A free press is the lifeblood of any well-functioning capitalist society. It ensures information flows free of state control, allowing democracy to flourish and journalists to pursue the truth—and, very often, to expose corruption. When societies limit press freedom, no matter how incrementally, democracy weakens a bit. That might have happened in the UK on Monday.
Last November, Lord Justice Brian Leveson—the leader of the UK government’s inquiry into newspaper shenaniganery (e.g., phone hacking, intimate photos taken without consent and other invasions of privacy)—released a 1,987-page report on strengthening press oversight. Among his recommendations: weakening sources’ confidentiality protections; limiting journalists’ ability to hold off-the-record meetings with members of government and parliament, party leaders, lobbyists and law enforcement; and establishing a statutory press regulator. As I wrote at the time, if the government adopted the full recommendation, the UK’s 318-year tradition of press freedom would be in jeopardy.
Still, I held out hope, as Prime Minister David Cameron seemed to reject the most onerous recommendations out of hand, denouncing any measures that “would create a vehicle for politicians whether today or sometime in the future to impose regulation and obligations on the press.” He saw the need to crackdown on illegal behavior in the industry, but he preferred to establish a new watchdog independently of Parliament and have newspapers voluntarily submit to it—still a bit heavy-handed, but a better alternative in the name of journalistic freedom. But Cameron had a tough road ahead, as Nick Clegg—Deputy Prime Minister and leader of the junior coalition partner Liberal Democrats—favored statutory regulation. Ditto for Ed Miliband, leader of the opposition Labour Party. And with the coalition becoming more fractious by the day (and Labour’s poll ratings rising), Cameron had scant political capital to spend.
Cross-party talks began shortly after the report’s release, but last Thursday, Cameron called them off, citing an unbridgeable gap between his Conservative Party and Labour and the Lib Dems. All three more or less supported establishing a regulator via royal charter, but Labour and the Lib Dems wouldn’t back down from demands for legislative underpinning. Meanwhile, actor Hugh Grant—a phone tapping victim and de facto leader of pressure group Hacked Off—phoned Labour and Lib Dem frontbenchers, urging them not to back down, and started rounding up potential Conservative rebels to support them. By Friday evening, it seemed Clegg and Miliband would table a bill for statutory press regulation on Monday, and Cameron would lose—potentially ending his leadership.
Saturday morning, Cameron went into overdrive. His goal: Securing enough of a compromise with Labour and the Lib Dems to ensure he didn’t suffer an embarrassing defeat, but keeping a press law off the books to preserve freedom and avoid a politically embarrassing U-turn. Sunday afternoon, the big guns convened: Cameron and his Conservative deputies, Clegg and other senior Lib Dems, Miliband and members of his shadow cabinet, and members of Hacked Off (officially there to ensure the deal upheld victims’ best interests). In the wee hours of the morning, compromise was reached: The new regulator’s functions and powers won’t be defined by Parliament and enshrined in legislation; however, Parliament will need to approve the royal charter, and certain provisions will require legislative underpinning.
Cameron claims this doesn’t cross the “Rubicon” of press law, but I don’t quite agree. One of the press’s primary functions is to hold politicians to account—the UK now risks the opposite happening. Parliament will have the power to amend the charter with a two-thirds majority—not as difficult a hurdle as you might think, even in a multi-party country like the UK. Cameron and his deputies may be devoted to a free press, but future governments may be more heavy handed, and the agreed-to arrangement opens the door for opportunism—there’s now a clear administrative pathway to full press regulation. Politicians have new power. With a two-thirds majority, a future government could, say, limit the press’s ability to report on skullduggery in Westminster. Right now, the UK has one of the most transparent governments on the planet, thanks in no small amount to the famously dogged British press. Clamp down on journalists, and government’s inner workings get murkier. Democracy gets murkier. Human rights get murkier. And businesses get less confident. (See a Hungarian citizen with any questions.)
