To be published as HC 143 - i i

House of commons



Culture, Media and Sport Committee


Tuesday 11 JUNE 2013

Mr Paul Vickers and mr peter wright

Evidence heard in Public Questions 600 - 696



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Oral Evidence

Taken before the Culture, Media and Sport Committee

on Tuesday 11 June 2013

Members present:

Mr John Whittingdale (Chair)

Mr Ben Bradshaw

Angie Bray

Conor Burns

Philip Davies

Paul Farrelly

Mr John Leech

Steve Rotheram

Jim Sheridan

Mr Gerry Sutcliffe


Examination of Witnesses

Witnesses: Mr Paul Vickers, Secretary and Group Legal Director, Trinity Mirror plc, and Mr Peter Wright, Editor Emeritus, Daily Mail, Mail on Sunday, Metro and Mail Online, gave evidence.

Chair: Good morning. This is a further session of the Committee’s inquiry into the future regulation of the press. I would like to welcome, as our two witnesses this morning, Peter Wright, the Editor Emeritus of the Daily Mail, Mail on Sunday, Mail Online and Metro, and Paul Vickers, who is the Secretary and Group Legal Director of Trinity Mirror. Ben Bradshaw to begin.

Q600 Mr Bradshaw: Thank you. We are all here because the Prime Minister set an independent judicial inquiry under Lord Justice Leveson, who deliberated for a long time hearing witnesses on all sides of the argument. I wondered why some of the newspapers felt that his recommendations were a matter for watering down by negotiation.

Mr Vickers: I think that we have done our best to produce a workable regulatory model that everybody would buy into, and the vast majority of the core recommendations of the Leveson Report have been followed.

Q601 Mr Bradshaw: You, Mr Vickers, welcomed the 12 February charter and said the industry did as a whole. I think you were quoted in the PressGazette as saying that. I wonder why since then the PressBoF’s current royal charter is even further away from Leveson’s recommendations than the 12 February one.

Mr Vickers: As far as I can remember, the PressBoF charter recognition criteria are virtually word-for-word the same as the 12 February document that we had agreed with Oliver Letwin and others.

Q602 Mr Sutcliffe: It removes a very significant issue of the requirement for any change to be approved by a two-thirds parliamentary majority in both Houses.

Mr Vickers: That was not in the recognition criteria that we had negotiated with Oliver Letwin and Maria Miller.

Q603 Mr Bradshaw: But it was in the 12 February charter that you welcomed.

Mr Vickers: I don’t think there was a 12 February charter, but we are concerned about the lack of flexibility that that two-thirds majority would require if there is a problem in the recognition criteria or the way in which the regulatory body is operating. We also feared that if we wanted to get something changed it would be very difficult to get changed. You only have to use a little bit of imagination-in fact, cast your minds back to previous Governments with very large majorities; we think it would be quite easy for politicians to change those recognition criteria but very difficult for us to if there was a problem.

Mr Wright: If I could help on the technical point. The negotiations on the charter, which ended up being published on 12 February, had concentrated entirely on the recognition criteria. We knew from talking to Ministers that there was also a proposal for a royal charter to sit behind it, but they did not show us the royal charter until it was published. The recognition criteria we had talked through at great length and I think are virtually word-for-word the same, but we had told Ministers that we would not be happy with a super majority that would leave any possible changes to the recognition criteria entirely in the hands of politicians.

Q604 Mr Bradshaw: I suspect we will get into the detail of some of the differences between the two charters in a moment. I want to ask you to cast your eyes forward to the likelihood that this new system is in place in a year or so’s time if, as is expected, Parliament’s royal charter is submitted to the Privy Council for approval and the recognition body is set up. Have you thought about what you will do then and, if so, what will you do? Will you still stay outside the new regulatory structure?

Mr Wright: That is a question you would have to consider should a whole series of hypothetical events take place. It is of the nature of the Leveson recommendations that regulation should be independent and it should be voluntary. We would very much like to have a regulatory body that covered the entire industry, which everybody signed up to and everybody was happy with, but if, by the Privy Council process, which is itself somewhat arcane and open to scrutiny, the charter that was approved was the 18 March charter, I think a lot of people in the industry would have great difficulty in forming a regulator to operate under those recognition criteria.

Q605 Mr Bradshaw: Have you considered the reputational impact that that would have on those newspapers or newspaper groups that stayed outside the system?

Mr Wright: Of course, that is a consideration you would have to take into account; but there are many other considerations you have to take into account, not in the least the importance of freedom of expression. In the case of the regional press in particular, there is no point in putting yourselves under a regulatory regime that burdens you with insupportable costs, which could mean in the long run that the newspapers you are putting under the regime could no longer go on publishing.

Q606 Mr Bradshaw: I imagine you have considered the other side of that argument, which is the exemplary costs that those newspapers or groups outside the regime would be subjected to. Would they not be a consideration?

Mr Wright: They would be a consideration. As you will be aware we, in common with all other publishers, think that exemplary damages are a legally extraordinarily dubious measure that will not stand up under the ECHR, but we may be placed in a position where we have to make a choice between two very unattractive things.

Q607 Mr Bradshaw: Lord Leveson would probably take issue with your suggestion that a charter based on his report was a threat to freedom of speech. How do you justify that statement?

Mr Wright: I think any regulatory system that ultimately is subject to parliamentary oversight is starting to set limits on freedom of expression. That is my belief.

Q608 Mr Bradshaw: We could have a discussion about whether the royal charter was an attempt by the Government and other parties to get over that problem and avoid this sort of statutory underpinning that you did not want and that Lord Justice Leveson recommended.

Mr Wright: We actually recommended oversight by Ofcom, but nobody seems to be in favour of that. I think we have to accept that Lord Justice Leveson’s recommendations were just that. They were recommendations and one of his key recommendations was oversight by Ofcom and all three political parties have rejected that.

Q609 Mr Bradshaw: But doesn’t your alternative charter, in effect, give oversight by Ministers, because Ministers have the power to scrap the whole system with an edict in effect?

Mr Wright: I am not sure that they do. One of the things that came out of the legislative process that we went through in March was the underpinning clause in the Enterprise and Regulatory Reform Act, which means that a charter can only be changed by the means described within it. I think, in the eyes of the people who drafted that clause, it was intended to cement the parliamentary super majority into the regulatory system without there being an overt statute, but it also has the effect of cementing into a royal charter, for a body regulating an industry like this, whatever other means of changing or preventing change to the charter are contained within the charter. I think that turned out to be a very useful piece of legislation that gives the royal charter we are putting forward political protection, which the charter suggested on 12 February would not have enjoined in it.

Q610 Chair: Can I press you a little on the situation Mr Bradshaw describes? If the royal charter proposal agreed by the three main parties in Parliament is indeed put in place, are each of you saying, in respect of your own major national publishing groups, that you would not wish to join a regulator that met the conditions laid down in a royal charter?

Mr Wright: That is a decision that we would have to take when and if such a charter was put in place but, speaking for my company, I think we would have great difficulty with that. That situation does not arise because I very sincerely hope and believe that a royal charter solution can be found that is acceptable to everybody, but Leveson does allow for this situation and you are not obliged to join a club.

Mr Vickers: From Trinity Mirror’s point of view, we have not made that decision yet. We don’t want to be appearing to threaten anybody or holding on to anyone’s head. I think what is very clear is that we would find it difficult to join a regulatory body that did not have a large proportion of the press who subscribe to it and that is partly for economic reasons. It is very expensive to run this sort of system and if there are fewer members sharing that cost those who are part of it have to take a greater burden. It is a pragmatic and practical response as much as anything else, but we haven’t formally made that decision yet.

