Hunt ex-aide faces more questions

24 May 2012
Last updated at 23:06 ET












Mr Smith resigned after saying his emails to and from News Corp lobbyist Fred Michel went too far

Culture Secretary Jeremy Hunt's former special adviser Adam Smith will face a second day of questioning later at the Leveson Inquiry into media ethics.

During his evidence on Thursday it emerged Mr Hunt had sent a memo to the PM supporting News Corp's bid for BSkyB weeks before taking charge of the deal.

Mr Smith, who resigned last month after admitting his contact with News Corp had got too close, also got the memo.

The culture department's most senior civil servant will also be questioned.

Permanent Secretary Jonathan Stephens is expected to be asked whether he gave permission for Mr Smith to be the point of contact with News Corp during the takeover bid process.

He refused to confirm or deny this during an appearance before the Commons Public Accounts Committee, and later said in a letter he was simply "aware and content" with the arrangement.

Mr Stephens will also be asked whether he was aware that so much information was flowing from Mr Hunt's office to News Corp's lobbyist Fred Michel.

Labour is demanding to know why PM David Cameron handed the adjudication over Rupert Murdoch's BSkyB bid to Mr Hunt, whom he knew to favour the takeover.

It argues that Mr Hunt was not an "impartial arbiter" on the deal, and has renewed calls for him to resign.

But Downing Street has said the memo, written when Business Secretary Vince Cable was in charge of overseeing the bid, was "entirely consistent" with Mr Hunt's public view.

Mr Hunt's memo, written on 19 November 2010, stated that News Corp executive James Murdoch was "furious" about Mr Cable's handling of the matter.

He told Mr Cameron it would be "totally wrong to cave in" to opponents of the deal and said the UK had the chance to "lead the way" if the BSkyB bid went ahead.

The memo also said the UK's media sector "would suffer for years" if the deal was blocked.

It was sent to Mr Smith before it went to Mr Cameron.

Mr Hunt has refused to quit and is due to give his own account of events to Lord Justice Leveson's inquiry at the Royal Courts of Justice in London on 31 May.

News Corp unveiled its bid for BSkyB in June 2010 but abandoned it in July 2011 amid outrage over the phone-hacking scandal at its News of the World newspaper.

Fuel costs spur Japan price rise

25 May 2012
Last updated at 01:08 ET












Japanese consumers have seen energy costs rise after last year's quake and tsunami

Japan's consumer prices rose in April, spurred by rising fuel costs, but growth remained below the central bank's target, official data has shown.

Prices rose by 0.2% from a year earlier, as fuel and energy costs jumped 4.7%.

Energy costs in Japan have risen after it shut all of its nuclear reactors in wake of last year's quake and tsunami.

However, prices excluding those of fuel and food fell, indicating that deflation remains a problem.

"The hope of Bank of Japan that deflation is already subsiding and a positive demand cycle is evolving seems to premature," Martin Schulz of Fujitsu Research Institute told the BBC.

Unsustainable demand

Continue reading the main story

“Start Quote

A lot of the increase in prices is also being driven by government programmes, reconstruction and consumer incentives, this kind of demand is not sustainable”

End Quote
Martin Schulz
Fujitsu Research Institute

Unlike many other countries in the region, Japan has been hurt by deflation, or falling prices, for best part of the past decade.

While that may be good news for shoppers, falling prices hurt the economy as companies and consumers tend to put off purchases, in hope that prices will continue to fall and they may get a better deal down the road.

Analysts have said that a steady rise in consumer prices is key to Japan's economic recovery and the Bank of Japan has set a target of 1% price growth.

Though prices have been rising for the past three months, analysts said that the growth was due to factors that were actually hurting the economy or were not sustainable in the long run.

"Most of the price increases are driven by higher energy costs. These are actually going overseas, as fuel is being imported, so this is an overall negative for the economy," said Mr Schulz.

"A lot of the increase in prices is also being driven by government programmes, reconstruction and consumer incentives, this kind of demand is not sustainable."

Bankia shares suspended in Madrid

25 May 2012
Last updated at 03:37 ET












The government holds a 45% stake in Bankia

Trading in shares in the Spanish lender Bankia have been suspended in Madrid.

