Press body 'needs urgent reform'

1 February 2012 Last updated at 08:04 ET

Lord Black rethought his views of the PCC after the phone hacking scandal was laid bare

Urgent reform of the Press Complaints Commission is needed, the chairman of the body which funds it has said.

Lord Black told the Leveson Inquiry that after the phone hacking scandal, he became aware of the regulatory system's lack of investigative powers.

"It took a scandal like that to show us we needed a new body to enforce the Editors' Code of Practice," he said.

Lord Black, an ex-PCC director, chairs the Board of Finance which collects levies from newspapers to fund the PCC.

He said he had believed the PCC had "real bite" within the industry but the hacking scandal had forced him to rethink those views.

He said he had always opposed imposing fines on newspapers, as "a matter of principle".

"I certainly now believe that some form of fining system would be appropriate," he told the inquiry.

He added that the PCC had changed in every year of its existence and the code of practice more than 30 times, but it was now time to look at it again and start from scratch.

Lord Black went on to deny that the Board of Finance exerted any control over the PCC.

"While there is a perception in some quarters that some form of control exists, that does not exist," he said.

He also denied that Tory peers exerted a superior influence on the bodies.

Lord Black, a life peer who was press secretary to former Conservative leader Michael Howard, added that the new appointment of Lord Hunt, a Tory peer, to the post of PCC chairman was not a political one.

Later, senior figures from Ofcom outlined the communications watchdog's working practices, and explained the code they used to regulate broadcasters.

Ed Richards, its chief executive, said Ofcom did not intervene before the broadcasting of programmes because it could lead you into the "area of censorship and suppression".

The inquiry expects to also hear evidence from the Advertising Standards Agency.

'Pandora's box'

On Tuesday, chairman of the Press Complaints Commission Lord Hunt acknowledged the need for a fresh start, saying he wanted to see the "participation of the whole industry in its own regulation".

He warned against any parliamentary move to regulate newspapers as it would "open a Pandora's box" and stifle freedom of speech.

The Leveson Inquiry was set up by Prime Minister David Cameron in July 2011 amid new revelations of phone hacking at the now-closed News of the World newspaper.

The first phase is examining the practices and ethics of the press.

The second will focus on unlawful conduct by the press and the police's initial hacking investigation, only after a police investigation into phone hacking at the NoW is complete.

Continue Reading... Labels: 'needs, Press, reform', urgent

Merkel: Greece debt deal urgent

9 January 2012 Last updated at 09:24 ET

Germany is now clearly the stronger partner in the Berlin-Paris alliance

An agreement with Greek bondholders must come soon for Greece to receive a vital second bailout, Germany's Chancellor Angela Merkel says.

"The second Greek aid package, including this [debt] restructuring, must be in place quickly.

"Otherwise it won't be possible to pay out the next tranche for Greece," she told a news conference.

Greece needs a second EU-IMF rescue to avoid a default on its debts and possible exclusion from the eurozone.

The rescue, worth 130bn euros (£107bn), would include a voluntary restructuring of Greek debt - meaning bondholders would have to write off 50% of the Greek bonds' value.

'Very tense' eurozone

Mrs Merkel called Greece "a special case" but insisted that "no country should be excluded from the eurozone".

She was speaking in Berlin at a joint news conference with France's President Nicolas Sarkozy, focused on the eurozone crisis.

Mr Sarkozy called the situation in the eurozone "very tense".

EU leaders are facing multiple pressures on the 17-nation eurozone in the run-up to a summit on 30 January.

Chancellor Merkel insists on tougher penalties for countries that violate eurozone budget rules.

Twenty-six of the EU's 27 members have agreed in principle to a new inter-governmental treaty - a "fiscal pact" - to stabilise the euro. The UK refused to sign.

Referring to the pact, Mr Sarkozy said "we want the negotiations to finish in the coming days, so that the treaty is signed on 1 March".

The pact will include automatic sanctions for budget rule-breakers - sanctions that can only be blocked if a majority of powerful eurozone members object.

A new EU bailout fund - the European Stability Mechanism (ESM) - is to be launched in July, a year earlier than originally planned.

The existing temporary fund - the 440bn-euro European Financial Stability Facility (EFSF) - is considered too weak to rescue a major eurozone economy such as Italy or Spain.

Mr Sarkozy said he and Mrs Merkel had agreed to ask the European Central Bank to "do all it can to ensure the EFSF works more effectively".

The liquidity of European banks remains a big worry, as economic stagnation takes its toll on lending.

Economic data suggest that the eurozone is heading for recession in 2012. The German economy remains much healthier than the struggling eurozone periphery economies, especially Greece and Italy.

The need to revive growth and create jobs is high on the EU leaders' agenda, although many economists argue that the drive for austerity is stifling growth prospects.

