Leveson: who will blink first, Labour or the Tories?

With some reservations, Labour is inching towards accepting the Tories' proposal of a Royal Charter to underpin a new press regulator.

In the two and a half months since the Leveson report was published, it has often appeared in danger of becoming what its chair described as "a footnote in some professor of journalism’s analysis of the history of the 21st century". But today the Conservatives will finally publish their plans to introduce a new system of press regulation. Having rejected Leveson's recommendation that any new body be underpinned by statute, the Tories have alighted on Oliver Letwin's proposal of a Royal Charter, the mechanism used to establish the BBC and the Bank of England, to formally recognise the new watchdog. 

Press campaigners have already rejected the plan as unacceptable. Evan Harris, the former Lib Dem MP and associate director of Hacked Off, described it as "one of the weakest forms of self-regulation anywhere to oversee one of the presses capable of the worst excesses. This is weaker than the [existing] Press Complaints Commission." But Labour and the Liberal Democrats have refused to rule out supporting this option. While both continue to favour state-backed regulation, they are aware of the need for progress after months of cross-party talks. Labour's decision not to follow through on its threat to force a Commons vote on its own draft bill in January if the government failed to bring forward satisfactory proposals by Christmas was viewed by the Tories as evidence of its willingness to compromise. 

One reason why Labour is more favourable to a Royal Charter than might be thought is that, in practice, it may be largely indistinguishable from state-backed regulation. As Conservative peer Norman Fowler has pointed out, "The final irony of the Letwin plan is that – in spite of all the fine words about how unacceptable it is to have statutory intervention – it looks as though the royal charter will require legislation to enable it to work. How else can the new system of damages and costs be introduced?" Indeed, one of the concerns expressed by Harman is that a Royal Charter (which would require renewal by the government every ten years), would place the ultimate responsibility for press regulation in the hands of ministers, rather than parliament. For now, the desire on all sides to avoid further delay, means a messy compromise is the most likely outcome. 

A protest group stages a mock burning of the Leveson report outside the Queen Elizabeth II centre in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.