Westminster Hall

Thursday 15th June 2023 Westminster Hall

Thursday 15 June 2023

[Clive Efford in the Chair]

Public Broadcasting in Scotland

Thursday 15th June 2023 Westminster Hall

13:30

[Pete Wishart (Perth and North Perthshire) (SNP)]

I beg to move,

That this House has considered the Fifth Report of the Scottish Affairs Committee, Public broadcasting in Scotland, HC 1048, and the Government response, HC 1305.

I thank the Liaison Committee for enabling this short debate, and I welcome you to the Chair, Mr Efford; in these situations, young bucks like us are great examples to the younger Members in this House. I also welcome the Minister to his place. I do not know how many times he has been recalled to the Department for Culture, Media and Sport, but it is great to see him providing maternity cover. He and I have had some great scraps in the past couple of decades as we have sought to ensure that the creative sector is defended and protected.

[John Nicolson (Ochil and South Perthshire) (SNP)]

He’s the Frank Sinatra of the Commons, isn’t he?

[Pete Wishart]

Absolutely, and I look forward to his closing remarks in this debate. The Scottish Affairs Committee held evidence sessions for this inquiry between July 2021 and January 2023. In that period, we examined the performance of public sector broadcasters in Scotland, and the general environment for broadcasting in Scotland. The Committee’s report was published on 2 March 2023. We found that Scottish broadcasting is generally in a reasonably good place. Scottish viewers can access a wide range of content, whether through the new streaming services that are now in practically every household, or through the established means of public service broadcasting. The services offer TV content that is made specifically for Scottish viewers—Scottish content—and globally recognised shows that are filmed in Scotland.

The screen sector is worth about £500 million to the Scottish economy, and between them STV, ITV and BBC have jointly spent £71.3 million on first-run content made specifically for viewers in Scotland. We have all seen the fantastic new programmes and series that have started to emerge across a number of services, including “Shetland”, “Outlander” and the fantastic “The Rig”, starring Martin Compston, which I think we have all particularly enjoyed over the past few months. Some of those shows have resulted in a nascent hospitality and tourism sector in some areas; people come to see where famous “Outlander” scenes featuring Jamie were filmed. I was in the States recently with colleagues from the Committee, and that was one of the points that came across to us: people were keen to come to Scotland to see the many locations where these fine shows were shot. I am delighted to be joined by colleagues from the Committee, who I know will be keen to contribute to today’s proceedings.

We also found that the independent production sector is thriving. The Committee heard from various witnesses that the prospects for independent TV producers in Scotland are better than they have ever been. That is great progress since the last time we looked at broadcasting some eight years ago.

As hon. Members would expect, we also identified a number of difficulties, challenges and issues, which our report highlights. The first regards Freeview, which is very important for Scotland. Scotland has more Freeview viewers than anywhere else across the United Kingdom; a third of Scots depend on Freeview as their essential and exclusive means of accessing content. The Government’s intention is to keep Freeview going until 2034. Our report asks for that to be continually reviewed. We should look at the numbers and ensure that Freeview will still be available to Scottish viewers at that point.

We looked at issues around the proposed privatisation of Channel 4. When we started the inquiry, it was to be privatised, and by the end of it, it was not. The Committee is very proud of one thing that came out of the inquiry: through our conversations with Channel 4 executives, we managed to secure Scottish participants on “Gogglebox”. It is not often that a Select Committee can claim any sort of success, but we were able to ensure that when we watch “Gogglebox”, Scottish participants will be there.

On inter-Government relations, which my Committee obviously has a rolling brief on, we called for a new inter-ministerial group on media and culture. It would serve as a forum for joint working between UK and Scottish Ministers, and help to improve outcomes in the screen industry across the whole of the United Kingdom. The Government response was received on 19 April and we published it on 28 April. In their response, the Government noted that the draft Media Bill was introduced to the House on 29 March and confirmed to us that

“a Culture and Creative Industries Inter-ministerial Group will be set up this year”

to support intergovernmental relations. The Committee particularly welcomed that. In his summing up, can the Minister tell us what progress has been made on establishing the group, and whether he has had time to consider the terms of reference under which it will be established?

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

A positive change in recent years is that independent producers are not all sitting in London. It used to be that people in the creative industries eventually had to come to the capital of the UK, or else they could not progress. Does my hon. Friend celebrate Channel 4 not only not being privatised, but opening a hub in Glasgow, where it is promoting training and access to skills in the industry, so that it will hopefully thrive even more?

[Pete Wishart]

My hon. Friend is quite right to point to those innovations, which we welcomed in the inquiry and report. The developments she mentions are significant. I remember the situation when I was a new Member of Parliament: London-based producers and commissioners did most of the commissioning when it came to Scotland. Now, there are opportunities for people in Scotland to ensure that commissions are considered by a whole range of public sector broadcasters, as well as the streaming services.

Two issues dominated the inquiry and report, and we spent a little time looking at both to see if there was anything we could do to help resolve matters associated with them. It will not come as a surprise that the first was the prominence of Scottish television, which is timely given that prominence is considered in the draft Media Bill. There are a couple of things I want to press the Minister on a little more. There is no statutory requirement for public service broadcasters’ on-demand streaming services such as iPlayer or STV Player to be featured prominently on smart TVs or streaming sticks. That risks public service content becoming more difficult to access in the shift away from traditional TV broadcasting modes. We heard that the new TV platforms do not give that type of content the same sort of prominence as is secured on Sky, Freeview or Virgin TV, which have the benefit of the electronic programme guide that ensures that stations such as STV are prominently featured. I think STV is No. 3 on both Sky and Virgin TV and is easily found on the Freeview service.

New legislation to ensure prominence for public service broadcasters’ on-demand services on internet-enabled TV was unanimously supported by all public service broadcasters who came to our Committee. It was something they were keen to stress to us throughout all our evidence sessions. The Committee’s report recommended that the UK Government bring forward “time-sensitive reform” within two months of the report being published. Within that time period, the Government brought forward their draft Media Bill and mentioned prominence in the provisions. I look forward to the Minister’s remarks on that; however, it is only a draft Bill with no time.

I heard the comments today at Culture, Media and Sport questions: we still do not know when the Bill will be introduced to Parliament, and the Minister was not able to reassure us that it would be delivered in this Session. That is important. Is there anything, over and beyond what is in the draft Bill, that the Government could do to address the issue of prominence? I worry that if nothing is done to resolve the issue, the habit will be formed, and systems might become embedded that make it difficult to locate services. I appeal to the Government to have a look at that again. The draft Bill would allow regional variation in the degree of prominence that regulated internet-enabled TV platforms would have to give certain content, but we need progress on that as a matter of priority.

Another issue, not covered much in the report, has emerged since its publication. In a recent meeting, STV was keen to communicate to us what was being asked of public sector broadcasters such as STV that wished to be hosted on big global networks, such as Amazon. STV told us that Amazon had indicated that it wants 30% of STV Player inventory to sell its own ads as a prerequisite if the STV player is to be on Amazon’s platforms. Thirty per cent of total assets is an almost outrageous demand. That is something that Ofcom can resolve; it has the regulatory powers to get involved in such situations, and I hope that encouragement from the Minister might just encourage it to do so. This issue is exercising colleagues in Scottish television, and it may inhibit their ability to appear on some of the big global network platforms.