Controversial tax

Mr Sarkozy has suggested France could introduce a financial transaction tax as early as February, while Germany says such a tax must be EU-wide.

Nevertheless, Mrs Merkel praised the French initiative, saying "we've been fighting for years to get a financial transaction tax".

The UK government says it will only consider introducing such a tax if there is global agreement on it.

Mr Sarkozy is anxious for France to keep its cherished AAA credit rating as he campaigns for re-election in April.

He holds the banks largely responsible for the debt crisis and sees the financial transaction tax as a fair measure to ease the burden on taxpayers - a message that may appeal to voters.

Mrs Merkel will meet International Monetary Fund (IMF) chief Christine Lagarde in Berlin on Tuesday, to consider how to proceed with the rescues of debt-laden eurozone economies.

Besides Greece, Italy and Spain are also saddled with huge debts, which will have to be refinanced this year. Their borrowing costs remain unsustainably high.

Hungary - outside the eurozone but dependent on it - has seen its sovereign debt downgraded to junk status. It is seeking an IMF standby loan amid a row over its economic policies and weak investor confidence.

Continue Reading... Labels: Greece, Merkel:, urgent

Pension deal urgent, says Hutton

4 December 2011 Last updated at 08:00 ET

 

Lord Hutton is often cited by ministers in support of their controversial pension reforms

The downgrading of Britain's growth forecasts has made the case for public sector pensions reform more urgent, Labour peer Lord Hutton has said.

The former minister, who conducted the coalition's review on pensions, said change was now the "order of the day".

He also told the BBC the government's offer was a "perfectly credible" one.

But unions, who say two million workers went on strike over the issue last week, argue their members will have to work longer and pay more, but get less.

The government wants public sector workers to pay more towards their pension schemes, retire later and accept a pension based on a "career average" salary, rather than the current arrangement based on their final salary.

On average workers face a 3.2% rise in their contributions.

The recommendations from Lord Hutton's independent review are at the heart of these proposals.

The former pensions minister told BBC Radio 4's The World This Weekend that his original assessments about the sustainability of future pension arrangements had been too optimistic.

'Heading for rocks'

He said the savings from an overhauled system should be brought forward as quickly as possible.

He was speaking days after the Office for Budget Responsibility said it now expects growth of 0.9% this year, down from the 1.7% predicted in March.

The prediction for next year has fallen to 0.7% from 2.5% predicted in March.

"Growth is slower. We know that by 2016 on the latest projections the economy is going to be about 3.5% smaller than we thought it would be," Lord Hutton said.

"That is going to affect the sustainability of public sector pensions in a negative way.

"The ground underneath those estimates has changed radically and I'm afraid in the wrong direction so we cannot be sure that the costs will fall over time and that we get to a more sustainable balance.

"The events of the last couple of weeks have confirmed that change is going to be the order of the day now, if we're going to remain competitive, successful as an economy... we could be heading for the rocks unless we make adjustments now."

He said the government's offer would give "significant protection" to workers close to retirement as well as "very generous accrual rates".

But he also said the unions had raised some genuine concerns, and he agreed with warnings that current plans could force large numbers of people on low or moderate incomes to opt out of their pensions altogether.

"I think there is a genuine issue between the unions and ministers about the pension contributions, which I hope is the subject of further discussion," he said.

'No concessions'

"I don't think you can build long-term reform on forcing people out of saving for pensions, that is a crazy way to do it."

He added: "I hope ministers can look again at some aspects of the way they're planning to increase pensions contributions."

For Labour, shadow home secretary Yvette Cooper said the government was going further than Lord Hutton's recommendations and had effectively introduced a "3% surcharge" on workers' contributions.

"That is not something that was in Lord Hutton's report," she told the BBC's Andrew Marr show.

Brian Strutton, from the GMB union, said Lord Hutton had not taken into account that caps on pay rises and job losses in the public sector meant the cost of pensions as a share of overall GDP would still fall despite the drop in economic output.

He added: "It is good that Lord Hutton has belatedly agreed with unions that the government's 50% contribution increase on public sector workers is too much and will drive people out of pension saving.

"In all the months of talks, the government has made no concessions on this point which is necessary if substantive progress is to be made in the ongoing talks."

MPs' pensions

Meanwhile, ministers themselves face a £4,000 rise in their pension contributions in a move aimed at showing they share the financial burden felt elsewhere in the public sector.

Prime Minister David Cameron has written to colleagues, the Mail on Sunday reported, to say they cannot expect low-paid workers like nurses and dinner ladies to "take on a burden we are not prepared to assume for ourselves".

Rises planned over the next three years would see Cabinet ministers contributing 17.9% of their £69,000 salaries to get the same benefits - equivalent to an extra £4,000.

Continue Reading... Labels: Hutton, Pension, urgent