Q611 Mr Leech: Is there any concern within your newspaper groups about the prospect of the Government taking even more drastic action than you perceive they have taken so far in the event of the vast majority of the industry not signing up?

Mr Wright: If the Government wants to legislate and wants to introduce statutory regulation of the press, it always can do. I think it is highly undesirable and I think a Government that did that would regret it. I happen not to believe in state control of the press, which is what it would ultimately be.

Q612 Mr Leech: When we have had the Minister in front of us previously, the Secretary of State, she was not keen on giving any sort of timetable for newspapers to sign up to and seemed unwilling to think about the consequences of newspapers not signing up because she just hoped that they would. Then, from the other perspective, you seem to be resisting the opportunity to sign up without thinking necessarily about what the consequence of not signing up might be. Is there a danger that both newspapers and the Government are playing chicken with each other and don’t really know who is going to give in?

Mr Vickers: I would not say we are playing chicken. We had a very long period of consultation or negotiation; a very intensive period of that. We thought we had achieved an agreement. Things changed. We were not involved in the last stages of consultation and, after 18 March, for a very long period people would not talk to us. The royal charter that we have put forward has attempted to come up with a solution that we believe the vast majority of the press will sign up to, which achieves most of the key recommendations of Leveson.

Q613 Mr Leech: Don’t you think, though, that ultimately the Government holds the cards, because public opinion appears to be on the side of the Government and the political parties have signed up to the politicians’ royal charter and, ultimately, if you do not sign up, there is a real danger that politicians will decide, "Well, the newspapers won’t play ball, so we’ll play harder ball"?

Mr Wright: We were talking earlier about threats. This is a threat, isn’t it? "We have written a royal charter for you. We did not invite you along to discuss it. You have to accept it as it is and, if you don’t accept it, we will force it on you."

Q614 Mr Leech: Is that a fair assessment of your involvement or lack of involvement in the process? How many meetings did people associated with the Daily Mail have with Ministers or civil servants in the last six months?

Mr Wright: Prior to 12 February, we had a lot of meetings. It was a very intensive period of negotiation. Between 12 February and 18 March, I would have to check. I don’t recall any meetings. I had a succession of phone calls from civil servants who were basically seeking concessions in order to try and achieve an agreement between the three political parties, which I helped them with as best I could. Since then, I have had one phone call from an Opposition politician and that is it.

Q615 Mr Leech: That doesn’t sound like "no involvement in the process", though.

Mr Wright: It would fall short of no involvement whatsoever. However, the charter that was presented to the world on the morning of 18 March we had not been shown and we were not at the meeting where it was agreed, although over that weekend I was told to expect a phone call from Oliver Letwin and it would all be discussed, but it never happened.

Mr Vickers: You mention the meetings that the representatives of the Daily Mail had with Ministers or civil servants. I wasn’t in every single meeting, but at most of the meetings that Peter had with either Ministers or civil servants there were a group of us, and so it wasn’t just the Daily Mail or representatives of it.

Mr Leech: No, it was just that Mr Wright had suggested that there were no meetings.

Mr Wright: There was generally a group of four of us.

Q616 Chair: Just for the record, who were the other two?

Mr Vickers: David Newell, who gave evidence a couple of weeks ago, who was there primarily in his role for the regional newspapers. I was there for regional newspapers. It was Peter and Guy Black.

Mr Wright: But there were others from time to time.

Mr Vickers: We had editors of The Independent. We had people from The Times. We had people from other red tops.

Q617 Conor Burns: Gentlemen, can I take you back a bit? Leveson was set up by the Prime Minister in the aftermath of some illegal practices by national newspapers, some of which we will see played out in the autumn when the Rebekah Brooks and Coulson case comes to court. Lord Hunt, when he gave evidence to us, reminded us that he told Lord Justice Leveson during his inquiry that he was very confident that his recommendations would not be needed because you were on the cusp of agreeing a code of voluntary self-regulation that would meet all the conditions that Leveson would likely lay down. Leveson told him that if that was the case he would welcome that; he would welcome his recommendations being redundant. Why, when you knew what was coming down the track, couldn’t you get to that point of voluntary agreement between yourselves?

Mr Vickers: You come to subtle points of timing. We believed we had an agreement among the industry-one or two were outliers-that we could have delivered before Leveson delivered his report. We were strongly advised not to do that because that would have seemed as though we were giving two fingers to Leveson, that we were not waiting for his final decision. I think we could have had an industry-wide agreement in place before Leveson delivered his report and it would have been very similar to what we are looking at now. Some of the things that are being claimed now by others, like the power to impose a £1 million fine, were in our drafts when Leveson first started to sit. I think we could have got there but were persuaded that would appear to be a calculated insult to Leveson, so we did not take it up. Since then, we have become embroiled in the mess around royal charters.

Q618 Conor Burns: Who advised you not to do that?

Mr Vickers: I can’t remember.

Mr Wright: I can’t remember either, but it was the general view that you should allow Leveson to report. Do bear in mind that the actual structure of the regulator that Leveson describes is based on the Hunt-Black proposal that was put forward in the summer of last year. That was in a pretty advanced state of preparedness in the autumn. Leveson quizzed both Lord Black and Lord Hunt fairly keenly for a long period of time, and it wasn’t clear that when he reported he would recommend something along those lines. In fact he did, but I think it would have put us in a very difficult situation if we had begun the process of appointing members of the board for a regulatory system only to find that Leveson had recommended something entirely different.

Q619 Conor Burns: With the benefit of hindsight, do you regret that you did not carry on to get that voluntary self-regulatory regime with everybody signed up before Leveson reported where you would have, therefore, already had a system that was Leveson-compliant before Leveson?

Mr Wright: Yes. I probably regret rather more that the agreement we had at the beginning of February, which was a more crystallised version of this, was not put into effect. It is certainly the case that I think all publishers recognise that there is a need for a regulator and the existing PCC has gamely gone on doing that job for a long period, but we do need to get on and set something up.

Q620 Conor Burns: In terms now of taking it to the next stage and getting something you can all sign up to, to what degree has your exclusion from the meetings in the Leader of the Opposition’s office, when other organisations headed up by B-list actors were present damaged trust within your industry?

Mr Wright: It seems to have put a stop to discussions between us and Ministers. I think it has placed the Government in a position where they are trapped with a royal charter proposal and a set of recognition criteria that they know the industry are not going to sign up to. I can quite see that it might be difficult to get things moving again, but at some point they do need to get moving.

Q621 Conor Burns: On a point of pure information, have you or others that you know within your industry made requests for meetings with Ministers in recent weeks, since that meeting in the Leader of the Opposition’s office that you have had refused?

Mr Wright: There have been meetings. My company has not had a meeting.

Conor Burns: Have you sought one?

Mr Wright: We have, and there is now to be a meeting this week.

Conor Burns: With?

Mr Wright: With the Secretary of State.

Conor Burns: For Culture, Media and Sport?

Mr Wright: Yes.

Mr Vickers: We have asked for a meeting. It took some time to arrange but I think there is a meeting next week with the Secretary of State.

Conor Burns: When you say "it took some time", weeks?

Mr Vickers: Weeks.

Q622 Paul Farrelly: Mr Wright, you are a former editor of longstanding. I want to try and explore, first of all, what it is at the heart of the royal charter that was debated in Parliament, which after all only sets up a recognition body that allows the press to set up its own regulator yet again, that makes it more difficult, do you think, for the Mail or The Mail on Sunday to do the journalism it does?

Mr Wright: There are a number of things, and they are not all related to the journalism that we do. I am afraid some of this is familiar ground, but as you have asked the question I have to answer it. One is that we think the compulsory arbitration system is insupportable. Another is that one part of the present system, which received no criticism from Leveson and in fact which your party insisted be incorporated into the new regulatory system as the Editors’ Code, under the 18 March royal charter the committee that writes the code will become a subcommittee of the body that administers it, which seems to us to be an improper way of doing things. It sets up a recognition panel from which anybody who has any close connection with the industry is completely excluded.

