Clegg urges BSkyB stake scrutiny

21 July 2011 Last updated at 17:07 GMT Mr Clegg defended the prime minister's handling of the BSkyB bid Nick Clegg has said media watchdogs must consider "very seriously" whether News Corporation is a suitable business to remain a shareholder in BSkyB.

The deputy prime minister said Ofcom must "show by their actions" that they are taking the issue seriously in the aftermath of phone-hacking revelations.

Lib Dem MPs have been urging the watchdog to apply its "fit and proper" test to News Corp's 39% share in Sky.

The firm dropped its bid to take full control amid political opposition.

Following allegations that the News of the World had hacked into the phones of murdered schoolgirl Milly Dowler and the families of 7/7 victims, all parties united to oppose the deal.

But three senior Lib Dem MPs wrote to Ofcom last week to press for it to examine News Corp's controlling stake in the broadcaster.

Ofcom has said it is "closely monitoring" the situation regarding alleged malpractice at News International - News Corp's UK newspaper arm - and investigations into what happened there.

The regulator has a statutory duty to satisfy itself on a continuing basis that the holder of a broadcasting licence is "fit and proper".

As part of this process, it has said it must "take account of News Corporation's conduct" in assessing whether BSkyB remains fit and proper as a licence holder.

Speaking at a news conference, Mr Clegg said this test should be "rigorously applied all the time and not just in a snapshot way".

"Ofcom have confirmed that they have got that ability to judge whether a media group is fit and proper or not," he said.

Continue reading the main story

I think we now have a once-in-a-generation opportunity to really clean up the murky practices and dodgy relationships which have taken root at the very heart of the British establishment”

End Quote Nick Clegg Deputy Prime Minister "And I very much hope that they will show by their actions that they are taking that very seriously".

"This fit and properness test has some meaning. There needs to be evidence quickly that the fitness and properness is applied on an ongoing basis to News International and other media organisations."

Ofcom has stressed it will not act on the basis of unsubstantiated allegations and will do nothing to prejudice any criminal proceedings.

But it has confirmed that it does have the power to act before the conclusion of a criminal investigation if it found a firm or directors were unfit to own a licence.

There have been no allegations made against BSkyB.

News Corp has said it remains committed to its stake in the firm - the UK's largest commercial broadcaster - and proud of its involvement in the firm.

'Murky practices'

Mr Clegg defended the prime minister's conduct during the course of News Corp's attempted bid after Mr Cameron insisted on Wednesday that he had removed himself from the process and had had no "inappropriate conversations" with any News Corp executives over the subject.

He confirmed he had questioned the appointment of former News of the World editor Andy Coulson as Mr Cameron's communications chief but added: "It was the prime minister's decision and the prime minister I think has been quite upfront about the fact that he is responsible for them."

It has emerged that Mr Coulson did not have the highest level of security vetting when he worked at Downing Street - having been subject to "security check" level, rather than the more rigorous "developed vetting".

Mr Clegg also said he hoped the judicial inquiry into what went on at the News of the World, other newspapers and the relationship between the press, police and politicians would lead to big changes.

"I think we now have a once-in-a-generation opportunity to really clean up the murky practices and dodgy relationships which have taken root at the very heart of the British establishment," he said.

Like Mr Cameron and Labur leader Ed Miliband, Mr Clegg has published details of all meetings he has had with newspaper editors, executives and proprietors in the past year.

Speaking at an event in Birmingham, Mr Miliband said the country "needed to look into its soul" after recent events and decide "what standards we want to set" in public life.

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Blaggers could be jailed - Clegg

14 July 2011 Last updated at 11:21 GMT By Brian Wheeler Political reporter, BBC News Deputy PM Nick Clegg: "A whole range of professions have been implicated."

People found guilty of obtaining personal details by deception - known as "blagging" - should be jailed, Deputy PM Nick Clegg has said.

Gordon Brown attempted to introduce prison terms of up to two years for the offence when he was in power.

But the law was never enacted amid concerns from newspaper bosses.

