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2.19 pm

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Barbara Follett): I beg to move,

I am grateful for the opportunity to open this debate on an issue that lies at the heart of the democratic process and in the soul of local communities. I know that many Members share my interest in, and concern for, the health and vitality of local and regional news journalism. Many of us, in our capacity as constituency MPs or, as in my case, as regional Ministers, have a great deal to do with the matter and are worried about what is happening. The Government are worried too, and the issue is at the top of our agenda.

In January, my noble Friend Lord Carter published his interim “Digital Britain” report. After consultation, the report will be published in its final form by early summer. I commend the interim report to Members who have not already read it. They will see that local, regional and national news is a key priority—not one with easy or ready answers but one for which we are urgently seeking the right solutions that will provide a choice of impartial news, whether on television or radio or in print.

Research carried out as part of Ofcom’s public service broadcasting review showed clearly that people trust and value the provision and choice of news services, particularly local and regional news. However, the sector is under pressure due to a combination of structural and cyclical factors, such as changes in readership or in styles of readership. People now tend to go online more for news, particularly younger people. My children think that I am antediluvian because I prefer to hold the thing that I am reading. They read the news online. Although newspapers are diversifying online, the physical circulation of print newspapers is suffering. It is declining by about 5.2 per cent. a year.

Mr. Nigel Evans (Ribble Valley) (Con): The Minister says that her children think that she is antediluvian—I am sure that they do not. We can see the trend in the disappearance of virtually every sporting newspaper, which used to be a mainstay. After the football finished on a Saturday, people would rush out and buy the sporting posts. They have virtually all gone now, as people access their information online or via the television.

Barbara Follett rose—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Before the Minister replies, perhaps it would be sensible at this stage to point out to hon. Members that there is still only an hour and a half for this debate. Every intervention extends the Front-Bench speeches, so that they could take up a total of 52 minutes out of the 90, and 12 hon. Members are seeking to speak. I propose now to reduce the time limit to five minutes.

Barbara Follett: Thank you, Mr. Deputy Speaker. You are right; this debate is not so much for Front-Bench as for Back-Bench contributions, so I will narrow mine down.

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The drop in print readership has had a crucial effect on the advertising revenue that regional and local newspapers can expect to receive. In fact, it has changed the economy of the media as a whole. The effect on equity is dramatically illustrated by the share prices of two of the four major regional news groups, which have dropped by more than 95 per cent. Those trends are exacerbated by current market conditions, which particularly affect advertising spend. There are global difficulties, and a fundamental shift is being caused by the transition from traditional methods of news gathering and reporting to the versatility of the digital world, which allows us to get news wherever we are on mobile phones—things that we keep in our pockets. The Government therefore have an important role in ensuring that a vital service that the public trust and enjoy is maintained for them.

“Digital Britain” will provide a comprehensive strategy for maintaining this country’s leadership in all aspects of the communications, media and cultural worlds, and as such it will offer thoughtful and practical proposals. It will take into account the views and expertise of media industry professionals, detailed analysis of the needs of the public and the economy, and the public’s views on securing the future of local and regional news.

First, the report will consider various options to ensure that the audience can enjoy the provision of high-quality regional news. In that respect, the recent memorandum of understanding signed by ITV and the BBC is an important step forward. Other options are also being considered for the longer term, including a potential role for a new public service broadcasting institution that would build on Channel 4’s strength.

Secondly, the report will give priority to local and digital radio. Historically, Government and regulators have sought to secure the provision of news on radio by prescribing the number of hours of local news that must be provided by each station. Those licence requirements, alongside the localness regime, have secured a strong local news presence on the radio. However, although we remain of the view that local news is an essential part of the public value of radio, we also recognise the challenges that the industry faces. A review is already under way to examine the role that radio should have in delivering local content in a predominantly digital landscape. The review is expected to report back to Government in the next few weeks and will be reflected in the final report.

We are also aware that there is increasing support for a relaxation of conditions on greater consolidation of local media businesses. The principle is that by sharing resources, particularly in news gathering, we can help to reduce costs. We have therefore invited the Office of Fair Trading, Ofcom and other interested parties to undertake an exploratory review across the local and regional media sector to inform a decision on the existing merger regime.

We all recognise the difficult conditions in which the media currently work, but we should also recognise that the transition to a digital world brings enormous potential to widen and deepen the democratic process. The correct response to a digital Britain is for our media, the envy of the world, to apply their natural propensity for innovation and instinctive creativity to finding solutions to the challenges we face. That means that we need a
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new way of thinking so that we see a new era of possibility, not an endless vista of threat and decline. We also need a new approach whereby people in the media share a vision of the future and use the converged landscape to forge partnerships.