That recognition panel can do ad hoc reviews whenever it thinks fit, which makes it effectively the regulator of the regulators. I am not really sure that under the 18 March system this is independent self-regulation at all. It also sets a very low bar for group complaints, which is probably more of a concern to broadsheet newspapers, but it would make the reporting of some issues-to take an obvious example, Palestinian problems in the Middle East-very difficult to report. Then, on top of that, you have the issue of political control of the recognition criteria.

Q623 Paul Farrelly: We have been through some of this. As you said, it is becoming old ground now, but group complaints we discussed at the last session with the regional press and it was quite clear that a new regulator has the latitude to reject group complaints, and it depends on how you set the regulator up. I do not think anybody has found that convincing. Let’s go to the code. Are you proud of the way that the old PCC saw to it that the code was enforced?

Mr Wright: Am I proud of the way that it was enforced?

Paul Farrelly: The way the Press Complaints Commission saw to it that the code is enforced in the industry.

Mr Wright: I know you will not agree, but I think that the Press Complaints Commission did a good job of enforcing the code. Its problem was that it was a complaints body and when it was confronted with an issue like phone hacking, and none of the people on the receiving end of phone hacking chose to take the issue to the Press Complaints Commission, it did not have a means of dealing with it. The new body does have a means of dealing with it under your royal charter and under our royal charter.

Q624 Paul Farrelly: I think everyone is in agreement, apart from you possibly now, but the problem was not with the code. It is a fine body of work. It is a wonderful text. It is a fine but limited, with its guidance and notes, set of jurisprudence but the problem was in its enforcement. I was just reading your statement to the Leveson Inquiry where you stated that, as far as you were concerned at the Mail on Sunday, "It is against our policy to publish stories that are inaccurate, that involve any breach of the law, that intrude into grief or personal privacy, or that cause offence to our readers." Was that followed in every edition that you edited?

Mr Wright: There would not be any point in having the Press Complaints Commission if every single story that every single newspaper published was beyond reproach in every aspect. Of course, the answer is no; sometimes we fell short.

Paul Farrelly: Just sometimes?

Mr Wright: I think in the time I edited the Mail on Sunday there were two PCC adjudications against the Mail on Sunday.

Q625 Paul Farrelly: Do you think the code has more likelihood of being rigorously enforced, starting with the newspapers but also with the regulator that oversees them, if the chair of that code committee were an independent person and not the editor or editor-in-chief of one of the newspapers that is regularly complained about?

Mr Wright: I completely agree.

Paul Farrelly: So you would agree that?

Mr Wright: Yes.

Paul Farrelly: Therefore, why is it such an important point for you that editors still control the code committee?

Mr Wright: Are you talking about the code committee?

Paul Farrelly: Yes.

Mr Wright: Sorry, I thought you were talking about the regulatory body.

Paul Farrelly: No, I was talking about the chair of the code committee.

Mr Wright: No, the code should be written by editors. It is editors who are subject to the code. It is editors who hold legal responsibility for what appears in their papers and, if they are going to respect the code, they have to have the most prominent role in writing it. Just as when you are making law, you make law on behalf of the people of Britain. The people of Britain don’t have law made for them by other people.

Q626 Paul Farrelly: Can you understand people’s bafflement out there in the general public? If we were to take, for instance, a big scandal in the drugs industry, say in the wake of thalidomide, if the drugs companies behaved in the way that you are behaving, in resisting any better regulation to improve standards, or in the tobacco industry, for instance, wouldn’t your newspapers be the first to lead the hue and cry? Can you understand people’s bafflement.

Mr Wright: We are putting forward a greatly improved form of regulation.

Paul Farrelly: Can you understand the bafflement, when people feel that you are fighting tooth and nail against what is sensible-

Mr Wright: You did not hear the answer to the question.

Paul Farrelly: I am listening.

Mr Wright: We are putting forward a greatly improved form of regulation.

Q627 Paul Farrelly: But, again, what difference will it make to Mail journalism if this royal charter that was debated in Parliament goes through? I still do not have the essence of what you are complaining about.

Mr Wright: I have listed it at great length. I could start all over again if you wanted.

Q628 Paul Farrelly: One of the things that baffled people about the behaviour of some of the papers was that, regarding phone hacking, it was a story that was suppressed until the hypocrisy and cynicism and criminality involved in the Milly Dowler case made it such a big story that newspapers like the Mail simply could not afford to ignore it anymore and one of the reasons that many people thought was because the Mail and the Mail on Sunday under your editorship did not really want to reopen the big can of worms that was, for instance, Operation Motorman. What would you say to that?

Mr Wright: I do not think there is any truth in that at all. Newspapers take a different view of different stories. This was a story that the papers that you used to work for took an enormous interest in. They make a big pitch to people working in the media as part of their core readership. You would expect them to give it an awful lot of space. I think probably also we were guilty of placing too much credence on what the police were saying at the time, about the extent of phone hacking. Do bear in mind that there are criminal trials taking place this autumn and there are people who are pleading not guilty, but if at the end of those trials it is shown that phone hacking was taking place on a very widespread scale, it may be that we were too ready to believe that it was a limited one-off. Those are matters of judgment that were made at the time, and I think all newspapers have been guilty of undervaluing stories. A number of newspapers were offered the evidence about MPs’ expenses and turned it down. Eventually The Daily Telegraph published it and it filled their paper for about six weeks on end.

Q629 Paul Farrelly: It was a failure of news judgment not self interest?

Mr Wright: If it was a failure it was a failure of news judgment, yes.

Q630 Paul Farrelly: Mr Wright, I am asking these questions because I think it is important for people out there and people here, as you are one of the front people and the leading people in formulating this rival royal charter, to be confident that you are doing so with clean hands, with nothing to hide and nothing to kick under the carpet. Before this session I re-read your statement to the Leveson Inquiry. To me it seemed very much like the story that we got in phone hacking, first of all, from the senior people and the editors at News International, "Oh, it was not something we at the top were aware of and when we found out about it we took steps to bar it". Yet I have been through the associated Motorman files and what I see from there and the acts that were being commissioned involving motor vehicle registration conversations that can only involve the DVLA or the Police National Computer, finding ex-directory telephone numbers, mobile conversions to addresses, and some of the names in there, they were not junior people on the shop floor. It went right to the top of the organisation. I find it difficult to square your statement to Leveson with what I have seen from the Motorman files.

Mr Wright: I am not sure which particular newspaper you are talking about there. I can only answer for the Mail on Sunday, which is the paper I was editing at the time. I am not entirely sure what this has to do with the royal charter and I have dealt with it at great lengths at Leveson, but if you have a specific question do feel free to ask me.

Q631 Paul Farrelly: Well, I may wish to follow it up rather than take individuals’ names in vain, but I think it is important for people out there, given what has gone on, to have the confidence that the people who are leading this process from the press have nothing to hide themselves.

Mr Wright: I do not have anything to hide. I discovered about the use of inquiry agents I think at the end of 2003 and stopped it at the beginning of 2004.

Q632 Paul Farrelly: You were never aware, from your time as the editor of the Mail on Sunday, that anybody had paid a public or private-sector employee for information that was potentially illegally sourced?

Mr Wright: No.

Q633 Chair: I think you said earlier it would be more difficult to report problems with the Palestinians in the Middle East. I did not quite understand why that was the case.

Mr Wright: I am speaking on behalf of others here. I know this is a concern of the Guardian in particular. The danger of group complaints is that, if you report any contentious issue, groups representing people on one side or the other will claim that you have in some way damaged the people that you are writing about. Even if they do not make a complaint themselves, a group can complain on their behalf.

