Regional publishers warn MPs of ‘major issues’ with Parliament’s Royal Charter – but stop short of boycott

Local newspaper groups have said the Government’s proposed Royal Charter on press regulation could threaten the financial future of many papers.

Giving evidence to the Culture, Media and Sport select committee at the House of Commons, regional newspaper publishers warned plans to introduce an arbitration process for complaints could open the way for a wave of small compensation claims that would have a crippling effect on local newspapers’ profitability.

They also expressed concerns about the higher cost of setting up a new regulator, as proposed in the Royal Charter advanced by the three main political parties.

David Newell, director of the Newspaper Society, told MPs that many complaints that are handled either by newspapers themselves or the Press Complaints Commission could “be dressed up as claims” under a new arbitration system.

“Because arbitration is free at the point of entry there will be a heavy cost paid to handle individual cases,” he continued, adding that the arbitration system should be brought in initially as a pilot scheme.

Christopher Thomson, managing director of DC Thomson, publisher of The Courier and the Sunday Post in Dundee, said the threat of claims could also damage the quality of editorial content.

“Potentially almost any group could interfere with the editorial process of a newspaper,” he argued. “The danger is that we end up with just press releases going out and that’s a real problem for democracy.”

Ashley Highfield, chief executive of Johnston Press, added: “We have substantial issues with a government charter that raises costs for us, that doesn’t provide true independence from politicians, is inflexible and could be the cause of vexatious group claims.”

The witnesses, which also included David Montgomery, chairman of Local World, and Adrian Jeakings, president of the Newspaper Society and chief executive of Archant, stopped short of saying they would refuse to sign up to the government’s version of the charter.

Highfield said: “We hope we can sit down and have meaningful discussions and reach an agreement. We have been exonerated by Leveson and have been punished.”