[Hywel Williams in the Chair]

– in Westminster Hall at 11:54 am on 20th January 2009.

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The only time I faced direct censorship from Channel 4 was when a passage was removed from a light entertainment show. I had offered Channel 4 Ben Elton, French and Saunders, Rik Mayall and others at a knock-down price as they were performing a charity concert to raise funds for Nicaragua. I had added a small political insert explaining where Nicaragua was and why funds were being raised, and that was regarded as unsatisfactory, but on artistic rather than political grounds.

I would like the Government to investigate jointly with the Newspaper Society whether there are opportunities for cross-subsidising printed newspapers from e-media, perhaps by using some of the advertising revenue from the internet or putting a levy on broadband service providers.

York has had a local newspaper for 288 years. The York Mercury was founded in 1721. By 1725, we had two local newspapers. State advertising has a long history in local newspapers. In 1789, advertisements were placed in the York press for tenders to build solitary confinement cells at York castle, then used as a prison. We need to ensure that local newspapers have a long future, and I certainly want to be able to celebrate the tercentenary of the local press in York in 12 years' time.

Several hon. Members:

rose—

Photo of Dai Davies Dai Davies Independent, Blaenau Gwent 12:02 pm, 20th January 2009

It is appropriate that you have taken the Chair just as I am about to speak, Mr. Williams. I add my congratulations to those already offered to Dr. Kumar on securing the debate. I hope that this is the start of the campaign and certainly not the end. The job losses in the regional and local press over the past 20 years amount not to tens or hundreds, but probably thousands, and the loss of several of those newspapers will have had a detrimental effect on local communities.

I want to touch on three areas. First, to be local to a place one has to be located there. Any place more than 10 miles outside my constituency is foreign land, so the locality of local press is an important point. They provide a drop-in point. Old-age pensioners were mentioned. They like to drop in to talk and have that personal contact with the people in the office. Without that, the opportunity to drop in their messages will be lost. For groups that advertise in their local communities, such as schools and theatre groups putting on shows, losing that personal contact and the understanding of the press people who cover it, who know what the shows and the people are about, is an important loss.

Secondly, the most important thing that we are currently losing is the draw of politics. The point about how we are attacked in the press has been made, but that is democracy. Hon. Members have spoken many times in the House about the importance of encouraging people to be part of political debate. That is what the local press allows, but the national press does not see that and does not have that personal contact. The loss of the local press in a locality means the loss of that democratic process and, more importantly, of the involvement of the individual. The multi-nationals that have now taken over so many of our smaller newspaper groups are putting profit above everything else. We understand that profit has to be made, but they must understand that in the longer term they will lose all their profits because their papers will disappear.

Thirdly, within the next 12 months there will be more amalgamations of small newspapers, so that they will have one editor and two or three journalists. They cannot survive in that way. I urge the Government to listen to the ideas that have been suggested today, especially those from hon. Members who talked about the Government investing in local press and newspapers. Perhaps we as MPs should also learn to invest more of our time and effort in promoting local press. It is difficult sometimes, and I guess I have suffered as much as any at the hands of the press, certainly in the letters page, but that is something we have to put up with. If we put our heads above the parapet, we are there to be shot at. I therefore urge the Government to please do all that they can to support this important part of our media.

Photo of Lorely Burt Lorely Burt Shadow Minister (Business, Innovation and Skills), Chair of the Liberal Democrat Parliamentary Party 12:05 pm, 20th January 2009

I congratulate Dr. Kumar on securing this extremely important debate. I preface my comments by declaring a vested interest: my daughter, Emma, is this week sitting her exam for the National Council for the Training of Journalists, so I hope we can do something to alleviate the problem that has been so well outlined.

The hon. Gentleman claimed that the economic downturn has caused this situation, but I disagree. The local press has been shrinking for some time. I will not rehearse the problems that have been more than adequately explained by other hon. Members, but I do want to mention the lack of journalists, because that is hugely important. I would like to sling in a word of praise for two regional newspapers in my area, TheExpress and Star and The Birmingham Mail, because they have fantastic editions that are very local and extremely well produced.

I would also like to look briefly at free newspapers. Several hon. Members have said how important those are as a source of information and advice for older people. In Solihull, we are blessed with three free papers, of which one tries to run three editions with one journalist and a part-timer. That is what the situation has been cut to there, and that is the Observer. We also havethe Solihull News and the Solihull Times, but apart from a couple of journalists, their main area has now been moved to Fort Dunlop in the centre of Birmingham. Mr. Davies stated how important it is that local journalists are on the patch, and that is a big concern.

Photo of Bob Spink Bob Spink Independent, Castle Point

Does the hon. Lady agree that sometimes those small one-man bands are real heroes in the community because they address and deal with vulnerable groups and make information available to them?