There is a particular concern that if group complaints are coupled with an arbitration service where compensation is available you will start getting group complaints for compensation. If you publish an article that is held to be offensive to a particular group of people, a body representing them will then make a complaint on behalf of all travellers, or whoever it might be, which would start inflicting newspapers with the sort of problems that have inflicted the insurance industry in particular.

Q634 Chair: I am still not quite sure how that affects reporting Palestinians in the Middle East.

Mr Wright: It is simply that, if groups make complaints on behalf of individuals, you are much more likely to face complaints because groups will go through newspapers looking for every story on a particular subject and then looking for somebody on behalf of whom they can complain. Individuals are less likely to complain, and there is a great concern that groups will use the complaints process in order to force their agenda on newspapers. You get this sort of pressure to a certain extent anyway.

Mr Vickers: If I may, it is worth stressing that we are not suggesting that there should not be the ability for group complaints to be brought at all. We simply say there should be a significant breach of the code and there should be a substantial public interest in the complaint being heard. That is quite a tough test and I think one of the concerns again, and I am afraid it does come back to money, is that this new regulatory body would be subject to judicial review. Our concern is that well-funded lobby groups will be taking the regulatory body to judicial review regularly if we do not have that protection where they say, "Well, we did not see that there was a substantial public interest in considering the complaint." It is as much as anything to free up the regulatory body to do its real work, rather than being subject to lobby groups-and there are some very well-funded lobby groups-who could just tie them up in knots.

Mr Wright: I should say that Ofcom does not take group complaints over fairness or privacy. They insist on an individual being involved and you will get groups who try to launch privacy complaints on behalf of people who do not want complaints brought, which is another problem.

Q635 Chair: Can I also just follow up another of Mr Farrelly’s questions? On behalf of each of your respective newspaper groups, can you tell the Committee that you have carried out inquiries into the practices within your news organisations and it remains the case that each of your newspaper groups does not believe that you indulged in phone hacking?

Mr Wright: I can certainly answer on behalf of my group that we made the most extensive inquiries. We could not find any evidence of it. I would be astonished if anybody was phone hacking and, if they were, they would be out on their ear immediately.

Mr Vickers: I think I should probably preface my answer by saying some of our current journalists have recently been arrested on charges that relate to phone hacking. We have done huge investigations and, to date, we have not found any proof that phone hacking took place.

Q636 Angie Bray: In the wake of the publication of the Leveson Report the Prime Minister said in Parliament that it was a Rubicon that he was not going to cross. Do you think in the end he did cross that Rubicon and why do you think he did?

Mr Vickers: He hasn’t quite, but-

Mr Wright: I don’t know. I think he is pretty close.

Angie Bray: Mr Vickers, perhaps you could go first.

Mr Vickers: There isn’t, under the state-sponsored or Government or three-party-sponsored royal charter pure statutory regulation of the press, but it is just half a step back from that, particularly with our concerns about the ability to change the terms of the recognition criteria if necessary and the huge sledgehammer of exemplary damages that are abhorrent in law and I am sure are challengeable in Europe. Those two things together make it very close and our concern, as Peter was saying earlier on, is that the recognition panel will be set up as a super regulator of the regulator. It is that structure that we find very difficult.

Mr Wright: I agree with Paul. I think the Prime Minister found himself in a very difficult political situation when Members of the House of Lords started hijacking Bills and he was forced into a corner. I suspect-but I don’t know and you will have to ask him this-the three-party royal charter, although he eventually put his name to it, does not represent his thinking on this matter.

Angie Bray: You feel it was politics that forced him to cross the Rubicon?

Mr Wright: Yes.

Q637 Mr Bradshaw: Sorry, can I just come in there? The Prime Minister did say in terms that only something that passed the Milly Dowler test would be acceptable to him. You are now implying that the Prime Minister has become some victim of a three-party stitch-up that he is reluctant to sign up to. The victims found your alternative completely unacceptable and intolerable and David Cameron said he would want to look the victims in the eye and say he had done right by them. Is that not the case?

Mr Wright: As far as I recall he pulled out of the three-party negotiations about three days before-

Mr Bradshaw: Then jumped straight back into them again.

Mr Wright: Yes. You are asking me to tell you what is in the Prime Minister’s mind and I do not know. I am guessing.

Q638 Angie Bray: One of the things that we have been told is that a lot of very important investigative work, which newspapers have traditionally carried out with great and excellent results, will no longer be possible under the new regime. Can you outline some of the investigations that have taken place that you do not think would have been able to take place under the new regime?

Mr Wright: I do not know that any investigations in the past would be impossible. If I were the editor of the Daily Telegraph and I was offered the MPs’ expenses disk under this regulatory regime I would think a great deal longer and harder about doing stories based on it than I would have done two years ago.

Q639 Angie Bray: What about some of the work that has been done just very recently where we have had journalists posing as lobbying companies and going to various parliamentarians? Would that still continue with the exposure?

Mr Wright: To be honest, I don’t think that all journalism is going to come to an end under either of these royal charter proposals. What we are more concerned about is that under the political parties’ royal charter the system becomes burdened with cost. It is immensely complex. I do not know whether anybody has seen this chart. People have to be found to sit on all these bodies. As much as anything, it is the cumbersome-

Angie Bray: It is a bureaucrat’s delight.

Mr Wright: Yes. It is the unnecessarily cumbersome nature of what is being proposed and the fact that it is open to being exploited by lobby groups.

Q640 Angie Bray: Do you think that one of the concerns is that, in many ways, it will become a tamer press and, as a result, a less interesting press?

Mr Wright: I think that is undoubtedly the case. One has to strike a balance in this and you may well be tempted to run more interesting stories by using illegal means to obtain them and you can’t do that, but if you over-regulate you will end up with a press that does not report important stories and that starts losing its readership and eventually disappears. The press is under great pressure anyway and each of these things is another turn of the screw.

Q641 Angie Bray: One of the surprises was so little was mentioned in Leveson about online, internet stuff.

Mr Wright: Yes.

Q642 Angie Bray: Again, we are told that that is the big threat to the future of the press because it will largely remain unregulated if it is operated from abroad. Is that where you are concerned that your readership will go to?

Mr Wright: That is definitely happening. My company now has a much bigger readership online than it does in print anyway. Our Mail Online operates internationally. It has more readers in America than it does here.

Q643 Angie Bray: Is it based in this country mainly?

Mr Wright: It is based in this country, but we are already seeing stories written in America by American journalists about American people being the subject of complaints to the Press Complaints Commission in this country because we have a tougher system of regulation than America does. I should say that some of the senior people in the magazine industry who work for American-based companies tell me that their colleagues in America are astounded by what is being suggested in the way of regulation here, as it would never be acceptable in America.

Mr Vickers: I think you also come close to some of the reasons why the press want to have a self-regulatory system. I think that, for us, on our own websites in our newspapers if we can be Kitemarked as journalism that you can trust-it is very difficult to know what you can and can’t trust on the web. If people are able to come to our websites, our newspapers online or our newspapers in printed form and know that they subscribe to the Editors’ Code and we are subject to self-regulation that is a good thing, and that is why we are passionate supporters of self-regulation.

Q644 Angie Bray: Finally, do you think that, in order to get that credibility, you do need the victims and the public to believe that the press is operating under a proper code of behaviour and that it is very important therefore, in the wake of everything that was revealed in Leveson from the victims, that those victims are going to have to give you a tick and say, "We are happy now with the way you intend to proceed in the future"? Do you think they should be part of the judgment on you?