[John Nicolson]

Does my hon. Friend accept that one of STV’s problems is that it does not know whether any of the other broadcasters will give in to this blackmail? If one gives in, it will be absolutely necessary that all the others do. Thirty per cent is an eye-watering percentage of the company’s profits, and paying that would restrict its ability to invest.

[Pete Wishart]

I was loth to use the word “blackmail”, although it is pretty hard to get away from that term, given that this is a gun to the head for so many public sector broadcasters. My hon. Friend is absolutely right about the sense of not being left behind. Because of Amazon’s importance, its worldwide reach and ability to get into households in Scotland, broadcasters have to take it seriously. He and all my colleagues listen carefully to representations from Scottish television. I hope that the Minister can put this right.

[Dr Whitford]

On that point, the sheer eye-watering ask of 30% of revenue could encourage other platforms, including those that are created in the future, to push for the same amount. That would quickly wipe out the viability of public sector broadcasters such as STV.

[Pete Wishart]

My hon. Friend makes a very good point. We have discovered that public sector broadcasting in Scotland is in a reasonably good place, but it remains fragile. Recovery and being able to provide the content that Scottish viewers want is important, so we have to be careful with all this. I know that the Minister is listening carefully, and I am sure that we will hear from him about this issue being taken forward.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Does my hon. Friend agree that this issue is particularly disappointing given that witnesses from Amazon and Netflix came to the Committee, and what they said sounded very positive? They said that they were working closely with public service broadcasters to deliver production. That makes it particularly odd that this has come up as an issue.

[Pete Wishart]

Indeed. Unfortunately, we were not able to press the main streaming services on this issue when they came to give evidence, because it had not emerged as a particular difficulty at that point. As my hon. Friend rightly points out, witnesses did say that there is a good relationship between the streaming services and the public service broadcasters. We heard in the Committee that there is room for everybody. Obviously, people who are in the habit of watching “Eastenders” or “Coronation Street” will prefer to watch public service broadcasters through Freeview, and that will be their evening viewing. Other people like to watch feature films and to binge on mini-series.

We have found a positive broadcasting environment that enables viewers to access a range of content that was unimaginable when the Minister and I were mere slips of boys watching glorious coloured television for the first time, as well as—when Channel 4 arrived—“Brookside” and “The Tube”. These are different days. It is unfortunate that there seems to be a dispute. It has really put a spoke in the works of what was described to us as a healthy working arrangement. We hope the issue can be sorted out.

There is one thing that we are not making progress on. It will not surprise you, Mr Efford, to see football—or “the fitba”, as we say in Scotland—come up in a debate on broadcasting in Scotland and what is available to viewers. We did not really expect, although we should have, that once we started bringing people in to discuss this topic, football would become the main focus of conversation.

What is happening to Scottish football fans is excruciatingly unfair. This conversation is timely because the Euro qualifiers return on Saturday, with the mighty Scotland taking on Norway. As you know, Mr Efford, we are top of group A, looking down at Spain, Norway and the rest of them below. Never before—or not since probably 1998, when we were last in the World cup—has Scotland had such an exciting national football team. People want to watch it. There is huge excitement about international football and the prospects for the Scottish football team. The only problem is that we have to pay to watch it. We are the only part of Great Britain where that happens; Northern Ireland is in the same situation. People in England and Wales can watch their national football team free to air—no problem. But in Scotland, they have to fork out or go to the pub to watch it with friends. That is not a bad prospect, but why is it only Scots on this island who have to pay? And the cost is not cheap.

In a competition to secure the rights to host and broadcast Scottish football, Viaplay was successful, and it has the rights until 2028. A standard Viaplay subscription for a month is £14.99. Viaplay has been reasonably generous and allowed a package that amounts to £59 if someone takes up the opportunity to buy for this year. We have a cost of living crisis. People are struggling to meet household bills. Mortgage rates are going through the roof. We still have very high energy costs. The subscription is a lot of money to ask people to pay when everybody else in the United Kingdom is able to access and watch the football for nothing.

Before Viaplay, the rights were owned by Sky, which had the rights during the 2018 and 2022 World cup competitions, as well as during the UEFA European championship in 2020, which were all shown on Sky. To show how important this is and what a big issue this is for Scottish football fans, in an online report by The Scotsman in November 2020, 92% of respondents agreed that Scotland’s men’s national football team games should be available on free-to-air TV.

We know the situation is complicated. We know there are lots of complex arguments, and that the future of the national game is in question. The Scottish Football Association relies on the money that it secures from selling the rights to a variety of broadcasters. Without that, it would not be able to invest in grassroots sport or support and resource a number of activities, so it is immensely important to it. It cannot gift this away for nothing. It rightly relies on the money to develop and build the game. All that has to be taken into account, and nothing should be done that would threaten that type of investment and resource.

There are ways through this. We identified two ways forward in the report. One is a voluntary arrangement between the Scottish Football Association and Scottish football fans and the rights holder. It is worth highlighting a couple of examples of how this could work. When Sky had the rights, it allowed the play-off final between Scotland and Serbia in the last European cup to be broadcast free to air, so that Scottish viewers could see it. During our inquiry there was a generous offer once again by Sky. Scotland had qualified for the final of the play-offs, and that was going to be free to air, too. Those are the sorts of voluntary arrangements that football fans would love the broadcasters to make. It is a generous offer that would be recognised and celebrated. It might even encourage take-up of the subscription services. That is a way it can be done, and we encourage more discussions and conversations about allowing particularly critical games to be free to air.

As for the listed events schedule, things are a little more complicated and technical there, but it is within the gift of the Government to say that those events should be free for Scottish viewers, recognising that everybody else in the UK has an opportunity to watch their country’s games. Can Scotland’s qualifying games be included? I know that is not the Government’s intention, and that they would have problems with such a thing, but perhaps this could be done, with compensation given for the loss of the revenue that the Scottish Football Association would normally secure from selling off the rights.

We have to start addressing this issue. I had a look round the whole of Europe to find out what other major footballing nations had done. It could be argued whether Scotland is a major footballing nation, but we are huge supporters, and we love our football. Looking at the teams that normally qualify, Scotland is one of the few countries in Europe that cannot access their national football team’s games, free to air.

[Dr Whitford]

I read somewhere—although I cannot vouch for the accuracy of this—that in relation to the size of its population Scotland has one of the highest attendance rates at football games, where people are engaging. But is it not vital that young people who are not going to games are able to see their team playing? We talk in lots of other sectors about the need to see role models in order to aspire. My hon. Friend talked about grassroots football being supported by the revenues, but it will not be there if we do not inspire children to want to go and play the game.

[Pete Wishart]

Absolutely—my hon. Friend is spot on. Scotland is a football-crazy nation, and it has been substantially proven that we have some of the highest numbers per capita going to football games. There is huge interest in our national football team, particularly now that we have such an exciting product to see, and it is good to be able to watch your heroes play. We have made huge strides in the promotion and viewing of women’s football; thank goodness we have free-to-air access to the Scotland women’s football team—it is great that that opportunity is afforded. We are trying to make football a community-based interest, and sitting around with the family to watch free-to-air football competitions is a healthy thing to do. I just wish that we could do it more.

