Addressing the inquiry yesterday, Paul said any future reforms of the industry had to take into account the commercial realities faced by newspapers – particularly in the regions.
The inquiry, set up by the government in the wake of the phone-hacking affair, is expected to recommend the replacement of the Press Complaints Commission.
However Paul called for the watchdog to be retained, alongside a new press ombudsman with the power to investigate press ‘scandals.’
He said: “There are thousands of decent journalists in Britain who don’t hack phones, don’t bribe policemen and who work long anti-social hours for modest recompense – and if they’re in the regional press often for a pittance – because they passionately believe that their papers give voice to the voiceless and expose the misdeeds of the rich, the powerful and the pompous.
“The political class’s current obsession with clamping down on the press is contiguous with the depressing fact that the newspaper industry is in a sick financial state. Several of our quality papers are losing awesome amounts of money.
“More worrying, Britain’s proud provincial and local press – currently subject to closures, mergers and swingeing cuts – is arguably facing the severest challenges.
“This diminishes our democracy. Courts go uncovered. Councils aren’t held to account. And the corrupt go unchallenged. That is a democratic deficit that in itself is worthy of an inquiry.
He added: “My greatest concern – and it’s a very real one – is that any future reforms must take into consideration the needs and commercial realities of ALL newspapers, the provincial press, mass-selling red tops, as well as loss-making broadsheets.
“We should not be blind to the irony that the most virulent criticism of self-regulation comes from papers that lose eye-watering amounts of money and which are subsidised either by trusts or Russian billionaires.”