Mr Vickers: I do not think the victims are a homogenous group, frankly, and it is very easy to point to them. Some dreadful things were done to people, most of the dreadful things that were wrong were either breaches of the criminal law or were in contempt of court or were defamatory. We have laws there to deal with all of those serious breaches.

Q645 Chair: So you don’t think there’s a problem?

Mr Vickers: I think the press has behaved badly in the past, but it has learnt its lessons.

Q646 Angie Bray: We have heard that before and we have had the last chance saloon and all those things and every time it is then, "Oh, sorry, we did not get that quite right". Do you feel now is your opportunity, once and for all, to get some kind of system in place that everybody can endorse?

Mr Wright: Just to take one example, contempt of court is a legal concept that exists in this country that newspapers have had to deal with for many years. I learned about it in the late 1970s as a trainee journalist. It can be difficult to get it right. You try very hard to. Nobody deliberately commits contempt of court, but occasionally it happens, in the same way that occasionally doctors will make an error and come up before the GMC. A system of regulation will not stop editors occasionally getting the contempt of court rules wrong.

Where the new regulatory system has a facility that the old one did not is that, if a body of evidence started to appear that a particular newspaper or a particular newspaper group was routinely flouting contempt of court as a matter of editorial practice, a standards and compliance investigation could be launched and the editors could be called before the body and they could be fined in addition to whatever fines they might face under the contempt of court law, but it still would not stop an editor getting it wrong in toto because people have to use their judgment.

Q647 Angie Bray: Is that not why the new system whereby you could be inside the body and be protected would not be a sensible way of making sure that you were protected against getting it wrong on those occasions?

Mr Wright: You are talking about libel there. The point I am trying to address is that you could give a regulator the most draconian powers in the world, you could have £500,000 fines for speeding on the motorway, but some people would still manage to drive at over 70 miles an hour. You can’t totally eliminate errors of judgment.

Q648 Angie Bray: What you are saying is no newspaper is ever going to be perfect and there are always going to be people who find themselves on the wrong side?

Mr Wright: Yes.

Mr Vickers: Can I just comment on that? You used the word "protected", but I think the way the system has been constructed is if you are outside the system you will be punished. At an earlier stage we were arguing, and I had a conversation with Lord Lester about this, that if there could have been protection within the Defamation Act for people who have signed up to a regulator so that you could demonstrate to a court that you believed in "responsible journalism", at the point when there was an assessment of damages that would have been taken into account in your favour. That has been flipped on its head and now you are punished in a way that is just contrary to the whole concept of civil damages. You are punished by exemplary damages.

Angie Bray: A final question from me, Chairman.

Chair: I have Gerry next.

Q649 Angie Bray: Just one final question. On that point, do you envisage that, if this new system was to go ahead, there will be publications that are outside the brief, for whatever reason, that go under as a result? Do you predict that there will be publications that close?

Mr Vickers: As a result of exemplary damages?

Angie Bray: Yes.

Mr Vickers: It is conceivable.

Q650 Mr Bradshaw: That comes back to what you said earlier that you were very confident that the European Court would throw out exemplary damages?

Mr Vickers: It is a long way to get there. We have current experience of this with our Naomi Campbell case. It takes about five years to get there and then five years to get the money that you are due.

Chair: Gerry has been sitting incredibly patiently.

Q651 Mr Sutcliffe: I am going to start off with an observation that you pray in aid the American system. American media ownership is only applicable to people who are citizens in America, so I think you will be arguing that case for the UK. On today’s performance I expected you to come with a robust and passionate argument about why we, as the lawmakers, should not go down this route because it was such a fundamental damage to democracy. I do not see that and do not hear any of that in what you have said. In fact what worries me is that you cannot remember who told you not to pursue the improved form of regulation that you were working on before Leveson reported because if you had been so passionate about that you would have pursued that, I would have thought.

Mr Wright: We were not told not to.

Mr Sutcliffe: You just cannot remember.

Mr Wright: We did not take instruction.

Q652 Conor Burns: You were advised not to. That was the phrase Mr Vickers used, you were advised not to.

Mr Vickers: I can’t remember whether it was in a press box meeting when we were talking about it, whether it was at the Newspaper Society Board or the Newspaper Publishers Association. Within those discussions it was suggested that it would be a mistake to appear to be flouting.

Q653 Mr Sutcliffe: You were not flouting because you passionately believed, as Peter gave evidence to Leveson and other colleagues from the industry have said, this legislation would be a grave mistake. You passionately believed that at the time, when giving evidence, but when it came to the crunch you did not pursue it.

Mr Wright: No. We had worked out during the summer of 2012 a fully-functioning scheme of regulation. It did not include any of the oversight, the royal charter element, because that was something Leveson came up with. That was put to Leveson at great lengths by Lords Hunt and Black and it was and still is ready to go and the fabric and framework of the regulator itself is fundamentally the same thing. It is fundamentally what was worked out last summer.

There was then a tactical question of, do you try to launch this in advance of Leveson reporting and, of course, we didn’t know what was going to be in his report. We felt that we should have respect for his inquiry and not put ourselves in the position of seeming to jump the gun or trying to force events by acting unilaterally. Perhaps, in the light of everything that has happened since, it would have been better if we had, but I think we would have sat here being questioned by people like you asking, "Why did you ignore Leveson? Why could you not have waited six weeks?"

Q654 Mr Sutcliffe: I think your answer to that, Peter, would have been, "Because we were so passionate that our solution was the right solution". You talk about the victims being a wide-ranging body of people, but, as the public representatives of victims like Milly Dowler and the family, there is a responsibility on us to respond to what happened to them. We go through the processes that we do but, you as an industry and sector, say, "We are passionate about our ability and rights to have a free press", and you pursue a solution. At the moment we are in a no-man’s land.

Mr Wright: Perhaps I can turn it on its head. We could, tomorrow, launch a regulator without a royal charter. Some of us think that might be a good idea, but would this Committee recommend it?

Q655 Mr Sutcliffe: I am heartened you say that, because what I am struggling to find is that you feel there was a problem in the first place. You say that when laws have been broken the courts will deal with that and I understand that, but do you feel that there was a fundamental problem right at the start with the PCC and its inability to deal with things "in a proper way"?

Mr Wright: The PCC was created in the early 1990s in response to the pressures then and the focus then was on privacy issues for which, at that point, there was no legal remedy and it was designed to deal with that sort of thing. It was also designed to avoid the mistakes of the previous Press Council that had become bogged down with lawyers and oral hearings. It did a good job at doing what it was designed to do, but nobody in 1991 or 1992 had even heard of voicemail and phone hacking. There was an enormous technological shift at the end of the 1990s that threw up all sorts of problems and, I am afraid, possibilities for unscrupulous people and we did not react to it as quickly as we should have done.

Q656 Mr Sutcliffe: I am more hopeful with that answer than I am about the version of, "We are not going to do this, we are not going to sign up and we are going to allow things to drift so that there will be no conclusion". I think that would be very damaging.

Mr Wright: I completely agree with you. We are very frustrated, which is why we put forward our royal charter proposal. Otherwise we would have just sat there staring at this royal charter put forward on 18 March and not doing anything because, for all sorts of different reasons, different elements of the press would not sign up to it.

Q657 Jim Sheridan: Mr Wright, I must say you are probably the last person standing that believes that the PCC were doing a good job. Incredible that you are still holding on to that. Just for the sake of the record, on the so-called infamous pizza meeting that took place in the Leader of the Opposition’s office, as I understand it all three major parties were present there. The question I want to ask you is about your reluctance to sign up for this compulsory arbitration. I would suggest that your paper and other papers would probably advocate compulsory arbitration for other organisations such as trade unions and so on. Would that be the case?