The current lack of opportunities to watch Scottish international football on free-to-air broadcast is letting down fans in Scotland, who are at a disadvantage compared with fans in England and, for now, Wales. Wales has a curious arrangement, which the Committee found very attractive. It gets permission from Sky to show matches on the Welsh-language station, so people are able to watch their football team, albeit that they are listening in Welsh, which I am pretty certain is not a huge distraction for Scottish football fans.

[Dr Whitford]

We have Alba.

[Pete Wishart]

As my hon. Friend the Member for Central Ayrshire (Dr Whitford) says, we have BBC Alba. Could something be done to see whether a similar arrangement could be made? There are a number of ways to explore this issue, but the current situation cannot go on.

The last indignity is that when we all sit down to watch the football at 5 o’clock on Saturday evening—I know that all my colleagues will be shouting on Scotland to ensure that we stay in a dominant position in group A —and turn on the BBC or Channel 4, it will be the England game that is on. We are not able to see our national football team, but we also have the indignity of being forced to watch another nation’s match. That is a huge disadvantage for my hon. Friends, who I know are great football fans, so it has to be sorted out.

We on the Committee were disappointed by the Government’s response to our report. There was a sense that they recognised the issue, but they did not express great sympathy for our situation. They suggested that it was nothing to do with them and that there was nothing they could do to resolve it.

I want to say one more thing, which is down to my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands), who has done a power of work on all this, as I am sure colleagues recognise. My hon. Friend has got everybody together and made sure that roundtables have been put together so that this issue can be discussed. He has built great relationships, formed real alliances with football fans and the Scottish Football Association, and got everybody together. Everybody is working together; we just need the Government to engage a bit more in order to help us sort this out. It is not good enough to say that it is all a matter for the Scottish Government, because broadcasting is a reserved issue. It is really a matter for the Government to fix, to ensure that we get the same access that everybody else does across the whole United Kingdom. Let us see what we can do to fix this. I know we are all looking forward to seeing what the team can do on Saturday.

I am conscious that I have said a lot about our report, and I will be interested to hear what the Minister has to say in response. What we have found is that things are relatively good just now, notwithstanding some of the issues we have identified—particularly the tricky issue of the relationship with Amazon. Viewers in Scotland are now able to see more content in a variety of different ways—more than they have been in the past. It is a great difference even from when I was a new Member, 20 years ago. There is now much more opportunity for people to enjoy broadcast television. Satisfaction rates with the BBC started from a low base and have improved, which is something else that we noted in our report, so there is a sense that the public sector broadcasters are responding to what Scottish people want and to their viewing habits.

Scottish viewers want to see much more Scottish content. When they turn on the television, they want to see their national life and culture reflected, and we are increasingly getting to that position. Innovations such as “The Nine” on the BBC have been fantastic. We now have STV giving a news service at 6 o’clock. I remember the conversations we had historically here about a “Scottish Six”, and we now have that “Scottish Six”, albeit delivered by Scottish Television. I think that is welcomed by Scottish viewers.

We are in a reasonably good place. There are difficulties. I am grateful to the Government for their response to some of the things we have highlighted, but I think they could do so much more, particularly on Scottish football. I look forward to the Minister’s closing remarks.

13:55

[John Nicolson (Ochil and South Perthshire) (SNP)]

On this occasion, it actually is a pleasure to serve under your chairmanship, Mr Efford. I commend my colleagues on the Scottish Affairs Committee—well, at least some of them—on their excellent work. The report on Scottish broadcasting was thorough, and their recommendations are extremely helpful.

I absolutely support the Committee’s call to establish, in short order, an inter-ministerial group on media and culture, as has been agreed, to enhance co-ordination between Governments across those briefs, especially around broadcasting. As we have heard, the matter is reserved to Westminster, so it is vital that our colleagues in the Scottish Government, especially the Cabinet Secretary, are able to input their knowledge and expertise on a regular, ongoing basis.

As we have heard, it is fairly clear that, as far as televised sport goes, Scotland isnae getting a fair kick of the ball, given that English and Welsh games are on free to air. I think my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) mentioned in his speech that English and Welsh games are free to air, while Scottish men’s team games are seldom allowed the same prominence.

I am well aware of how important local, regional and national news is for democracy. In Scotland, “STV News” plays a huge part in informing the electorate and providing credible news that can form the basis of public discourse. My hon. Friend the Member for Perth and North Perthshire mentioned the separate “Scottish Six”, which we now have along with a separate “Scottish Nine”. When I was on the Select Committee the first time around, I argued strenuously for a separate “Scottish Six” because, as a journalist myself, it seemed obvious that news should be based on news merit. If the main story of the day is a national Scottish one, that leads. If it is British, that leads. If it is international, that leads. No one in radio news or in a newspaper would ever dream of leading only on Scottish stories—it is unbelievably parochial. News should be based on merit.

I was delighted that my friends in the Select Committee agreed with this proposal cross party. I have to say that the Scottish Tories literally went into meltdown when they discovered that their colleagues south of the border had accepted this conclusion, when they had argued that a full hour of Scottish news would be SNP propaganda—how patronising to BBC journalists! In fact, the opposite is the case: it gives more time for scrutiny of the Scottish Government, which I happen to think is a very good thing.

[Dr Whitford]

Is it not the case that it is not just about what the lead story is, whether it is Scottish, UK or international? There will be different views and perspectives on British or international news from Scotland, Wales and Northern Ireland. It is about having the lens the public want on big stories, regardless of where those are from.

[John Nicolson]

I think that is true. Obviously, Irish viewers will sometimes have different views on international stories than German viewers. It is common sense. One slight disappointment about “The Nine”, which is a terrific news programme, is that they are not using as many correspondents sent from Scotland to cover international stories as I would perhaps hope for.

My hon. Friend the Member for Perth and North Perthshire also mentioned the issue of prominence. One problem for the BBC Scotland channel is how hard it is to find. Although, as BBC Scotland itself points out, it does better in terms of viewing figures than Sky, for example, it could do much better if it was easier to find. There is something clearly absurd about the fact that, when we run down that wee box looking for news channels, Talk TV is about No. 4. It is utterly ridiculous. We see the BBC, STV, ITV and Channel 4, and then there is Talk TV, with somebody ranting away about some crazy Brexit conspiracy theory for hour after hour. It is not news, and it should not be. We have had this argument with Ofcom about GB News and Tory MPs who seem to go in a revolving door from the House of Commons to interview other Tory MPs about fantastic good-news Tory stories. Obviously, it is something that Ofcom should be interfering with; it should enforce its own rules. Certainly, that should not be given the prominence that it is, and in Scotland the BBC Scotland channel should be given far greater prominence.

The draft Media Bill includes lots of really good things that are absolutely necessary—among them, prominence for the languages of these islands, which is very healthy. Something that the Culture, Media and Sport Committee, which Mr Efford and I are members of, is about to cover is how to protect and encourage the indigenous languages of these islands. The Media Bill encourages that and gives due prominence to STV on smart televisions, set-top boxes and similar. As we have heard, to fail to do so would risk a further diminution of the quality of information available to voters in Scotland. It is an interesting subject, and this is a very detailed report, which I commend to the crowds here in Westminster Hall listening to the debate.

The updated Media Bill is required, and I join the Scottish Affairs Committee in encouraging the UK Government to get on with it as soon as possible and to get it introduced into the Commons. We will engage with it in a constructive manner. Let us get this legislation, to catch up with the reality of broadcasting.