Another problem: While Parliament won’t technically define the regulator’s powers, it will pass measures on the awarding of damages in press lawsuits, extending favorable treatment to publishers that submit to the new regulator. This belies Cameron’s claims that participation is voluntary—with these legislative changes, which the government submitted as amendments to the Crime and Courts Bill on Monday, it’s in publishers’ best interests to subscribe. If they do, they get partial immunity from damages in civil suits; if they don’t, they face heavy “exemplary damages.” Future versions of this bill could easily be tweaked to extend heavier penalties to regulatory holdouts. Even more damning, one amendment states, “No publisher shall be considered eligible for recognition by an approved regulatory body constituted under the terms of a Royal Charter unless a ‘conscience clause’ has been incorporated into the employment contracts of all journalistic staff.” Yep, Parliament’s now regulating journalistic employment contracts—and if a conscience clause seems innocuous, just think how future governments might amend this. It opens the door for a government to silence media with any affiliation with the opposition, killing public discourse.
Even without this small legislative underpinning, the new regulator would be problematic. The charter encourages the regulator to adopt many of Leveson’s recommendations, including those aimed at ensuring “transparency” of journalists’ sources—but which, in practice, would make confidential briefings extremely risky for journalists. Many investigative reporters believe key stories they’ve broken wouldn’t be possible under the new scheme. The Daily Mail’s exposure of key failings in a 1993 murder investigation, which resulted in the guilty party’s (who finally confessed last week) conviction, would likely be a no-go. Ditto for The Guardian’s exposure of the “Cash for Questions” scandal in 1994.
People may not like everything the UK press does. Goodness knows I don’t love slimy tabloid journalism. But it’s a necessary evil in a truly free society. As London Mayor Boris Johnson wrote in an editorial on Monday: “Like any strong detergent, the work of the British media may cause a certain smarting of the eyes. But if you want to keep clean the gutters of public life, you need a gutter press.” That means a press that’s free to continue stalking the darkest hallways of Westminster and party offices, meeting confidential sources, and exposing every last political and corporate misdeed—damn the political consequences and regulatory repercussions. Imagine if regulations prevented Bob Woodward and Carl Bernstein from breaking Watergate. Or The Wall Street Journal from exposing the brewing Libor scandal in April 2008—fair game under the new scheme, which would apply to foreign publishers covering UK-centric news. Or The Telegraph from breaking Parliament’s expense scandal in 2009—a watershed moment in the ever-present fight against corruption. And if you think these investigations would simply fall to the blogosphere, think again—the charter lumps bloggers in with newspapers and magazines.
This saga is just one more symptom of a larger flaw with the UK government’s approach to regulation: When bad behavior comes to light, regulators go overboard trying to prevent a repeat when simply enforcing the existing system better would suffice. Libel, phone tapping, hacking and other privacy invasions were illegal before Monday, and the guilty parties have already been sued and tried—that happened without a statutory regulatory body. This is a solution in search of a problem. Ditto for the pending financial regulatory changes, which go overboard to try to prevent a repeat of 2008: They miss the mark, and they undo some of the “Big Bang” financial deregulation of the 1980s, which many credit for London’s emergence as a global financial hub. They also interfere with banks’ free functioning, to the detriment of economic growth. The government claims it’s dedicated to keeping the UK business friendly. But its actions say otherwise, in my view.
For centuries, the UK has been a beacon of freedom—not least because, 318 years ago, press licenses were abolished and journalists were granted the freedom to expose government wrongdoings at every level. That’s one big reason the UK has a vibrant corporate sector and some of the world’s deepest capital markets—transparency fosters confidence. A transparent, capitalist society is the holy grail for citizens and businesses. Politicians should do whatever it takes to uphold this.
As I write, no major newspaper has committed to subscribe to the new scheme. Instead, they’ve spoken out against the government’s so-called incentives for them to join, signaling their larger displeasure with Monday’s agreement. I suspect we’re only seeing the beginning of this debate—hopefully, in the end, officials will find a way to safeguard press freedom. The UK’s not Hungary. Let’s keep it that way.
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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.