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 2005March
UK GOVERNMENT POSITION
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 sectorsto 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
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 http://poit.cabinetoffice.gov.uk/poit/,
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
SCOTTISH NATIONAL PRESS CIRCULATION TRENDS,
JUNE 2005 TO MARCH 2009
|Jun 05-Nov 05
||Nov 05-Apr 06||Apr 06-Sep 06
||Sep 06-Feb 07||Feb 07-Jul 07
||Jul 07-Dec 07||Dec 07-May 08
||May 08-Oct 08||Oct 08-Mar 09
|Daily Mirror & Daily Record||466,783
|Daily Star Sunday||30,584
|Independent On Sunday||10,543
|Mail On Sunday||122,298
|News Of The World||325,824
|Scotland on Sunday||77,681