Good grief - this is news from years ago.
Anyway, if you don't have an issue with someone watching, why is there such a big issue with the possibility of taking part?
If the original quoted line had once been a headline, it is certainly not the one on the web page now, which says "Let 16-year-olds visit sex shops and see explicit porn, say Lib Dems"
It's not a position that I see anyone encouraging and the newspaper piece quoted the spokesman as saying "it was inconsistent to allow 16-year-olds to have children, and be treated as adults in other respects, but to bar them from watching or taking part in explicit material - which they could access, anyway, from the internet."
I read that as a clear statement of fact, the way it would be interpreted by a judge, and not a suggestion that it would be encouraged, and re-reading the original statement "should have the right to watch and appear in explicit pornography", I don't see it as encouragement but, again, just giving the effect of implementation, were such a change to take place.
With the widespread availability of web cams, mobile phones, and digital cameras, I bet a big portion of under 18s (and perhaps some, under 16s too) are already "starring" in their own small way!
More than 10 years ago, while visiting friends in California, I was sharing a PC with a teenager, whose boyfriend (on the East Coast) had just sent her 8 porn clips in an e-mail. She was so embarrassed, poor thing, because I was introduced to her shortly before the download finished and she was either genuinely surprised or had to act it, because she didn't manage to stop the automatic playback of the first XXX clip...
Seems like every teenager in the USA went online straight after school (mostly on AOL). If you didn't get on then, the phone lines were engaged so they always kept the connection "busy" in case they were logged out for inactivity!