment", or whatever, I mean, they would first smile and then conclude that I'd arrived from Mars.

  • Which itself says a great deal.

  • Well, it just wouldn't be part of your discourse with a journalist. I mean, it just wouldn't.

  • I understand that entirely.

  • You know, they would just -- honestly, they would just look at you with a sort of mixture of pity and sort of fascination.

  • Lord Mandelson, I understand exactly what you're saying, but you will see why I'm bringing it out.

  • It's actually quite important.

  • I think it is important and I would like to return, if I may, when we come to discuss reforms.

  • I think we shall. Sorry, Mr Jay.

  • Can I deal with the issue now of the Faustian pact, which you address in your statement. See if we can analyse this in three --

  • I think I said the non-Faustian pact.

  • Yes, you do. This is page 06902.

  • Got to watch the spin on this.

  • There are three different levels of possible pact. There can be an express deal, where the terms of reference are articulated and defined. That's the highest level. The lowest level is perception, which you deal with in the third paragraph --

  • Sorry, the highest was ...?

  • Express deal, yes, clearly expressed between two parties.

  • The lowest is the possibility of adverse inferences, which you deal with in the third paragraph on 0609.

  • And the mid position is some sort of implied deal.

  • My understanding of your statement is that you repudiate the suggestion of the express deal and you accept the possibility of adverse inferences. But I'm most interested in implied deal, Lord Mandelson, whether you think there's any basis for that.

  • I'm sorry to be precise, but let me clearly understand. You're talking about a deal between who and who over what?

  • Senior politician and media proprietor where, although nothing is expressly stated, it is understood by each of them what may or will be delivered in exchange.

  • In my view and from my experience and knowledge of the time, there was no deal, express or implied, between any proprietor and any leading politician of the Labour Party that suggested that in return for that proprietor's support for the Labour Party, they could expect some favourable commercial treatment in return. I simply do not believe such a deal happened, and I don't believe that such a relationship existed.

  • Wasn't it a question, though, that each side to this conversation, whether you describe it as a form of pirouette, a courtship -- see the period 1995 to 1997 -- would well understand what the other wanted and therefore it wasn't necessary to set out the rules of engagement because each would, not by telepathy but by common sense, understand what the other was after?

  • Well, I think it was -- would have been -- if we're talking about News International or if you want to take News International as an example -- I mean, you'd hardly be pirouetting around the Daily Telegraph or the Daily Mail, I think, imagining that they're going to change the habit of a lifetime and suddenly support the Labour Party, New Labour or not.

    In the case of News International, we had had famously bad relations from the 1980s. The Labour Party, an international executive had criticised and attempted to mount a boycott of News International titles and journalists when the move to Wapping took place. That didn't last for very long, but nonetheless the bad feelings, I think, continued, but I think that the Labour Party's feelings about News International and about Mr Murdoch reached a sort of fresh depth around the time of the 1992 election, for the reasons that we've already discussed.

    What we all wanted to do in the 1990s, should we ever have any hope of winning a General Election again -- and by that time we'd lost three or four, I can't remember -- we didn't want to make permanent enemies of News International, and therefore, at different levels in different ways, different dialogues were opened, with working journalists or editors or executives and including the proprietor. I don't think that's unreasonable.

  • No, and your assessment was, presumably, that Mr Murdoch liked to back the winning party; is that right?

  • Yes. I mean, I was hopeful, I suppose, that if we started turning things around and looked like winners, he might be more attracted to supporting the Labour Party, but I also think, being a man who's very interested in politics and policy, that he might have needed some reassurance from the Labour Party about how genuine were the changes we had undergone and the changes in policies that we had made.

  • What you say in your statement is:

    "What is clear is that Mr Murdoch does not make a habit of backing losers."

    Was it part of your assessment, at least, that he would want to back the winning party because he felt that there might be greater commercial advantage to him, or put another way, less commercial disadvantage, because the party now in power would not seek to harm his interests?

  • Well, if we were likely to win the election, and he in the meantime had thrown everything bar the kitchen sink at us to stop us being elected, then he might judge that that was, you know, commercially not a brilliant thing to do, that you don't deliberately want to put yourself on the wrong side of a party that is looking more than likely to become the next government. He may well have had that in his mind, but as far as we were concerned, whilst we wanted his support or didn't want the same degree of trenchant opposition, at any rate, that we'd experienced from them before, it did not mean that we were prepared to make concessions to his commercial interests that might enable us to curry favour and draw him over the line in supporting us. I don't believe such a conversation would have taken place.

  • Did the wooing of Mr Murdoch's title, in particular between 1995 and March 1997, fill you with any distaste at the time?

  • About, I'm sorry, about ...?

  • The wooing of Mr Murdoch's titles.

  • I -- I -- I -- I was a fully paid-up member of the New Labour cause, the New Labour strategy.

  • Does that mean that any distaste you felt was immediately suppressed because you were so wedded to that clause?

  • It would mean that I would either have kept it to myself or given one or two people in private the benefit of my views.

  • But look, I'm -- you know, I was part of whatever you call it, the reassurance neutralisation strategy, just to use that shorthand. Of course I wasn't comfortable in policy areas like Europe, for example. I was a notorious pro-European and I felt that the concessions we were making in that policy area, at least on rhetoric and tone, language, was perhaps going a tad too far.

  • You cover this at the top of 06908. This is the piece in the Sun. I think it was 18 March 1997, wasn't it, which you've described as all about rhetoric and tone, not about substance?

  • You must have been party to discussions about the timing and tone of that piece, though, Lord Mandelson; isn't that right?

  • I wasn't sort of greatly involved. I mean, if I remember -- and because you asked me to comment on this, I familiarised myself with it -- I mean, there were in fact two points at which Mr Blair sought to reassure the Sun over Europe. One was on March 17, 1997, in an article place by Mr Blair in the Sun entitled "I'm a British patriot", where he made clear that New Labour would have no truck with a European superstate, which you could argue was a statement of the obvious and a statement of policy, no greater or less than that, but probably the language chosen was designed to make a point or strike home. And the day after that article appeared, the Sun announced that it was endorsing New Labour.

    And then, a month later, on April 17 -- that was a couple of weeks before the election -- an interview with Mr Blair appeared in the Sun, which was headlined "My love for the pound", in which he made clear in this exclusive interview that there would be a triple lock on Britain's possible going into the single currency: a government lock, a Parliament lock and a public referendum lock. And that obviously was well received by the Sun and no doubt its proprietor.

  • Do you think there were discussions with the Sun's political editor, though, about the timing of the articles and the delivery of support?

  • From what I remember of the views of the then political editor of the Sun, it didn't -- the less he had to do with us, the better. He didn't like it at all. I suspect the discussions would have been with the editor of the Sun, Stuart Higgins.

  • Okay. The year after, in 1999 -- your statement says it's 1998 but the exact year probably doesn't matter very much -- it's paragraph 19(a) of your statement at 06912 -- there were discussions about the possibility of a referendum on Britain's entry to the single currency.

  • You deal with this in your book, don't you?

  • You say:

    "My view was that there was much to recommend holding a referendum on the principle of joining and that we should hold it as soon as possible, while Tony's standing was at its highest. He was worried about the reluctance of a good part of the Cabinet, and of course Gordon, to agree. He also feared a backlash from the Murdoch papers, especially the Sun. The referendum now was a step too far."

    So you're saying there that there really were a mixture of factors which militated against any decision to hold a referendum on the euro and the backlash from the Sun was only one aspect, one facet of the overall decision. Is that fair?

  • Yes. The suggestion was that we should perhaps hold a referendum on the principle of entering the single currency, but then subsequently judge the exact timing according to the circumstances prevailing at the time. So you would separate the principle and the actual recommendation to go into the single currency.

    Mr Blair's view was: why take the pain of holding a referendum, with all the sort of hostility and opposition that will be thrown at you by the anti-European press, when you weren't actually thinking of going in there and then? Better to wait and do it later when possibly the circumstances would be different or better.

  • Yes. So is this an example when, for good political reasons, a decision might be made, as you described it, but an ancillary reason might be that there would be an excessive backlash in the press anyway, which we would wish to avoid, so it's a bit difficult to say that excessive backlash or the fear of it was the real reason for not make the decision?

  • As ever in politics, it was probably a combination of reasons and factors.

  • Okay. Another decision in 2001 when Mr Straw replaced Mr Cook as Foreign Secretary. You cover this in your book at page 336, Lord Mandelson.

  • In the middle of the page:

    "Then he came to it [this is Mr Blair speaking].

    "'I know you're not going to like this. Jack is going to the Foreign Office to replace Robin.'.

    "I could hardly deny that I thought it was a mistake. Jack Straw seemed to me an inappropriate choice because he had euro-scepticism in his DNA. As it happened, that turned out to have been an attraction for Tony. He reasoned that once Jack was locked into his new job, he would toe the line on Europe and the euro. Due to the very fact he was a known sceptic, Tony said, his support would count for more voters, MPs and the Murdoch press.

    "'That remains to be seen,' I replied. In fact, it seemed to me that Tony had his doubts. He sounded as if he was trying to convince himself."

    So I suppose there the Murdoch press was just one factor looming in the background, but may not have been at the forefront of consideration. Have I correctly summarised it?

  • Yes. I say "voters, MPs and the Murdoch press". I mean, people who, knowing that Jack Straw was less sympathetic to Europe, should he, in becoming Foreign Secretary, then back the Prime Minister in being more pro-Europe or indeed entering the single currency, that would count for more, that his sort of Damascene conversion would have a positive effect, from the Prime Minister's point of view.

  • Can you assist us with the events of Easter 2004 and the proposed referendum on the European constitutional treaty? You deal with this in your statement at 06907. But the Sun, you say, wanted a referendum?

  • This wasn't on the single currency; it was on the constitutional treaty, so-called at the time.

    Mr Blair certainly wanted to avoid a referendum commitment. Those who wanted such a commitment, frankly, were those who were least sympathetic to Europe and/or its new constitutional treaty. They were people who thought that the pressure on the government to hold a referendum would be great and overwhelming and that we might as well concede it ourselves from the beginning.

    There was also what I regarded as a false argument at the time, that the House of Lords would insist on a referendum and amend the legislation accordingly and that as the House of Lords were going to insist on it and impose a referendum, we might as well go for it at the beginning.

    I didn't think those arguments held water. I thought they thought he were self-serving. I also thought they were taking advantage of the Prime Minister at a time when he was not politically strong, post Iraq, and that they were arguably exploiting this opportunity to get their way over Europe and the referendum.

  • -- the Sun was a factor in the decision?

  • Of course. It always is a factor and these discussions took place with Mr Blair before Easter. I remember very well -- I, of course, was not in the government at this time, I hasten to add, but I was very familiar with them from Mr Blair's vantage point. I gather -- I believe -- I mean, he can speak for himself but I think what he said to those who were pressing him in this way are: "I see the arguments. You may well be right, but let me think about it."

    He went away to think about it over the Easter break, but during the course of that weekend the news was leaked or briefed to the Sun and to the Times that the Prime Minister had made up his mind in favour of the referendum and by the time he came back from holiday, it was a fait accompli.

