Lord McNally
That this House do not insist on its Amendment 131A, to which the Commons have disagreed and do agree with the Commons in their Amendments 18A and 131B in lieu.
The Minister of State, Ministry of Justice (Lord McNally)
I beg to move Motion A standing in the name of my noble friend Lord Taylor of Holbeach.
Noble Lords will recall that when this House considered the Commons amendments to the Bill on 25 March it accepted a series of Commons amendments that form part of the cross-party deal on Leveson and ultimately seek to establish an incentive-based, self-regulatory system for the press as envisaged by Lord Justice Leveson.
In advance of the debate on 25 March, the Government recognised that there was continuing concern in relation to the impact of the new system on small-scale blogs. Indeed, Lord Justice Leveson himself was clear that he did not expect very small publishers to join the new self-regulatory body. In recognition of the continued debate around the extent of the definition of “relevant publisher”, this House accepted the government amendment, Amendment 131A, to allow a period of further reflection over the Easter Recess and thereby ensure that the issue remained in play and could be discussed further in the Commons during the next round of ping-pong.
It might at this stage be helpful to remind noble Lords briefly of the context of these further amendments and explain the rationale behind the definition of relevant publisher. At present, four interlocking tests serve to define who is, and is not, a relevant publisher and therefore affected by the system of incentives. A relevant publisher must publish news-related material, which must be written by different authors, be subject to editorial control and be published in the course of a business, whether or not carried out with a view to profit.
Further to this, a number of specific exclusions have also been set out in the new schedule provided for in Commons Amendment 131. These exclusions include special interest titles, scientific journals, publications by public bodies and charities, book publishers and company news publications. However, the provision as drafted raised concerns on the part of small-scale blog sites that they could be caught by the definition of a relevant publisher, and that this was not an outcome we sought in establishing the definition. We have now had the opportunity to hold discussions with a number of relevant parties to understand their concerns about the extent of the relevant publisher definition. These were valuable discussions and Amendments 18A and 131B agreed yesterday by the Commons reflect the outcome of those discussions. I can also confirm that the amendments were agreed in advance on a cross-party basis.
Amendment 131B develops the list of exclusions from the definition of relevant publisher. Specifically, it exempts microbusinesses where they are either a blog or where their publications are only incidental to their other business activities. Microbusinesses which publish news-related material that is incidental to the main activities of their business are also exempted, whether they do so online or offline. The definition of microbusinesses in this amendment captures any business with fewer than 10 employees and a turnover of less than £2 million. This definition is frequently used by the Department for Business, Innovation and Skills. We consider that measuring both the number of employees and the turnover of an organisation, and setting the bar at this level, provides the most appropriate proxy for potential impact and harm and ensures that the incentive system is proportionate.
The aim is to make certain that the incentive system affects only those publishers Lord Justice Leveson intended to capture and that, by extension, many blogs, small web forums and think tanks will fall resolutely outside the incentive framework. Noble Lords will appreciate that it is, of course, ultimately and properly a matter for the courts to decide in any particular case whether a publisher falls within the revised definition of a relevant publisher. It is worth noting here how blogs may be perceived to be different from, for example, the online edition of a newspaper. Blogging takes many forms and is an evolving concept. However, there are some key features which distinguish blogs, even where they are edited and multiauthored, from online news reporting. A blog is used primarily for the expression of opinions, comments or personal experiences by an individual or group of individuals. Multiauthored blogs usually cover a single subject of interest, such as food or fashion, or a particular viewpoint, such as a political blogsite. Blogs do not usually report in a factual or neutral way on news or current affairs but are led by the personal views and voice of the individual or group of individuals concerned. The amendment intentionally contains no definition of a blog. It will take its natural, commonly understood meaning and, in the usual way, the term will ultimately be subject to interpretation by the courts.
Amendment 18A allows those parties not captured by the new exemption to benefit from the incentives around exemplary damages and costs, should they choose to join a recognised regulator. We consider this ensures that the system is fair and that those parties not captured by the definition can remain competitive. By joining a recognised regulator, parties not captured by the definition will now have the opportunity to benefit from the system of incentives we are putting in place.
Before concluding my remarks, I will clarify again the effect of the definition of “relevant publisher” on some other interests, in particular news aggregators. It is not our intention that these provisions should capture news aggregators such as Yahoo!, MSN or Google. News and content aggregators who license or otherwise acquire news-related content from third parties control this content only in so far as they decide how to present it in its totality to the end-user. To that extent, they are not subjecting the material to “editorial control” as defined in the provisions.
Lord Justice Leveson did not intend services that provide a platform for bloggers to post content to be captured. Again, the control that is exercised by aggregators here is limited to the high-level presentation of the content. It is for these reasons that news aggregators are not intended to be captured by our definition. Likewise, the definition is also not intended to capture political parties. These were not the target of Lord Justice Leveson’s reforms and it has not been the Government’s intention to capture them. In order to qualify, an organisation must meet all four tests in the definition: it must be publishing news-related material; the material must be written by different authors; it must be subject to editorial control; and it must be carried on in the course of business. An individual MP who runs a blog site should also be safely outside the definition as they would be unlikely to qualify for the four tests. If for some reason it was felt that they did, they would also be able to look at the microbusiness exemption.