The market regulator CNMV said it was "due to circumstances that may affect the normal share trading".

Bankia is reported to be due to ask the government for a bailout of more than 15bn euros ($19bn; £12bn) after a board meeting later on Friday.

Bankia, which is Spain's fourth-largest bank, was part-nationalised two weeks ago because of its problems with bad property debt.

Any extra government money would be on top of the 4.5bn euros in state loans that the government converted into shares in the group in the part-nationalisation process.

Shares in Bankia's parent company Banco Financiero y de Ahorros (BFA) have also been suspended.

Bankia was created in 2010 from the merger of seven struggling regional savings banks.

It holds 32bn euros in distressed property assets.

Some holiday money rates 'unfair'

24 May 2012
Last updated at 19:00 ET












Currency charges are one of a number of costs facing holidaymakers

Some currency exchange providers are being "unfair" by offering different rates at different branches across the UK, a consumer group says.

A relatively small test survey by Which? found differences of up to 30 euros (£24) being offered by the same provider in different cities in exchange for £500.

However, it also found some retailers offered identical rates nationwide.

The eurozone crisis has seen the pound strengthen against the euro recently.

The latest prices saw the exchange rate for travellers reaching about one euro and 21 cents for a pound.

However, Which? said that not everyone across the country is getting the same rate.

"While we understand that local competition may play a part in the rates set, it is unfair that people are missing out on the best currency exchange rates just because of where they live," said Richard Lloyd, Which? executive director.

"Holidays do not come cheap and these anomalies do not help hard-pressed consumers. Currency providers need to make sure their rates are consistent to ensure a fair deal for everyone."

Head of Vatican Bank is sacked

24 May 2012
Last updated at 17:25 ET












Mr Tedeschi is under investigation for suspected money-laundering

The director of the Vatican Bank, Ettore Gotti Tedeschi, has been removed from his post for dereliction of duty, the Vatican says.

The bank's board of directors unanimously passed a no-confidence vote in Mr Gotti Tedeschi, a statement said.

It said he had failed "to carry out duties of primary importance", but it did not elaborate.

In 2010 Italian police launched an investigation against Mr Gotti Tedeschi as part of a money-laundering inquiry.

Members of the board believed Mr Gotti Tedeschi's dismissal was needed to "maintain the vitality of the bank", the Vatican statement said.

The board will now look for a new director to restore relations with the international financial community, "based on mutual respect for accepted international banking standards".

Mr Gotti Tedeschi declined to comment on his dismissal. He told journalists: "I'd rather say nothing, otherwise I'd say ugly things."

Transparency

But in remarks to the Reuters news agency, he said: "I have paid for my transparency."

The moves comes as Moneyval, the Council of Europe body tasked with counteracting money laundering, prepares to rule at the beginning of July on whether the Vatican meets international standards on financial transactions.

Memos leaked earlier this year suggest there are serious differences among Vatican officials over how far to go in ensuring financial transparency, according to media reports.

The Vatican Bank, known officially as the Institute for Religious Works (IOR), was created during World War II to administer accounts held by religious orders, cardinals, bishops and priests.

It lost £250m in a scandal involving the collapse of one of Italy's biggest private banks - the Banco Ambrosiano - in 1982, with which it had close ties.

The Vatican Bank has been headed by Mr Gotti Tedeschi, 62, a trained economist, since 2009.

When Mr Gotti Tedeschi was placed under investigation in 2010, the Vatican said it was "perplexed and astonished", and expressed full confidence in Mr Tedeschi.

It said the matter was the result of a misunderstanding, and that none of its employees were involved in any wrongdoing.

As part of the inquiry, Italian tax police seized 23m euros ($29m, £18.4m) that the Vatican Bank had tried to transfer from a small Italian bank called Credito Artigiano.

A month later, the Vatican set up a new financial authority to combat money laundering and make its financial operations more transparent, ahead of an EU deadline.

The move was aimed at winning inclusion in the European Commission's "white list" of states which comply with international standards against tax fraud and money-laundering.

Huawei in competition complaint

24 May 2012
Last updated at 21:41 ET












Huawei has been looking to tap into the fast-growing tablet PC and smartphone market

China's Huawei has filed a competition complaint against US firm InterDigital with European Union regulators.