  • In your book, you identify Mr Straw as the source of the briefings?

  • He was not the only source.

  • He was one of them, was he?

  • I believe he was. It doesn't matter who it was. The fact is that side of the argument let it be known to those Murdoch newspapers that the Prime Minister was going for a referendum and once the genie was out of the bottle, it was near impossible for the genie to be put back, whatever the Prime Minister's view. He might have reached a view in favour of one, but he hadn't reached it before Easter. Not on the basis, at any rate, of what he told me.

  • You say in your statement you believe Mr Blair was in contact with Irwin Stelzer at about this time; is that right?

  • Yes, I believe that was the case.

  • Do you know anything about the frequency and depth of Mr Blair's contacts with Mr Stelzer?

  • I think he had quite a high regard for Irwin Stelzer as an economist, as an analyser of global events, as I did myself.

  • Was there any sense that -- it would be unfair to describe him as a proxy for Mr Murdoch, but at least some sort of litmus paper test for what Mr Murdoch was thinking or might be thinking?

  • He was a reasonable litmus test paper, yeah, litmus paper test, but not the only one and probably not as important as, you know, say Rebekah Wade as was or Les Hinton.

  • Okay. In your witness statement you make this further point: that you agree that it's improbable that the government would have made an important move on Europe without warning News International. Why do you think that was so?

  • It would have been so, in my view, as a matter of relation management. If you were going to do something that was bad news for the Sun or going to be received badly by them all, you would probably not wish to take them by surprise but pave the way by talking to them and introducing them gently to the change or whatever, or to the development.

    I mean, I remember in the case of the single currency -- I can't remember whether it was in 1998 or 1999 -- I think it was 1999 -- Mr Blair insisted on going ahead with publishing a national changeover plan. I mean, our policy at the time was: prepare and decide. The Conservatives' was sort of: wait and see and hope the entire thing collapses and goes away and we won't ever have to make up our mind. Our view was different. Ours was: prepare and decide. In pursuit of that policy, Mr Blair decided, rather courageously and certainly against the advices, I remember, of the Treasury, to publish a putative national changeover plan from the pound to the euro should, at any stage, we believe that Britain going in was right in our national interest. I think I'm right in saying that the Sun's front page the next day featured a rather large photograph of an unhappy-looking Mr Blair, with the question: "Is this the most dangerous man in Britain?"

    So you got a taste then of what you could expect from the Sun if you went against their views and wishes on anything to do with Europe. But not just the Sun. In different measures, other News International titles, quite apart from the Daily Express and the Daily Mail, of course.

  • You referred then to relation management in the context of News International. Are you suggesting that they would be the only beneficiaries of some sort of briefing or are you including within this the Associated titles and other important newspaper title?

  • No, I wouldn't include Associated in this, because -- I mean, they were opposed, hostile without redemption.

    In the case of News International, where -- in the case of the Sun, at least, they were supporting you and your government and what you were doing across the policy area, you would probably want to manage the relationship if you were going to do something that was unwelcome to them, but by sheer dint of that, you're doing something which is unwelcome to the Sun. You're not sort of saying, "Oh my God, this is going to go down like a lead balloon with the Sun. We'd better not do it." That's not what I'm saying. What I'm saying is that you manage the relationship, both when you're doing things which the Sun & co are likely to support and welcome and vice versa.

  • Do you think that gives the proprietor of the Sun, who has made it clear -- Mr Murdoch made it clear that if one wanted to understand his views, one need only read the editorial of the Sun. But do you think that it gives him a greater, if not influence, at least relevance compared to other titles? Because you may say, "The Associated titles were always going to oppose us", the Trinity Mirror titles were --

  • Generally always going to support us.

  • -- likely going to support you, therefore we don't need to worry about them at all, particularly.

  • You wouldn't not worry them at all, but you wouldn't -- they're not the swing constituency.

  • I understand. Therefore, by, as it were, allowing it to go abroad that he, Mr Murdoch, was open to discussion, he was acquiring for his papers a link into the government -- it wouldn't affect your policy, you've made that clear, but it might affect your rhetoric -- that others did not have. Do you understand the question I'm asking?

  • I do. I think it's a very pertinent question and I think probably the observation you're making is a fair one.

    I mean, look, you asked me whether I was happy or unhappy in the run-up to the 1997 election. Now, I was a fully paid-up member of and integral part of Labour's strategy, but there would be some areas of policy where, you know, I'd be less comfortable. Europe was one of them. Not that we were abandoning our pro-European policies and credentials but the way in which they were being presented, the concessions in rhetoric -- I would say the same, to be honest, about myself in relation to policies to do with immigration or crime and law and order. You know, I was -- I tended to be more on the liberal side of these things. It didn't mean to say that I didn't fully support the party's policies; of course I did, and I fully understood the need to do what you could to bring the media with you, including, and notably, News International. But it can make you a bit queasy because all of us as individuals have slightly different leanings one way or another. On Europe, my leaning was obviously pro, and in other areas of policy I had slightly different emphases or leanings or whatever. So there will be times when you're feeling a bit queasy.

    I don't happen to like invoking patriotic language very much. I don't like running up the Union Jack and, you know, getting everyone to dance around it in what I would regard as a rather sort of phoney jingoistic way.

    So we all have our preferences, but I think also -- look, what I was concerned about also over this whole Europe business before 1997 was not whether we were pro or anti Europe or that I was pro and the party was pro, or even whether it was necessary or not to manage Mr Murdoch. Of course it was. But I didn't want Mr Blair to say or do anything that might appear weak or pandering, because that might lead to a wider judgment by the public of him. I didn't want him to say or do anything that might lead people to infer that he was under some obligation to Mr Murdoch or any other proprietor. I didn't think that that was wise or healthy from a wider political and electoral point of view.

    I suppose if I was being honest too, I'd say that it was attaching too much importance to them. It was making them feel more important than they were entitled to feel, and I didn't think that was terribly healthy either. If you don't want press proprietors to sort of go around, you know, sort of feeling that they're ever so regal, they be don't treat them regally. I mean, you could hardly blame proprietors for feeling rather grand and important if that's the way that politicians behave towards them, and I think that's been the case over decades and generations. I don't think it's going to happen very much in the future, incidentally, but we'll see, or less so in the future. And I think that's very good, both from the point of view of the proprietors and the politicians, frankly.

  • Thank you. The "feral beast" speech of Mr Blair in 2007 --

  • Yes, just before he left office.

  • That's right. The themes that he raised in that speech, had they been the matter of discussion between you and him over the years?

  • Oh, we'd had endless discussions about the press and -- endless. I mean ... endless. I mean, he was very, very frustrated, I think. You can ask him this. He can speak better for himself than I can, but he felt, I think, sort of mixed, conflicted and very frustrated. I think he felt that the influence of the press on the country, our society, was baleful. I think he believed that the press made people, by and large, feel cynical and negative about politics and politicians, and he thought this was undermining of our political system and our democracy. He didn't know really what to do with it -- about it. It was like sort of wrestling with a crocodile, and if you weren't careful, before you knew where you were, it snapped your head off, so perhaps keep away from it.

    But I think there were times when he just sort of felt completely exasperated. Not because of what they were doing to him, per se, or to the government -- I think he can probably live with that or survive it. I honestly think it was the wider effect and impact that it was having on our country that troubled him, and it troubled him to know what to do about it and whether he should take it on and do something and take action. But for the reasons I've explained in my witness statement, a politician, a prime minister, is going to think very long and hard before he starts taking on the press in this country. Some would say, for the reasons I explain in my witness statement, that it would be politically suicidal and they would have good reason to wonder whether that would be the case.

  • You said in a piece in the Guardian on 11 July of last year, which of course was right in the maelstrom, really, of the Guardian revelations, et cetera:

    "We were cowed."

    You probably recall that piece, Lord Mandelson?

  • I can bring it up in necessary. Was that rhetoric or was that the truth?

  • Touch of hyperbole, perhaps.

  • I have to say, that's not necessarily --

  • No. I was giving you two choices which aren't, in fact, genuine choices because they could be both.

  • I was listening very carefully.

  • Could it be said that the Faustian pact, which would have to be an implied pact, went along the lines that he supports you and you'll do nothing, which is indeed what happened?

  • How do you mean? On what? He will support -- who will support who?

  • News International titles support New Labour, did so consistently from 1997.

  • New Labour then does nothing in the context of press regulation. In other words, leaves him -- and true, everybody else -- alone. Might that be the pact?

  • It might be, but I don't think it was because I don't believe such a pact existed. But I think that certainly if Mr Blair and the Labour government were going to embark on a course of legislative change, then they would have to put it in a manifesto, and then sort of introduce legislation, and for the reasons I've described, they will be taking a political risk in doing that, because I think the attitude or punishment of you by the press would have been fairly unrelenting. I think you'd have quickly started to regret ever embarking on the course. I think that it would take real nerve and real mettle on any Prime Minister's part to start introducing legislation because, as I say, I think the press regarded themselves, to all intents and purposes, as above the law. I don't believe they felt that they should be accountable to anything or anyone or any standard or set of ethics because that would sort of constrain their freedom and that would make them less the pillar of democracy that they try to maintain they are.

  • You cover this very fully at 06905 in your statement, where you use two -- you use one comparison, historical comparison, and one metaphor. You say:

    "It would have been like inviting the press to beat us with steel rods until we gave in and backed down."

    Ten lines from the top of 06905. This is the context of introducing statutory changes to press regulation.

  • I probably wrote that a bit late at night, but I do make the point later on -- I mean, look at their reaction to Mr Blair's speech in 2007, as if he were announcing the sort of killing of the first born across the country. You know, that's just making a speech. You can imagine what it would have been like if he'd started to introduce legislation.

  • There would, in reality -- is this right? -- have been the reception the Conservative government would have attracted to itself had it implemented the full force of the Calcutt reforms. Is that fair?

  • Yes. I think it's why, after Calcutt reported, within 72 hours the Prime Minister's official spokesman, Mr Major's press secretary, let it be known that the Prime Minister would not embark on legislative change or the introduction of legislation.

    Now, in theory, in principle, when Clive Soley's bill, following -- Clive Soley MP's bill was introduced following Calcutt, which received an overwhelming majority in favour in the House of Commons, the minister who was participating in the debate made it all but absolutely clear that the government would not allow this bill to reach the statute book.

    I've heard it said, incidentally, that as time wore on and the bill went through its legislative stages and was very well and thoroughly debated in the House, as John Major's sort of views of the press sort of evolved, he became more and more sympathetic to Mr Soley's bid, and I've heard it said at one point he encouraged Mr Soley to continue with it. But whether, at the end of the day, his government would have allowed it to pass on to the statute book by making time available in the House of Commons I think is open to question. I suspect that they would not. I think John Major felt as conflicted in his mind on this as Mr Blair did, and as Mr Cameron might do.

  • It begins to suggest it's the sort of almost quasi-constitutional piece of legislation which might need a consensus across all parties; is that fair or not?

