Crisis in the Scottish Press Industry - Scottish Affairs Committee Contents

Memorandum from the Scotland Office

  1.  The Scotland Office is pleased to have the opportunity to comment on the Scottish Affairs Committee inquiry into the crisis in the Scottish press industry.


  2.  The Scotland Office is aware that the Committee has heard witnesses and will be gathering further evidence on such matters as:

    — The historic role of the Scottish press in covering regional, Scottish, UK and international news from the distinctive perspectives of the four major Scottish cities and their environs.

    — The rise in competition from the London press with special Scottish editions.

    — The decline in sales of Scottish newspapers at a greater rate than that experienced by the Scottish editions of the London press.

    — The rise in competition from digital media and the corresponding falls in newspaper advertising revenues.

    — The impact of technology in changing production methods and traditional roles within newspapers.

    — The concerns about the viability of both the major national papers and some strictly local titles and about reductions in jobs within the industry.

  3.  The table at Annex A shows the trends in circulation for the national press from June 2005—March 2009.


  4.  The Government's position is informed by several principles:

    — A free and viable press is essential to enable the people of the UK to participate in all levels of government. This requires a plurality of ownership.

    — The Government should not seek to intervene in the management of individual newspapers.

    — The Government should not seek to intervene in the commercial management of individual businesses.

  5.  The Government's regulation of business does however impact on the newspaper industry in various ways, particularly in the regulation of monopolies and mergers, including the ownership of media, and of intellectual property.

Regulation of monopolies and mergers

  6.  The UK's digital economy accounts for around 8% of GDP and has been one of the fastest growing successes of the past decade. More importantly, the digital economy underpins our whole economy and builds our national competitiveness. Over the last 10 years the UK has been consistently closing its historic productivity gap with the other leading European economies, based largely on our take-up and adoption of digital technology.

  7.  The Digital Britain Report assesses the UK's readiness to exploit the dramatic shift to digital technology as the basis of huge parts of our economy and private lives and one part of this is how the news media are meeting the challenge.

  8.  It is important for the UK that we enjoy content over digital networks that relates to our culture and experiences as a society and informs us as citizens in a democracy. Our track record in creativity and technical innovation in existing media provides an excellent base, but this needs to be married to development of business models that enable content creators to flourish on new platforms. The market will always provide some of this content, but we need to decide what else we require, and make policy decisions to achieve that.

  9.  Action 14 of the Interim Digital Britain Report invited the Office of Fair Trading (OFT) Ofcom and other interested parties to "to undertake an exploratory review across the local and regional media sector" to inform whether change to the merger regime is desirable or necessary. The OFT is close to completing its review and is due to issue a headline report by the middle of May and Ofcom will be consulting later in the year.

  10.  The Communications Act 2003 requires Ofcom to review the media ownership rules at least every three years and to make recommendations if in Ofcom's view changes to the rules are needed. The rules are designed to strike a balance between ensuring a degree of plurality on the one hand and providing freedom to companies to expand, innovate and invest on the other. Ofcom is expected to submit its review of the current ownership rules, alongside any recommendations for change, to the Secretary of State for Culture, Media and Sport later this year.

  11.  The government recognises the important role the media plays in society and believes it is essential to have a balance of views expressed in the media. To date plurality of voice in media has been secured through statutory rules which seek to ensure that the most influential media in any community are not controlled by too few people or express too narrow a range of views and interests. These include cross-media ownership rules which prohibit the ownership of newspapers, radio stations and or a Channel 3 licence in a single market. There are also statutory obligations that provide for impartiality and accuracy in broadcasting. Changes of ownership involving newspaper enterprises are also subject to the same competition based regulation as mergers in other sectors—to prevent unacceptable levels of concentration in markets. These regulatory arrangements provide an appropriate means of controlling media ownership.


  12.  The Newspaper Society and the Society of Newspaper Editors argue that some internet providers are undermining the economic position of newspapers and infringing copyright by taking news gathered by the newspaper industry, and republishing it on the web. The operation is financed by advertising revenue which the internet providers receive.

  13.  Copyright law is determined by a combination of UK laws, EU Directives and international treaties. Copyright is primarily a civil law matter and it is mainly for rights holders to sue if they feel their rights have been infringed. The UK Intellectual Property Office (IPO) is responsible for the UK's copyright framework, but it does not function as a regulator.

  14.  The Government is encouraging the newspaper industry and internet providers to collaborate in the investigation and implementation of initiatives such as Automated Content Access Protocol. Automated Content Access Protocol marks webpages to identify the intellectual property owner.