Photo of Lorely Burt Lorely Burt Shadow Minister (Business, Innovation and Skills), Chair of the Liberal Democrat Parliamentary Party

Indeed, they are heroes and heroines alike.

I want to focus on solutions. The hon. Member for Middlesbrough, South and East Cleveland suggested that using the digital switchover spectrum licensing money as public subsidy might be an appropriate way to go forward. That would be a big step, because the press in this country has been unsubsidised for 200 years. However, when hon. Members look at the example of the BBC, I hope that most of them will agree that it has done a reasonably good job in maintaining balanced coverage. I do not feel, however, that simply throwing money from an amount for a one-off digital switchover will solve the problem. The market is fluid, so how would we decide which papers to subsidise?

I shall propose a couple of solutions. In response to the withdrawal of local newspapers, local people in some areas are actually doing it for themselves through community newsletters. I am referring not to a local authority's party political rag, as mentioned by Mr. Slaughter, but to those produced by the true, local people on the ground who do it for the love of it and because they want to keep their neighbours informed.

A year or so ago, when we were sold the BBC online video idea, which has now been withdrawn, we were told that local people would be able to send in video clips. We would all submit video press pieces, in a sort of "You've Been Framed", although hopefully without so many faux pas. The proposal was withdrawn to enable the BBC to concentrate on its existing network services, but also because, in some cases, it would have killed the local commercial media.

To return to the subject of the web, newspapers, the BBC and all the news media are trying to swim in the same pool. It is an important pool, particularly for younger readers; it is where a lot of younger people get all their news, or a great deal of it. However, there is a shortage of local reporters, who are being lost at an alarming rate.

Photo of Edward Timpson Edward Timpson Conservative, Crewe and Nantwich

Does the hon. Lady agree that the current circumstances in which the local press finds itself are damaging to what used to be the traditional training ground for journalists—young people brought up in the local community who had immersed themselves in it and had a depth of knowledge? If we lose the local press—the Crewe Guardian in my constituency has lost its satellite office, and the Crewe Chronicle is having to make freezing measures—we will lose those young people and the ability to scrutinise the local community and local politicians who work there.

Photo of Lorely Burt Lorely Burt Shadow Minister (Business, Innovation and Skills), Chair of the Liberal Democrat Parliamentary Party

I could not agree more. I have a proposal for the Minister on which I would like his comments. Can the BBC not use existing local journalists in a joint venture website? There would be benefits to that. It would keep local journalism alive and kicking, it would be attractive to advertisers and more interesting, varied and local, and it would create a synergy beneficial to both.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

How does the hon. Lady respond to the fear that such a website would put the same pressure on local printed newspapers as the now-defunct BBC proposal to sink £68 million into local website reporting?

Photo of Lorely Burt Lorely Burt Shadow Minister (Business, Innovation and Skills), Chair of the Liberal Democrat Parliamentary Party

I understand that the threat was to newspapers' website operations rather than to the newspapers themselves. I hope that the hon. Gentleman will agree that there will always be a place for written rather than online newspapers in this country.

The Communications Act 2003, which might be a barrier to such co-operation, is due for review in 2009. Let us seize the opportunity to consider a partnership between the BBC and the local press to produce an online news service far greater than the sum of its individual parts.

Photo of Ed Vaizey Ed Vaizey Shadow Minister (Culture, Media and Sport) 12:13 pm, 20th January 2009

I am grateful to speak under your chairmanship, Mr. Williams. I shall be as brief as I can in order to allow the Minister to respond, but the brevity of my speech should not be taken as an indication that I underestimate the problems faced by our local press.

I congratulate Dr. Kumar on securing this debate. I hope that I will not wreck his career by saying that I regard him as a personal friend. He has one particular attribute that I would like to put on record: he is the only Member of the House to have read the seminal "History of British Steel", written by the late John Vaizey, my father. For that reason, he will always have a special place in my heart.

I would also like to give some brief parliamentary time to my own local newspapers, as so many local newspapers have been praised. The Herald, the Oxford Mail and The Oxford Times are owned by Newsquest Media Group and provide a superb local service, led by their brilliant editor Simon O'Neill, the inscrutable Derek Holmes, editor of the Herald and one of the most brilliant young journalists working in newspapers today, Emily Allen.

Speaking of the history of local newspapers, last week was the retirement of Ian Townsend, our Wallingford reporter, who had reported in and around Wallingford, Thame and so on for the past 50 years. Two or three reporters like him—Mike Hambleton and Gordon Rogers spring to mind—have retired from my local newspaper in the past couple of years. It marks the passing of an era. I do not think that we will see again local journalists who spend 50 years with local newspapers reporting on a single area. That is perhaps a cause for regret, but time moves on.