  • I think that is fair, yes, because nobody would want to single themselves out as the people who are sort of taking on the press.

  • So they give it to a judge to do instead?

  • Yes, in not so many words. But look, I'm not going to anticipate what you -- what emerges from this Inquiry, but I suspect that were you to make a proposal that some form of legislation needed to be introduced, you would be putting the government of the day in an incredibly awkward position.

    Yes, they would have greater cover for what they had to do, it having been recommended as a result of a full-blown judicial Inquiry, and that may be one of the reasons you've been given the job that you have. Certainly, if I were a politician, if I were a minister, I can see myself standing up at the House of Commons much more easily introducing a bill or making a speech in favour of change because the Leveson Inquiry has recommended such than if I were just taking it out of my own mind and deciding on my own judgment that this is something that should be done.

  • Maybe we'll come to this --

  • I understand that, but I must ask the question while it's in my mind: do you think that the process that has been undertaken over the last six, seven, eight, nine months of these very public hearings makes the task easier or do you think it's just as difficult as it ever was?

  • Oh no, no, no, much -- significantly easier. Significantly easier. For two reasons. People are, for the first time, focusing on the issues in a way that they wouldn't normally do, but secondly, as a result of the Inquiry and people watching the television and seeing -- not people like me, but other people, personalities, ordinary members of the public, family members interviewed and describing what they've been put through will be a revelation for, you know, 90 per cent or more of the population. A complete revelation. I don't think that most people -- even I, and I'm pretty experienced at the media -- when I was looking at many so of these witnesses who were sitting here and giving you evidence, my mouth dropped open because you don't realise what has happened and what people have been put through and what sort of journalistic processes, if you can use that term, stories have emerged from which you've seen in the newspapers. You don't realise it. You see the end product, but you don't know what hell people have been put through in order to get to that product. This is new for people. They've never had it before. Calcutt wasn't taking evidence in public. You couldn't watch his Inquiry on the television or streamed out of your laptop. It's completely new.

    I think because people will realise that actually all these issues are both more complicated than they imagine because the forces of play are so great. I mean, the conflicts the interweaving interests and issues are complex, but at another level it's all amazingly simple. You either operate, in this walk of British life, in an ethical way and operate standards and put yourself within the frame of the law or you put yourself above the law, beyond the reach of any set of ethics or standards that might be applied by a sort of half decent regulator on a good day.

    Actually, when it boils down to it, it's amazingly simple, and I think that the simple conclusion people reach is that something has to be done, rather than simply sitting back and allowing all this to continue as it has done for years.

  • Thank you. The second point you make, third paragraph, 606905:

    "The fact is the press has been too powerful for any government, in normal circumstances, to take on. Like the trade unions of old, they want to operate above the law, and like the trades unions, when you try to apply the law, they shout from the rooftops about basic freedoms and fundamental rights."

  • Yes, they want to make themselves untouchable. They don't accept that there are sort of standards or ethics or acceptable behaviour or what's reasonable or fair.

    I mean, I had this when I came -- when I first went to trade and industry. I had to introduce a White Paper on trade union legislation and, you know, all these arguments were paraded in front of me and I think what's different now, as far as the press is concerned, is that the methods they have and the technologies available to them, the means they have at their disposal to operate in an unethical way have transformed the situation. We're not talking about somebody standing at a street corner keeping an eye out on who's coming and going into somebody's house or flat. You're talking about hacking into people's mobile phones and their voicemail. That is what technology and the failure to protect their data adequately has given us as far as the press is concerned, and that's what people have seen.

  • I think your own data were accessed by Southern Investigations. This is the top of 06906.

  • There was a guy called Jonathan Rees, yeah. This was, I gather, commissioned by the Daily Mirror when Piers Morgan was its editor, I'm told.

  • Is that what the police have told you?

  • Without going into the detail of this, it relates to some bank account details and enquiries about another member of your family.

  • Yes, my brother and my mother. But the police were rather unclear -- I mean, it's some time since I saw them and they may have become clearer, I don't know, since they originally saw me, but they were not clear what activity had taken place, but they had seen the invoices for the work that had been commissioned by these people.

  • And then you released a press statement in June 2001 which we see in your statement.

  • Because I contacted the Metropolitan Police.

  • Yes. In the context of the Metropolitan Police, you share with us a letter that Mr Yates wrote to you on 20 August 2007.

  • That's your annex 2, which is going to be under tab 3, Lord Mandelson.

  • I think he was thinking that you were accusing him of leaking to the media, and he, as it were, came back --

  • I was leaking to the media? That would have been rich coming from him. How do you mean?

  • That's what he was suggesting and --

  • I commented to the media. I didn't leak anything to the media. I came out with my view.

  • It's right. He says, in the fifth line that following the CPS announcement, you were widely quoted, apparently on the record, accusing the police of using media leaks during the inquiry. So there's no question of you doing any leaking; it's on the record.

  • And he denies that rather strongly. Why did you draw this letter to our attention in particular?

  • Because I think it says something about the Metropolitan Police, how it's operated and behaved and how senior individuals inside it have chosen to go about their business, and I think it deserved to be aired.

    The idea -- he says later on in this letter -- I can't quite see -- he said how people around the Prime Minister, you know, "admired the exceptional steps we took to minimise the harm to his or his party's reputation", "noted the many comments that were supportive of the police team". He's got to be joking. Praising the professionalism? All those around the Prime Minister, I can tell you -- and I'm sure that Mr Blair, when he comes to you, will be far more circumspect in what he says than I need be. All of those close to the investigation were absolutely convinced that Mr Yates was briefing journalists throughout the investigation, and frankly it was common knowledge in journalistic circles that this was happening. I remember a journalist remarking on this to me himself.

    It was thought that at the time Mr Yates wanted a high profile. He was aiming for, you know, high things in the Metropolitan Police, and of course, inevitably, since then, people have contrasted his absolute sort of determination -- in a sense, rightly and professionally -- to pursue the cash for peerages inquiry in contrast to the manner in which he set about conducting himself in relation to phone hacking, an inquiry, I think, if I remember, which was opened and closed down rather speedily by him initially.

  • Okay. The last point you make at 06906 of your statement, this part of your statement --

  • I mean, sorry, I just think that writing me a letter like that -- I mean, it just showed such chutzpah. Amazing. I also thought it was rather bullying. Actually, if I hadn't been so busy being the European Union's Trade Commissioner, I would have probably thought it might be an idea to see him in court and repeat the statement, but I didn't. I filed his letter instead.

  • Mm. But you've drawn it to our attention now, Lord Mandelson, so it's there.

    You give some general thoughts there at the bottom of 06906 about what happened at News of the World which wasn't to do with any relationship between proprietor and politicians, which is absolutely right. You say, four lines from the bottom:

    "Faced with unprecedented competition from online sources, the News of the World reacted with increasingly desperate, gossipy stories, errors of judgment as to what constituted the public interest and a failure to enforce a regime of high journalistic standards and ethics. Effective regulation would certainly help to counter this, but at root is a question of economics, culture and quality of management, not just ethics."

    So the economics are all the commercial pressures bearing down on newspapers, which have increased over the years; is that right?

  • Yes. The technological changes and the consequent economic pressures, yes, but you mix those economic pressures and the technology available with a poor quality management and a lapse of sort of standards and a sort of absence of a moral compass and the result is as we have seen. That's the point I'm making, and it's, of course, right that you should ask questions about the relationship between the press and politicians and proprietors and prime ministers and whatever. I'm simply making the point that the behaviour of the News of the World -- and I would add this behaviour I don't think is limited to the News of the World. I mean, look in my own case of Southern Investigators and Jonathan Rees and the Mirror. So it's not simply confined to the News of the World, but I'm just making the point that this is a result, as it were, of a sort of breakdown in relations or a poor relationship between the newspaper and its journalists, not between proprietors and politicians, and I think that's a reasonable point.

    I think the News of the World, like every other tabloid newspaper, was facing fierce competition, but it chose to take on that competition in the media market not by improving its quality and product but by falling yet further in the standards of journalism that it chose to operate. It sunk below rather than sort of engaged in some more professional race to the top, if I can put it in that way. But that's not the politicians' fault or ministers' fault or indeed, I would say, not the fault of an effective system of press regulation in this country or a half decent PCC code. I happen to think that regulation would help, but I don't think it's the only or the full answer to this situation.

    Corporate governance, transparency, professionalism, all these things come into it, not just the law and not just the actions of a would-be regulator.

  • Yes. That's why it's not sufficient to say -- would you agree with this? I'll put it as a question. It's not sufficient to say: "Well, the criminal law is there. Let it do its business." It's not sufficient to say that?

  • I don't believe it is, no, and I don't see why the press should be the last sort of bastion or professional category left in this country that doesn't have some form of accountability or enforceable standard in what it does. Even lawyers have that now.

  • I'm not sure about the word "even", Lord Mandelson.

  • As a result of legislation I think introduced by the last Labour government.

  • I think you may also be saying that more effective regulation is maybe necessary but is not sufficient either, because you're looking for cultural and corporate governance changes within the organisation --

  • I don't think we have regulation.

  • So "more" doesn't come into it. But I do believe, equally strongly, that just as in the case of banks, you need good regulation, quite tough and intrusive regulation -- I'm not saying that banks and the newspapers are the same -- but for banks not to go wrong and for them to uphold proper, professional ethical standards and proper risk management, if you like, in the judgments they make, they need better people running them, better corporate governance, more transparency, more accountability, more openness. That's the only way in which you're going to raise standards alongside any system of regulation that you introduce.

  • Can I touch on the section which is headed "Media influence on the formulation of a party's media policies", 06908, Lord Mandelson. You touch on that quite briefly. You draw your attention to a number of contemporaneous materials from you in your annexes, which we've read.

    The basic point you're making is that your government's policy was, in fact, pro-BBC which might, on one level, at least, be said to be contrary to what Mr Murdoch would have wished your policy to have been. Is that a fair summary?

  • He was not in love with the BBC. He thought it was too big, too expensive, too powerful, growing far too quickly, it was too big for its boots and needed to be cut down, as he would be very happy, I'm sure, to tell you, with little encouragement. He's entitled to his view. I happen to think it's wrong. I don't agree with it and nor did the last Labour government. That's why I have absolutely no hesitation in describing the government as basically pro-BBC and proud of it.

  • Okay. I'm not going to dwell on the detail unless there are any particular points you wish to draw to our attention in --

  • No, I just think that when you talk I know hypothetically about Faustian pacts, it's as well to remember -- and there are others more versed in this than I but I think it's worth remembering that the media policies and those policies and decisions that bore on the commercial interests of Mr Murdoch and other press proprietors were unhelpful to him. Not welcomed by him.

    The biggest of all, of course, was the creation of Ofcom in the 2003 Act. He hated Ofcom. He and James Murdoch have railed against it on every opportunity since, and in my view were able to persuade, in opposition, the Conservative Party to share their view. You may want to come on to that.

  • Mm. Can I ask you about your relations with proprietors.

  • You tell us that the third Lord Rothermere, who died, of course, in 1998, was in fact a supporter of New Labour. Is that correct?