  15.  A number of solutions have been advanced by different voices in the newspaper industry, including:

    — direct grants and subsidies to newspapers;

    — free newspapers for all schoolchildren;

    — imposing a duty on local authorities to advertise in the local press; and

    — top-slicing the BBC licence fee to support local papers.

  16.  There is however no unanimity of views and some within the industry have argued that some of these solutions would threaten the independence of the press.

  17.  Government policy on these proposals will be informed by the OFT review, Ofcom's Media Ownership Rules Review and the report by the UK-wide Power of Information Task Force, published on 2 March 2009 at, which contributes to thinking about the way that most people regularly use the internet.


  18.  To further inform the direction of travel, the Government held a local media summit, hosted by Culture Secretary Andy Burnham on 28 April, in which key figures from across the media industry came together to discuss the challenges facing local newspapers. The event looked at various ways to support local news providers and is part of the ongoing programme of work looking at the future of media as part of the Digital Britain project. Speakers at the event included Stephen Carter, Minister for Communications, Broadcasting and Technology, Ed Richards, Chief Executive of Ofcom, and Alan Rusbridger, editor of The Guardian. They discussed issues around new models of ownership and collaborative ways of working particularly around training, along with ways for the industry to modernise and become part of the digital age. The discussion at the summit will feed into the Digital Britain report to be published by the Government later in the summer.


  19.  The Government awaits the conclusions of the Scottish Affairs Committee's important inquiry with great interest.

Annex A


Jun 05-Nov 05 Nov 05-Apr 06Apr 06-Sep 06 Sep 06-Feb 07Feb 07-Jul 07 Jul 07-Dec 07Dec 07-May 08 May 08-Oct 08Oct 08-Mar 09
Daily Express83,09884,069 82,28679,91378,272 81,69376,67574,183 72,744
Daily Mail127,567126,916 124,807124,993126,807 128,288125,802121,506 117,766
Daily Mirror47,98644,321 40,51637,09934,947 34,47132,76631,267 28,896
Daily Mirror & Daily Record466,783 461,517437,142424,138 407,835402,813398,392 382,031362,601
Daily Record418,797417,196 396,626387,039372,888 368,342365,626350,764 333,705
Daily Star92,92191,594 88,43990,74493,927 92,84886,91185,159 85,058
Daily Star Sunday30,584 29,75330,49932,526 30,85135,45229,299 30,07028,241
Daily Telegraph24,676 23,48424,32323,464 24,91224,67023,594 24,42223,035
Financial Times6,0075,825 5,4595,7755,695 5,5625,2065,099 5,223
Guardian15,86516,385 16,15815,83015,760 16,35916,20416,109 16,030
Herald (Scotland)75,672 75,06171,37670,778 69,56267,61466,313 63,09760,642
Independent12,40712,363 11,46710,8359,950 9,4379,7359,385 8,756
Independent On Sunday10,543 11,74910,1399,420 9,5568,4819,495 8,6727,895
Mail On Sunday122,298 125,519123,388120,491 115,841117,531113,577 109,669105,568
News Of The World325,824 318,886306,616308,241 294,916295,222289,950 278,151270,084
Observer20,49822,437 22,60021,83721,804 22,55322,50022,611 22,122
People31,43629,516 28,40026,12224,336 23,25621,08119,736 18,450
Racing Post3,9874,015 4,0853,7653,869 3,7353,8133,634 3,498
Scotland on Sunday77,681 74,89469,25169,142 66,97765,22364,939 62,63959,466
Scotsman65,71063,380 60,04557,65855,556 53,81252,05350,073 48,270
Sun355,040366,822 399,423418,003403,113 402,823400,071379,781 369,032
Sunday Express56,00656,258 52,44453,29849,632 46,71443,50942,226 42,006
Sunday Herald57,84260,170 54,20555,28653,554 50,64448,41944,869 42,464
Sunday Mail504,324500,366 483,548478,914465,223 463,910452,728432,691 415,866
Sunday Mirror39,06637,377 34,45532,05532,249 32,12529,77728,102 25,634
Sunday Postn/an/a n/a291,628281,806 275,548272,850260,478 252,540
Sunday Sport14,43512,738 10,6579,7359,055 8,5137,9817,623 n/a
Sunday Telegraph22,376 22,18221,66821,180 22,20721,99420,770 20,83120,111
Sunday Times78,74677,209 74,86674,30469,157 68,93767,28168,385 70,590
May 2009

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Prepared 13 July 2009