14:02

[Stephanie Peacock (Barnsley East) (Lab)]

It is a pleasure to serve under your chairship, Mr Efford. I congratulate the hon. Member for Perth and North Perthshire (Pete Wishart) on leading this important debate.

I begin by thanking the Scottish Affairs Committee for undertaking this timely inquiry over the last two years. During that time, Scottish broadcasting has achieved some big wins, as the hon. Member mentioned, from the first Scottish family finally appearing on “Gogglebox” to STV reaching a deal with Sky that meant Scottish football fans could watch their national team win on penalties to reach the Euro 2020 finals.

Scottish broadcasting forms a vital piece of the puzzle of the UK’s creative sector. Scotland is not only home to Amazon, but our public sector broadcasters—Channel 4 and the BBC—also operate from the nation, alongside the strongly performing STV, whose main channel reaches 80% of Scots every month, as of 2021.

Although broadcasting is a reserved matter, we must ensure that our creative industries represent, and prosper throughout, all our nations and regions, bringing communities together, promoting pride in place and strengthening local economies. However, as the Committee report shows, if the industry in Scotland is to thrive as we know it can and better serve Scottish audiences, there is a range of important issues to be considered, particularly given rapid advancements in technology and the establishment of global media giants as competition for our public service broadcasters. Therefore, I will focus my remarks today on each of the main recommendations in the report.

First and foremost, I will address recommendations 4, 5 and 6 about prominence and the draft Media Bill. In essence, these recommendations reiterate what the industry and the Labour party have been saying for years: our public sector broadcasters and radio services need to be given the tools to survive in the modern era. Amid the rise of the global media giants and the game-changing impact of new technologies, the legislation that supports our broadcasting industry, which was made in 2003, is quite simply out of date.

The Media Bill is exactly the kind of intervention needed to address some of those issues—for example, by ensuring that our public sector broadcasters, including STV, are protected and promoted in the streaming age through a new prominence regime. There are questions to be asked about the detail of how the Bill will ensure that, particularly with regard to how prominence for regional channels in Scotland will work in practice, given the technology available.

However, instead of pushing on with scrutiny, the Government have wasted a year in pursuing the disastrous plans to sell off Channel 4. Now that they have finally U-turned on that decision, it is disappointing that the publication of the draft Bill did not come with a clear timetable for its implementation. As the report highlights, the Government need to get on with bringing those changes into law. The longer we leave it, the longer British broadcasters such as STV will risk losing further market share to the big global media corporations, to the detriment of our creative economy and British audiences, including those in Scotland.

The report also recommends that the UK Government commit to maintaining Freeview beyond 2034. As the Government themselves highlight in their response,

“millions of households across the UK, including in Scotland, rely on”

broadcast TV, and that is expected to continue “over the next decade.” Further, unlike internet streaming services, terrestrial TV does not require an internet connection or rely on a monthly subscription. Terrestrial TV content is therefore primarily relied on by those who are already marginalised in our society—people on the lowest incomes, older citizens and those in isolated rural areas. Indeed, as the Broadcast 2040+ campaign highlights, such services are relied on by an even greater proportion of those in Scotland because of its increased rurality, island communities and comparatively older population.

It is a start, therefore, that the Government have committed to preserving digital terrestrial television for over a decade, but the lack of long-term certainty over the future of the service is causing unpredictability both for the broadcasting industry, in terms of investment, and for the digitally excluded. What does the Department think are the disadvantages of providing long-term certainty about broadcast TV and radio, given their importance to both the industry and the community?

Further, the report makes two recommendations regarding sports rights. It was extremely pleasing to see STV come to a formal agreement with Sky to allow for the viewing of the World cup qualifiers on a free-to-air basis. However, it is understandable that campaign groups are unhappy with the lack of a formal plan to ensure that Scottish international football is free to watch. Indeed, there is a careful balance to be struck between ensuring that crucial sporting moments are available to watch and securing investment in sport through the revenue generated by selling rights.

That is what the listed events regime seeks to recognise but, in the age of streaming clips, the problem goes beyond what is contained in the regime, and the question is whether it is still fit for purpose in the modern era. The Department is right to conduct a review of digital sporting rights, and it is positive that it is looking to ensure the longevity of the listed events regime through the Media Bill. As has been argued, however, it has taken too long for the legislation to see the light of day, and it is unclear how it will address digital rights.

Finally, it is pleasing to see the Government confirm, in response to recommendation 7, that the inter-ministerial group on culture and creative industries will be set up this year and that there will be an industry-led task- force to look at skills. However, there is still more to be done to boost screen industry skills across our nations and regions. As part of our creative compact, Labour wants to see the apprenticeship levy reformed into a growth and skills levy that would allow creative industries to spend up to half their levy on shorter training courses and modular skills. The Government must consider such fundamental changes if we are to truly address the creative skills shortages that are holding industries back.

To conclude, Scottish broadcasting plays a vital role in our creative landscape, but the Government can and must do more if the industry is to thrive in the modern age and continue to serve the needs of viewers across all our nations and regions.

14:08

[The Minister for Media, Tourism and Creative Industries (Sir John Whittingdale)]

I thank the hon. Member for Perth and North Perthshire (Pete Wishart) for obtaining the debate and for the work that he and his colleagues have done on the Scottish Affairs Committee report. I know that the then and—when she returns from her maternity leave—future Minister, my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez), was happy to give evidence to the Committee and will be interested to see the report’s conclusions. I thank all the other members of the Committee for their contributions as well.

The hon. Member for Perth and North Perthshire was right that Scottish broadcasting is in pretty good shape, as indeed is broadcasting across the United Kingdom. We continue to have some of the finest broadcasters in the world—not just the BBC, but Channel 4 and those in the commercial sector—and independent production is going from strength to strength. I particularly welcome the growth of independent producers in areas of the UK outside London and the south-east—Scotland, in particular. As was acknowledged, the public service broadcasters are strengthening their presence in Scotland, such as with the establishment of Channel 4’s Glasgow hub and the continuing success of STV in Scotland.

Saying that broadcasting is in good shape does not mean that there are not some serious issues that we need to consider, particularly as we look to the future. The hon. Gentleman did a good job of summarising some of them. As he knows, the Government published the Media Bill in draft in March. It has taken some time to reach that point—indeed, I recall Ofcom making recommendations for legislation on prominence when I was Secretary of State, and there have been other recommendations since. That was an important recommendation; we absolutely agree that if public service broadcasting is to thrive into the future, it needs to be prominently displayed, regardless of the means people choose to obtain their TV content.

We are moving into an era in which more and more people rely on smart TV devices. It is therefore only right that we replicate the existing prominence requirements on the electronic programme guide on traditional sets. We should also reflect smart TVs, Fire TV sticks and other means that are used. That does not just relate to television; the hon. Gentleman did not go into detail on this, but we believe it is important to apply similar requirements to radio, too. The Media Bill will also address that.

The hon. Gentleman raised a concern about the relationship between STV and Amazon, which has arisen relatively recently. I was concerned to learn about that, because, like him, I had understood that the relationship was reasonably good. One of our reasons for publishing the Media Bill in draft is to enable us to consider whether further measures are necessary. We have an opportunity to debate the provisions in the Bill, and I look forward to giving evidence to the Culture, Media and Sport Committee. I will also be talking to Amazon and, I hope, Simon Pitts from STV. I am very happy to look further at the concerns that have been raised to find an appropriate solution.

