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Mr Watson: I have not had the chance to read in detail the Minister's vision for a multi-platform local media ecosystem and for public service TV. Does he acknowledge that some commercially independent newspapers would be wary of a further extension of local TV if it distorts a market in which they are already finding it difficult to operate? Can he reassure them?

Mr Vaizey: I am happy to reassure them; we see local newspaper groups as having an opportunity with local television. It is important to make the point that many of our local newspapers are owned by national or multinational companies; they are not produced with a photocopier in someone's back room, but are part of a substantial business. The Government think that there could be a huge opportunity there, not just because of the quality of the journalism, which is obviously very high and we should not lose sight of that-it reaches its peak in the Wantage and Grove Herald, owned by Newsquest-but because local people tend to identify closely with the brands. We continue to see opportunities there.

On introducing local television into this country, part of the opportunity for local television comes about because of the changes in technology that have decentralised production and reduced costs, and because we have new flexible means of reaching and interacting with audiences. I have already talked about the convergence of different media platforms online, which, again, makes this an exciting opportunity.

We have asked a chap called Nicholas Shott, the head of UK investment banking at Lazard, to examine the potential for commercially viable local television stations and to look at what the barriers are, what incentives are needed and what we need to do to make local television a central part of a thriving local media ecology. On the basis that if one announces something in Parliament, it will not get into the public domain, I want to tell right hon. and hon. Members in complete confidence that we have appointed a steering group to support Nicholas Shott. That may be in the newspapers in a few weeks, but I will tell Members in confidence now. The group includes the media analyst, Claire Enders; the venture capitalist, Brian Linden; the former GCap director, Richard Eyre; and the Labour peer, Baroness Kingsmill, the former head of the Competition Commission. They have agreed to work with Nicholas Shott on his report, which is due in the autumn, to take things forward. There is work to be done.

Mr Watson: I apologise for hogging the Minister's time. Have the terms of reference for the review been published in the House? If they have not, could he facilitate that?

Mr Vaizey: I am not entirely clear-I cast a panicked look at my officials-whether those terms of reference have been published. I cannot see any reason why they should be confidential. I imagine that my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport has sent a letter to Nicholas Shott explaining in detail exactly what the Government hope he will examine in the next few months.

A number of other points arose from the Culture, Media and Sport Committee's report that are worth covering. It focused on the impact that local authority newspapers might have on local newspapers. In opposition
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I enjoyed sparring with the hon. Member for Hammersmith (Mr Slaughter) on the subject of the role of Hammersmith and Fulham council's local newspaper. I got the impression that he was driven less by principle than by a concern that the newspaper might cost him his seat. Now that he has won a seat that the Conservatives may have expected to win, he may take a more objective view of the newspaper's role. The Secretary of State for Communities and Local Government will bring forward a consultation on the impact of local authority newspapers on the local press in the very near future.

It is also important to address specifically the Culture, Media and Sport Committee's points on local radio. In particular, the Committee praised the role of community radio, and I am delighted to echo that praise. Community radio has been a huge success story, and a lot of the credit goes to the previous Government for how they nurtured it. Towards the end of the previous Parliament, I was on a Committee that further deregulated community radio. In the run-up to digital switchover, which remains a firm commitment of the coalition Government, it is important to acknowledge that there is, again, a significant opportunity for community radio, in that more of the FM spectrum should be available to community radio stations so that they can broadcast to local communities.

I have covered quite a large area of ground in substantial detail. I am grateful that not too many hon. Members intervened on me. I look forward to hearing the speeches of the Opposition spokesman-the right hon. Member for Exeter (Mr Bradshaw)-and other hon. Members during the two and a half hours that we have to debate this subject.

Mr Joe Benton (in the Chair): I call Mr Ben Bradshaw.

Mr Ben Bradshaw (Exeter) (Lab): Forgive me, Mr Benton, but I understood that I would speak towards the end of the debate. I can then respond to hon. Members' points before the Minister sums up.

Mr Joe Benton (in the Chair): If you prefer, you may do so. I call Mr Tom Watson.

2.59 pm

Mr Tom Watson (West Bromwich East) (Lab): It is a pleasure to serve under your chairmanship, Mr Benton, and to give a speech that I did not know I was going to deliver when I entered this cavernously empty Chamber. Given that we have two and a half hours together this afternoon, I would like to use the opportunity to praise the Minister and congratulate him on his appointment. He is a noble and elegant member of the Government, and I am looking forward to working with him when I can, scrutinising him in infinite detail and helping him to do his job to the best of his ability. It is good that he has published the response to the Select Committee's report last year on local media, but I suspect that it has only just gone to the Table Office. He is new to his job, so I shall not be pedantic and complain about that, but he will understand that we have not had time adequately to read the report and respond to it. Perhaps we will have a chance to do so in another forum.