Huawei, the world's second largest telecoms equipment maker, accuses InterDigital of "abusing" its position and demanding "exploitative" fees to licence its mobile patents.

It added that such moves were against the EU rules which require holders to licence their patents fairly.

Huawei has been looking to tap into the smartphone and tablet PC market.

InterDigital, which is based in Philadelphia, owns more than 19,500 mobile communications patents and patent applications.

Huawei said in a statement: "InterDigital is seeking to leverage its declared 3G standard essential patents to force Huawei to conclude a discriminatory, unfair and exploitative license.

"InterDigital's demand manifestly breaches the policies of the European Telecommunications Standards Institute calling for fair, reasonable, and non-discriminatory licensing practices by technology patent holders."

US factory activity slows in May

24 May 2012
Last updated at 10:05 ET












US factories are still expanding, according to the latest survey from Markit

US manufacturing growth slowed in May as exports weakened, according to a report from research firm Markit.

Its purchasing managers index' (PMI) fell to a three-month low of 53.9, down from 56.0 in April. A reading above 50 indicates expansion.

There were also signs of weakness in the latest durable goods orders.

Orders for long-lasting US factory goods edged 0.2% higher in April, but an indicator of business investment plans fell sharply.

Core capital goods orders, which economists use as a gauge for business investment plans, fell 1.9% last month, figures from the US Commerce Department showed.

"Durable goods orders also give a message of business uncertainty and lack of confidence," said Pierre Ellis, senior economist at Decision Economics in New York.

"It looks more and more like businesses are hesitating to invest in the face of worsening uncertainties in the US and global economy," he said.

Markit said that slowing export sales, particularly to Europe, contributed to the weaker showing .

"US manufacturing seems to be repeating the trend seen in the previous two years, whereby a strong start to the year loses momentum as summer approaches," said Markit chief economist Chris Williamson.

"This year, the cause seems to lie largely with weak export sales, which likely reflects the deteriorating economic situation in Europe as well as slower growth in China," he said.

However, the US performance is much stronger than Europe, where PMI data released earlier indicated that activity at European businesses hit a near three-year low in May.

Vatican sacks bank chief Tedeschi

24 May 2012
Last updated at 15:16 ET












Mr Tedeschi is under investigation for suspected money-laundering

The director of the Vatican Bank, Ettore Gotti Tedeschi, has been removed from his post for dereliction of duty, the Vatican says.

The bank's board of directors unanimously passed a no-confidence vote in Mr Tedeschi, a statement said.

It said he had failed "to carry out duties of primary importance", but it did not elaborate.

In 2010 Italian police launched an investigation against Mr Tedeschi as part of a money-laundering inquiry.

Members of the board believed Mr Tedeschi's dismissal was needed to "maintain the vitality of the bank", the Vatican statement said.

The board will now look for a new director to restore relations with the international financial community, "based on mutual respect for accepted international banking standards".

Mr Tedeschi declined to comment on his dismissal. He told journalists: "I'd rather say nothing, otherwise I'd say ugly things."

The Vatican Bank, known officially as the Institute for Religious Works (IOR), was created during World War II to administer accounts held by religious orders, cardinals, bishops and priests.

It lost £250m in a scandal involving the collapse of one of Italy's biggest private banks - the Banco Ambrosiano - in 1982, with which it had close ties.

'Misunderstanding'

The Vatican Bank has been headed by Mr Tedeschi, 62, a trained economist, since 2009.

When Mr Tedeschi was placed under investigation in 2010, the Vatican said it was "perplexed and astonished", and expressed full confidence in Mr Tedeschi.

It said the matter was the result of a misunderstanding, and that none of its employees were involved in any wrongdoing.

As part of the inquiry, Italian tax police seized 23m euros ($29m, £18.4m) that the Vatican Bank had tried to transfer from a small Italian bank called Credito Artigianato.

A month later, the Vatican set up a new financial authority to combat money laundering and make its financial operations more transparent, ahead of an EU deadline.

Hunt memo reveals BSkyB support

24 May 2012
Last updated at 15:16 ET

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Adam Smith on Jeremy Hunt: "He didn't really have that much of a relationship with either of the Murdochs or the chief executive of News International"

Culture Secretary Jeremy Hunt sent a memo to David Cameron voicing support for News Corp's bid for BSkyB before he was put in charge of dealing with it, the Leveson Inquiry has heard.