The hon. Member for Ochil and South Perthshire (John Nicolson) spoke about plurality and prominence. Although the PSBs hold the top positions, one or two other news broadcasters now appear on the schedule. I am surprised that he does not welcome plurality. He also seemed concerned about the appearance of one or two Members of this House on one or two channels, although he glossed over the show presented by the former leader of his party on RT. I do not think he particularly complained about that at the time.

[John Nicolson]

Oh, I did.

[Sir John Whittingdale]

I take it back if the hon. Gentleman did, but he is still there.

One of the reasons the Media Bill is important is that the take-up of smart TV will continue at pace. I suspect I am one of only a very small number whose television set receives only internet protocol television—I do not have DTT or a freeview application in my TV—and I have to say that IPTV is extremely impressive. As we move forward with more and more access to gigabit broadband under the Government’s Project Gigabit scheme and the commercial roll-out, more and more people will move in that direction.

That prompts a longer-term question about whether DTT will remain the main means of accessing television. It is too soon to say. What the Government have said is that we foresee DTT continuing until at least 2034, but we will be looking in due course at what should happen after that. Giving that assurance until 2034 should give confidence. Obviously, the debate about what happens beyond that time will continue, and we will see how the market develops.

[Stephanie Peacock]

Is there a reason why the Government will not go further and give longer-term security until 2040, as some campaign groups have called for?

[Sir John Whittingdale]

I think 2034 is still a long way off, and this technology is developing fast. Obviously, as we look at the roll-out and at consumer behaviour, that will influence our decision as to how much further to go. The roll-out is happening fast: Scotland is already approaching 70% gigabit coverage, and we anticipate that within a few years every part of the United Kingdom will have access to gigabit coverage. I was pleased to announce earlier this week that the Government will support the provision of gigabit coverage under Project Gigabit to the inhabitants of Papa Stour, a remote part of the Shetland islands, who will in future be able to obtain gigabit coverage from a low Earth orbit satellite as a result of Government investment in this area. No matter what part of the United Kingdom or how remote the area, it is our ambition that everybody should be able to enjoy gigabit coverage in due course. That may affect decisions as to how we continue to ensure that they have access to high-quality television content.

The hon. Member for Perth and North Perthshire concentrated a lot on the issue of listed events. This has always been a “but”. Under the Broadcasting Act 1996, we have a small number of events that are seen to be iconic, which bring all the nations of the United Kingdom together and should remain free to air. The obvious ones are things like the Olympic games, the grand national and the Derby. It is not the case that England football matches are listed. The reason people can watch them on television is that the free to air broadcasters have obtained those rights, but they do not have any exclusive ability to bid for them; others could, too. What are listed events are the FIFA World cup finals, women’s World cup finals, UEFA championship finals and UEFA women’s championship finals. If—as I am sure the hon. Gentleman and his colleagues believe will happen in due course—Scotland reaches the finals in one of those competitions, that will be free to air under the listed events regime. Until then, the Scottish team will have the same rights as the English team and those of other nations of the UK in terms of the football authorities’ ability to decide who they should sell their rights to.

[Pete Wishart]

The Minister is right that we mentioned the events as an example of something that could be done, without any real expectation that that would be delivered, because we understand the complexities and exclusivity of the listed events schedule. The point we are making is that it is a matter of scale. Scotland has 5.2 million people, whereas England has 55 million to 60 million, so the rights have greater value when it comes to England than Scotland. We are looking for a little more support, encouragement and understanding of our particular issues, given the difference in scale of the populations, and for that little bit of input from Government to help us to resolve this. That is our plea on this issue.

[Sir John Whittingdale]

Of course we are happy to keep it under review. I suspect the hon. Gentleman is as aware as I am that the determination whether an event should be included in the listed events regime has considerable financial consequences for the sport involved. We have to strike a balance between giving as many people as possible the opportunity to watch that particular sporting event and the wish to obtain the revenue to put it back into the sport, which is possible from the sale of sporting broadcast rights to whoever is willing to pay the most. That is generally something that I have felt the sporting authorities are well placed to do. A significant proportion of the Scottish FA’s income comes from the sale of broadcast rights to a subscription service. Of course it needs to be kept under review. Although broadcasting is a reserved matter, sport is not. The Scottish Government might like to consider that, and if they have views we will be happy to hear them.

At the moment, we do not intend to change the listed events. As the hon. Member for Barnsley East (Stephanie Peacock) said, we are currently examining whether the digital rights should be packaged with the linear broadcasting rights so that they come under the same rules, and we will come forward with conclusions on that matter in due course. I understand the frustration, but Scottish football benefits considerably from the sale of broadcast rights. It is also important to talk to the Scottish FA. I urge the hon. Member for Perth and North Perthshire to talk to the Scottish Government. I am happy to continue the dialogue with him.

Turning to that dialogue, mention was made of the establishment of the inter-ministerial group. Two days ago, I was happy to have a call with the Scottish Government Minister for Culture, Europe and International Development, Christina McKelvie. We confirmed that the inter-ministerial group is being established to cover the creative industries. I look forward to working through that with her. The purpose of my call was to give her advance notice of the Government’s package of measures that was announced yesterday—the creative industries sector vision—which contains really good news for Scotland. We hope that through the extension of the creative industries clusters programme the existing clusters will be increased by six. There is already one in Edinburgh; I am sure that there will be considerable interest from across Scotland, as there will be from elsewhere.

There is also the CoSTAR—convergent screen technologies and performance in real-time—package for research and development for some of the latest screen technologies. Four new R&D labs are being established. One of the preferred bidders is in Dundee. There are also various other measures, including the tripling of funding for the music export growth scheme. I know that the hon. Member for Perth and North Perthshire has a distinguished record in music. Whether MP4 would qualify under the music export growth scheme I am not entirely convinced. Nevertheless, I know that as a great music supporter he will welcome that.

This has been an important debate. I want to see broadcasting thrive in all nations of the United Kingdom. The situation in Scotland is good at present, but that is not to say that there are not important issues, which we have had the opportunity to debate this afternoon. I thank the hon. Gentleman for securing the debate and look forward to continuing to work with him and with Members across the House to ensure that Scotland and the rest of the UK continue to have some of the most successful broadcasters in the world.

14:19

[Pete Wishart]

Thank you to everybody who has taken part in the debate. I was right to predict that it would be a convivial and consensual affair. I am grateful to the shadow Minister and the Minister for their contributions, and particularly to the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), for reiterating a number of our recommendations and conclusions. I am pretty certain that the Minister picked up on that.

On the football issue, there is one last thing that I think is important to address. At this point, we are trying to seek a solution. We recognise that we are a smaller market. We will not have the advertising revenue that is available to those that want to provide free-to-air viewing in the rest of the UK, particularly in England. We understand, too, that of course the SFA is totally dependent on the income that it receives from selling on the broadcasting rights. It is about getting together to see whether, through these sorts of conversations, we can find a way forward that will enable Scottish football fans to secure the same rights as everybody else on this island.

I am really grateful to everybody. I am glad that the report has been so positively received and that our recommendations and conclusions will be taken seriously. I commend the report to the House.

Question put and agreed to.