Daily Mail editor Paul Dacre said at the time that the "frightening amendment" would "have a truly chilling effect on good journalism".

But in a speech earlier on press freedom, Mr Clegg said it was time to think again in the light of recent revelations about the alleged behaviour of journalists - and investigators hired by them - at News International.

'Under review'

Mr Clegg said: "On the issue of selling confidential information to journalists specifically, a whole range of professions have been implicated.

"Not just the police, but also private investigators, medical professionals and phone companies. Under the current law, for fraud and phone hacking you can go to prison.

"Whereas, under Section 55 of the Data Protection Act, unlawful use of personal data can get you a fine.

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We want to get to the root cause of blagging - the incentive for stealing information and selling it on”

End Quote Information Commissioner's Office "The Information Commissioner recommended in 2006 that that offence should also attract a custodial sentence.

"It wasn't taken up then, and this government has said it will keep it under review.

"I think that now - where it cannot be proved that information was obtained in the public interest - there is a case for looking at this issue again."

Knowingly or recklessly obtaining or disclosing personal information without consent is an offence under Section 55 of Data Protection Act 1998.

However, the act also offers a defence, which is available to anyone who shows that obtaining, disclosing or procuring the information was in the public interest. The public interest defence has never been tested in court.

'Root cause'

Mr Clegg's announcement was welcomed by the Information Commissioner's office, which has been calling for tougher penalties for breaking the Data Protection Act since 2006.

"We believe a custodial sentence is necessary. If it goes to magistrates court, the maximum fine is ?5,000 and that can easily be written off as a business expense," said a spokesman.

"We want to get to the root cause of blagging - the incentive for stealing information and selling it on.

"We believe the threat of a custodial sentence will stop the problem overnight."

Continue reading the main story

This legislation would have made Britain the only country in the free world to jail journalists and could have had a considerable chilling effect on good journalism”

End Quote Paul Dacre Daily Mail editor in 2008 In a 2008 speech to the Society of Editors, Daily Mail editor Paul Dacre described how he had persuaded then Prime Minister Gordon Brown to rethink the proposals to protect press freedom.

He said: "The fourth issue we raised with Gordon Brown was a truly frightening amendment to the Data Protection Act, winding its way through Parliament, under which journalists faced being jailed for two years for illicitly obtaining personal information such as ex-directory telephone numbers or an individual's gas bills or medical records.

"This legislation would have made Britain the only country in the free world to jail journalists and could have had a considerable chilling effect on good journalism.

"The prime minister - I don't think it is breaking confidences to reveal - was hugely sympathetic to the industry's case and promised to do what he could to help.

"Over the coming months and battles ahead, Mr Brown was totally true to his word."

'Knee-jerk'

In May 2006, the Information Commissioner exposed the trade in details about people's lives - and said journalists were among the main customers.

The report revealed that 305 journalists had been identified during one investigation - Operation Motorman - as customers who were driving the illegal trade in confidential personal information.

It found nine magazines and 22 newspapers had regularly used a private investigator to access illegally-obtained information. A subsequent Freedom of Information request showed where the journalists were employed.

The Daily Mail used the private investigator the most, clocking up 952 transactions - almost five times that used by the News of the World (NoW), the now-defunct newspaper that started the phone-hacking scandal.

The Criminal Justice Act of 2008 provides for a maximum two-year sentence for illegally obtaining personal information without its owner's consent.

It is on the statute book but has never been enacted, meaning it can not be used by judges or magistrates.

A Ministry of Justice spokesperson said: "The government is keeping the matter of penalties for offences committed under section 55 of the Data Protection Act 1998 under review."

Mr Clegg also used his speech to urge politicians to "resist any temptation to impose knee-jerk, short-sighted restrictions on the media" in the aftermath of the scandal surrounding News International.

The government has launched a judge-led inquiry into press conduct, after allegations of phone hacking and payments to the police.

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Clegg tries to sell Lords reform

27 June 2011 Last updated at 22:50 GMT Nick Clegg opens the debate on Lords reform: From Democracy Live

Deputy Prime Minister Nick Clegg has insisted the House of Lords is "past the point of no reform".