My right hon. Friend the Secretary of State for Culture, Media and Sport recently asked the industry to set out the key actions that it believes need to be taken in the short and longer term to sustain local media. He also agreed that the Government would host a conference bringing together all the interested parties—the National Union of Journalists, the Society of Editors, the Newspaper Society, local media, MPs and local and regional bodies—for a broad discussion of the issues affecting local media and potential new business models. That conference will take place as soon as possible. I am pleased that a more collaborative approach is already emerging, with the memorandum of understanding agreed last week between the BBC and ITV about the provision of news. That is a welcome step forward, which should enable others across the media landscape, including commercial partners, to examine new ways of delivering news.

Convergence in the media not only gives rise to challenges but creates new business opportunities. A sensible strategy that uses that convergence can help to sustain our vital local media. We must explore partnerships locally—private and public sector ones and those that involve local government, which has tended to turn to other methods of conveying its news. Is there potential for a new national network of local media consortiums? Is there potential for partnerships to emerge with the size, scale and vision to break down the old barriers into the media by offering work experience, training and apprenticeships to those who were previously excluded or would not have aspired to a media career, through lack of money or local opportunity? Is there potential to end the old “who you know, who can afford it” culture of journalism? That would be a truly worthwhile legacy of convergence.

My right hon. Friend the Secretary of State said earlier this year that the provision of local news and the plight of local newspapers have to rise up the political agenda. We are achieving that. We will work tirelessly to secure for local communities in every part of the country news that maintains the high standards that have long been associated with British journalism.

2.30 pm

Mr. Edward Vaizey (Wantage) (Con): We are debating an immensely important subject—the future of not simply a specific industry or sector, but a sector that is vital to our democracy. It seems rather sad to me, as a relatively new boy, that we have only 90 minutes to debate the subject and not the full three and a half hours that we could have if the business ran until 6 o’clock. Perhaps the Modernisation Committee, of which I used to be a member and on which I cut my teeth, could consider the matter. One example of the fall-out is that we will hear from the hon. Member for Bath (Mr. Foster) for only six minutes, and that is unfortunate.

We are all used to local newspapers and to broadcasts on the BBC and ITV to which we can look for local news. Even in the current crisis for local newspapers, 40 million adults read 1,300 regional and local newspapers
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daily or weekly, some paid for and others free. A quarter of the regional press work force are focused on editorial activities. The sector still employs around 40,000 people, and 110,000 paper boys deliver local newspapers. It is still the largest advertising medium in the UK, taking almost £3 billion a year and accounting for 16 per cent. of all advertising revenue. While some of that is migrating online, about 95 per cent. is still print advertising. However, online is becoming more important for local newspapers.

We are debating the local and regional press because they find themselves in a perfect storm. They will not only have to change their business models radically in any event because of the advent of the internet, but they must do it in perhaps the toughest recession the country has experienced in our lifetime. The lifeblood of local newspapers in particular—classified advertising—was already migrating to the internet. Whereas, even five years ago, one would buy a local newspaper to find what jobs were available or what property one could buy locally, one can now do that at the click of a mouse on a range of websites. The recession has made the paradigm shift even more acute.

We debated local media as recently as the end of January in Westminster Hall. The Newspaper Society told me then that it predicted a reduction of 20 per cent. in advertising revenue in the third quarter of last year. I now understand that the advertising revenue of at least one major regional news company declined by 55 per cent. in the fourth quarter. Some people predict that about 40 per cent. of the 12,000 estate agents in this country will go out of business during the recession, and that will have an obvious knock-on effect on local newspapers’ revenue.

I do not need to spout a series of statistics at hon. Members, because we all buy our local newspapers assiduously and we can all see the physical manifestation of what I am talking about, which is that local newspapers are thinner and their coverage is perhaps sketchier than it has been. When we debated local newspapers in Westminster Hall at the end of January, we were all keen to praise the fantastic works that local newspapers do in our constituencies. In my constituency, we have the Herald series, which has a fine editor in Derek Holmes and Simon O’Neill editing the Oxford Mail, and a good local reporter, Emily Allen. I made the point that in my four years in Parliament, three reporters who worked for the local paper for 30 or 40 years have retired. We will not see their like again, in the sense that people are unlikely to work for a local newspaper for 10, 20 or 30 years, so everything is in flux.

As I have mentioned, however, it is not the recession alone that is causing the problem, but a shift caused by the internet and changing patterns of media that have been going on for quite some time. The revenue of commercial radio has fallen by 20 per cent. since as long ago as 2003, and some four out of 10 commercial radio stations are no longer profitable. ITV has proposed substantial cuts to its regional news service, but we cannot pretend that the cuts were forced on ITV only in the past few months—they have been a long time coming. We welcome the announcement that ITV is to work with the BBC to share costs, which I understand will be worth some £7 million a year by 2012. However, that is
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in no way enough to cover the huge gap in the cost of regional news, which is some £60 million.