Resolved,

That this House has considered the Fifth Report of the Scottish Affairs Committee, Public broadcasting in Scotland, HC 1048, and the Government response, HC 1305.

14:19

Sitting suspended.

VAT on Audiobooks

Thursday 15th June 2023 Westminster Hall

BACKBENCH BUSINESS

Thursday 15th June 2023 Westminster Hall

[Mr Virendra Sharma in the Chair]

14:59

[Sir Mike Penning (Hemel Hempstead) (Con)]

I beg to move,

That this House has considered the matter of VAT on audiobooks.

It is a pleasure to serve under your chairmanship this afternoon, Mr Sharma. We are in the coolest place in Westminster, so let us see if we can stay in here; this is probably the only room with any decent air conditioning.

I will start by declaring an interest: as well as being a former disabilities Minister, I am also dyslexic. I was not diagnosed until I was in the military, when I was sent on a course and was told by an education officer that I was dyslexic. I thought that it was some kind of tropical disease. No one ever said to me at school when I had real struggles with English and maths, particularly reading, that I might have a learning difficulty. I was told by my headmaster that I was thick and I was not allowed to take my 11-plus exam—I would have failed it. But no one with dyslexia is thick; they just struggle sometimes with understanding words and mathematics. I also declare an interest in that I am a non-executive director of a law firm, even though, unlike the Minister, I am not legally trained.

Let me say at the outset that I would like this to be a genuine debate, because it is not an “us and them” situation. For people with visual impairment, or with dyslexia or another learning difficulty that prevents them from being able to read the written word as easily as most people, the subject of this debate is an anomaly that I hope we can try to resolve.

I know that there are discussions about the issue within Government; I think there were when I was a disabilities Minister back in the coalition Government, but it looked at the time as if it would be difficult to resolve. Campaign groups out there have said to me, “We should be able to take the Government to court” under the 2010 legislation, although of course the Government are exempt—under section 29. My speech might show that the Government should take note when it comes to other pieces of legislation, because the legislation as it is at the moment may well be technically illegal; I again cite the fact that I am a lay person and not a legal beagle.

According to the Publishers Association, in 2020 sales of audiobooks rose by 69%, which might have had a lot to do with covid. The Prime Minister, who at that time was the Chancellor, said on 11 March 2020:

“A world-class education will help the next generation thrive, and nothing could be more fundamental to that than reading. And yet digital publications are subject to VAT. That cannot be right. So today I am abolishing the reading tax.”—[Official Report, 11 March 2020; Vol. 673, c. 290.]

He was talking about e-books, but I do not think that anybody out there knows the difference between audiobooks and e-books. Actually, I think the Government made a genuine mistake. We have zero VAT rating on books and publications of all types—whether that be academic, fiction or non-fiction—and e-books are exempt. Why were a whole group of people, from many different backgrounds, thrilled for a minute or two by the announcement, only to realise, once they saw the small print, that they would still be excluded?

For many of our constituents, audio is their only communication with the outside world and their way of finding out what is going on. If someone uses audiobooks to read fiction or non-fiction, perhaps, as we all want to do, they want to get on in life. Audiobooks are part of that process—for training, learning and education. We are holding them back by having 20% VAT on every audiobook they purchase.

People with disabilities are already being penalised extensively; Scope has said they are £970 per month worse off—a figure I recognise from when I was the Minister. We give people with disabilities other benefits, but if someone is using audiobooks extensively, that 20% is a huge amount of their income or household income. We are not just talking about people who are visually impaired or who are dyslexic, like myself. My form of dyslexia is quite minimal, but I tend to memorise everything. As Members have probably noticed, I do not tend to read from a script; I get much too wooden when I try to. In my case, it is much better to memorise most of the points that I want to raise.

My question to the Minister is simple. I know she cares passionately about making equality fair, but the Equality Act 2010 as it stands does not quite hit the nail on the head or do what is says on the tin. Does it protect all people from discrimination? In other words, does it protect people who need to use audiobooks from discrimination, when they have to pay 20% to be able to read? The rest of the population who can read visual books do not have to pay that.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

Is it not true that young people especially enjoy audiobooks and it is a real path for them into the joy of reading? Some will not be able to discover that joy because of the expense, but it is how many first access literature?

[Sir Mike Penning]

I agree, and I hope that is part of the problem that the Minister, as a Treasury Minister, will recognise. It is difficult to work out how we can ensure that people who are being discriminated against—as opposed to people who can read in general terms; I will return to that point—have the ability to access audiobooks, while protecting the Treasury from the cost burdens. That is probably where the biggest problem lies.

If we were just talking about people who are visually impaired—a group of people who, without being rude, can be quite easily identified—the Treasury could make those calculations quite quickly. But what about when we get into the realms of what I was just talking about—people with learning difficulties, one of which is dyslexia? A huge percentage of those people have not had a diagnosis. How do you capture them?

To the point made by the hon. Member for Motherwell and Wishaw (Marion Fellows): how do we take into account people who are not natural readers? I do not want to get into a class situation, but I did not read many books when I was at school because I struggled to read, and I know people who were in school with me who were not dyslexic but who just did not read. We want people to expand their knowledge, education and view of the world as much as possible, so if someone can read—they are not visually impaired—but they want to use audiobooks, should that not be okay? I think the Treasury would turn around and say, “How do you find the costs?”

I agree with the hon. Member for Motherwell and Wishaw, but I am just trying to play devil’s advocate. That is the only way we can do it. We do not know who uses e-books but they have been removed from VAT. All printed books and publications are exempt, but audiobooks are not. Even though it would be easier to define an exemption for a certain group of people—I vividly remember conversations about that when I was disabilities Minister—I do not think that would be fair, not least for the millions of people out there who are dyslexic but have never had a diagnosis; dyslexia covers a very large spectrum.

The Equality Act means that no one should be discriminated against because of their disability, sex or race—a whole list of things. Given that Parliament cannot be caught under the Act, I suspect that it might be disingenuous to tell outside bodies that they may discriminate. It would be saying, “We are not breaking the Equality Act, but we are telling you to do so.” Take an obvious example: a local authority that wanted to sell audiobooks would have to charge VAT—in a library, for instance—whereas there is no VAT on books. Parliament is telling an agency of Government—that is, His Majesty’s Revenue and Customs—to charge VAT on audiobooks. If it did so without an Act of Parliament, that would be discriminatory, but because we are exempt under section 29, it is not.

Long before the word “Brexit,” I was pretty well known for being what used to be called a Eurosceptic. I wanted to leave the European Union and for this country to have its sovereignty. But if there are laws on our statute books, we should use them. Section 6(1) of the Human Rights Act 1998 states:

“It is unlawful for a public authority to act in a way which is incompatible with a Convention right.”

There are other Acts of Parliament on the statute book. I am sure that there are plenty of lawyers who would argue one way and plenty who would argue another, but morally and ethically it cannot be right that there is legislation on the statute book—the Human Rights Act, the Equality Act and other European Acts—that states that we should not discriminate, and yet we are still in a situation in which someone who wants to improve their life for whatever reason is, by no choice of their own, penalised by our tax system. I am sure that the Minister will probably say that this is very complicated, and I know what her brief will say, because it is not dissimilar to the briefs that were given to me when I was sitting in that very chair. But because something is difficult, it does not mean it is right to do nothing about it.