  • Yes, he was. Surprisingly, he was.

  • But you were under no misapprehension or had no illusions that his paper would support New Labour. Did you have any discussions with the third Lord Rothermere about Mr Dacre and his editorial stance or not?

  • Could you tell us about those?

  • He regarded Mr Dacre as being in charge, not the proprietor. He thought there were very definite limits to the proprietor's influence or scope of action. Mr Dacre was and is the editor in charge, and in that sense, you know, the Mail and the Mail on Sunday and the MailOnline are forged in his image, not Mr Rothermere's. Not Lord Rothermere's.

    He -- I think he would encourage -- he encouraged us to try and have contact with Mr Dacre, to try and take the more hostile edges off his attitude to us. He encouraged us always to explain, you know, what New Labour was about, the changes, and basically to try and set out to reassure him. But with Mr Dacre I always felt that basically -- I mean, he was very firmly on the right of centre, and therefore unlikely to support the Labour Party, that he thought a sort of Labour government was an interruption to the sort of natural order of things, and that in the case of New Labour, that, you know, we had gained support and office through artifice, by hiding the truth about ourselves and pretending that we were something that we weren't, and he thought that the arch practitioner of this was Mr Blair, which is why he disliked him so intensely and never made any secret of it.

  • And probably brought you within that same envelope?

  • He was not press president of my fan club, no.

  • It does raise a very interesting question.

  • Although I could have relations -- I mean, I remember, over the last ten years or so, meeting Paul Dacre and on two occasions having dinner with him. He liked a good argument, but it was not an argument that you thought the outcome of which was going to be that you had converted him to your cause. It was more to sort of try and take the edges off his anger about us, and it was real anger about New Labour and Mr Blair. Sorry.

  • No, no, no, I was going to ask the question that it does raise an interesting question about the nature of the relationship between a proprietor and an editor --

  • Well, they're different.

  • Oh, I understand. But the relationship is different depending upon the title. The Inquiry has seen a number of families who own, in large or whole part, titles who take a very different approach to the question of the relationship that they have to their editors. I suppose that's just the way things are and nothing can be done to affect it.

  • It is, and that's, in a sense, one of the virtues of our system.

  • It is that there is a plurality. It's not as great or as wide a plurality as I would like to see, obviously, but if you're not going to have newspapers which are owned or controlled by the state -- which, thank God, in this country we don't -- then you're going to have commercial organisations and private individuals owning and controlling your newspapers and that is a facet of our democracy and our way of doing things in this country which I think is good. But that doesn't mean to say that they should be beyond the reach of standards and ethics or of sort of a moral way of doing things in that walk of life. That's all.

  • Sir, would that be a convenient moment for our break?

  • Certainly. We'll just have five minutes.

  • (A short break)

  • Lord Mandelson, moving off the Daily Mail, contacts with News International journalists. You touch on this at 06903. You make it clear that your relations with Sun and News of the World were poor from the 1980s onwards, in part because of their strong antagonism to Labour. Is that something which really continued into the 1990s as far as you were concerned?

  • Yes. I'm -- I mean, the early 1990s -- when I was elected to Parliament in 1992, I took an interest in media policy and broadcasting matters. I was -- I spoke in the Commons. I initiated an adjournment debate on another occasion about ITV, and I was known as a champion of public interest service broadcasting, of the BBC, of ITV, News at Ten included, I remember, on one occasion -- so I had an interest. I even wrote an article for the Daily Mail, I think, in 1993 or 1994, in which I advocated changes in the regulation of the media in this country to allow regional newspaper groups and ITV companies to join forces, and my view was that the best way -- and I said this in the article -- to, as it were, beat Murdoch was not to ban Murdoch but to allow rival alternative media groups to grow, and the way in which the market was regulated should allow or encourage that to happen.

    So I doubt whether they saw me as, you know, the best friend at court they had. Obviously, from the 1980s, when I had had a very robust, rumbustious relationship with journalists -- I've characterised it as hand-to-hand combat -- you know, I didn't make a large number of friends through that and therefore I don't think that those working for Mr Murdoch's titles would have seen me either as a sort of great friend or somebody who was a suitable target for lobbying in their interests.

  • Thank you. You make it clear subsequently in your statement -- this is 06911 -- you say:

    "I think it's true to say that News International executives were more active in soliciting contact with politicians at the highest senior level than other newspapers, and Les Hinton and Rebekah Brooks were especially assiduous."

    In what way was Mr Hinton especially assiduous?

  • Just through his presence. I mean, he was Rebekah Wade's/Brooks' predecessor as the chief executive of News International, so it was his job to look after the company's corporate interests vis-a-vis government, Parliament and the rest, and he was not at all like Rebekah, but that, I think, is because he wasn't really a sort of a journalist/editor player the way Rebekah was. He didn't quite seem to enjoy the fun of the chase in the way that she did, if I can put it that way. But he put himself about, certainly in Labour Party circles and I assume in Conservative and Liberal Democrat circles as well.

  • His job, you said, was to look after the company's corporate interests vis-a-vis, amongst other parties, government. How did he go about doing that?

  • I remember one occasion -- I refer to it in my witness statement -- he was chiefly lobbying the government over the changes in trade union legislation that we were proposing to introduce, and he was concerned about how that might affect the print industry. He obviously didn't want to see the print industry going back to how it was in the early 1980s and 70s and 60s and frankly, nor did anyone else. I certainly didn't.

  • But to your knowledge, did he lobby government in relation to media policy?

  • He may well have done. I would assume that he did but not me.

  • Okay. Elisabeth Murdoch you describe as a social friend of yours.

  • How influential is or was Matthew Freud in terms of being a social and lobbying hub?

  • Can you be a little bit more specific, please, Lord Mandelson?

  • Well, I'm trying now. Matthew -- you know, he socialises, he's a good networker, he gives reasonable parties and he likes having people round to his home for dinner and barbecues and the like, and you would see a huge variety of people from different walks of life, absolutely huge, from the sort of semi-interesting to the genuinely interesting, and they would include people from politics. A predominance of New Labour people in the earlier years, perhaps a rather larger smattering of Conservatives in the later years.

  • Apart from being an organiser of parties, was he influential in lobbying or in pressing certain policies?

  • I don't recall any occasion on which he did that. He was more a connector than a conduit. He connected people rather than sent messages to them. He was a helper and supporter of mine when I was doing the Millennium Dome, and he was a sort of -- I found him to be the sort of person who, you know, when you were in trouble and when things were going wrong, he'd be there to help. I called him once, indeed, my foul-weather friend, I remember.

  • Rebekah Brooks. Can I ask you first of all to address her point that she is or was merely standing up for the views of her readers. Is that a valid point or not?

  • Yes, in the sense that she knew her readers as well as we did, and obviously her readers' views were not only big in number and quantity, but were an important swing vote in the British electorate, and therefore it was important for us, during the 1990s, to win back and retain the support of Sun readers.

    Now, she would say that the editorial stance or the campaigning -- the campaigns she launched or the positions she took were simply to advance the views and interests of her readers. I think that is partly true. I also think it's partly true that they were an expression of her own and her colleagues', including her proprietor's, prejudices. They don't like government. They don't like regulation. They don't like interference in markets. They don't like high taxes. They think a lot of spending is wasteful. They think that welfare is consumed by too many scroungers and so it goes on, that the country is in danger of being swamped by immigrants or asylum seekers.

    I'm not saying that these views are not held by people in the country. I would argue, however, that their views tend to be sharpened or excited by the Sun's journalism, and that the way in which the Sun chooses to portray a government's policies or response to these issues can be very important in how voters see those actions and their government. You know, perception is all in politics but perception becomes reality. If you're constantly told, whether it be by the Sun or the Daily Mail, that the entire Sussex and Kent countryside is now awash with illegal immigrants and asylum seekers who have clung to the bottom of the Eurostar, they'll tend to believe it, even if it's a completely fanciful piece of nonsense.

  • You describe her in the same bracket as Les Hinton as being especially assiduous and then you refer to using her personal influence --

  • Another way of putting it would be to say they were better at it.

  • Better at putting themselves about, better at gaining attention for their views, gaining access to ministers and to politicians. It's not a crime.

  • No, no. But what are the attributes or characteristics of her personal influence from your own perception of it?

  • Persistence. Charm. You know, manipulative skills, although some people might say that's rich coming from me, you know, given that they all think that people like me are just sort of spin doctors and spend our time manipulating people. She -- she's very good at keeping in touch. I mean, obviously famously by text, as we know, but in other ways. I mean, she doesn't hold back.

    I'd say my greatest exposure to her was after I came back to the government in 2008. I mean, that was the sort of long slide down in relations between the government and Mr Brown as Prime Minister and the Sun, and there were occasions on which I got on the telephone. I didn't like sometimes the way he was being treated by the Sun. I objected to it very strongly and told her in no uncertain terms. On other occasions, she would come on to me and complain that, I don't know, Tom Watson or whoever it was, or members of the Culture, Media and Sport Select Committee, you know, were hounding them. Couldn't they be pulled away, pulled off.

    So she was very free with her views.

  • As you say, she was adroit, as editor, in pushing her views with ministers and number 10. That's page 06910 of your statement. That implies she had ready ease of access to the Prime Minister and senior members of Cabinet. Is that so?

  • Yes, I'd say so, or certainly to their, you know, higher, innermost staffs, yes. But I think that -- I mean, if you were a Home Secretary -- I think I say this. If I didn't, I meant to, or I had it in originally and took it out, I can't remember. But if you were a Home Secretary, you'd be pretty well advised to watch your Ps and Qs as far as the Sun and the Daily Mail are concerned. They were two papers who were absolutely neuralgic about the policy areas and issues you were dealing with as Home Secretary, and they wouldn't hold back, certainly in print, in letting their views be known about the shortcomings and failures of whatever home secretary that they were trying to influence/bully at the time.

    But they also, as it were, through the back door would be saying, "Well, it might be nice if you, you know, supported us in what we're doing for injured soldiers or police dependants or whatever." You know, heroes. And the Prime Minister or Home Secretary and other ministers, Defence Secretary would probably be keen to associate themselves with those events and those causes, partly because they believed in them and partly because it was a way of trying to retain some favour from these papers, which were very, very important in the way in which they were acting as ministers.

    I was more shielded from it, to be perfectly frank. I was more on the economic side rather than the sort of Home Office side. I never went to the Home Office. Perhaps it's as well that I didn't, but -- I was relatively shielded from it but I knew it was going on.

  • How important was Mrs Brooks' support for Mr Blair in his third term, 2005 to 2007?

  • Oh, very important, because -- 2005 to 2007?

  • Very important, because he had been weakened politically as a result of the Iraq war. The Murdoch titles obviously had been, as it were, the last loyalists over Iraq. They maintained consistent support for him when other papers of the left and the right did not support Mr Blair's actions or his decisions, and so I would say that the importance of the titles -- the Murdoch titles, before 2005, I think in a sense came to a peak around Iraq, and then, when Mr Blair subsequently came under pressure from his friend next door, the continuing Murdoch support for Mr Blair was very important for him.