But he was heckled by Conservative backbenchers as he tried to win support for his plans to create a wholly or largely elected second chamber.

Shadow justice secretary Sadiq Khan told the Commons Labour believed in a fully elected House of Lords.

But former minister David Miliband said he feared MPs and peers would block the plans purely to damage Mr Clegg.

Mr Clegg is leading efforts to reduce the size of the Lords to just over 300 people and make 80% of its members elected, starting from 2015.

But last week, peers from all parties attacked the proposals during a two-day debate in the Lords.

'Yes we do!'

In the Commons on Monday, Mr Clegg said the second chamber could not "afford another hundred years in limbo".

He told MPs: "Very few people seriously believe the status quo - an unelected second chamber - makes sense in a modern democracy."

A handful of Conservatives then interrupted him, shouting: "Yes we do!"

Mr Clegg then replied: "Most people anyway. There is a fundamental principle at stake here - a basic choice. Do we believe people should choose their representatives in Parliament or do we not?"

Continue reading the main story About 300 members80% to be elected but with a provision for a fully elected chamberMembers to be elected for single 15-year terms under the single transferable vote system of proportional representationA third of members to be elected in 2015, a further third in 2020 and 2025Number of bishops to be reduced from 26 to 12Small number of appointed government ministersConservative MP Julian Lewis said he was concerned about the potential loss of expertise if figures from the worlds of medicine, academia, science, business and the arts refused to stand for election.

"The single most important function of our second chamber is the revision of legislation and its improvement," he said.

"If you take out hundreds of people who are experts in their field and substitute for them hundreds of people who are professional party politicians, what will make them better qualified to revise legislation in that chamber than we amateurs are in this chamber?"

Labour MP Barry Sheerman said he believed an elected second chamber would be too powerful.

"Every bicameral I know ends up deeply conservative where the elected mandated government in the lower house is frustrated from implementing its manifesto by a second chamber, increasingly powerful over the years," he said.

'Bigger gain'

For Labour, Mr Khan said an elected upper house was "the right and proper outcome and one which will deliver the democratic system the people of this country deserve".

But he noted that it was a difficult time to try to generate momentum on the issue when much of country was preoccupied with concerns about jobs, pensions and the cost of living.

Mr Miliband said some MPs were inclined to oppose the bill purely because Mr Clegg was its biggest champion.

But he urged them to see the potential "bigger gain" of backing the reforms and to resist the temptation to "kick a man when he is down".

A number of other MPs also expressed support for Mr Clegg's plans.

Lib Dem Mark Williams said they were "a huge step in the right direction", but also wanted the Commons to retain primacy.

Conservative John Stevenson said that if peers were excluded from the chamber, they could still use their expertise by forming committees and producing reports for the government.

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Clegg backs 'bank shares for all'

23 June 2011 Last updated at 10:44 GMT "Every (adult) citizen should get some shares," says MP Stephen Williams

Proposals to give the public shares in part-nationalised banks RBS and Lloyds have been backed by Nick Clegg.

The idea is that individual taxpayers would benefit from any long-term gains when shares in the banks are sold.

The deputy prime minister said it was important British people were not overlooked after their money was used to keep the banking system alive.

The Treasury said all options would be considered but some experts have warned the scheme would be difficult to run.

'Life-support machine'

Under the plan, the 45 million people on the electoral roll would be given free shares in the bailed-out banks, Royal Bank of Scotland and Lloyds Banking Group.

The shares would only have any value above a "floor price", equivalent to what the government paid for the holdings, so the Treasury could cover the cost of its investment.

That price is estimated at 74p per share for Lloyds and 51p for RBS.

Continue reading the main story About 75% of publicly-owned shares distributed to all British adults on the electoral roll - for free Recipients get full rights of shareholder When shares are sold, a fixed "floor price" goes to Treasury to return its investmentThe shareholder, who could choose when to sell, would keep any profitThe idea for so-called people's shareholdings, first suggested in March, was developed by City firm Portman Capital with the support of the Lib Dems' Treasury Parliamentary Committee, chaired by backbencher Stephen Williams.

