We need a regulatory system that is truly voluntary

 - David Elstein, chairman of the Broadcasting Policy Group and openDemocracy

The annual Oxford Media Convention on January 23rd – organised by IPPR and supported by The Guardian – featured yet more discussion on the Leveson Report’s views on how the Press Complaints Council should be replaced later this year. A duel between the two Davids – Lord Hunt, who chairs the PCC, and Lord Puttnam, who has fought the plurality battle for more than a decade in the Lords – dominated the first plenary session. Hunt continues to pursue his vision of a voluntary new regulator for the press, with non-statutory external verification of its compliance with the principles in the Leveson Report. Puttnam continues to voice scepticism as to that vision being realised, preferring a new statute setting out how the press must be regulated.

Two other recent interventions in the Leveson debate have come from IPPR itself – in the shape of a pamphlet written by Nigel Warner – and from Hacked Off, which added to its battle honours in this whole process by simply publishing a draft statute (as well as unauthorised drafts of statutes it had obtained from the DCMS). Sadly, these new efforts have only added to the concern that the left has – consciously or unconsciously – tilted into an unattractive illiberalism.

The draft bill from Hacked Off is deceptive from the start. It describes itself as an act for voluntary media regulation, but the penalties prescribed for publications that fail to join the licensing system are so draconian as to make the “voluntary” tag grossly misleading. Even failed libel litigants can secure their costs against such publications, and exemplary damages are readily available for successful litigants. Given the long-standing opposition to regulatory regimes from Private Eye, it would seem that Hacked Off would succeed where Goldsmith and Maxwell failed – in forcing the closure of one of our bravest critics of the establishment.

Lord (Anthony) Lester, in the House of Lords debate on Leveson, castigated this approach and is probably right in suggesting it would not survive judicial challenge, as an infringement of the Human Rights Act. The Hacked Off bill also puzzlingly tries to roll broadcasters into this regime, despite the fact that all radio and television channels based in the UK require an Ofcom licence and are already subject to a tight regulatory regime. Haste has not been Hacked Off’s friend in this initiative.

The IPPR document is more thoughtful and is based on wide reading and consultation, yet depressingly arrives at the same conclusion: mandatory licensing of all publications above a minimum circulation threshold. That this is both unnecessary and dangerous seems not to have deterred the author, former Labour policy advisor, Nigel Warner.

To be fair to Warner, there is much careful analysis in his 80-page report. His scheme for regulation at least has the merit of comprehensiveness and coherence. Unfortunately, the lynch-pin of his structure is Ofcom, which has repeatedly stated its lack of interest in trying to regulate print as well as broadcasting and telecoms.

The IPPR attempt to design an all-embracing structure actually creates as many problems as it solves. Even where Warner identifies issues which might benefit from regulatory de-clutter (whether or not relevant to the Leveson issues), his lack of detailed knowledge tends to lead him astray. So the confusion over broadcast regulation – entirely a function of allowing the BBC Trust, rather than Ofcom, to regulate the BBC in relation to complaints about lack of accuracy and impartiality – leads to unnecessary proposals for re-allocating responsibilities. The “blizzard of acronyms” is actually not that difficult to decipher. There is no need to subject the Advertising Standards Authority or the British Board of Film Classification to backstop authority from Ofcom. The ASA and the BBFC deal with different material, even if much of it is broadcast on Ofcom-licensed services. Nor is the creation of the Authority on Television-on-Demand (ATVOD), with Ofcom as its statutory back-stop, the most encouraging model for Warner’s preferred structure: content owners object both to ATVOD’s charges and to its appetite for imposing itself on reluctant “clients” (who regularly appeal successfully to Ofcom against such land grabs).