  • Okay. Can we talk then about the friend next door? I think he started off being pro-euro; is that right? Mr Brown?

  • Yes, he was pro-euro, pro-Europe, decidedly so in the early 1990s. He didn't really waver in that until we reached government.

  • And what were the reasons for that?

  • I think you'll have to ask him.

  • Did he become an ally of Mr Dacre or vice versa?

  • He was, much to our astonishment, incredibly close to Mr Dacre. I'm not saying it's wrong to be a friend of Mr Dacre; I too sometimes enjoyed Mr Dacre's company. I enjoyed his company more than his treatment of me in his newspapers. But he -- Gordon and Paul Dacre had a great friendship and I remember Paul Dacre describing to me the virtues of Mr Brown in contrast to Mr Blair in fairly graphic terms.

    And that continued, actually. Even when Gordon, as Prime Minister, was, you know, having a really tough time, you know, following the financial crash and what happened to our economy as a result of the financial crash, and the Mail and the Mail on Sunday would be laying into the Labour government left, right and centre, there was always an element, an element, of laying off Mr Brown, and so I think that friendship continued.

  • Did that friendship, in your view, have any influential on Mr Brown's political and policy thinking, particularly in the context of Europe?

  • I think Mr Dacre's influence in their friendship would have accentuated his cooling on Europe and the single currency, but that was by no means the only influence. A far greater influence would have been his economic adviser and minister throughout the period, Ed Balls, who I remember, when he came to work for Gordon in 1992 or 1993, I talked to him and he said, "I'm with you guys all the way, I believe in all you're doing to modernise the Labour Party, but I'm not with you on Europe."

    So Ed would have had quite an influence on Gordon, but it would not have been the only influence and I think it was, in a sense, politically advantageous to Gordon -- it was certainly an opportunity for Gordon to use his views on Europe and the single currency as a way of lifting himself in the sights of those newspapers that were hostile to Europe.

  • Do you think Mr Brown had an eye on the Daily Mail, Mr Dacre's view, in terms of policies for which he was responsible?

  • As Prime Minister, he was responsible, in a sense, for all policies. I'm not sure. I mean, the only thing I vaguely remember was something to do with data protection. There was an issue to do with data protection. I'm sorry, I didn't research this and my memory is not great on it, but there was a piece of legislation --

  • Increasing sentencing powers for breaches of section 55 of the Data Protection Act, which came onto the statute book alongside the parallel increased defence for data protection offences but was never implemented. That's the position.

  • I'm afraid I'm not familiar with the detail of that at all, but I remember that that was an issue which concerned Mr Brown.

  • We've discussed at some length the impact of News International titles in the context of tone and rhetoric, Lord Mandelson. Does the same apply at all to the Daily Mail? We can look at any part of the relevant period. Let's say 1997 to 2010.

  • Well, I mean, the tone of the Daily Mail?

  • Sorry, the tone -- our tone of policy?

  • Yes, your tone and rhetoric.

  • I think the truth is that most of the Daily Mail's views and interests would have been coincidental with the Sun's. Not in every case, but there was a huge overlap, so it would have been difficult to distinguish between the two and our management of both. When I say "our management", I wasn't actually in the government, famously, but anyway, "our", Labour, New Labour.

  • We know Mr Brown as well personally was close to Rupert Murdoch, and you knew that. You cover this in your book and Mr Stelzer again, in your book at page 488.

  • Yes, at the top of the page.

    "The chancellor, Gordon, had gone on to develop a good relationship with Rupert Murdoch, and especially with Murdoch's favourite economic adviser and columnist, Irwin Stelzer."

    So we're looking really --

  • They thought highly of Gordon as chancellor with good reason. But I think that in the main they preferred him as chancellor over Prime Minister. So it's not just a simple matter of Gordon sort of currying favour with these people. These people genuinely admired Gordon's performance as chancellor.

  • You make that clear in your statement, and it's crystal clear in the book --

  • It didn't stop her entertaining perfectly open relations with Gordon Brown. She wouldn't have allowed mere dislike to get in the way of what she needed to do.

  • You presumably detected the shift in support, which was gradual, from Mr Brown to Mr Cameron; is that right?

  • Yes. That was during 2009. Yes, during the course of that year.

  • Had you seen signs of it the previous year in 2008?

  • It was not hard to get Rebekah Wade, or Brooks, as she became, to wax eloquent about the inequities of Gordon Brown and the so-called coup against Tony Blair. She had strong views. They were consistent. I remember on one occasion I'd gone in to have lunch with the Times when I came back as a minister, and at the end of the lunch, a message came. Would I see Rupert Murdoch, as he was in the building? Did I have time before I had to leave? I saw him. Rebekah joined us, and straight away she tipped into this great tirade against Gordon and these others who had brought down Tony and whatever, and Mr Murdoch said, "For goodness sake, Rebekah, can't you let history be history? Let bygones be bygones. Let's not go into that any more."

  • You were involved in, I think, the Corfu leg of Elisabeth Murdoch's 40th birthday party.

  • That was in 2008. I think the boats had moved on from Santorini; is that right? Not that you were this in Santorini.

  • I wasn't on the Santorini leg of that, no. I managed to get through great sort of logistical inconvenience from where I was finishing my holiday in Italy to Corfu, but then I'd been asked a long time in advance whether I would do it and because it was a small birthday party -- everything is relative, of course, small -- for Elisabeth Murdoch's 40th birthday, but I did get there.

  • There's a much-talked about conversation between you and Mr Osborne, and I think Rebekah Brooks was party to that conversation.

  • No, she wasn't. I mean, if fate had acted differently, I'd have ended up at the other end of the table sitting next to Rebekah, because when I arrived late for this meal in the Greek taverna, there were just two places empty at different ends of the table. One was beside Rebekah Brooks. The other was beside George Osborne. In 2008, I chose George Osborne, and the rest, as they say, is history.

  • What passed between you and Mr Osborne is in fact of no interest to this Inquiry, but you presumably learnt at that dinner that Mr Cameron had seen Mr Murdoch at Santorini and you were beginning to work out that the shift of opinion within News International was moving in a certain way; is that right?

  • Yeah, I sort of teased Matthew mercilessly for -- because I think he did put his plane at David Cameron's disposal to fire him through there in order to have a dinner and a tete a tete with Rupert Murdoch. I said, "Don't be so quick to forget your old friends." He smiled.

  • But when the shift in support came finally in September 2009, it clearly wasn't a surprise to you, as your book makes clear at page 487.

  • Yeah. What had irritated me before September 2009 was the way in which the Sun, in my belief, was using the war in Afghanistan -- I mean, all our armed forces had taken on there -- as a way of undermining public confidence in Mr Brown in particular and the government in general. There was a sort of regular drip feed of poisonous reporting and comment, which implied that Mr Brown was not a good leader for this war, that he was indifferent to the alleged lack of protection of our troops, that he was not paying attention to the need for helicopters and the like, and it greatly irritated me, because I believed -- I could see, in daily contact with Mr Brown, that he was focused, that he did care, that he was very concerned about any shortages in body armour or helicopters or whatever, and I thought that this was a -- that this was sort of an unfair weapon to use against him.

    In my view, it was being used in order to sort of ramp up and pave the way for their abandoning of support for Labour, and using him and the Afghan war as a pretext for doing to.

  • I don't think the basic facts are in dispute --

  • 487:

    "She tried to speak to Mr Brown. Couldn't get through."

    You agreed to speak with her --

  • This is on the actual day?

  • And then there was a conversation in which the exact words used, again, are not something we need debate.

  • The reason I said I thought they were a bunch of chumps was because I think for a newspaper like the Sun to insult its readers by supporting one party in the government right up until a particular speech on one day and then turn on a sixpence and suddenly undergo this Damascene conversion and find out that actually they were, after all, Conservative supporters and thought that David Cameron was the bees' knees would be incredible to their readers, and I thought that to turn the Sun into some Tory fanzine just on the flick of a coin between Rebekah Brooks and James Murdoch -- you know, "Shall we do it today or shall we wait another day?" -- was insulting to Sun readers. Not that they were my paramount concern. My paramount concern was the government and where it would leave us. But that's why I called them chumps. I thought they would make fools of themselves and I believe that they did. And actually I think Rupert Murdoch foresaw that, which is why he didn't support what they had done that day and said so.

  • I'm going to come to that. Your feeling was that some sort of deal had been done between the Conservative Party and News International. You said as much on Radio 4, the Today programme, on 11 November 2009, didn't you?

  • I did say that, and I know that, you know, some people have said that I was just, you know, throwing around these claims for specious reasons or without evidence. In fact, I made these comments both on the Today programme and in the House of Lords, when it was clear to me that there was more than a coincidence, if I can put it that way, between the Tory's media policies and the views that were being expressed, for example, by James Murdoch in his MacTaggart lecture.

    In July of 2009, Mr Cameron had pledged to dismantle the hated Ofcom -- I mean hated by News International. He said that it was part of the Tories' cutting back of the quango state and he said that under the Conservatives Ofcom will cease to exist as we know it.

    When I subsequently learned that the team supporting the Conservative Party's media policy development were the same team and the same people who were helping Mr Murdoch to draft his speeches, including the MacTaggart lecture, I didn't have to go very far to put two and two together to realise that this coincidence of policy had slightly greater meaning and that there was, in fact, a sort of organic link between the two, which is why I said what I did.

  • Can I seek to address that in two ways? You were very careful in your evidence, when we were looking at the period 1995 to 2010, that there's no evidence of any implied deal between Mr Murdoch and politicians, and yet you seem quite willing to persuade us that as soon as we're talking about Tory politicians, then Mr Murdoch changes and is prepared to reach almost an express deal with his interlocutor. Isn't that a little bit inconsistent?

  • No, I don't think it is. I'm not saying that Mr Murdoch wouldn't have liked to see express commitments made in the Labour Party's manifesto in 1997 onwards to media policies and regulatory matters which suited him and his commercial interests. I'm not saying he wouldn't have liked to see that. All I am saying is that (a) he didn't get it, (b) I have no knowledge that he expressly asked for it, and that there was certainly no pact or contract put in place between Mr Murdoch and the Labour government that would deliver it.

    Whereas I am saying, in contrast, that it is a little more than a coincidence to see basically the same teams working both for the Conservative Party and James Murdoch, and lo and behold, Mr Cameron comes up with a speech and commitments in July 2009 which were exactly corresponding to the policy objectives of News International, and Mr Murdoch, James Murdoch, came out with the same sort of sentiments when a month later he delivered his MacTaggart lecture.

  • It's not what you say in your book either, Lord Mandelson. At page 489, at the very top of the page -- to give the context -- and I'm going to come back to this -- Mr Brown was of the view that there was a deal.

  • 489. At the top of 489, you having said that:

    "At his urging [that's Mr Brown's urging] I spoke out on that issue publicly on a couple of occasions following the Sun's switch."