The figure that worried me most in the Minister's speech was that from the OECD of a 26% fall in print advertising revenue this year. That illustrates the huge structural problems that local, regional and national
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media face in the United Kingdom. They are structural because of the internet, which is the most disruptive technology for many centuries. It is hackneyed to say that it is as disruptive as the Gutenberg press, but it is important that we, as policy makers, understand some of the characteristics that the internet gives us when responding to the challenges in local media. I hope to sketch out a few of my concerns in that area.

The Minister talked about advertising revenue as a prime example of why advertising models for newspapers are now in such trouble. A great man called Craig Newmark, who invented Craigslist, looked at the classified ads in American newspapers and thought they created an imperfect marketplace because people could not find all the goods that they wanted to purchase, and people trying to sell goods could not find all their potential purchasers. He found a digital solution and founded Craigslist, the vast majority of which offers free classified advertising. Having started his endeavour with no idea of how he would make the model pay, he created a small revenue base, based on advertising real estate in selected American cities. Craigslist is one of the biggest and most successful global websites.

Craig Newmark understood the power of network growth, which is killing newspapers' revenue models today. We are almost in a commune of despair when it comes to considering how we can retain a strong, rigorous local news base in the UK. None of us has the answers to the hugely disruptive models that the internet gives us. The lesson that we, as policy makers, must learn is: if we do not have the answers, let us not make it harder to find them. One thing that worries me-my position is probably slightly ironic in my party-is that if one does not know an answer, the regulatory models that are then devised may make the problem worse, not better. I hope that in years to come, the one thing that we can share an interest in is trying not to be too prescriptive with our regulation.

The two Front-Bench teams will probably be in despair at my wittering on about the Digital Economy Act 2010, but I believe that if we are honest with each other, it managed the politics of decline for some of the old publishing models that are now completely challenged and almost washed away by the internet. Governments must sometimes step in and protect industries that are transforming themselves, and that is fine, but I suspect that the Act has made it harder, not easier, for publishers to find solutions.

The simple truth of the internet is that scarcity cannot be enforced, as used to be possible in print media, and local newspapers have found it difficult to find solutions. There are some things that communities do on the internet from which lessons can be learned. It enables people easily to form groups. They may coalesce around a brand, a journalist or a newspaper group, so that what a newspaper does and its component parts are vital to its future success. A classic example is the Daily Mail's Jan Moir, who chose to write a vicious article that resulted in 25,000 complaints to the Press Complaints Commission when people uprose digitally and formed a community. I believe that harmed the Daily Mail brand. A good pioneering local newspaper that distinguishes itself in a niche market by being the only creator of local news and has a track record of integrity, honesty
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and checking facts can manage transformation in the digital space, but it must understand the power of its brand.

The Minister referred to the Wantage and Grove Herald, which mistakenly made an editorial decision to put his expenses on the front page. How would a newspaper respond to that? The country's biggest-selling regional newspaper-the Express and Star-is in my constituency. It is-dare I say it?-a classically run newspaper with strong news values, and when one turns a page one knows whether one is reading a news story or a comment piece; it does not have editorialised news pages. Editorially, it backs a political party-the Minister's party-but its news coverage is studiously impartial. It refuses to take off-the-record or unattributed briefings; everything is on the record. When it makes a mistake, it apologises and puts it right. When I appeared in the Express and Star accused of claiming for a 69p pair of rubber gloves and a tree surgeon, it apologised and put the matter right by explaining that it was in fact my neighbouring MP who had made those claims. That is why the Express and Star has managed to stand up against some of the forces that have been unleashed in local newspapers better than others. It has strong values which result in a loyal readership.

Another matter that newspapers should understand is the power of communities. They could collaborate with their readership more than they have. We all take part in some form of collaboration. Most hon. Members have columns in our local newspapers, and it is far easier in a digital age to build a more participative relationship with readers. I hope that the Government will play a role in helping to facilitate that.

In our report, we did not discuss in depth whether there is a role for the Government to provide not a technology fund, but technology advice to old-school newspapers in the analogue sector moving through the transition to the digital age. Perhaps one of the most worrying parts of the mix in the newspaper industry now is that when it has had to cut back, it has done so on news journalism to such a degree that it cannot cut the staff any more, so it is now turning on the higher-paid technologists and making it harder for them to handle the digital age. If the Government have a role in partnership, it could be in the technology sector.

I cannot end my rather rambling contribution without referring to the report's reference to the Hammersmith newspaper. What united both wings of the Committee was that we were almost stupefied that a local authority could produce a weekly newspaper containing pizza advertising and-I will not refer to cranky religious advertising-all sorts of dubious advertising without any social policy on that. The only people from the council who were allowed to appear in the pages of the newspaper were the elected Conservative cabinet councillors; the poor Conservative back-bench councillors were not even allowed a voice. The paper had such a dominant place in the local market that it would be impossible for a commercial rival to set up and produce an alternative form of news. It could not possibly have held the local authority to account.