Local newspapers are under enormous threat, but it is worth remembering what a sizeable chunk of the media they still constitute. There are some 1,300 local newspapers across the country; 40 million adults read a local newspaper at some point during the week; 40,000 people work for local newspapers; and local newspapers still generate about £3 billion in advertising revenue, although the figures are probably dropping sharply. I gather from the Newspaper Society that the figures look bad. Although the official report has not yet been published, I understand that there has been a 20 per cent. drop-off in advertising revenue in this quarter alone.

One can play chicken and egg deciding what has caused the problem. I agree with Lorely Burt that the problem has been brewing for many years—people's reading habits are changing, and the internet is turning everything on its head—but as the hon. Member for Middlesbrough, South and East Cleveland has pointed out, it is now a perfect storm. The problem of having to compete with changing technology has been exacerbated by the deep recession that we are entering.

Two or three things could help local media. As the hon. Member for Solihull has said, Ofcom is reviewing the ownership rules for local media, and I understand that the review is due this year. The review is urgent, and perhaps Ofcom should bring it forward. I am not sure when it plans to begin or publish the review, but the matter is urgent and the review should begin now. Dominant local newspapers are still prevented, for example, from owning local radio stations. When the Communications Act 2003 was drawn up, there was a balance to be struck on the domination of one media owner in a local area, but given the parlous state of local newspapers—and, with the growth of the internet, the huge range of different sources from which local people can get information—those rules now look out of date and need an urgent review.

Reference has been made to the BBC Trust's interim decision to prevent the BBC from investing £68 million in local video. I understand that the trust will state whether that decision will be confirmed on 25 February. I call on the BBC Trust not to allow the BBC to bring back the local video proposals in another guise. My party campaigned against them, as did other parties, because we recognised that the BBC had the opportunity to invest public money without any commercial pressure into local video, which would have been an enormous threat to local newspapers seeking different ways to continue to grab readers' attention and gain revenues.

A lot has been said about the need to use Government advertising to help local newspapers. In that sense, this debate is reminiscent of the debates that all of us have had in the House about the future of local post offices. Will the Government recognise that local newspapers, despite being owned by private companies, are an important community resource? Are Ministers prepared to work hard to ensure that as much legitimate Government advertising as possible goes into local press?

In that light, I would be interested to know the Minister's views on the Killian Pretty review, which advised that local councils should no longer have an obligation to publish planning applications in the local newspaper. I can guess what his view might be, because the Secretary of State for Children, Schools and Families—the Deputy Prime Minister—has effectively said that he opposes that reform, so I assume that the Minister, whose career is on an upward trajectory, will agree.

I have the utmost respect for the view of the hon. Member for Middlesbrough, South and East Cleveland that digital switchover money, of which there will be a surplus, should be used to support local newspapers. Plenty of media outlets will be looking for that money to support them—possibly Channel 4, possibly broadband. Indeed, we will know next week, when Lord Carter publishes his review, the Government's view of that digital surplus.

Although local newspapers can be supported by reforms made in this House, their salvation ultimately lies in the hands of the newspaper groups and the local newspapers. There is an argument that, as with many industries, including the music industry, local newspapers have been slow to catch up with the implications of the internet. I am grateful that I do not have to run a local newspaper, because it is an extremely difficult job, but local newspapers must completely rethink their business model. They have relied on property advertising and car advertising, and even without a recession a lot of that advertising is going on to the internet, particularly national websites that allow people to type in their postcode and find a local car or house that they want to buy. So local newspapers must rethink their business model, but if they can do so, that would put them back at the heart of their communities, because the unique selling point that they have is a strong relationship with local people, local MPs—as we have seen in this debate—and local businesses. They can become an important community resource.

I recognise the danger of local councils putting out newspapers, but I counsel Mr. Slaughter that, if the Conservatives are re-elected in Hammersmith and Fulham, it will be because they have cut the council tax by 3 per cent. every single year while improving services. I look forward to hearing from the Minister.

Photo of Ian Pearson Ian Pearson Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform, Economic Secretary (Economic and Business), HM Treasury 12:21 pm, 20th January 2009

It is a pleasure, Mr. Williams, to serve under your chairmanship and that of Mr. Cummings.

I would like to begin by warmly congratulating my hon. Friend Dr. Kumar on securing this debate on a topic that affects many local communities right up and down the country. A thriving local press is important to the health of local communities and local democracy. Although I agree with my hon. Friend that we may not always be happy with the views of the local newspapers that serve our constituencies, I do not think that there is a single MP in this House who would deny that they have a key role.

We have had an extremely good debate with contributions from the hon. Members for Shrewsbury and Atcham (Daniel Kawczynski), for Croydon, Central (Mr. Pelling), for Argyll and Bute (Mr. Reid) and for Blaenau Gwent (Mr. Davies), my hon. Friends the Members for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) and for City of York (Hugh Bayley) and the Opposition Front-Bench spokesmen the hon. Members for Solihull (Lorely Burt) and for Wantage (Mr. Vaizey). There were also a number of interventions.