Warner fails to explain which barriers to entry or diversification in his view justify a new regulatory structure. As for his discussion of the withdrawn News Corp bid to take full control of BSkyB, he seems to believe (and is not alone in doing so, of course) that this controversial deal required the approval of the British government. In fact, the government as such had no role to play: there was a quasi-judicial role for a Secretary of State, but that was designed to be conducted away from political considerations. When Vince Cable failed to act in a quasi-judicial way (not so much in exercising his discretion as to whether to ask Ofcom to see if there were public interest objections to the deal, as in later admitting that he had done so as part of his “war against Murdoch”), he was forced to resign that role. His replacement, Jeremy Hunt, acted solely in accordance with advice from specialist regulators, as Leveson confirms. Warner wants to remove this very limited role, and hand the whole matter of deciding, not just whether there is a public interest issue in such a merger, but even whether to ask that question, to Ofcom. Even if Ofcom had not made such a fearful botch of its examination of the public interest issue – raising serious doubts about its own impartiality – it is surely inviting yet further politicisation of our regulators if they are given the power to decide for themselves whether to intervene in a merger, even where there the EU has ruled there are no competition reasons for doing so.

Warner’s discussion of media plurality is better than most, but still lacking in precision. He notes the argument Ofcom advanced in relation to television news, that the broadcasting code obligations to observe impartiality were not a guarantee that editorial preferences could not be expressed through choice of stories and running orders: this to justify its conclusion that the News Corp bid for full control of BSkyB might affect Sky News. However, he fails to register the point that any persistent distortion of these elements would in due course be picked up by Ofcom, whose intervention in the process would surely have led to a real weakening of Sky News if the deal had not collapsed as a result of the phone-hacking revelations.

Warner helpfully cites the actions of the German regulators in terms of preventing the creation of dominant cross-media holdings. Unfortunately, he fails to recognize that the only media operation or news provider that would fall foul of the German rules if they applied to the UK would be the BBC. He compounds this failure by imagining that BBC TV news, radio news, online news and overseas news all have different editorial controls, such that internal plurality prevails. The truth, unfortunately, is the exact opposite: TV, radio, online and – imminently – overseas news are all centrally managed, through a single news and current affairs directorate. Indeed, Ofcom’s most recent report on media plurality has called on the BBC to take the necessary steps to create internal plurality (no penalty is suggested for failing to do so, but there is an implicit threat that action might be imposed if it is not self-implemented).

The IPPR paper regularly cites a piece of audience research it commissioned from YouGov, including such responses as the 62% who want the press to be regulated by a “legally-established body”. From this, and from the perceived need for regulatory conformity, it argues for mandatory licensing of newspapers, without facing up to the possible consequences, such as the impact on the likes of Private Eye. In truth, the debate about the so-called “Rubicon” that legislation might constitute has narrowed greatly. There is clearly a case for a statute to establish the recognition body that would need to approve any replacements for the PCC. A Royal Charter status for the recognition body – as an alternative to legislation – is simply a variation on that theme. Each has some weaknesses, but neither is out of the question. What is important is that participation in any regulatory body itself be voluntary, and that the penalties for failing to participate be transparent, predictable and – up to a point – affordable.

That is why I have favoured a removal of the VAT waiver for non-participants. This would obviously not affect free-sheets, but only the Evening Standard is in the business of investigative journalism amongst the free-sheets, and it is improbable that the Lebedevs would submit The Independent and its two siblings to the new system, but exclude the Standard. For Private Eye, the honour of non-participation would cost an extra 30p on the cover price, and perhaps a requirement that it prominently states in each issue that it is a non-participant in any Leveson-approved scheme. The House of Lords favoured such an approach, but was advised that removal of the VAT waiver for non-participant publications would run into EU problems. Given that the UK has secured VAT waivers for food and children’s clothes, it seems somewhat pessimistic to assume the EU would object to removal of the VAT waiver for certain publications, when the public interest in doing so is so strong.

Warner’s puzzlement as to why people think politicians would meddle in press matters if they were invited to legislate on them is itself puzzling. Even if he is unaware of 300 years of such meddling, he surely must know that MPs tried their hardest to limit publication of their expenses, and only had their hand forced by the Daily Telegraph deciding to publish the contents of a stolen file.

