Nick Clegg

Nick Clegg calls for an overhaul of press regulation at the Institute for Government

Credit: Oli Scarff/PA

Nick Clegg, the deputy prime minister, has called for a complete overhaul of press regulation, calling the current system "absolutely ludicrous".

Speaking at the Institute for Government this morning, Clegg heavily criticised the Press Complaints Commission for its handling of the phone hacking scandal, claiming that it had "failed as an effective watchdog" and that it was "time for fundamental reform". But he stressed that the coalition would not enforce any kind of statutory regulation on the industry.

"It would be wholly wrong to respond to the current crisis with any action that inhibits a free and vigorous press," he said.

"Politicians must resist any temptation to impose short-term, knee-jerk restrictions on the media. This is an area where it would be easy to legislate in case, and repent at our leisure.

"But the coalition will not succumb to that temptation."

Clegg went on to argue that the PCC had been undermined by its inability to act on third-party complaints and the fact that media organisations are free to remove themselves from its governance, as Richard Desmond's Northern & Shell titles did earlier this year.

He called the commission "a complaints body at best, and a limited one at that".

Clegg also accused the media of "crossing the line from public interest into vulgar voyeurism" and of falling behind other institutions, such as the police and financial sector, on accountability, saying that it has "simply not kept up".

He said that the press had enjoyed an "institutionalised immunity from the basic standards that govern the rest of society".

Outlining the proposed reforms, the deputy prime minister called for an "independent regulator, insulated from vested interests in the media and free from the influence of government".

He said that the body must have the power to enforce financial penalties on editors and proprietors who breach the code of conduct.

He also called for clarification on how the fit and proper persons test can be applied. In the wake of legal confusion over the test – which many called to be applied to News Corp in regard to its now-defunct bid to take full control of BSkyB – Clegg said that it was vital to determine whether it could be applied to organisations as well as individuals.

"It's not clear whether institutions can be deemed unfit and improper, or if the issue is just on of personal liability," he said.

In an apparent reference to the actions of News International over the growing phone hacking scandal, Clegg warned that the confusion "creates the potential for organisations to evade the responsibility by blaming a handful of individuals when clearly the problem is ingrained across the culture of an institution."

Speaking on Radio 4 this morning, Clegg said there were "big questions" over whether News International was a fit and proper organisation. In his speech at the Institute he called on its senior executives Rupert and James Murdoch and Rebekah Brooks to "do the decent thing" and appear before the culture media and sport select committee, as they were requested to do on Tuesday.

"It is immensely important as a matter of principle that they should make themselves available for questioning," he said.

"When you're in that position of power you're also accountable to the millions of people who consume your products.

He added: "You can't hide away from this level of public anguish and anger and indeed interest."

As Clegg spoke, the committee received responses from the trio of News International executives. Brooks confirmed that she would appear next Tuesday as requested, but both Rupert and James Murdoch declined the invitation.

Rupert Murdoch said that he would give evidence to the committee only he had done so before the judge-led public inquiry announced by David Cameron yesterday. James Murdoch said that he would appear but not before August.

Both have now be summonsed by the serjeant-at-arms however, and a further refusal to appear could result in them being found to be in contempt of parliament.

Along with the rest of the media industry, News International now faces further scrutiny as the public inquiry announced by Cameron gets underway.

The inquiry, which will be led by senior judge Lord Leveson, will look into phone hacking, media regulation, and the relationship between the press and the police. It will take place in two stages: the first, which is due to report back within 12 months, will look at media standards and the second at the extent of the unlawful activity across the news industry and the nature of its connections to the police.

Speaking to after Clegg's speech, Media Standards Trust director Martin Moore said he was concerned about the second stage of the inquiry, which is not due to begin until the end of the criminal investigation, being "kicked into the long grass".

But Moore, who is leading the Hacked Off campaign, added that "every party has been extremely supportive so far", and said that it was now the job of the campaign to "keep emphasising that this can not be left to disappear down the road".

"Both the discussion of media ethics and media regulation have to happen in parallel to the inquiries into what happened".

The public inquiry will also look at the issue of media plurality, which was the foremost concern with the the proposed BSkyB takeover bid prior to the escalation of the hacking scandal.

Clegg said today that media organisations should face plurality tests not just at the point of mergers and acquisitions, but as they grow and develop "organically" through smaller expansions.

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