Given the limited time, I do not intend to take any interventions, because I want to respond to the key points that have been made in the debate. I agree with the hon. Member for Wantage that the primary responsibility for local news organisations lies in their own hands and that they must respond to changing market circumstances. Four other key points were mentioned in the debate—competition, advertising, training and financial support—and I want to cover them in my brief contribution.

As has been touched on in the debate, we all recognise that we have seen at least two technological revolutions in the industry in the past 30 years or so. The first revolution was in printing, with the move away from compositing typesetting and hot metal, and the second revolution has been the creation of the internet and the world wide web. Both those revolutions have brought about massive changes to print news media at national, regional and local levels.

As other hon. Members have done, I want to plug my local and regional news media, namely the Express & Star and its sister newspapers the Dudley Chronicle, the Birmingham Post and Birmingham Evening Mail, and Newsgroup, which is part of Newsquest. Those newspapers are all strongly campaigning newspapers and all hon. Members who have contributed to the debate recognise the fundamental importance of campaigning local news media.

The challenges that the industry is facing obviously relate to the current economic circumstances and wider structural changes. On the short-term cyclical factors, the current downturn that the country is facing has resulted in advertising revenues for all media coming under severe pressure. Overall advertising expenditure is currently predicted to decline by 6 to 12 per cent., and newspaper advertising revenue is predicted to decline by 12 to 21 per cent. in the next 12 months. As more than half the income of regional presses derives from advertising income, that factor alone will create pressure on business models. At the same time, we have also seen the key raw materials of newsprint increasing in cost by 20 per cent. in the past year.

As has been indicated, we are also seeing some major structural changes. The hon. Member for Wantage mentioned some figures about the structure of the industry at the moment. I just want to point out that, although online readership of local newspaper websites is rising, the physical circulation of print is suffering year on year—it is declining by about 5.2 per cent. Furthermore, the share prices of two out of four of the major regional news groups have dropped by more than 95 per cent. in the past 12 months. Classified advertising revenue in the regional and local press is estimated to have fallen from £1.8 billion in 2007 to £1.4 billion in 2008. There are major challenges, and publishers are responding to them head-on. For example, the Guardian and Telegraph media groups have created new newsroom structures to facilitate the efficient gathering and distribution of news to a variety of media.

Turning to competition, although the market for news content has changed significantly, the need to ensure the plurality of our news content remains. However, achieving that goal presents major challenges, given the changes that are taking place. I am aware that where titles have become unsustainable, publishers have considered it impossible for existing media groups to sell titles to each other, even though they might find synergies, because there are takeover or competition implications. I believe that the impact of competition law in this sector is worthy of further consideration. As hon. Members will be aware, there is a review planned by Ofcom, which is scheduled to take place during 2009.

My hon. Friend the Member for Middlesbrough, South and East Cleveland also mentioned the potential role of advertising. As he is aware, the advertising of health, education and other jobs, as well as statutory notices issued by public sector bodies, has moved substantially to websites that are owned or operated by or on behalf of the relevant public services. Those public services are seeking to achieve the best value for taxpayers and also to reach a wide cross-section of the community. Those are laudable objectives, but that development has clearly had an impact on traditional print media. The Government will obviously reflect on the contribution that my hon. Friend has made during this debate. However, there is a real difficulty given the nature of the technological change that we are seeing in society today. Of course, newspapers are now facing the costs associated with transforming their businesses from a single format paper product to take advantage of those new challenges of communication.

I also want to refer to the comments that my hon. Friend made about training. The issue of training the work force is important. Last year, publishing joined the sector skills councils network and is now part of Skillset. Skillset, with input from the publishing sector, is currently examining the skills required for the sector to take full advantage of the opportunities and challenges offered by digital technologies. My hon. Friend will be aware of the Train to Gain programme and the flexibilities that have been granted by the Government in its operation particularly to help companies during difficult economic times, including local news organisations.

The final issue that I want to mention is financial support. My hon. Friend raised this issue, as did other hon. Members, and it is a complex one, given the requirement that freedom of editorial control must not be threatened by state intervention. I want to reassure him that such support is being considered within the Digital Britain initiative, which Lord Carter of Barnes is taking forward. My hon. Friend will also be aware of the announcements that were made yesterday about additional support for the banks to ensure that they maintain lending, and of the support that was announced last Wednesday, through the enterprise finance guarantee and the working capital scheme. Those schemes are available respectively to companies with an annual turnover of up to £25 million and up to £500 million. They are applicable right across industrial sectors and therefore would include local news organisations. So there is support out there and there will continue to be support.