Mr Hunt said the UK's media sector "would suffer for years" if the deal was blocked, according to the memo.

Number 10 said the memo was "entirely consistent" with Mr Hunt's public view.

But Labour say Mr Hunt was not an "impartial arbiter" on the deal, and that he should resign.

In the memo - written on 19 November 2010, when Business Secretary Vince Cable was in charge over overseeing the BSkyB bid - Mr Hunt said News Corp executive James Murdoch was "furious" about Mr Cable's handling of the matter.

He told the Prime Minister it would be "totally wrong to cave in" to opponents of the deal and said the UK had the chance to "lead the way" if the BSkyB bid went ahead.

Labour deputy leader Harriet Harman said: "It is clear from today's evidence that David Cameron gave responsibility to Jeremy Hunt for deciding on the BSkyB bid when he knew only too well that the Culture Secretary was actively supporting the bid.

"The Prime Minister should never have given him the job."

BBC political editor Nick Robinson said the memo was "ammunition for the culture secretary's critics who say his mind was made up to give the Murdochs what they wanted."

Mr Cable lost responsibility for overseeing the BSkyB bid when his private anti-Murdoch views became public, our correspondent adds.

"Yet now we learn that the man who replaced him, Culture Secretary Jeremy Hunt, had expressed equally strident - albeit pro rather than anti Murdoch - views in private in a draft memo to the prime minister, before he took over responsibility for the bid."

The memo was sent to Mr Hunt's ex-special adviser Adam Smith on 19 November 2010 before it went to Mr Cameron.

Mr Smith resigned in April after saying his emails to and from News Corp lobbyist Fred Michel over the firm's bid to take over BSkyB went too far.

He said the "content and extent" of his dealings with Mr Michel had not been authorised by the culture secretary.

Downing Street confirmed the prime minister received the memo. But a spokesman said that Mr Hunt had previously said there were no grounds for blocking the deal over competition requirements.

Drafted memo

Mr Hunt has resisted Labour calls to quit over claims his relationship with Rupert Murdoch's company was too close, and is due to give his own account of events to the Leveson inquiry into media ethics.

Mr Hunt's memo - read out at Thursday's inquiry session - expressed concerns that referring the bid to Ofcom could leave the government "on the wrong side of media policy".

The inquiry's lawyer Robert Jay read from the memo, saying: "The UK has the chance to lead the way [I paraphrase, says Mr Jay] but if we block it our media sector will suffer for years.

"In the end I am sure sensible controls can be put into any merger to ensure there is plurality but I think it would be totally wrong to cave into the Mark Thompson/Channel 4/Guardian line that this represents a substantial change of control given that we all know Sky is controlled by News Corp now anyway."

Mr Jay suggested to Mr Smith that Mr Hunt had drafted the memo and sent it to Mr Smith to check for mistakes.

In his evidence to the inquiry the ex-special adviser said Mr Hunt was not close to News Corporation, and Mr Hunt has denied News Corp had any influence with his office.

Text messages

Earlier, Mr Michel said his dealings with Mr Smith were not "inappropriate".

But he denied government claims he had exaggerated the closeness of his relationship with Mr Smith.

"I think my emails, as they were internal emails, were an accurate account of the conversations I have had," he said.

In his witness statement published by the inquiry, Mr Michel says he did not have "any direct conversation" with Mr Hunt relating to the BSkyB bid beyond his attendance at two formal meetings.

But the statement confirms the men had exchanged numerous text messages, some of which Mr Michel said were "jokey".

Mr Michel told the inquiry references to conversations with "JH" in his emails with Mr Smith were "shorthand" for the culture department.

Later, he said he believed Mr Smith was representing the culture secretary in the same way he was representing News Corp.

Mr Michel told the inquiry: "I was never of the opinion that it was inappropriate to at least try to put the arguments to or make representations to these officers."

'Buying time'

News Corp unveiled its bid for BSkyB in June 2010 but abandoned it in July 2011 amid outrage over the phone-hacking scandal at its News of the World newspaper.