Philip Davies: I support what the hon. Gentleman says. Does he agree that it is bad enough when local authorities use local taxpayers' money to pay for propaganda when it is clearly labelled as propaganda,
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but it is even worse when local authorities such as Hammersmith and Fulham produce newspapers full of propaganda that masquerade as independent newspapers?

Mr Watson: Yes, the hon. Gentleman is right. In an article in The Daily Telegraph last week, the Secretary of State for Communities and Local Government complained about the cost of envelopes in local government. Far be it from me to give the Minister advice about his privatisation plans, but the paper in Hammersmith and Fulham is one local authority paper that could adequately be privatised. That would do us all a democratic service, because it would then hold elected politicians to account.

On the consultation, I hope that we have a serious discussion about how we can give local authorities proper boundaries and show them what is and is not democratically acceptable, because some authorities have inadvertently or deliberately crossed a line that needs defining. It is fair to say that all the members of the Committee entered the inquiry thinking that old newspapers were bleating about local authority newspapers, but when we looked at the issue in depth, we were pretty shocked. I hope the Minister will be able to work with colleagues in other Departments to do something about that, because it is not fair. With that, I will conclude, which should give my right hon. Friend the Member for Exeter (Mr Bradshaw) adequate time to wrap up over the next two hours.

3.11 pm

Mr Don Foster (Bath) (LD): It is a great pleasure to follow the hon. Member for West Bromwich East (Mr Watson) and to serve under your chairmanship, Mr Benton. The debate gives me the opportunity formally to welcome the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), to his post on the Front Bench.

We are discussing a really important issue. The Minister rightly recognised that we all had an opportunity to namecheck our excellent local newspapers. He did so with the Wantage and Grove Herald, and I certainly want to do the same for my own paper, The Bath Chronicle, which is now, sadly, a weekly rather than a daily. The Bath Chronicle, the Wantage and Grove Herald and all other local newspapers are important in ensuring the accountability of our local councils and other public bodies, and they are a focal point for the community. Sometimes they do interesting things; the Minister gave us the example of the coverage of his expenses. About eight years ago, when The Bath Chronicle was a daily, the letters page included a letter complaining that there were too many photographs of Don Foster in the paper. I was delighted that the paper chose to illustrate the letter with a quarter-page photograph of me, with a banner underneath saying, "Too many photographs?"

Local newspapers and the local media-radio and so on-also act as good vehicles for important local campaigns. Let me just say on a serious note, and with a degree of personal interest, that the front page of today's edition of The Bath Chronicle includes an article about my part-time secretary in my constituency office. This lady has had breast cancer and bone cancer, and she now has
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liver cancer. She is quite seriously ill and she was, most recently, taking Herceptin, until her consultants discovered that it was causing heart failure. The only drug now available to her is relatively new. It was recommended by her consultants, but it has not, unfortunately, gone through the final stages of approval by the National Institute for Health and Clinical Excellence, so she is being denied access to this life-saving drug. I am delighted that my local newspaper is running a campaign to gain support for her and that my secretary's local MP, the hon. Member for North East Somerset (Jacob Rees-Mogg), is supporting her.

Local newspapers, local radio and local media overall are clearly important, and they provide all the things that I have described. They also provide a training ground where many people can develop their media skills before moving to more regional or national newspapers. Given the emphasis that the coalition Government place on localism, it is critical that we find ways of supporting and defending local media so that they can carry out important checks on what happens locally.

As we have heard from the Minister, there are many problems. The local media industry has been contracting for the past five years. Thousands of jobs have been lost in regional and local newspapers, and 25% of jobs are being cut in local papers. Sixty titles were cut last year alone, and more jobs and titles will potentially be lost. Reference has also been made to ITV, where some 1,000 jobs have already gone in the regional news service. More than half of local commercial radio stations are now loss-making, and the industry's total revenue has gone down dramatically-by nearly a quarter-in the past few years. Its audience share has also declined.

The Minister has given us some of the reasons for what has happened. Of course, it is largely to do with the recession and, therefore, the fall in advertising revenue. However, there has also been a move to new platforms, not least on the internet-an issue to which I will return shortly. If we believe that something needs to be done, the real question is what we are going to do about these issues. I am delighted that the coalition agreement makes clear reference to the coalition Government's desire to

The question is how we do that. I want to make a number of suggestions to the Minister and to pick up on some of the points that he and others have made.

Let me start by saying that it is critical that we understand the important role that the BBC plays, and that we make it clear that we would do great damage to local, regional and national media if we followed the advice of the hon. Member for Shipley (Philip Davies) and top-sliced the BBC's licence fee. That would undermine the BBC's independence-something that I am delighted the Secretary of State, in his recent speech on these issues, made clear the coalition Government are not prepared to do. The minute we allow top-slicing at the BBC, the corporation will be constantly looking over its shoulder to make sure that it is not offending the Government of the day, and its independence from the Government will be lost. I have to tell the hon. Gentleman that I strongly oppose top-slicing and I hope that that will be the view of the coalition Government.

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