    Well, we've covered one of those. You say:

    "In fact, I suspected that the real reason for the change was simpler and, in a way, even more discouraging. The Sun was a mass market paper. It saw its interests as backing a winner. While I was still not convinced or at least not ready to accept that a Tory victory at the next election was inevitable, giving the yawning gap we would have to make up in the polls --"

  • You're not saying there that there was any --

  • No, I'm saying that they're not mutually exclusive. I'm talking -- of course the Murdochs will make continuing calculations about who's up and who's down and who's likely to win and how that would effect them, both in terms of their commercial interests --

  • -- Ofcom, and secondly the position of their best-selling title, the Sun, which always likes to be on the winning side. These aren't mutuality exclusive. They're not compartments in people's minds without any connection between them.

  • Surely, Lord Mandelson, by saying "in fact", which is by contrast, "I suspected that the real reason for the change was simpler", you're saying that you're disagreeing with Mr Brown's conspiracy theory and you're putting forward a much plainer and simpler theory.

  • Isn't that the true position?

  • First of all, I chose my words in finishing this book in 2010 without any prescience that I might be poring over it line by line, word by word with you in the course of justice, but secondly and more seriously, two things were operating here, in my view: one, the Conservatives looked as if they were on the up and with a good chance of winning the election, and the Murdochs wouldn't ignore it.

    Secondly, they would have seen very clearly that their commercial interests would have been suited more by a Conservative victory, given what Mr Cameron was saying in his own public speeches, than they would with a further Labour government, you know.

  • But you don't think the same considerations were equally in play at all material times between 1995 and 2010, Lord Mandelson?

  • No, I don't, because there was nothing on offer to the Murdochs and to News International, in respect of their commercial interests, from Mr Blair or Mr Brown or from the Labour Party. There was from Mr Cameron. He made it very clear in his speech in July 2009, and repeated his views about Ofcom, its chief executive, how much money he was earning. This was a deliberate, institutional and personal attack on an organisation, Ofcom, which News International wanted to see swept off the board.

  • Okay. You say in your book that Mr Brown was stunned by the news that the Sun had shifted allegiance, and that this grew greater, as it were, over the forthcoming weeks. Was it your assessment that Mr Brown was personally embittered by this?

  • I think he was greatly upset by it. I don't think he should have been surprised, but he took these things very personally.

    Look, different politicians will take these things in different ways, and he did feel stung by it. He thought that after all that he had done as Prime Minister, all that he had done to deliver our economy from the greatest post-war crisis that we had seen, during which he felt that in respect of the banks, for example, he had received a lot of encouragement from Rupert Murdoch and Irwin Stelzer and other informed commentators, that it was sort of unfair in a sense for them to turn on him now.

    He also felt wronged over Afghanistan, with good reason, and I was very sympathetic to him, but he shouldn't have taken it so personally. You know, this is politics. You know, this was, I'm afraid, a Labour government which, coming to the end of 12, 13 years in office, you know, was being buffeted by events and changing electoral attitudes, as well, I believe -- but it's for others to judge -- a company that saw a greater commercial interest in the election of a Conservative government than the re-election of a Labour one.

  • You might be able to throw direct light on that belief by a piece of evidence. We heard from Mr Murdoch -- and he said it twice, sitting where you are -- that there was a telephone call between him and Mr Brown when Mr Brown delivered what was tantamount to --

  • But the interesting thing about the phone call --

  • -- is Mr Murdoch himself said that he did not agree with the method and timing of what had been done.

  • Yes, but we don't know yet from your evidence whether you know whether there was such a call, and that was the question.

  • The allegation is -- or rather the evidence was from Mr Murdoch -- that Mr Brown said or uttered the words "declare war on News International" or words to that effect. From your own knowledge, Lord Mandelson, can you assist us as to whether there was such a call?

  • Well, I wasn't on the call. I hadn't been patched into the call.

  • I assume that there was the call because I seem to remember the Prime Minister telling me that Rupert Murdoch was not at all happy with the method and timing of James and Rebekah's action.

  • What did the Prime Minister tell you, Lord Mandelson, about the call? Did he communicate to you that that's what he told Mr Murdoch?

  • No, he didn't say that. He told me what Mr Murdoch had said to him.

  • So there was nothing about what Mr Brown said to Mr Murdoch? Is that your evidence?

  • Yes, it is. I cannot remember being told by Mr Brown what he said, and I have no way of knowing. But I -- but I know what he said to me about Rupert Murdoch's reaction, which was to say basically: "I don't like how it's been done and I think it's a bad day to do it and I wouldn't have done it this way myself, but that's life and we have to get on with it."

  • Mr Murdoch's reaction to what, though, Lord Mandelson?

  • The decision of the Sun to switch support from New Labour to the Conservative Party, which he has said, if I recall correctly, was James and Rebekah's decision. Not the editor's, incidentally.

  • Can you at least assist us with the timing of this call? We know that there was a later call relating to the letter to the mother of the soldier who died in Afghanistan. We're talking about an earlier conversation, if it took place.

  • There would have been a number of -- I mean, Gordon did not hold back in talking to Rupert Murdoch. He did telephone him, he had every right to do so, and when he thought that he was being traduced, as he did, by the Sun, he wanted to give vent to his feelings about that. I mean, who can blame him in the circumstances? Personally, I think it is better to go to editors rather than proprietors, but he did have a good relationship with Rupert and he invoked that friendship.

  • Did you have a meeting with Mr Murdoch at about this time?

  • I don't know when I had a meeting with Mr Murdoch, but I was asked to go to dinner with him. It would have been, I assume, some time in the spring of 2010. I declined the invitation to dinner and I agreed to go and see him at his flat before dinner, but not to stay for dinner.

  • Why did he want you to have dinner with him, or meet him, at least?

  • I think he wanted to -- and he did -- give me his views on the fact, as he saw it, that the government had declared war on his company, as he put it to me.

  • But where did he get the idea from that the government had declared war on his company, Lord Mandelson?

  • Well, possibly by what I had said, if I had said it by then, on the Today programme and in the House of Lords.

  • But I'm -- I don't think there's any great secret that the government and the Prime Minister were unhappy that suddenly, after all those years of support from the Sun, that the Sun was now gunning for us. I don't think it's a great secret that people felt unhappy.

  • You'd never used the words "declare war on News International", had you?

  • Someone else had, though, to your knowledge, Lord Mandelson, hadn't they?

  • I don't know for sure whether they had used those words. All I know is that when I saw Mr Murdoch he was quite agitated --

  • -- as he put it, that the government had declared war on his company.

  • And you didn't have any idea where he got that notion from; is that it?

  • Well, as I said, he might have got that notion from what I had said publicly. I didn't say anything behind his back. I expressed my views quite straightforwardly.

  • But I suppose, apart from issues of credibility, which may or may not in the end be resolved, it's relevant to this extent: it would be all the more reason, I suppose, for News International to want a Conservative government at the election which, of course, was going to take place in May 2010.

  • So it throws light on that, doesn't it?

  • You could say: here we were, history repeating itself, and we were back to the sort of, you know, late 1980s, early 1990s, at war with the Murdoch empire. It's not something that I would have sought or wished for, but there we are. They decided to withdraw their support. There was nothing that we could do about it at that stage. We had to live with it. As it happens, in my view, it meant a darn sight less to us in 2010 than it had been in 1997.

    In my view -- and I think frankly people exaggerated the role of the Sun in 1997 and said so at the time, but nonetheless, I think by 2010 their influence had further receded and my view was, you know, shrug it off. Don't dignify them with tears, crocodile or otherwise. Just get on with life, get on with business, get on with government, fight the election hard, and if they want to go for us, let them do so.

  • I think you have had, to change the subject, some personal dealings with Mr Michel; is that correct?

  • I haven't had personal dealings with him. I was chairman of a think tank policy network that employed him as its director until, I think, about 2003.

  • So for how many years were you involved with him in that capacity?

  • About two. Two and a bit.

  • And after 2003, have you spoken to or met with Mr Michel at all or not?

  • No. He's messaged me, texted me, but I've not had any contact with him, no.

  • The Inquiry is interested to know, from your own knowledge, anything which might assist it as to his character and modus operandi, please, Lord Mandelson. Can you assist us?

  • I think I'm in a difficult position, because he left the think tank, the organisation that I chaired, by mutual consent, and part of our -- part of that decision was that the circumstances would remain confidential.

  • Hm. It would be standard practice for the circumstances of departure, if I can put it in those terms, to remain confidential. But I'm not asking you about that, I think; I'm asking you about, more generally, his character and modus operandi, because you may be able to assist.

  • I think it's quite a leap to judge somebody's modus operandi from being the director of a think tank to being the chief lobbyist of News International.

    I mean, I don't want to mislead you and I'm not going to do so, but I'm in a difficult position. I think all I would say is that he was perhaps better at networking than he was, you know, dealing with policies. He was better over people than he was on policies and perhaps he might have been better suited to public relations than lobbying.

  • That all sounds very fair and moderate, but is that it?

  • I'm not trying to traduce anybody unfairly. I'm not trying to do anything but be fair in connection with the issues that I have to consider, and I have no doubt at all that you understand very fully what I am going to have to confront in the course of the next few weeks. Therefore, putting to one side that there are party political issues -- and I understand that, I'm fully aware of what's going on --

  • I don't have a party political issue.

  • -- I am interested to learn what I can simply to try and decide what I make of the various exchanges there have been.

    So, for example, Mr Michel in a statement that was put into the Inquiry, made it clear that his references to "JH" did not necessarily mean a reference to the Secretary of State for Culture, Olympics, Media and Sport. It might be one of his special advisers. I think that that was in the statement, wasn't it, Mr Jay? Does that surprise you?

  • So, without, in any sense, divulging any confidence -- and although I'm not sure that I could, I'm not going to ask you to -- should I address issues such as the ones that I will have to think about with that answer in mind? Would that be, in your judgment, fair?

  • I think it would be fair for you to approach this with -- and some of the communications that took place with some scepticism.

  • Thank you very much. And to be fair to him, I think Mr James Murdoch said that one had to look at these with a bit of a pinch of salt himself. I think that was his expression. Again, am I right?

  • You also have to ask yourself: what on earth was a temporary civil servant, you know, a special adviser to a Secretary of State, doing, texting like that and exchanging messages and information with a corporate lobbyist?

  • I mean, if they had been in the Department of Business or the Department of Trade and Industry, they would have been taken out and shot. Actually, they would never have got to that stage, because, you know, the rules and discipline in a department that is familiar with dealing with these issues would never have allowed it to get to that point. Perhaps it was the inexperience, perhaps, of the individuals concerned and the Secretary of State and, dare I say it, the department that didn't take greater preventive action to stop this inappropriate contact and information exchange that would, as I say, never have happened in my department.

  • Thank you, Lord Mandelson.

    The issue now of spin, which I've been asked to address with you.

  • You told Mr Rawnsley, page 9 of his book:

    "There was great emphasis on managing the media at the expense of managing policy. There was a sense that if you got the story right, you'd achieved something, and that is not how government is."

    First of all, has he fairly quoted you?