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Fred Michel said he did not think it wrong to "put arguments or make representations" to Mr Hunt's team

At the time of the correspondence between Mr Smith and Mr Michel, the culture secretary had been given a "quasi-judicial" role to decide whether the proposed BSkyB purchase should be referred to the Competition Commission for final approval.

The inquiry heard Mr Michel made 191 telephone calls and sent 158 emails and 799 texts to Mr Hunt's team, 90% of which were were exchanges with Mr Smith.

Mr Jay said Mr Smith sent 257 text messages to Mr Michel between 28 November 2010 and 11 July 2011.

Mr Michel's witness statement revealed in May 2010 both men "bumped into each other" at a London hospital where their wives were about to give birth and "shared a night of anxiety".

But after Mr Hunt was handed responsibility for the BSkyB bid in December 2010, the culture secretary said in a text message exchange that all business contact "now needs to be through official channels until decision made...".

On 3 March 3 2011, Mr Hunt told MPs he was minded to accept the BSkyB takeover after News Corp offered to spin off Sky News. In response to the lobbyist's text that he was "great at the Commons", Mr Hunt replied: "Merci. Large drink tonight!"

Mr Michel contacted Mr Hunt by text message later in March 2011 after his appearance on Andrew Marr's BBC programme to say he had been "very good". Mr Hunt replied: "Merci hopefully when consultation over we can have a coffee like the old days!"

When News Corp withdrew the BSkyB bid, Mr Hunt's response to a text from Mr Michel said "It has been the most challenging time for all of us... would be great to catch up when the dust has settled."

Mr Jay referred to an email in which Mr Michel called on the secretary of state, via Mr Smith, to "show some backbone" and dismiss Ofcom's calls for concessions.

Mr Michel told the inquiry: "It's my English - I might use words in a more melodramatic way than I intended."

Under earlier questioning, Mr Michel agreed Mr Hunt was "keeping an open mind" about the bid but when asked whether he had been supportive of it, he replied: "I can't say."

Supermarkets 'misled on pricing'

24 May 2012
Last updated at 07:08 ET












Supermarkets have admitted to occasional mistakes over pricing

Customers have been misled by supermarkets over discounts and multi-buy offers, according to consumer group Which?.

It analysed more than 700,000 prices and suggested that in some cases "discounts" ran for much longer than the original price.

However, the government has said that it has no plans to alter its "robust" rules on pricing.

It is a criminal offence for traders to give misleading price indications.

"If consumers are misled, traders may face enforcement action from trading standards for breach of the legislation," said a spokesman for the Department for Business.

"The government believes that the existing regulatory framework is robust and has no plans to change it."

The Which? research cited cases including:

• Asda doubling the price of a single Muller yoghurt from 30p to 61p as it offered 10 for £4, then put it back to 30p


• Tesco selling Beck's beer for 190 days on discount and 70 days at the higher price


• Ocado sold strawberries stating that the price "was £4.38, now £2.19/£2.29/£2.25" across a 112-day period, although they were only at the highest price for 13 days beforehand

Rules state that the non-discount price should be the amount a product was sold at for 28 consecutive days immediately prior to it going on offer, while a product should not ordinarily be on offer for longer than it was at the higher price.

But Which? said the rules included a "get-out clause" allowing for individual circumstances.

"At a time when household budgets are squeezed and food bills are going up, many people are on the look out for a bargain," said Which? executive director Richard Lloyd.

"It is unacceptable that shoppers are confused into thinking they are getting a good deal when that might not be the case."

The supermarkets accepted that made some mistakes among a huge volume of pricing.

"By and large our systems and procedures ensure those instances are kept to an absolute minimum, but when we do get it wrong we put our hands up to say sorry and put things right as quickly as possible," said a spokesman for Asda.

Tesco said: "We are committed to helping our customers keep their costs down. We change millions of price labels in store and online each week and we sometimes make mistakes, for which we apologise.

"We make every effort to ensure we act in accordance with government guidelines on price promotions."

Ocado said: "Ocado has thousands of special offers and is committed to providing clear and accurate information about our offers. Regrettably on this one isolated occasion this specific promotion did not explain our offer in the required detail.

"Measures have now been put in place to ensure this does not happen again and we continue to heavily monitor our processes accordingly."