It is also likely that many smaller political campaigning organisations will be able to take advantage of the new microbusiness exemption. They will qualify if they are microbusinesses and operating a multiauthored blog. If they are operating a multiauthored blog but publication of news-related material is incidental to their main activities, they will also be exempt.
I would like to underline that the activity of running a web forum is also not caught by this definition. I draw noble Lords’ attention to the additional provisions in the legislation which explain that the moderation of websites does not qualify. This is also true of blogs if they are posted without the exercise of editorial control. Therefore, a site like Mumsnet, to the extent that it runs a blog forum, is not caught by these provisions. However, any site, including Mumsnet, that moves into commissioning and publishing news stories may be caught by the definition.
I hope that this has helped to provide some clarity on who it has been the intention to capture in the definition and, equally importantly, who is not caught. I believe that these provisions provide a proportionate approach to implementing a crucial part of Lord Justice Leveson’s reforms. I commend these amendments to the House.
Lord Avebury
Before my noble friend sits down, perhaps he could help me on material that is published in the cloud. He went into very helpful detail on blogs, but material can be aggregated in the cloud in specific folders. Can the Minister say whether that is exempt in the same way that blogs are?
Lord McNally
I am not as au fait as the noble Lord and I have only just come to terms with clouds and things like that. What exactly is his concern?
Lord Avebury
Would material which is aggregated in a cloud folder with something such as Dropbox, where you can put a number of different items which may be news or other kinds of material, be exempt in the same way that blogs are?
Lord McNally
I am reliably informed, post haste, that such aggregates in clouds are not covered. If by any chance that is not true I will write to the noble Lord and make sure the letter is circulated to the House. I cannot see over my shoulder but I sincerely hope that the Box is currently nodding firmly.
Lord Stevenson of Balmacara
I can inform the Minister that the Box looked absolutely transfixed by that recent exchange. I do not know who is more surprised, them or us, by the ability of the noble Lord, Lord Avebury, to come to the white heat of the technological revolution and ask a question that has stumped us all. On this side of the House, we would venture to say that we think they are covered, but that just adds a little piquancy to the debate which will, I am sure, be resolved before we get too far down the line.
Following the Leveson trail is a bit like appearing in “Rosencrantz and Guildenstern are Dead”. We pop up at odd times as other events seem to be filling the spaces. We pay a small contribution to it and then we discover that the whole event has moved on, another Bill has appeared, and yet another set of amendments appears which look awfully like the ones we have just been discussing. Only earlier today, we knocked out one set of amendments, yesterday we could have done the same, today we hope they will stick. I want to reassure the Minister that we will be supporting him in this event and he will not need to use the wiles he displayed when he almost reached across the Dispatch Box to my noble friend Lady Hayter to try to persuade her not to push her vote. The vote was unsuccessful so he won out in the end anyway: he has all the luck.
As the Minister has explained, these amendments, inserted into the Bill late in the process, provide for new rules on exemplary damages and costs. They are an essential part of the cross-party agreement on a royal charter which is part of the new framework of independent self-regulation, guaranteed by law, as recommended by Lord Justice Leveson. This part of the Bill aims to provide publishers with incentives to sign up to the new system of self-regulation that should meet the criteria set out in the royal charter. Publishers that join a recognised regulator will receive protection from the award of exemplary damages in media disputes, the opportunity to use an arbitration service and cost benefits from having access to this service. That is one reason why it would benefit local as well as national newspapers. If a complainant chooses not to use the arbitration service, they can still be liable for costs even if they win.
Lord Justice Leveson’s report was mainly about the press but the original drafting of this Bill had the unintended effect of catching blogs. That said, Lord Justice Leveson did express the hope, in Recommendation 73 of his report, that online publishers would also join a regulator. The Bill therefore needs to be amended to ensure that exemplary damages did not apply to blogs and they could receive the benefits of joining a recognised regulator. In recognition of the fact that this is a complex area, your Lordships’ House agreed a placeholder amendment on 25 March. The Government’s decision to hold a mini consultation and pause for reflection to consider how the Bill should deal with the blogosphere was sensible and we agree with the policy objectives that the Government are seeking to address to exempt micro businesses from the definition of relevant publisher where they are a blog or where their publications are merely incidental to their other businesses and to enable such micro businesses to receive the benefits and cost incentives of joining a recognised regulator. The Minister has been helpful in setting out a number of accompanying thoughts around these points and the issues relating to what would and would not qualify, and I think they will bear further consideration once we see them written up in Hansard.
However, the main point is that the amendments we are now looking at and which we support define a small blog as one whose turnover is below £2 million and has up to 10 employees. It exempts such businesses from exemplary damages and enables them to benefit from the cost advantages of an arbitration service if they join a regulator, and that last point will be particularly welcome to the community. As I say, we support the proposals, and I am grateful for the manner in which they have been pursued within the all-party agreement which has underpinned the whole process, so we will not be dividing the House.