He argued that the mass distribution of the bank shares would be the fairest way of giving taxpayers a share of the rewards, of getting back the money the government paid out in 2008, and would help restore confidence in state-owned financial institutions.

Mr Clegg has written to Chancellor George Osborne in support of the proposal.

Speaking on a trip to Brazil, Mr Clegg said: "Psychologically it is immensely important that the British people feel they have not just been overlooked and ignored.

"Their money has been used to the tune of billions to keep the British banking system on a life-support machine and they have absolutely no say at all in what happens when normality is restored.

"I think, in a sense, as a society we are condemned to take an interest in our banking system."

'Huge fees'

He said the scheme would give the Treasury an assurance that they would "break even" without allowing it "the freedom to grab the windfall if there is one".

Liberal Democrat leader Mr Clegg admitted there remained "a huge amount of detail still to be worked on".

Continue reading the main story Hugh Pym Chief economics correspondent, BBC News

If it happens it would be the biggest exercise yet in "people's shareownership", putting the Thatcherite privatisations into the shade.

The sales of British Gas and other utilities created a new generation of 10 million shareholders in the late 1980s and early 90s.

But they had all made a conscious decision to buy.

The proposed scheme for Lloyds and RBS would give 45 million adults shares, many with no experience or knowledge of the Stock Market.

The fact that Nick Clegg has thrown his weight behind it is significant.

There has been no rubbishing by the Treasury who say they will "look at all options".

But there's no guarantee it will go further.

The chancellor ultimately will decide whether its workable and gives value for taxpayer.

There have been suggestions the scheme could cost hundreds of millions to administer but Mr Williams, the MP who floated the idea, told the BBC he was convinced it would be cheaper than a conventional privatisation.

He said: "If you privatise a huge utility, like BT or British Gas, all the merchant banks get involved, stock brokers get involved... huge fees will be clocked up by the Treasury."

He added that people with "surplus cash" would be able to buy shares, but millions of citizens would miss out, despite having "felt the pain of contributing" to the bank bailout in the first place.

The idea has also been backed by the Conservative backbencher John Redwood, who told the BBC: "It is a great opportunity so that the taxpayers can be involved, the taxpayers could then it discipline the banks as their owners and shareholders and they can get something back when the banks have sorted themselves out."

Northern Rock

The Tory right winger asked Chancellor George Osborne about the idea in the Commons earlier in the week.

Mr Osborne told him was "always happy to discuss ideas" about disposing of the bank shares and the "good bank" in Northern Rock was going up for sale.

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The government needs to urgently explain what impact this proposal will have on the public finances”

End Quote Ed Balls Shadow Chancellor But he added: "We want to exit from our shareholdings in RBS and Lloyds in due course, but we do not judge now to be the right time."

Business Secretary Vince Cable said proposals were at a "preliminary" stage and it would be some years before the banks were in a position to be returned to the private sector.

But he said it would be a way for tax-payers to benefit after "saving" the banks.

Mr Cable, who has previously accused the banks of privatising their profits and socialising the losses, said the proposal would be one way of reversing that he said.

The taxpayer owns 83% of RBS and 41% of Lloyds after the government invested about ?65.8bn in 2008 at the height of the banking crisis.

A Treasury spokesman said: "While the question hasn't arisen at the moment, we've said we shall look at all options".

Labour dismissed the proposal as a headline grabbing exercise by Mr Clegg that had not been properly thought-through.

Shadow chancellor Ed Balls said: "The test for what happens to the nationalised banks must be the long-term best interests of the taxpayer not the short-term need to get headlines for Nick Clegg's overseas trip.

"The government needs to urgently explain what impact this proposal will have on the public finances, what the administration costs are estimated to be, how the scheme would work and what effect it would have on the balance sheets of the banks."

Michael Stephenson, general secretary of the Co-operative Party, which is affiliated to the Labour Party, accused Mr Clegg of recycling an old Conservative proposal "to sell off cheap shares in the rescued banks that can be sold on by the shareholders for a quick buck at taxpayers' expense".