Mr Wright: Arbitration is, of its nature, a voluntary process. If you are in the construction industry and there is a dispute between two people, you can resolve it through the courts or you can go to arbitration. What concerns us is being forced to run an arbitration service that is free to the complainant. I think if we were not obliged to make it free so that we could limit the scope of it, we would have much less concern about it being compulsory.

Q658 Jim Sheridan: Would you suggest that any individual or organisation should have the opportunity to refuse compulsory arbitration if they so choose?

Mr Wright: To refuse to have compulsory arbitration placed upon them? We have been asked to agree to compulsory arbitration, which we do not agree to. If this House chooses to legislate and to introduce arbitration by statute then we do not have the choice in it, but at the moment we are being asked, "Do you want to sign up to a system that includes compulsory arbitration as one of its features?" If we are asked whether we want to, the answer is no.

Mr Vickers: It is a very different form of arbitration we are talking about. This is acting a bit like a small claims court, but with quite high costs; whereas the civil arbitration we are talking about between employer and trade union is to try and resolve a dispute. I am a lawyer, but our big concern is that the system will be taken over by lawyers trying to earn fees from small, struggling newspapers.

Q659 Jim Sheridan: If I could just move on briefly because I would suggest if I did some research that there would be some articles in newspapers in this country advocating compulsory arbitration for others, but we will park that there just now. Everyone agrees that the phone hacking was terrible and I think you certainly learned your lessons again, but the ink on the Leveson Report was not even dry when you went after the two lawyers who were involved in the Leveson Inquiry smearing them. It suggests to me, anyway, here we go again. Anyone who speaks out against or does anything to upset the press we go after them. Is that still the case?

Mr Wright: I do not think it was a case of going after them. They are the subjects of a Bar Standards Board inquiry, as far as I am aware.

Q660 Jim Sheridan: Had they done anything wrong?

Mr Wright: Under Bar Standards rules, they may well have done.

Q661 Jim Sheridan: Do you understand the perception of the press, that they just simply go after people if they say things that the press do not like or threaten them in any way?

Mr Wright: This is a very difficult area. You are suggesting if two lawyers are alleged to have acted improperly that, because they were involved in the Leveson Inquiry, that is unreportable. Is that your suggestion?

Q662 Jim Sheridan: No, I am suggesting that you went after them, to smear them, because what they were reporting was not palatable to the press.

Mr Wright: I think in this case that there has been no smearing and anything that has been reported is factually correct.

Q663 Mr Bradshaw: No smearing of David Bell? You wrote to every single conservative MP with a 12-page dossier of a very decent man, who is also a former newspaper executive, full of total nonsense and conspiracy theories. No smearing?

Mr Wright: That is not smearing. He has not challenged any of it.

Q664 Mr Bradshaw: He may have made the decision that it was not worth his while.

Mr Wright: It would not have been worth his while because it is all accurate.

Jim Sheridan: I rest my case, Chairman.

Q665 Paul Farrelly: Perhaps we can come on to some of the bits of detail in your alternative royal charter. First of all, on the arbitration point, Mr Vickers, your characterisation of this having been flipped is rather one-sided, isn’t it? If I was still a working journalist my fear would be that some multimillionaire might sue me for libel. With the arbitration system we have a protection. If these people do not use it, they are outside the system.

Mr Vickers: Yes. The thing I said had been flipped was the exemplary damages point. We had advocated at one stage having protection against damages, so a reduction in damages if you were a member and were signed up to a regulatory body, whereas what is being imposed is a penalty if you are not. Different people have different views and different parts of the press have different views on the arbitration process. The national newspapers, and particularly the broadsheets, have welcomed it in part. I am not sure it is, but if it is a way of avoiding huge multimillion pound High Court libel actions, then great. If we could get through a serious libel trial that avoided each side having to pay hundreds of thousands of pounds in costs and get that dealt with by an arbitration system that would be great.

I think some of the concerns around the practicalities of that are that there is an upper limit cap that has been imposed on the level of damages that would be awardable, but from the national newspapers’ point of view we have taken the view that, if we could avoid those costs, taken in the round the costs of funding the service would probably be worth paying. If Trinity Mirror was to avoid two or three libel actions-we do not get two or three big libel actions a year, but if we did-in which we had to pay £400,000 each, then there is a lot of money there to spend on our share of an arbitration service.

For the smaller, regional newspaper groups-I always quote this one and it would be the year before last-the Wolverhampton Express and Star, which is the biggest regional newspaper title that is published, the largest selling, did not pay out a penny in compensation or legal costs for anything that it had published. Their big fear is that if you get into an arbitration process where in the past something would have been dealt with to everybody’s satisfaction by the PCC, it is very easy to dress up an accuracy complaint into a libel claim and run that through the arbitration process. It is not so much the £400 or £500 that is likely to be awarded in damages. It is the cost of each individual arbitration, which we estimate to be in the low thousands. You have to hire an arbitrator for the day. You have to go through the process of that and there will be the sub-costs of the administration side.

Q666 Paul Farrelly: In your answer you are being more even-handed as far as the national press is concerned about the potential benefits of the arbitration system to reduce costs. That has not come out in the hue and cry.

Mr Vickers: Something that was introduced as a good thing I think has turned into a problem. Yes, I think for portions of the national press they would probably still welcome it.

Q667 Paul Farrelly: When it comes to the regional press, we explored this in some detail in a session a fortnight ago and we have asked David Newell of the Newspaper Society to provide us with his analysis of the statistics so that we can have a look at where he draws his conclusions, for instance, as to how accuracy complaints might be dressed up as libel complaints. At the end of the day, Lord Leveson said that the local press behaved in a very good fashion and, therefore, we were struggling to understand where suddenly under this new system the floodgates will be open for a torrent of complaints against them to change the balance.

Mr Vickers: Peter is probably closer to the figures, but 40% of the complaints that are heard by the PCC are from the regional press. As Peter said, everyone gets things wrong occasionally. However hard you try, you get something wrong. The regional press do get things wrong and there are many complaints that are heard by the PCC. Their concern is that someone who would have been happy with having a complaint heard by the PCC and adjudicated and they get their published correction or their adjudication suddenly will want money for it.

Mr Wright: I am a PCC commissioner, as you are probably aware, so I see the weekly crop of cases that go through the PCC. This is very rule of thumb, but I went through, a couple of weeks ago, that week’s intake of cases and I would say about one-third of them could have been framed as claims for damages because they were either involving matters of accuracy or privacy. Under the present system people prefer to go to a body that offers a quick and free resolution rather than going to the courts, but if they thought there might be a couple of thousand pounds in it for them and there was no risk they would make a claim for compensation.

Q668 Paul Farrelly: Let us move on to another issue of contention between the rival royal charters, this issue of the power to ultimately direct apologies. If the Mail on Sunday gets things wrong on the front page, why should it not apologise on the front page?

Mr Wright: We do, but this is a legal distinction. In the courts if you lose a libel case you have to pay damages, but you are not forced to apologise. If you settle a case an apology may be part of the agreement to settle it, but the law takes the view that an apology has no force unless it is genuine. If you order an editor to apologise when he is not sorry it has no value and I do not think anybody would want to end up with a situation where a newspaper carries an apology on page 1 or page 5 and then on its leader page carries a leader saying, "We are not sorry."

Q669 Paul Farrelly: It is not a legal point at all, because we are talking about press regulation and the ultimate power of a regulator to direct. The experience of most people with newspapers is even when they have things wrong, and I have been on both sides of the fence, the newspaper says, "Get lost", and then people will fight and fight. Sometimes they will take it to a regulator and this is a reserved power, the power to direct. If a newspaper is digging its heels in and something as heinous as the vilification of the McCanns or Christopher Jefferies or other such people happens then what we are arguing about is whether the regulator should have that power ultimately to direct that if the splash was on page 1 and it was wrong, then the apology should be on page 1. I fail to understand what the problem is.