  • I really have absolutely no memory of talking to him or using the quote, but that's not a reason for thinking that I didn't say it. I just don't recall saying it to him. It sounds -- I mean, in a sense it echoes a view I had. What time are we talking about? The early part of the government or -- 1997 onwards?

  • He notes this as a private communication he had with you for the purposes of preparing his book, but he doesn't date that private communication. It's just footnote 43 on page 9.

  • Okay, I don't know. Look, I think that early on in the government there was, perhaps at the centre of government, a too media-centric mode of operation as opposed to a policy-centric mode of operation. Why do I say that? I think it's partly -- I mean, in the sort of New Labour hierarchy of things, you know, media management, the personality of Alastair Campbell himself, the Prime Minister's pre-occupations, media management was pretty high. I happen to think, although you'd be forgiven for wondering otherwise, that it's also rather high in the case of Mr Cameron and the present government.

    But that doesn't mean to say that the sort of strategic direction or thrust or policies of the Labour government from 1997 onwards were sort of subordinated to a sort of media confection or obsession about how things were going to play in the press. I don't think that's true. But in an organisation like Number 10 Downing Street, you know, there are things, people, processes, that acquire a bigger prominence than others, and I think we did go through a period where -- I think -- didn't I write this or say something about it in the book that I republished in 2002, "The Blair Revolution Revisited"? And I'm almost certain that Alastair Campbell made a speech or wrote a very lengthy article saying exactly the same thing, that our media focus extended for too long into the government, not to the detriment of policy but perhaps in the energy that was devoted to, you know, media relations as opposed to policy development. Perhaps things in those early years got a little bit out of kilter.

  • Yes. The piece you wrote --

  • I don't think it's so of Mr Blair's second or third terms, incidentally.

  • Your book, "The Blair Revolution Revisited", which is annex --

  • I fear not available in all good book shops, unlike the other book.

  • You've kindly copied it for us. It's under tab 2, in the preface, page 44.

  • Tab 2. It's material you provided us with, Lord Mandelson. If go to page 44, in Roman numerals, seven lines from the top:

    "My criticism of New Labour ..."

    To be fair, you may be looking, what, at the first term of office, not subsequent terms; is that right?

  • Yes, because this was published in 2002, so it would have been written at the back end of 2001. So we're talking about the first term.

  • Yes.

    "My criticism of New Labour -- and of course, I include myself in this -- is not that it has good media skills but that these have been allowed to fall into disrepute through overuse and misuse when in inexperienced or overzealous hands, and in the process, the government's character has been harmed. That's why in the case of spin, as in other aspects of the government, actions generate reactions that have to be countered by new actions, as Alastair Campbell has openly acknowledged."

    Well, he did that conspicuously in 2002 in a piece which we've found and we've referred to. Then you say, further down:

    "But crude, clumsy handling of the media by overly controlling and politicised press officers causes more problems than no handling at all because it undermines trust."

  • All of those statements are true and I stand by them and I think they were legitimate self-criticisms. But I also think that what was going on was a very interesting and sustained attempt by many in the media to turn essentially what was New Labour's strengths into weaknesses and vulnerabilities of the government, and in a sense what they were trying to do is turn us into something that we weren't. I mean, people who were obsessed by the media, obsessed by so-called spin -- indeed, what did spin become? Spin, in the eyes and words of many in the media, became anything that any minister said or anything that anyone working for a minister said. Facts became spin. Explanations became spin. It just became the most overused word in the English language, as it was applied to the government.

  • But didn't it also involve bullying, control freakery, to use your term, and excessive favouritism of some journalists?

  • What, the people who supported us?

  • There weren't that very many, you know.

  • What about the bullying, Lord Mandelson?

  • It's hardly a crime to sort of talk to people who sort of were going to give you a fair crack of the whip. But bullying? No. I mean, look, you take this thing about control freakery. Yes, we did have a strong centre of government and we did want to provide a strong sense of direction for the government and therefore for the country. That was turned into, called, labelled, control freakery, and all of a sudden, alongside spin, we have everyone talking about this awful control freakery government. It's part and parcel of, you know, propaganda and war by another means. I mean, there comes a time in the life of any government when the honeymoon ends and the press turns and they think: "Right, we're going to give these people a run for their money." And my word, isn't the present government seeing the same, coincidentally or not, with the launch of this Inquiry?

    But now, all of a sudden, everything the present government does is wrong. They can't do anything right. Every sort of small thing is magnified and amplified into some sort of terrible wrongdoing or crisis. I mean, that's the way the press are. I don't know how -- I don't know why, in the first two years of the government, they didn't see all this, but suddenly, you know, having thought that the government walked on water, now they can do absolutely nothing right. So that when a book is published about -- a biography is published about the Prime Minister and it harmlessly points out that when he does relax over a weekend, you know, he enjoys karaoke or watches a DVD, immediately you have interviewers asking people on TV and radio chat shows what they think about the Prime Minister's indolence? You know, isn't this a problem for the government that you have a lazy prime minister who doesn't do any work, just because somebody's written a book somewhere saying that he likes watching DVDs on a Saturday evening! It's ridiculous. It's fad and fashion. Heaven knows, there are perfectly legitimate criticisms to be made of this government without resorting to what is essentially media spin, to use an expression.

  • You say in your statement, almost with a tone of lament:

    "I wish I could have played soft cop to someone else's hard cop."

    The implication being --

  • No, that was the story of my life. I don't know what page that's on.

  • That just about sums up my life. If I had been able to, you know, be, you know, homespun chatty Larry, you know, friend of everyone, a great guy to go out for a pint with and an Indian meal, thoroughly emollient Mandy, as it were, I have no doubt my life in politics would have been easier.

  • However, that wasn't the case.

  • Maybe you were the victim of circumstance. You've talked about the horrible 1980s, but the reality is that in order to survive you had to be this extremely --

  • I was tough. I was tough.

  • In the 1980s, when I started out, we didn't have a lot to play with. We didn't have great material in the Labour Party. Nobody was doing us any favour, including ourselves to ourselves. So I stood up for my party and I always do and I always will and I know that some people therefore feel that I'm too partisan a figure or whatever, but there we are. You can't change your character.

  • Mm. In this brutal world, no doubt, part of your strategy inevitably had to be briefing against others, your enemies, often on the same side of the House; is that right?

  • Briefing against others? What does that mean? What does that mean?

  • Well, attacking the allies of the man next door, as you described him. Is that not it?

  • If -- if I was doing that, which I don't accept I was, I certainly had many lessons to learn from next door.

  • Because of course he was -- his men were arch-exponents of the same tactic.

  • The problem for me was I started off in the 1980s as a rough, tough robust defender of my party, such as it was. It nearly went out of existence in the 1980s. Then I became a lightning conductor for Mr Blair, very handily, and then, of course, I would say I was picked over by Mr Blair's neighbour, who thought that weakening me would have been an advantage for him.

  • So, you know -- but that's politics and it's all water under the bridge, and fortunately I've turned a corner and got a new life.

  • Mm. I have been asked to put to you these two questions.

  • Who's asking you to put --

  • The questions come to me and I just put them.

  • These predictable questions.

  • Predictable or otherwise, they're going to come to you, Lord Mandelson. How much personal responsibility do you accept for the increase in cynicism and negativity of which you complain?

  • I don't accept responsibility for it. No, I don't. I know it's a wonderful defence that the press like to put forward, that if it weren't for these great sort of media manipulators and kings of spin like Alastair Campbell and Peter Mandelson, all would have been different. But please, do me a favour. Do me a favour.

  • Is the thrust of your evidence that insofar as responsibility in full need to be found -- query whether that's necessary but insofar as it does -- we should be looking at journalists rather than politicians?

  • I think that in a sense, up to a point, they sort of deserve each other, because both must have responsibility for a relationship that has broken down. Both must take responsibility also for putting it right. They need a better working relationship. It needs for openness, more transparency, more mutual respect and an understanding of what each other's job is, and if we didn't adequately understand and appreciate what the journalists felt their job was when they were tearing us to bits, then I'm very sorry. We'll reflect on it. But equally, I think the press must also reflect on what's happened in their stable, and I don't think it's pretty.

    I also think, incidentally, that the challenges that we're going to face as digital content takes over from print circulation are nothing -- are going to far exceed anything that we've had to deal with to date. I mean, you're looking at a domestically and internationally sourced Internet which is pouring out undigested news and information and character assassination about people, which doesn't even know how to spell the word "privacy".

  • It knows a darn sight more about piracy than it does about privacy.

  • And that's the challenge that we face in the -- I said at the end of my witness statement -- somebody showed me another statement written by somebody. I can't remember his name --

  • Martin Clarke for MailOnline. I thought that was fascinating and chilling, what he was pointing to, and really creates a much bigger challenge for you and what you're doing in this Inquiry than anything that arises from whoever said what to whom over the 2003 Communications Act.

  • That's one of the four topics I'm going to conclude with, the last section of your witness statement, but there's one other question from a core participant before I come to that, if you will forgive me, Lord Mandelson. I'm required to put these.

    Did either you or your company, Global Counsel, provide advice to News Corporation or News International and/or senior staff there?

  • Like a job? No, we did not.

  • I have talked on occasions to people about what's happened, obviously. It's hard not to talk to people about what has happened and to consider what to do about it, but work professionally? No.

  • So it's informal advice but not part of your professional --

  • It's not advice. I mean, expression of opinion.

  • Yes, okay.

    I have four topics to conclude --

  • I do remember saying, by the way, that what they really ought to do is embark on a sort of truth and reconciliation process. I don't just mean News International. I mean the press generally. Put their hands up to everything, and let it all come out, put it all on the table and say, "Look, this is why we did it, these are the pressures, yes, there were lapses, no, we shouldn't have done this and we shouldn't have gone there, but there we are, we did and it won't happen again." Truth and reconciliation. I remember saying this to -- on occasion, to somebody at News International. I said, "Actually, why are you taking the whole rap for all the rest of the press? It's not as though News of the World is the only newspaper to have used these illicit and covert means", and the reply was that Paul Dacre would take a very dim view indeed if we were to start spraying machine gun bullets in all directions around the media. So if we start broadening it and making into an issue of the press as a whole and not just News International, then we'll be in danger of the roof falling in and the whole house collapsing around our years.

    Well, fine, but it's happened anyway. So it would have been better if they'd got there to begin with before this Inquiry began, in my view.

  • My four concluding topics, Lord Mandelson.

  • Do you have any view about Lord David Hunt's proposals, contractual proposals, for the future of self-regulation, for want of a better word?

  • Well, I have looked at them. He sent them to me, and I think they are a perfectly plausible, respectable system, as outlined, of self-regulation of the press. I make a distinction between that and what we have at the moment, which is no regulation. We don't have a regulator as such in the press, and I think the whole term "self-regulation" is a misnomer. We don't have anyone who is able to sort of intervene, you know, investigate, draw out patterns of behaviour or practice that are unacceptable or adopt views and impose them or enforce anything. I mean, no judgment that the PCC reaches about anything is enforceable. It's ridiculous.