Instead, he said Northern Rock should be "re-mutualised" to create a real "people's bank".

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Cameron defies Clegg on Ashcroft

24 May 2011 Last updated at 16:08 GMT Lord Ashcroft was made a peer in 2000 David Cameron gave a government advisory post to Conservative donor Lord Ashcroft despite objections from Nick Clegg, the BBC understands.

The peer and former Tory deputy chairman will lead a review of the UK's military bases in Cyprus.

But he has come under fire from Labour and Lib Dem MPs, including the deputy prime minister, over his tax status.

A source said Mr Clegg made it clear he was "not keen" on the appointment, but the prime minister chose to go ahead.

In a statement, Defence Secretary Liam Fox confirmed that Lord Ashcroft would undertake the role of senior independent advisor to the review of the Cyprus bases.

He will work alongside Conservative MP and former Army officer Patrick Mercer.

Government sources say Lord Ashcroft's appointment is unpaid, short term and advisory only. The study, due to be completed by the end of 2011, is part of the strategic defence review.

More than 3,000 UK personnel are stationed in two bases, Akrotiri and Dhekelia, on the Mediterranean island.

'To the wall'

In the run up to last year's general election, Lord Ashcroft was the subject of fierce criticism from Mr Clegg.

The future deputy PM said it was "wholly wrong" that someone "seeking to influence the outcome of the general election" sought to pay taxes "only partially" in the UK.

The peer confirmed in March that he did have so-called "non-dom" status, but later renounced it in order to keep his seat in the Lords.

A non-dom is someone who is resident in the UK but not domiciled in the UK for tax purposes - although they will pay some UK tax, they will not be fully taxed in the UK on their interests overseas.

Following the announcement of Lord Ashcroft's appointment, a senior Liberal Democrat source told the BBC: "We knew about it, but we were not keen.

"The prime minister made it clear he really wanted to do this, but it was not the appointment we would have made.

"You cannot go to the wall on every single appointment, but we made it clear we were not keen."

Lord Ashcroft has donated more than ?4m to the party in recent years, much of which has been spent on campaigns by Tory candidates in marginal seats.

There had been speculation for a number of years that he was a "non-dom", but both he and the Conservatives had previously refused to clarify the matter.

He was appointed a peer in 2000 by then Conservative leader William Hague.

'Sinister'

Lord Ashcroft has longstanding connections with the military and was heavily involved in the Imperial War Museum.

He also owns the world's largest collection of Victoria Crosses - Britain's highest military honour.

But BBC News Channel's chief political correspondent Laura Kuenssberg said his appointment would inevitably be controversial, particularly among Liberal Democrat MPs, many of whom are now in government.

One of those angry at the decision was Lord Oakeshott, former Lib Dem Treasury spokesman in the Lords.

"Even [President] Obama's visit cant hide this sinister news, which Liberal Democrats will find deeply offensive," he told the BBC.

"Lord Ashcroft's qualifications for this task are his collection of old Victoria Crosses, years of private plane and yacht rides with William Hague, and a decade of vast Tory donations as a secret non dom.

"The government has still not brought in the simple order needed to ban non-dom donations to political parties under the 2009 Political Parties and Elections Act. The Queen's Speech promised to remove big money from politics, not reward big donors.

"What on earth is his hold over Cameron and Hague?"

For Labour, Shadow Defence Secretary Jim Murphy said: "People will be surprised that such a contentious and controversial character has been put in charge of something as strategically important as British bases in Cyprus.

"The Tories' major donor should not write government policy. Many in the Armed Forces will be bewildered by this decision.

"There needs to be ministerial involvement in this. Military expertise, not the self interest of the coalition parties, must drive the study."

The strategic defence review was announced by the government in October 2010 and set out ways to cut defence spending by 8% over four years.

Among the plans was a commitment to bring home some 20,000 UK personnel currently stationed in Germany by 2020.

The bases in Cyprus are used to give the UK a foothold at a strategic point in the Mediterranean, and the MoD describes RAF Akrotiri in particular as "an important staging post for military aircraft".

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