Mr Wright: Leveson confused corrections, apologies and adjudications and, under our charter, the regulator would have the power to require where an adjudicational correction appeared but he would not have the power to force an apology. An apology would have to be genuine.

Mr Vickers: That is about the only difference between us. The correctional requirement-I think those words are almost interchangeable but not quite-is something that we have conceded. Most newspapers now do publish their corrections prominently. The Mail got there just before we did, but on page 2 we have-they are not hidden away any more on page 39. They are on page 2 or, if it is in a libel action and someone settles, it can be agreed where it would go. Our concern is over the forced apology. We say, "What is the value of an apology that somebody has to be ordered to give?" It is not around the requirement or positioning of any correction or adjudication.

Paul Farrelly: I have a few more questions, but I am conscious of allowing other people into this.

Q670 Mr Bradshaw: Why are you so keen to have serving Members of the House of Lords on both of these bodies, potentially, when Parliament’s royal charter to avoid the whole question of political interference explicitly ruled that out?

Mr Wright: This is purely a matter of practicality. The new body will need to have a person of very high calibre to lead it and, believe it or not, quite a lot of people of high calibre in this country end up being Members of the House of Lords. It is a fact that other media regulatory bodies tend to have Members of the House of Lords as their chairmen. I think the last three Chairmen of the ASA have been Labour or Lib Dem peers. It is not an absolute requirement. It is simply that we would like to have the widest pool of talent available.

Q671 Mr Bradshaw: Do you not see that if, as you are seeking to assure us, your charter and your system would be really independent it looks rather as if you are trying to keep a seat warm for Lord Black or Lord Hunt?

Mr Wright: I do not think we are for one minute, and whoever becomes chairman of this body is going to have to go through a rigorous independent appointments process, but I think it would be unfortunate if we ruled out a fairly large pool of talented people because they had at one point in the past served as a Member of the Government.

Q672 Mr Bradshaw: You say that whoever gets this job will have to go through a rigorous independent appointments process, but isn’t one of the other major differences between your charter and Parliament’s charter that Parliament’s charter involves the Independent Appointments Commission in appointing the chair of the recognition body who then, him or herself, appoints the rest of the members; whereas under your charter-

Mr Wright: You are now talking about the recognition panel?

Mr Bradshaw: Yes-PressBof would manage and control that whole process?

Mr Wright: No, they do not. The appointments panel for the recognition panel under our charter is chaired by a retired Justice of the Supreme Court, chosen by the Commissioner for Public Appointments. It includes three other people, one of whom is a Public Appointments Commissioner. PressBof dissolves itself.

Q673 Mr Bradshaw: Why are you so keen to have serving editors back in when, again, the parliamentary charter-

Mr Wright: Back in where?

Mr Bradshaw: On to the regulatory body now I am talking about.

Mr Wright: We are not. Past editors can be. Serving editors can’t.

Q674 Paul Farrelly: Past editors such as yourself, recently past editors.

Mr Wright: Completely past editors, I think.

Paul Farrelly: Promoted editors.

Mr Wright: Editors who get called before parliamentary committees.

Q675 Conor Burns: I just want to follow on directly from Ben Bradshaw. You said earlier you seem to get some comfort from this two-thirds parliamentary lock. My understanding was that one Parliament can’t buy into a successive Parliament and, while it may be the will of this Parliament, the charter could not be amended except by a vote of two-thirds in both Houses. That might not be the view of a future Parliament. What advice, if any, have you taken on the enduring significance of that? I had informal conversations with very senior clerks here, because this will be a massive constitutional innovation if one Parliament could lock future Parliaments indefinitely.

Mr Wright: I am sorry, I may not have explained myself clearly enough there. It is not the two-thirds super majority from which we get comfort. It is the underpinning clause, which means that a royal charter for an industry can only be changed by the means described within that royal charter and our royal charter does not include the two-thirds super majority. Our royal charter can only be changed by the unanimous agreement of the recognition panel, the board of the regulatory body and the four industry trade associations.

Q676 Mr Leech: Mr Wright, you said in answer to Mr Farrelly that 40% of complaints to the Press Complaints Commission were about regional press. Do you have a breakdown of the difference between the number of complaints that relate to local press that are owned by a big national newspaper organisation and how many are individual local newspapers?

Mr Wright: I simply don’t. Anecdotally-

Chair: But there aren’t many national newspapers still in the local business.

Mr Vickers: We are the only ones.

Chair: You are the only ones left now, are you?

Mr Wright: We have a stake in Local Worlds, which is a big chain, but it is a 37% stake. Anecdotally the big chains tend to run their papers fairly tightly and they have access to central legal advice. Very small papers tend not to come up before the PCC very much, but there is a sort of fringe of what you might you call spiky independently-owned newspapers. There is one or two in Northern Ireland who over the years have been before the PCC quite frequently. It is very hard to generalise.

Q677 Mr Leech: But in terms of your charter or the politician’s charter, are you comfortable that regional and local newspapers should sign up to your charter but should not be expected to sign up to a politician’s charter?

Mr Wright: I think you will have great difficulty persuading them signing up to the politician’s charter because they think the cost is insupportable. Everybody in the industry thinks it is greatly preferable that there is one regulator, both for cost reasons so that there is one code that the public can understand and because of the difficulty in staffing and finding suitable people to sit on the board of more than one regulator. The regional press would sign up to our proposal. Does that answer your question?

Q678 Mr Leech: Would it be fair to say that local newspapers have, to a certain extent, tried to distance themselves a little bit from national newspapers throughout this process? For instance, I received a letter from the editor of the Manchester Evening News, part of the Trinity Mirror Group, saying, "We are not responsible for all this mess". I do not want to put words in their mouth but, "We should not be tarred with the same brush that some of the national papers perhaps have been". Would it be fair to say that there is some disagreement within the industry about whether or not regional and local press should be treated differently?

Mr Vickers: There are certainly some very small weekly newspapers who would like not to be part of any system at all. I think they would be happy for the PCC to continue because they do see some benefits of that form of complaint service, but are terrified by the burdens that will come with signing up to the regulatory system.

Q679 Mr Leech: Would that include papers within your group?

Mr Vickers: I think every single title in our group will sign up. They would certainly sign up to the press version of the royal charter, because that will be a group decision. We can see the benefits and we can see the benefits of scale. Even quite largish groups, not the Big Four, of weekly newspaper publishers would much rather have nothing to do with it, but if they have to have something to do with anything they would rather ours than the state-sponsored charter.

Q680 Mr Leech: If a major newspaper does not sign up either to the politician’s charter or to your charter, what should happen? Hypothetically, if your charter was to go ahead but one of the major newspaper groups decided that it did not want to be involved, what should happen?

Mr Wright: No major newspaper group has indicated that. If they did, this is one of the things that the Leveson system allows for and they would be punished by exemplary damages should they ever publish a libel.

Q681 Mr Leech: But you have suggested that exemplary damages might be illegal under European legislation anyway.

Mr Wright: As Paul said, it might be five years before you get a case before Europe.

Q682 Mr Leech: But, in those circumstances, if they do not sign up to your charter, which from your perspective would be completely reasonable and totally in the interests of newspapers to do so, would you then support the principle of exemplary damages against those newspapers who chose to not sign up to your charter?

Mr Wright: No. This is a situation that we have had in the last three or four years with the PCC. It is deeply regrettable if a newspaper group chooses not to sign up. We have looked at all sorts of means of bending people’s arms to sign up but, in the end, I am afraid they amount to licensing systems, which I do not think are acceptable. There are great advantages in signing up. Newspapers all need a complaints resolution system of some sort. I know the PCC has its detractors, but it has a staff of trained people. It has a code that is acknowledged to be good and it deals with complaints, which is useful to newspapers.