In the time available, I would like to make a couple of ruminations about some of the issues that we are talking about today, and within that are two questions to which I hope the Minister will be able to respond. The first is that the digital world as we know it is changing rapidly and the complexity and parliamentary arithmetic of changing the royal charter means that it will be hard to alter the legislation after this Session, so it needs to be right. What consideration have the Government given to the health and future of the blogging industry, and can the noble Lord share with us the Government’s thinking on this point? I understand that the indicators for a micro-business have come from a definition used by BIS, and in that sense they are not specific to the blogosphere. I have had representations already, and I am sure that other noble Lords will also have received them, from those who argue that the figures being used are on the high side, as rarely do we find 10 employees or even an annual turnover of £2 million in a blog company. That would make for a very healthy company, but it is not how the sector operates. Can the Minister estimate roughly how many blogs this definition would capture at present?
I turn to a related but more general point. We are talking about an industry that is in the process of change. For example, the print circulation of newspapers is estimated to shrink by at least a quarter in the next five years and yet we are facing a rather bizarre situation where newspapers are exempted the full 20% rate of VAT on print sales despite the fact that in many cases online traffic now represents the majority of their audiences. This is something which is bound to grow as we go forward. In fact, we are fast approaching a situation where what we previously believed, which is that we in this country do not tax reading, is becoming the reverse of what will happen. Those who read using electronic means, which will include those who are caught by this amendment, will be paying 20% VAT. Is this something that the Minister can say is under consideration, because it seems to me that we will need to face up to it before too long?
I am very grateful to the Minister for mentioning Mumsnet because it was the subject of discussions in another place, and others have raised it. The break point that he expressed is one to which we may need to return. Perhaps when he concludes he will reflect on this. At what point do those who blog and use it as a campaigning tool get caught? There is some doubt in what he has said about whether Mumsnet, which is not a charity but exists largely to circulate material that is in favour of a particular point of view, could possibly be caught by this exception. It is one of a number of areas in which, as the Minister has said, time will show us what emerges. However, a little more clarity at this stage would be helpful.
Finally, the Minister was keen to assert that it would not be sensible at this stage to define a blog. He was then caught quite quickly by a question related to blogging which illustrates that sometimes it might be sensible to have in primary legislation clear definitions which we can all use. I understand and support the idea that it is probably wrong to try to be definitive at this stage and that we should see how things go, but if that is the case, are there are any thoughts about how the Government might consider revisiting the issue within a reasonable time if it turns out that we need to move? After all, as I have said, this is the digital age and things are moving fast. What is a blog today may change into something else, and we want to be sure that we have the flexibility which I do not currently see in the Bill.
Lord McNally
I thank the noble Lord, Lord Stevenson, not only for that reply but for the constructive role he has played in getting us as far as we are today. It is important to retain an all-party approach as we take this through. The noble Lord asked how many blogs this amendment will cover. We cannot provide an accurate estimate because blogs are constantly started up and then stopped. However, we feel that this is the right figure in order to exclude all those who we hope and intend to exclude. On the definition of a blog, I was tempted to call in aid that used by Clement Attlee when he wanted to exclude Trotskyists from the Labour Party. They said, “How do we know who are Trotskyists?”, and he said, “It’s a bit like an elephant—when you see one, you know one”. In a way, we are groping with blogs in an age of technology that is constantly and frighteningly rapidly changing.
We have tried to get some key features which distinguish blogs from online newspaper reporting. A blog is used primarily for an expression of opinion. Multi-authored blogs usually cover a single subject of interest. In all cases, blogs do not report in a factual and neutral way on news or current affairs but are led by the personal views of the individuals. While an online news site may contain comment, opinion or bias, comment pieces are not its principal focus. What constitutes a blog may change over time as convergence increases.
It is a difficult area. When we debate these areas, we often point out that future-proofing is virtually impossible. We hope that the definition I have given today has been sufficiently carefully drafted to provide the maximum possible clarity to organisations seeking to know whether they are caught. We have produced a handy set of questions on our website to help organisations to work this out. This is intended as guidance only. Ultimately, as in the case of all legislation, the decision on whether an organisation comes within or outside the scope of any particular piece of legislation will fall to the courts. The intention of the definition is to capture news publishers who were the focus of Lord Justice Leveson’s inquiry and his subsequent recommendations. They are intended to act as the key incentive for those publishers to join the new press regulator, while also protecting those not intending to join.
On Mumsnet, protection is the interlocking test, but such an organisation may branch out or develop a kind of activity which takes it into the realms of news and newspapers—a news media. Again, we would have to be flexible. If an organisation develops in a way that makes it a news organisation, it would have to consider its position. Lord Justice Leveson, in making his recommendation and recognising the changing architecture of our media, specifically said that he hoped news organisations that were primarily online would consider themselves willing to join any new regulator.
Parliament at both ends of the Corridor has done a good bit of business in dealing with a specific concern that was raised. I thank the noble Lord, Lord Stevenson, for his very constructive and helpful approach, not only at the Dispatch Box, but in bilateral discussions.