Warner seems not to have understood why broadcasting is licensed, but books, newspapers, films, magazines and music are not. Broadcasting historically occupied publicly-owned spectrum, which was limited in scope. One way of allocating that spectrum – other than by auctioning it, as is done with telecommunications spectrum these days – was to require the equivalent of “planning gain”: that is, socially desirable features, such as impartiality, fairness and accuracy in factual output, and decency (however defined) in entertainment output. As broadcast spectrum has in recent years been hugely enlarged by satellite broadcasting and digital technology, there is a good case for de-regulating that arena, rather than extending the regime more widely, though it should be noted that many leading broadcasters are happy to cling to regulation as a kind of kite-marking that gives consumers confidence in their offerings.

Be that as it may, there is only a very weak case for extending broadcast regulation to the press, though the likes of David Puttnam (at Oxford) and a group of distinguished broadcasters (in a letter to The Times on January 30th) have argued that there is nothing for journalists to fear from such an extension. This is a dangerous piece of sophistry. Over the decades, broadcasting regulators have repeatedly blocked, censored or suppressed documentary programmes they disliked, when they had the power to do so. That pre-emptive power has now been replaced by post-transmission regulation, but the tension between broadcasters and regulators remains, even if it is much harder to pin down. The source of this tension is the potential removal of a licence to continue in business (as recently was imposed by Ofcom on the UK version of the Iranian channel, Press TV). Prudent self-censorship prevails (as I repeatedly experienced in my many years as a current affairs producer). Lawyers and managers inside TV companies have far greater say on what can be broadcast – or even produced – than in newspapers. No broadcaster would have dared do what the Daily Telegraph did.

For broadcasters, investigative journalism is an occasional side-product of an entertainment business. For the serious newspapers, it is part and parcel of their raison d’etre. That occasional pieces of investigative journalism survive in broadcasting does not justify imposing a licensing system on the real providers of investigative journalism – overwhelmingly, the national press. For all its faults – many of which resulted from our collective failure to take the required action after the revelations of Operation Motorman a decade ago – the press needs the freedom to make mistakes, and pay the necessary penalties: not face being put out of business by refusing to be licensed or by being punished with loss of licence.

The IPPR report concludes, somewhat oddly, with an appeal for re-inforcement of the public service broadcasters. What this boils down to is a call for a ten-year licence settlement for the BBC in 2017. Warner mistakenly believes that there was once a link between the renewal of the BBC Charter and Licence, and the setting of the licence fee. In fact, since the TV licence was introduced, no Charter has run for less than 10 years, and no licence fee settlement for more than five (and even that was torn up half way through): there has never been a link, nor should there be. As for the notion that in the digital age – and Warner envisages a fee running to 2027 – such a charge as £145-50 annually to own a TV set seems quaint in the extreme. Perhaps those YouGov respondents should be asked their view: first, how they think the BBC should be financed, and secondly, at what level should a licence fee – if that is what is preferred – be set. The answers might not be quite what the IPPR had in mind.

Listen to the victims: Leveson's proposals must be passed into law

 - Brian Cathcart, founder of the Hacked Off campaign

The draft Leveson Bill can be read here.

David Elstein’s reflections on the Leveson report and its implications deserve a reply from Hacked Off, not least because they include comments upon us and our work.

We have indeed published a draft Bill – our Leveson Bill – which has been open for consultation. Mr Elstein says that it is deceptive because, though it is billed as supporting voluntary press regulation, the penalties for failing to join are actually, to use his word, draconian.

A little background. Before the publication of the report the air was thick with warnings that the judge would introduce compulsory statutory regulation. He did not. He proposed independent self-regulation, and instead of making membership compulsory he proposed a series of carrots and sticks. News publishers that claimed to be concerned as a matter of principle about a risk of ‘licensing’ could therefore stay out, but they would suffer disadvantages. Our draft Bill, to which Mr Elstein is welcome to suggest amendments, is our best effort at delivering Leveson’s regulatory system into law as purely as possible. That includes meaningful incentives as opposed to meaningless ones.

News publishers choosing to remain outside the system, in other words, would face possible disadvantages in terms of court costs and damages and (generally overlooked) in their relations with a reformed Information Commissioner’s Office. The purpose is to encourage membership. The history, and the Leveson Report, show that most of our national press organisations hold the very idea of self-regulation in contempt, and have no moral commitment to providing protection or redress for the public. If there were no meaningful disadvantages to avoiding it, then why would any organisation join the self-regulator?