Q683 Mr Leech: Hypothetically though, if exemplary damages are not against European law, are they not a pretty good incentive for a newspaper to sign up?

Mr Wright: Yes, they are a good incentive, but if you constructed a gallows on the M3 nobody would go over 70. I would not recommend doing it.

Q684 Mr Leech: You have just said it is a shame that not everyone has signed up to the PCC and basically there is not a great deal we can do about it if they don’t, but if this is a way of ensuring that people do sign up to it and it transpires that it is legal to do, surely that is a good way of getting them to sign up?

Mr Wright: There are hideous dangers in it. We have not examined exemplary damages, but one of the problems with exemplary damages is the cost proposals could mean that you could end up funding Russian oligarchs to take spurious actions against you, even if they lose them, and still have to pay the cost of it.

Q685 Mr Leech: Isn’t that only a problem if someone does not sign up?

Mr Wright: Yes, but it does not make it good law. It is still bad law.

Q686 Mr Leech: Isn’t legislation often about incentivising people to do things or not to do things?

Mr Wright: It may be, but I do not think you should do it through bad law.

Q687 Mr Leech: If it is the only way in which you can persuade an organisation to do something?

Mr Wright: If that is the only reason for having exemplary damages, my legal advice is that it will fail under European law.

Q688 Paul Farrelly: A few points of detail, picking up some of the threads that were woven by Ben earlier on. We were discussing previously how you have widened the experience pool or the gene pool, as David Newell called it, in bringing Members of the Lords back in, but when it comes to the appointments panel for the recognition commission, right from the start you have narrowed it down because your charter says the chair of that appointments panel must be a retired Justice of the Supreme Court. Why?

Mr Wright: Well, you need to have somebody who will command respect and I would have thought a retired Justice of the Supreme Court would.

Q689 Paul Farrelly: A Member of the House of Lords could not? It rather goes against the arguments you were making for widening the experience pool.

Mr Wright: You are now suggesting that we should include Members of the House of Lords.

Paul Farrelly: I am asking you why narrow it down to a retired Justice of the Supreme Court.

Mr Wright: I have just told you.

Q690 Paul Farrelly: Do you have any particular former judge in mind?

Mr Wright: No.

Paul Farrelly: What is the foundation group getting up to at the moment? That was headed by Lord Phillips of Worth Matravers. What is that-

Mr Wright: They are waiting for a decision on the royal charter.

Paul Farrelly: Lord Judge is a name that has often cropped up. Has he been in mind?

Mr Wright: He is Lord Chief Justice as far as I am aware.

Paul Farrelly: But he may be retiring.

Mr Vickers: He has not been on the Supreme Court, has he? I may be wrong there but I think he might be-

Paul Farrelly: You do not have any judges in mind?

Mr Wright: No.

Q691 Paul Farrelly: I just want to put this to you because, on this four-member panel, one of the people in another change that you are proposing would be one person that, in the press funding body’s opinion, represents the industry. Would the reality not be that with that one person of yours, one out of four, you as an industry would be lobbying for a friendly judge? Anybody else who would be lobbying for an alternative judge, if an alternative judge came forward, they would be in the position where they knew they were not wanted by the industry, so they might have second thoughts about doing it. Would the reality not be that with one member on the appointments panel and you are lobbying for a respected friendly judge, two out of four would give you a veto over appointments from the start in practice, in reality, to the recognition commission?

Mr Wright: Sorry, I do not quite follow your arithmetic there. You have somebody-

Paul Farrelly: From the industry. You lobby hard for a friendly judge, somebody you as an industry respect-

Mr Wright: But the judge is appointed by the Commissioner of Public Appointments.

Paul Farrelly: Indeed, but you are lobbying-

Mr Wright: Can you believe the Commissioner of Public Appointments would be open to lobbying? I don’t-

Paul Farrelly: If there is no other retired Justice of the Supreme Court who wants to step in because you have your favourite candidate-

Mr Wright: We do not have a favourite candidate.

Paul Farrelly: -because the choice is so narrow, the Public Appointments Commissioner is potentially going to be left with your choice.

Mr Wright: You have asked us whether we have a retired justice in mind and we do not.

Q692 Paul Farrelly: I am just putting forward a scenario that, with some of the changes that go throughout your alternative charter, they just beg the question of how many of these changes and objections are based on your desire to hold on to the status quo in making appointments and, therefore, ultimately having control of the regulatory system?

Mr Wright: We are not looking for control. We are simply looking for a voice. Under your system, anybody who has any connection with journalism or publishing is entirely excluded from this. I don’t believe that a recognition panel that was completely divorced from the industry would have the respect of the industry.

Q693 Paul Farrelly: That is not entirely the case. It certainly is not the case when it comes to the proposals for the criteria that a regulator must pass. Let’s just go on to the recognition panel. As well as Members of the House of Lords, you have added in Members of the European Parliament. Some people might find it strange that representatives of the Mail are backing MEPs to be on this body and be involved in this process.

Mr Wright: I don’t have any animus against MEPs.

Paul Farrelly: What is the reasoning for that change?

Mr Wright: The reasoning is that this was in the royal charter published on 12 February, on which we based our proposal. I could not see a reason personally to change that, but if you felt very strongly that MEPs should be excluded I would be very happy to exclude them.

Q694 Paul Farrelly: I don’t. It is just a curiosity. My final question, this is again all about the recognition panel and its functions before we even get on to the regulator. Your rival charter removes one function from the recognition panel, which is under 4.1(b), which is to pronounce on the effectiveness of the system. Then your clause 10.2 goes rather further and you have explained it previously. It gives you and the trade associations making up the independent funding body a veto over scrapping the system and changing it entirely. Again, people are left with the impression that, at the end of the day, as has happened in the past, you just want control; so much influence that in practice it amounts to control.

Mr Wright: I think you have asked two separate questions there but, if I have understood you correctly on the first one, we have removed the power of the recognition panel to hold-

Paul Farrelly: Denouncing the effectiveness of the system.

Mr Wright: Yes. Well, we think that the board of the regulator should be the regulator and not the recognition panel and the recognition panel should be there to do the job of whether the structure of the regulator follows the criteria. It should not be sitting continuously passing judgment on the work of the regulator otherwise it becomes the regulator itself.

Q695 Paul Farrelly: So you have removed the power? This Committee, on the same evidence as the Press Complaints Commission, found in a report that we did in 2010, after following the evidence, that what News International were saying was not and could not have been true. The Press Complaints Commission, on the same evidence, exonerated the News of the World and indeed had a go at the Guardian over its reporting and its methods. In that situation you are removing from a recognition panel the ability to say, "Actually, we think the job the Press Complaints Commission is doing is absolutely rubbish and change is needed". People will struggle to understand why.

Mr Wright: What you are proposing is the regulator sits in the recognition panel.

Paul Farrelly: No, it is not.

Mr Wright: It does because if it has the power to effectively sack the regulator whenever it takes issue with what the regulator is doing, it is then a super regulator.

Q696 Paul Farrelly: You are also giving yourself, in your clause 10.2, a veto as an industry over any changes to the system.

Mr Wright: We are not giving ourselves a veto. We are saying that changes must be made by unanimous agreement.

Paul Farrelly: That is pretty much the dictionary definition of a veto.

Mr Wright: I do not think it is unreasonable that the people who are being regulated should agree to changes to regulation.

Paul Farrelly: I would love to see that argument in your papers if there was a scandal in the drugs industry or the tobacco industry or banks or the NHS.

Mr Wright: Parliament is always free to legislate.

Chair: I think that is all the questions we have. I thank both of you very much.

Prepared 20th June 2013