The change is therefore urgently needed. However, although we obviously welcome the Government’s decision to look at the market and to get the Office of Fair Trading to hold an inquiry, we are within our rights to ask whether it is too little, too late. We certainly need a dramatic look at the regulations governing ownership and competition. Even in America, the Democrat leader of Congress, Nancy Pelosi, has written to the American Attorney-General asking him to intervene to save local news organisations. She makes a good point, which applies to this country, too:

which she represents,

That goes to the heart of my argument. The Competition Commission and the Office of Fair Trading have been very much behind the curve. They refused the decision of the BBC and commercial broadcasters to create Kangaroo because they were looking at too narrow a market. We urgently need to sweep away the rules of media ownership that prevent consolidation of local newspaper groups and alliances between local newspaper groups and commercial radio companies.

Five years ago those restrictions would have been appropriate, because they would have allowed one organisation to have a dominant impact on a local area. However, with the advent of the internet, that is no longer possible. There are now myriad local sources to which local people can turn. If we want to find a market solution to what is happening, we have to deregulate as rapidly as possible. We know that the Government have intervened in the past to suspend competition rules—for good or, as some might say, for bad—when the situation was urgent. I submit that the situation is now particularly urgent for the local press.

There is a great deal of concern about whether too many local councils are substituting their newspapers for local newspapers. Does the Minister take the same view as the Secretary of State for Children, Schools and Families on the Killian Pretty review of planning applications? It has recommended that local authorities should be allowed to pull planning application notices from local newspapers. The Secretary of State has indicated his opposition to that proposal. I asked the Minister from the Department for Business, Enterprise and Regulatory Reform about this in our debate in January, but he failed to give me an answer. This Minister is more robust and clear sighted, however, and I know that she will give us an answer on the Government’s position today.

We urgently need the OFT to get on with this inquiry. We need the rules to be pushed to one side, to allow newspapers and commercial radio companies to provide a market solution to their problems, and to consolidate and form alliances as and when they think it appropriate.

Several hon. Members rose

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Madam Deputy Speaker (Sylvia Heal): Order. May I remind hon. Members that Mr. Speaker has imposed a five-minute limit on Back-Bench contributions?

2.40 pm

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): Inevitably, much of the focus of today’s debate will be on the crisis facing many of our local newspapers. I share that concern, as do those of my constituents who work in the local and regional Scottish press. I had an e-mail yesterday from a constituent who works for the Daily Record and the Sunday Mail and who was extremely unhappy about the impact that the merger of those papers will have, not only on staffing levels but on the working conditions and practices of those involved. I congratulate the National Union of Journalists on highlighting this issue in its campaign on the local and regional press.

Today, I want to talk briefly about a different aspect of the provision of local and regional news. The United Kingdom should take the opportunity to set up a network of truly local television stations. If that were done in the right way, it could benefit not only the news environment but local newspapers as well. Members will know that, with few exceptions, this country has very few examples of genuinely local TV. We have various types of regional programmes, and a regional opt-out here and there, but we have no local TV networks that are truly focused on local communities in the way that local radio is—particularly with the growing network of commercial radio stations, such as the excellent Leith FM, which is based in my constituency and with which I was fortunate enough to do an interview only an hour or so ago.

The present debate about the allocation of the digital spectrum means that we can, as part of the process, take steps to encourage the establishment of a network of genuinely local TV stations serving local communities. In Edinburgh, for example, we could have Edinburgh TV and, further afield, Fife TV or Scottish Borders TV. There are similar possibilities elsewhere in the UK to a greater or lesser extent.

There is a debate in Scotland at the moment about the possibility of a new digital TV channel for Scotland as a whole, alongside the debate about broadcasting in general that has followed the establishment of the Scottish Broadcasting Commission by the Scottish Government. There is a rather sterile debate about whether £75 million should be found for a new Scotland-wide digital channel, yet we are not having the same kind of debate about local TV in Scotland. I am sure that that applies elsewhere as well. If Scottish National party Members could have been bothered to turn up for this debate, they would no doubt have made some comments at this point, but unfortunately they do not appear to be here today.

A move towards establishing a local TV network in the UK would clearly involve certain crucial financial and organisational issues, but they could be addressed. We need to establish that, in principle, we want to see the growth of a genuinely local TV network that would be delivered on Freeview as a new local tier of public service broadcasting. Above all, that network should be delivered by organisations based in their communities and offering a genuine local perspective, and not a network that purports to be local but in fact carries
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little more than the occasional local item to justify its licence. Such a development could also benefit local newspapers.

I agree with the Minister that convergence offers great opportunities as well as great threats. In the process of considering how the world of local and regional news will move forward, we need to maximise the opportunities while remaining aware of the threats. For example, there is a threat that consolidation could result in even fewer players dominating even more of the media market at local as well as national level. We could see ourselves moving into a world where there is even less local news content in any local media form than there is at present. Those are directions in which we certainly do not want to move. If we work in the right way, we could actually see convergence and the development of local media such as local TV supporting other local media areas, so that the different forms could learn and benefit from sharing expertise, resources and, indeed, advertising, but that can be done only if we also accept that there has to be a real plurality of ownership, real competition and, above all, local TV and local media more genuinely based in local communities.

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