As for Lord Lester’s concerns about exemplary damages, they were answered in full here by Hacked Off’s chair, Hugh Tomlinson QC: To put it briefly, the Leveson recommendations on exemplary damages are not in breach of the Human Rights Act, nor are they draconian. On the other hand, they would help to protect people from the abuse of their rights.

Elsewhere, Mr Elstein has written that ‘It is time to say thank you and goodbye to Hacked Off. The notion that "victims" should have a decisive voice at this stage of the debate is mere sentimentality.’ 

The bravery and determination of victims of press abuse is the main reason we had a public inquiry, and also the main reason that the judge’s findings are capable of carrying public support. Their involvement is of course inconvenient for the press (convicted by Leveson of ‘wreaking havoc in the lives of innocent people’), but for all other purposes it serves the public good. On the day the victims of press abuses no longer take an interest in these matters, ministers and editors will promptly get together and cheat the rest of us. So we should thank those like the Dowlers, McCanns, Watsons, Hollinses, Christopher Jefferies, Jacqui Hames and many more, and we should remember the words of David Cameron in July 2011: ‘This has to be about the public and the victims.’

Press regulation cannot be treated in splendid isolation: we need a coherent system with digital savvy

 - Nigel Warner, IPPR Associate Fellow and author of 'Life after Leveson'

'Life After Leveson: the challenge to strengthen Britain's diverse and vibrant media' can be read here.

How newspaper companies can be encouraged to remain inside a new regulatory system was a fundamental question for Lord Justice Leveson's inquiry. Much of the debate since has focused on striking the right balance between carrots and sticks.

David Elstein, in his comments on both my report for the IPPR, Life after Leveson, and the work of the Hacked Off campaign, appears to rule out two potentially effective approaches to this problem and substitutes one that is no longer regarded as a serious runner. 

For my part, I remain sceptical about both the effectiveness and practicality of the various ‘incentives to participate’ currently on offer. That includes those suggested by Hacked Off campaigners, such as the imposition of exemplary damages on non-participating publications in libel cases. Given the contortions the politicians are currently going through on this, it may yet prove unworkable.

My proposal was simpler, make participation in the new regulatory system mandatory on all news publishing organisations above a certain size. In the end, what matters, it seems to me, is not how you ensure organisations participate in the system, but that the system itself is fair, transparent and works successfully both for the industry and for consumers and citizens.

David Elstein rules out this option and doesn't appear to like the incentives proposed by Hugh Tomlinson QC either. He favours instead the economic inducement of removing the current VAT waiver from news publications that opt to stay outside the regulatory system.

Unfortunately he doesn't appear to have read the opinion submitted to the Leveson inquiry by the Deputy Director in the Solicitors Office at the HMRC, John Evans. The HMRC opinion concludes that "the fundamental principle” “of the fiscal neutrality is likely to be breached if VAT at the standard rate were applied to supplies of some newspapers and not others". One potential downside of this, John Evans notes, is that zero rating might be lost in supplies of all newspapers - something I'm sure would be universally opposed by the publications David Elstein seeks to protect from more "Draconian" measures.

In my report for the IPPR I attempt to look beyond press regulation, which I believe can no longer be treated in splendid isolation. The migration of newspaper readerships online is a trend that will continue. Yet David Elstein’s argument seems to be based in a world where digital news publishing does not exist.

We need to recognise that print, online and broadcast media are increasingly operating in a converged space. A regulatory system which continues to treat them as if they lived in discrete little boxes will become increasingly ineffective and loose public support.

I do not believe that the distinction between broadcast journalism and newspaper journalism (not to mention online journalism) is as marked as David Elstein appears to believe. It is often said that broadcasters could not have exposed the scandal of MPs’ expenses in the way that the Daily Telegraph did. That may be the case, but as long as a public interest defence can be satisfied, both the Broadcasting Code and the BBC Editorial Code certainly allow for investigative journalists to take steps which might otherwise be regarded as outside the law. The ITV Exposure programme on Jimmy Savile or the Dispatches programme which exposed senior former ministers offering themselves as ‘taxis for hire’ are both examples that demonstrate how effective television can be as a medium for investigation and exposing wrongdoing.