One of my constituents, whose sight is failing—I will not in any way indicate who she is—is finding that her ability to work in commerce is being affected. She now relies almost completely on audiobooks, although there is also now software that will help people. She relies on audiobooks, and she does not want anybody to know that. She works from home and for her own reasons— I will not put words in her mouth—she wants to use audiobooks, because of her visual impairment. How can it be right that, if she needs an audiobook this week, she has to pay 20% on the product, but last month or last year, when she could read the publication, she did not have to pay that 20%?

Let us look at education for a second. This is where I deviate from the notes that people have helped me try to write—I will come back to some of it; people have been very supportive of me bringing this debate. Education books are quite rightly VAT-free, like all printed books. Audiobooks are not. The Minister will probably say that a lot of the VAT can be claimed back, but for individuals it cannot. If mum and dad, or grandpa and grandma, want to help their son, grandson or grand- daughter who is at a special needs school by buying them an audiobook, they cannot claim that VAT back, even if the organisation could. That child is being held back because the family perhaps do not have the money to buy the audiobook. For every five audiobooks they want to buy, one will be lost to VAT. We need taxes to pay for the schools that I have just alluded to, and for the education system, the health service and various other things. But for the public to have trust in our taxation system, it has to be fair and proportionate, and, in the public’s eye—because we are spending their money on their behalf—it has to be right and proper.

This has been going on for too long. It is worth reading the comments of the Prime Minister when he was the Chancellor:

“That cannot be right. So today I am abolishing the reading tax.”—[Official Report, 11 March 2020; Vol. 673, c. 290.]

That referred specifically to printed books and e-books. Why on earth did it not include audiobooks? I really do not understand.

I will not be able to mention all the relevant organisations, but I have particularly been helped by Scope and the Royal National Institute of Blind People. The House of Commons Library has been fantastically helpful. I did not want the debate to be about me saying, “You’re a nasty, horrible Government, because you are not doing this”. It is not about that. Governments have not addressed this issue since before the current Government came in.

Things get left out when you are in government, and you think, “I wish I had done that.” I am leaving this House whenever the next general election comes, and I do not want to leave with a few things still on my bucket list that I wish I had done more about, perhaps when I was the Minister. I wish I had kicked harder when I was the disabilities Minister, particularly against my Treasury colleagues, so I am going to kick now for people who are suffering this 20% tax through no fault of their own, which surely has to be morally and ethically wrong.

15:17

[Marion Fellows (Motherwell and Wishaw) (SNP)]

It is a real pleasure to serve under your chairmanship, Mr Sharma, and as they say, “Follow that!” The previous contribution was a passionate and informed speech by someone who really understands the difficulties that the tax on audiobooks represents to some people. The right hon. Member for Hemel Hempstead (Sir Mike Penning), whom I congratulate on securing the debate, might not be legally qualified, as he said, but he certainly knows what he is talking about. I followed his argument carefully, and I love the idea of him ticking something off his bucket list. Any kind of persuasion that can be used to get rid of the tax is well worth using.

One of the reasons why I enjoy Westminster Hall debates is that they tend to be less contentious. They tend to be a meeting of minds, with people who are interested coming together to try to solve a common problem, which is not something that too many of our constituents see too often.

I also want to thank a number of organisations, especially the RNIB. In my time in this place, I have also been involved in the Axe the Reading Tax campaign, which led to the abolition of the tax on e-books. It is an aberration—an unintended consequence—that there is still a tax on audiobooks. I love audiobooks. I am a voracious reader—not of anything mind-blowingly interesting, I must say, but it is a great way to relax—and I know that many other people, especially those with visual impairment, dyslexia or other conditions, get great joy out of losing themselves in a good book for a few hours on an afternoon like today. There is nothing nicer.

Audiobooks benefit younger people, including people studying. I have to confess—I may have to ask Hansard not to record this, although I know it will—that I cannot read Dickens. I can read lots of older authors who are considered fantastic—I love Hardy—but I cannot read Dickens. I was required to read a Dickens novel for an Open University course I was doing, and I thought, “I can’t do that,” but an audiobook was my answer. I love listening to someone reading Dickens to me, but I cannot read him myself, so there are sometimes good educational benefits. If people who struggle to read can access the literature in a different form, it may pique their interest in reading. We all know that everyone, especially young people—and especially nowadays—benefits from sitting down quietly and absorbing things in a way that does not involve playing video games and killing people online.

It is really important that people with visual impairment, dyslexia or other medical conditions that require them to read in a different way are not excluded. I listened very carefully to the right hon. Gentleman, and there are real issues in trying to circumnavigate who is eligible for some kind of exemption. That is why in this case—in many other cases too, but especially this one—I plead with the Minister to make it a universal exemption. In other words, people should not have to prove that they cannot access books in any other way. The tax should be gone, because accessing literature is important for everyone.

[Sir Mike Penning]

The hon. Lady is making a very important point that I probably did not express very well in my speech. Asking people to prove their disability may exclude a whole tranche of people. That sort of vetting would be so negative for so many people that they just would not do it. I agree completely that a general relaxation of VAT is the only way forward.

[Marion Fellows]

I totally agree, and the right hon. Gentleman expressed it much better than I was able to.

Reading has many mental health benefits, and there is a clear link between reading and improved wellbeing. Given that the cost of living crisis has led to soaring rates of stress, anxiety and depression, there are clear benefits to making audiobooks more affordable. Norway— I frequently refer to small, independent nations in other debates, although I do not do so on this occasion for any other reason—has scrapped VAT on audiobooks altogether.

The National Literacy Trust says that two in five audiobook listeners are children, and young people said that listening to an audiobook or podcast got them interested in reading books. Something that encourages children to read has to be good. Most children and young people who enjoy listening say that they also enjoy reading, compared with children who do not enjoy listening. Introducing children and young people to reading in a way that they find engaging and enjoyable is a vital means of improving literacy. I have grandchildren, and they love listening to stories on the BBC or through the fancy machine that I bought one of them for Christmas last year. It encourages them to think about books in a positive way. Many more children would benefit if there were no tax on audiobooks. Reducing VAT on audiobooks is essential to ensure that young people especially listen to books.

I want to ask the Minister a question—the RNIB asked me to ask her this, so I will. Has she evaluated the cost of extending the VAT exemption to those who are blind, partially sighted or have print disabilities? Has anything been done on that? As well as that question from the RNIB, I would like to ask a further question: how much would it cost to just remove the tax entirely?

I do not think I need to go on further because the right hon. Member for Hemel Hempstead covered this topic extremely effectively. I cannot find an argument against this, so I am going let the Opposition spokesperson speak and listen carefully to what the Minister has to say on this very important topic.

15:25

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to serve under you, Mr Sharma, my parliamentary neighbour in Ealing. I start by wholeheartedly congratulating the right hon. Member for Hemel Hempstead (Sir Mike Penning) on securing the debate. I listened to him with great interest and I thought his speech was very thoughtful, heartfelt and informative. Indeed, in preparing for this debate, I found it informative to understand the nuance of the issues relating to audiobooks in greater detail. As well as thanking the right hon. Member, I thank several organisations that have campaigned for this change, including the Macular Society, the Society of Authors, and the Writers’ Guild of Great Britain, all of which have called for the exemption of audiobooks from VAT.

