Attack on papers spares Guardian

LABOUR’S bid to force newspapers into state-backed regulation contains an extraordinary loophole that would exempt just two national newspapers – the Labour-supporting Guardian and Observer.

Proposals put forward by deputy leader Tom Watson would expose all national newspaper groups to punishing legal bills every time someone chose to sue them, even if the newspaper won.

It would apply to any newspaper that refused to sign up to the stateapproved regulator Impress, funded almost entirely by ex-Formula 1 boss Max Mosley, whose racist past was exposed by the Mail. Mr Mosley has also given £540,000 to fund Mr Watson’s private office.

Almost all national and local newspapers, including the Daily Mail, are members of Ipso, which is free of state control and operates an arbitration scheme giving the public means to sue newspapers without the ruinous cost of going to court. The Guardian and The Observer have no independent regulator and no arbitration scheme.

But Mr Watson’s proposed new law would not apply to a publisher that ploughs all profits back into the business.

That would lift the threat of extra legal costs from The Guardian and The Observer, which are controlled by the Scott Trust. Its rules say that if the loss-making papers move into profit the money would be put back into their newspaper and website operation.

It would mean national newspapers that supported Labour but do not belong to an independent regulator and do not offer arbitration – the two most persistent demands of critics of the Press – would not be hit by the proposed punitive costs regime.