A more fundamental distinction within news is between those services that are required to be balanced (i.e. broadcast services) and those in which news reporting is accompanied by partial comment and opinion. This is an important distinction my proposals seek to preserve. 

My proposal is that the regulation of different types of content – advertising, news publishing, broadcast news, on demand content – be managed in future on a day-to-day basis by distinct independent bodies, operating at arm's-length from current media regulator, Ofcom.

I chose Ofcom for this role because I don’t believe in reinventing the wheel, and I don’t accept the argument that we shouldn’t make Ofcom the backstop power for the press simply because “it doesn’t want the job”. That is not a sound basis for decision-making. I doubt that Ofcom was terribly keen to take on regulation of postal services. But there you are; the decision was made and Ofcom seem to be getting on fine with the job today.

My report is an attempt to provide some coherence to the current fragmented system for media regulation. It was also an attempt to ensure that industry as well as consumer voices are represented within independent regulatory bodies, so that the best of self-regulation can be preserved, albeit with recourse to Ofcom’s authority and statutory back-up, if necessary.

David Elstein accuses me of lacking "detailed knowledge" in making these proposals. As one example he says that “there is no need to subject the Advertising Standards Authority...to backstop authority from Ofcom”. This is surprising since, on current arrangements, the Advertising Standards Authority has not one but two backstop authorities: Ofcom and the OFT. The point of my argument is that the blurring of the space between print, broadcast and online advertising suggests that eventually it might be better for these roles to sit in one place.

His criticisms about the workings of the Authority for Television On Demand (ATVOD) – another current arms-length body – may be valid, and I argue for reform of ATVOD too. On- demand television content is becoming increasingly indistinct from linear television content and I see a more seamless approach to regulatory standards as becoming a necessary protection for parents and children.

In the world of news publishing (in print and online), video rich, on-demand news content is a potential growth area where newspaper companies should be allowed to develop their services further without risking (as they do now) a jump from one regulator to another. It makes sense to put regulatory responsibilities in this area under the wing of whatever emerges as a post-Leveson regulatory body. It might even help the newspaper companies who, I would argue, face a bigger threat economically than they do from the development of the new regulatory system.

Alongside standards in media, plurality of media (particularly new media) is a critical part of an open democracy. We need a new approach to this issue. David Elstein seems to believe that the current system, where the Secretary of State performs a “quasi judicial” role in plurality assessments means that "the government, as such, has no role to play”. This seems a little credulous. The idea that an individual Secretary of State could perform a quasi-judicial role on a matter of such national significance as media plurality without other parts of government, including Number 10 Downing Street, having a view is unrealistic.

For the future, Ofcom has suggested a very sensible approach involving periodic plurality assessments which requires much further thought and examination given that it was an area where Lord Justice Leveson did not have the time nor the capacity to delve too deeply.

Amidst all that is changing in the media, I do believe that public service broadcasting (PSB) should remain at the heart of the UK content investment and distribution. I don’t see this as “odd”. It would seem that Parliament and government agree, having recently awarded ITV and Channel 5 a further 10 years each to operate their PSB licences.

I believe the same should be afforded to the BBC. The most recent exercise in setting the licence fee (2010) over a weekend of frantic phone calls between ministers and the BBC management was frankly an insult to the licence fee paying public. There is an important debate to be had both about the future level of the licence fee and the scale and scope of BBC services to be delivered in return. This must be made much more open and transparent next time round.   

Media consumption in the UK is changing and delivery technologies are changing. Our regulatory system will continue to fall woefully behind if the kind of piecemeal approach David Elstein appears to favour prevails.

He may regard the approach I outline as "dangerous", but I think there is a bigger danger: that the economic pressures now being brought to bear on traditional media in the UK put at risk the very forthright and vibrant mix of media - new and old, impartial and opinionated - that people in this country currently enjoy.