    He quite rightly rejects that system of what I would call non-regulation, but in its place, he proposes a system of contractually based self-regulation. I don't think that would be in effect, in practical terms, any different from what we have at the moment, and instead what we need is not self-regulation but independent regulation, and if, as a result of all that's happened and all that we've seen flow through this Inquiry and the evidence that people have seen, we still do not result in a system of independent regulation, then it won't be a last drink that the press are enjoying at the last-chance saloon; it will be many magnums of champagne.

  • By independent regulation, you mean what?

  • I mean statutorily based regulation by neither the press nor government. It's what we have in other walks of life. It's what we're used to in this country. It's what lawyers have had to take on, as I said earlier.

  • You know, Ofcom undertakes a perfectly reputable responsible role in regulating the media generally in this country. Why not have Ofcom or Ofcom-like doing the same in this context?

  • Could I ask why you think that Lord Hunt's proposals, if accepted, would effectively be the same as the present?

  • Because they would rely on a system there was industry buy-in. He underlines that. I'm not saying that the industry shouldn't have confidence in the system, but "buy-in", ie acceptable to them and on their terms, I don't think is likely to command public confidence.

    Secondly, a system that relies on a regulator suing newspapers, with all the rigmarole, upheaval and expense and bad feeling that that would generate, is not practical and not likely to be an effective mode of operation.

    I think that essentially what Lord Hunt -- and I have great respect for Lord Hunt. I've known him for over 30 years, and I think he's very sincere in what he's proposing, but essentially what he's talking about is mediation under a different name and within a different rubric. And mediation, I'm afraid, has been seen to fail when it's not backed by teeth. It's the same in every other walk of life.

    The idea that some industry -- some compliance officer, appointed by each company and each newspaper or whatever, is going to be able to sort of crack the whip and stand up to the likes of -- I don't know, whoever, James Murdoch or Paul Dacre or whatever. I mean, taking any action open to a compliance officer would be like travelling across an assault course cum minefield to get effective enforcement of the standards they're meant to be operating. It's just not realistic.

    I mean, I think it's sincerely motivated and I can see why he's come up with these ideas. It's to avoid what the press most dislike, and that's the thought that Parliament might take a view. But Parliament has to take a view on everyone else's professions and walks of life and how we do things in this country. It doesn't mean to say that, you know, their role, their freedoms are eviscerated as a result of Parliament setting up or underpinning some sort of independent mechanism.

  • The argument is, of course, that it would impact on freedom of speech.

  • Why? How?

    I mean, all these great investigative campaigns, all these resources and all this investment and journalistic firepower that's thrown by these newspapers at unearthing real wrongdoing, real corruption, real corporate misbehaviour -- where is all this investment in investigative journalism? Where are all these journalists and all these resources being thrown at investigative activity by these newspapers that would be in peril? I don't think there's any likelihood whatsoever of a regulator standing in the way of real, purposeful, focused, investigative journalism, and in any case, as I say, how much do we have it already in the present circumstances? Not nearly enough in my view. If newspapers spent more time looking into corporate misbehaviour or corruption or genuine wrongdoing rather than, you know, journalistic celebrity-driven tittle-tattle and gossip, the entire country would be a lot better off, and actually their circulation would probably go up as well, and it would be more profitable.

  • Thank you. The second topic, Mr Cameron stated last year the relationship between politicians and the press at the higher echelons needed to be reset. How does one do that?

  • I think you have to digest what's been exposed and revealed during the course of this Inquiry. Parliament has to take on the recommendations and proposals and government needs to back Parliament in doing that rather than sitting on a fence or sitting on the sidelines not wanting to take the brunt of media anger.

    Thirdly, I think that government and opposition have to look at the way in which they sort of carry out their discourse, if I can use that term, with the public through the media. I think everyone has to be a mite less paranoid, a mite less cynical, and frankly more generous to each other, and operating standards of sort of truthfulness, openness and genuine news as opposed to -- reporting as opposed to comment, which if, you fall below those standards, the weight of public opinion and, in extremis, a regulator will come down on you. But I think public opinion is a much more important and much bigger force for change in this than any statutory based regulator might be, and I have no doubt that what you say and what comes out of this Inquiry will have a huge impact on the public's views and their understanding of what's going on, whether it be on the media side or the political side.

    I don't think you should underestimate the influence that you will have in shaping public opinion and its receptiveness to the proposals and recommendations that come from this Inquiry. And any legislation, by the way, needs to be conducted as far as possible and go through its legislative stages on a bipartisan basis. I think that's really important. The moment one party seeks to be taking advantage over the other in the stance they take is a road -- is a race to the bottom, and it should be avoided by them.

  • The last big point is the concluding section of your evidence, 06912.

  • You make a general point about the power of the media, which I think has safely been covered now, but your second observation, new technology, of course the Internet and all the other manifestations of it, do you have any practical solutions which you would wish this Inquiry to consider?

  • Well, I would like to think about it a bit more, although I'm sure that there are others who are more knowledgeable than I am about these matters. They are very big issues. I'm not absolutely sure what you do when digital content, the vast quantity of it, the different sources of it, the different means by which it arrives at an individual's door, as it were, the role of Internet service providers, which I had to deal with when I introduced the digital economy legislation and ran up against huge resistance from ISPs in taking any responsibility or assuming any role in dealing with issues to do with piracy -- they will be even more loathe to become involved, in my view, and assume some sort of responsibility in respect of privacy.

    And for good and understandable reasons. I mean, privacy is, to an extent, a nebulous concept. It's a concept which means different things to different people, and they will feel it's not for us to provide the judge and jury about what people should be able to receive from the web. So it is very difficult -- indeed, if bloggers, for example, don't now accept the purview or reach of the PCC, in the way that sort of online versions of printed material and providers could do, heaven knows what we're going to do when the whole social media universe continues to explode, offering messages, information, judgments, descriptions of character which might be troublesome at best and downright libellous at worst. What do you do? How do you manage this? It's like managing a tsunami.

  • These are the questions that have been bouncing around in my mind for some months, and I have described it a little bit as the elephant in the room. I would be grateful for your assistance on the topic, Lord Mandelson, because you approach these issues with a different experience, with an experience of government, with an experience of having to consider the digital economy, and if you do have, on reflection, some thoughts that you feel might be of value, I'd be very interested to see them.

  • I've wondered -- and one of the things that I am considering is whether those who are putting stories, facts, information, comment out in the course of a trade or business might be treated differently from those who are simply communicating on Facebook or Twitter.

  • I'm not saying yea or nay at this stage, I'm merely contemplating the possibilities, but I am very conscious that there is an enormous range out there. On the one hand, what the BBC puts online is governed by Ofcom, what the MailOnline puts online is governed by the PCC and what a blogger puts online is governed by nobody.

  • That just seems, at least, difficult, not necessarily soluble, but it needs to be thought about. So if I can trespass on your time --

  • No, you can, and I will think about it or find some people to talk to about it and think what is best or what might be helpful, and I want to help you. I don't have any silver bullets or magic solutions, I have to say. I'm not one of those, I'm afraid, who thinks that, you know, the Internet can or should be regulated.

  • To be honest, my sort of more practical and liberal sympathies lie on the side of freedom of the Internet. My difficulty, though, with it, is on issues, as I had to deal with as a Secretary of State to do with piracy, and now, even more challengingly, privacy. It's very difficult. We're not going to deal with the Internet by sort of forcing or training water to flow uphill.

  • No, I understand that entirely, and indeed in some places the criminal law might operate. So if somebody breaches the criminal law by naming the victim of a sexual assault on Twitter, then the criminal law can deal with it and that will be the way forward, and it may be that that's all we can do. But --

  • But should we have national rules and laws or should they be European, at least, if not global? But let's talk realistically at any rate. This is an area, I would have thought, where Europe needs to come to the fore rather than try to carve up the operation of the Internet at least on our continent into sort of artificial national compartments.

  • I understand entirely, and I see this as an extremely difficult area --

  • -- if not insoluble. I'm not saying it is, I'm not saying it isn't; I simply don't know. We've focused a lot on what's happened, as it were, in the last years because that at least provides us with a base from which to proceed to consider what might happen, but if you say, as in fact you do imply in your statement, that there is no purpose in my simply solving yesterday's battles without considering tomorrow's, I think you'd be absolutely right.

  • I mean, I have felt a little bit, in preparing my statement -- my appearance before you, that I have been operating in a rather, I don't know, not anachronistic but I felt that I was taking a rather more backward-looking historical perspective, that the world is fast-changing and moving on and that we have to be prepared now for what's coming our way, the hurtling train.

    On the other hand, that's not a reason for doing nothing. It's not a reason for sort of plunging ourselves into a sort of analysis paralysis. Perhaps at the end of the day we have to address what we know and deal with what we can.

  • Yes. I agree with that. But we ought to think about all that we can, it seems to me, and if we can help, then we should do. If we can't, then it will be for another problem, another day.

  • Yes. Talking of which ...

  • I notice the time, but in the light of the way Lord Mandelson gave evidence in respect of the cash for honours saga, I do apply to ask him one or two questions.

  • Could you tell me what tab? Oh, tab 3.

  • Lord Mandelson, you had in July 2007, and you still have today, no evidence whatsoever, do you, that Mr Yates or the Metropolitan Police leaked information about the cash for honours investigation?

  • You have no evidence?

  • And no basis for that belief, do you?

  • No, you're quite wrong. I do have a basis for belief.

  • Because it's a surprising belief for you to continue to hold when, firstly, there was an independent investigation into that very question that concluded --

  • Who undertook that investigation?

  • Yes. And it may be of interest, may it not, that some of the most sensitive material from that investigation was never leaked?

  • Including the fact that a serving Prime Minister was interviewed four times without that ever being leaked. Is that not surprising, if your belief was well-founded?

  • I'm afraid I do not find your line of questioning very plausible.

  • The plausibility of it or otherwise is not the question I ask you. I ask you whether or not it's the case that there is no foundation for your belief.

  • If I thought there was no foundation, I wouldn't have made the comments I did.

  • And I'm suggesting you should not have made those comments --

  • You're entitled to your view. You do your job, you're representing the Metropolitan Police, you're a lawyer, you're employed by them and of course you would say this.

  • What's the answer to the question, though? Was there any evidence to support the belief you say you hold?

  • Is there any evidence behind that belief?

  • Yes, what journalists said themselves. They were as surprised as anyone to suddenly find themselves on the phone to Assistant Commissioner Yates.

  • Did it not occur to you that the --

  • Why should he be talking to these journalists during the course of an Inquiry? Why should he?

  • On the contrary, there's nothing to suggest that he was.

  • Isn't the much more likely explanation for where such information as did became public the fact that material had to be released to those who were being interviewed as part of the pre-investigation disclosure? Is that not much more likely?

  • No, it's not much more likely, given that journalists found themselves talking on the phone to Mr Yates himself.

  • And are you willing to name who these people are?

  • Thank you very much.

  • But it remains solid belief. But I fully appreciate and respect the job that you have to do.

  • Right. Lord Mandelson, thank you very much indeed. We've trespassed on your time a great deal. I'm very grateful to you.

  • (The hearing adjourned until 10 o'clock the following day)