Before coming to the debate, I read an early-day motion that has been tabled as part of the campaign. I also found that informative in setting out the benefits of audiobooks for the many people with sight loss, visual impairment, dyslexia or other reading disabilities. The motion explains how audiobooks offer unique opportunities for visually impaired and dyslexic people to improve their education on a par with their peers. It recognises the role of audiobooks in enabling visually impaired and dyslexic people to continue working independently for longer and thereby contribute to the economy for longer. It explains how audiobooks open up a world of information, literature and poetry to visually impaired and dyslexic people. The attractions and benefits of audiobooks are clear, but there is the question of how much they cost.

Although this debate concerns VAT on audiobooks in particular, there is a wider context. Inflation and the high tax burden in our country affect people’s spending across the board. Before the debate, I also read that the application of VAT to printed publications dates right back to the introduction of VAT in 1973, when printed books, newspapers and magazines were given a zero rate.

Recent technological changes are raising questions over how the tax system across the board adjusts to a more digital world. That applies in many parts of our society and economy, and it raises questions about fairness, consistency and revenue raising. In response to technological changes, since 1 May 2020, the zero rate of VAT charged on printed books, newspapers and magazines has also been applied to e-publications. However, as we heard from the right hon. Member, the sale of audiobooks continues to be subject to the standard rate of 20%.

I will listen with interest to the Minister’s response, because the attractions and benefits of audiobooks are clear, and I am sure that she will recognise many of the points made about the importance of audiobooks for people with sight loss, visual impairment, dyslexia and other reading disabilities. The Opposition appreciate, however, that expanding the scope of VAT is complex and can add pressures to the public finances. I am sure that the Government will carefully consider this issue, and like other Members, I look forward to hearing the Minister’s response.

15:29

[The Financial Secretary to the Treasury (Victoria Atkins)]

It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) on securing this debate, and I thank him sincerely for the personal experiences that he has brought into it.

For what it is worth, I did not know that my right hon. Friend has lived with dyslexia. I have seen him so many times in the Chamber, both at the Dispatch Box and as am eminent Back Bencher. I am genuinely in awe of his ability to memorise the briefs that we get. Anyone who has had to stand at the Dispatch Box, whether in Government or in Opposition, will know how densely written and complex they can be.

[Sir Mike Penning]

The Minister and the civil servants who are listening will realise just how petrified officials were when I walked into my first ministerial position and said, “By the way, I memorise—I do not read—the submissions that you want me to read out at the Dispatch Box.” In a further seven Departments, the message not to try to push stuff in front of me eventually got round Westminster. It is interesting that we take for granted that people are reading verbatim what is in front of them. An awful lot of people with reading and learning difficulties do not. They actually go with their gut feeling, which is what I have always tended to do.

[Victoria Atkins]

My right hon. Friend makes an important point more generally, if I may have your munificence for a moment, Mr Sharma. It is so important that people such as my right hon. Friend show that dyslexia or other learning conditions need not be a barrier in a person’s ability to achieve success nowadays. In many ways, he will have been at the forefront of that change. I was horrified to hear about the reaction he had at school. I hope and trust that nowadays, children with a similar condition would not have that reaction; it would be much better understood. The fact that he rather endearingly described that he thought it was a tropical disease shows just how far we have come. He and others have been at the forefront of that, and I am genuinely grateful to him for sharing his experiences with us.

Ensuring that everybody is able to access books in all their forms is something that this Government take very seriously. Driving up standards in literacy has been our long-term priority in education, and our focus over the past decade has been on improving the teaching of reading for everybody. We have given students across the country a solid foundation in reading. That is not just to give young people the skills that are vital for their success in later life, but—as the hon. Member for Motherwell and Wishaw (Marion Fellows) put it so eloquently—to encourage a lifelong love and respect for one of life’s greatest pleasures.

I very much understand the enormous pleasures that audiobooks can bring, as someone whose constituency is quite some distance from London—I know the hon. Lady’s is, too. I have had an excitable seven, eight, nine, 10 and then 11-year-old throughout my career in this place, and having an audiobook that really grips a young child’s attention can be a godsend to parents struggling on long journeys.

I am veering into flippancy, but there is a much more serious point about what an audiobook can mean for an individual’s ability to read and enjoy reading. My right hon. Friend the Member for Hemel Hempstead gave the compelling example of his constituent who is losing her sight and with it, she fears, her ability to continue enjoying reading. I take that very seriously. I understand his point about the difference in timing and the implications of VAT.

We believe that a love of reading should be ignited at a young age, which is why we have committed to ensuring that early reading is taught well in schools. We have introduced packages of measures.

[Christine Jardine (Edinburgh West) (LD)]

The Minister is making a good point. In a previous life as a university lecturer in journalism, I had a student who was blind. The books that were available as audiobooks were much more expensive because of the VAT, and there were fewer of them. With podcasts, there is more material. The educational value is not just in schools, but goes right through to higher education. I had an elderly grandparent who went blind, but was still able to read through audiobooks, which became a lifeline. The VAT is an obstacle to providing a vital lifeline to elderly people who can no longer read.

[Victoria Atkins]

Although this part of my speech focuses on children, I very much accept the point about people having a love of reading throughout their life. I want to mention the positive work, which I hope is welcomed across the House, in schools to improve literacy and give that love of reading to young people. The English hubs programme promotes a love of reading and spreads best practice in teaching pupils to read. It supports schools in England in providing excellent phonics and early language teaching. The hon. Lady will be able to help us with what happens in Scotland. The ability to teach reading, particularly through the use of phonics, is very much recognised. Through the hub programme, literary specialists provide tailored support to schools, including by running events to showcase excellent practice in teaching and reading, and by working with local schools to develop their practice. So far, it has supported 1,600 schools intensively, and focuses on supporting the children who are making the slowest progress in reading, many of whom come from disadvantaged backgrounds.

[Sir Mike Penning]

The work the Minister alludes to is on key stage 1 English. It is on the teaching of phonics. The hubs are brilliant—absolutely great—but they do not help dyslexic kids, or kids who are visually impaired, because it is a book-reading hub; it is not what they need. Nothing I have said today takes away from the fact that we want more people to have that wonderful experience of reading, but those who cannot are being excluded from those hubs.

[Victoria Atkins]

I hope my right hon. Friend will understand that this is not my area of expertise, and that I am here responding on VAT, but I will take away his observations on the hubs. Schools find their own ways of teaching their children. I recently had the pleasure of a Friday afternoon visit to a wonderful primary school in my constituency, Mareham Le Fen Primary School. They have “mystery reading”, where someone reads an extract of a book to the entire primary school to try to encourage pupils to finish that book. Schools across the country have programmes like that to encourage reading and to make it a real pleasure for children, and I very much support any efforts to bring that about.

We have provided £8.7 million of funding this academic year to support schools in purchasing complete systematic synthetic phonics programmes for their curriculum—that is a good example of Department for Education jargon. By ensuring high-quality phonics teaching and improving literacy, we are giving children a solid base on which to build as they progress through school. We published the reading framework in 2021. Over 90% of schools have read that framework, which provides guidance on how to improve the teaching of reading. It focuses on the early stages of teaching reading, and on the contribution of talk, stories and systematic synthetic phonics. It also helps schools to meet expectations for teaching early reading.

We very much appreciate the fact that these measures are paying off. England came fourth out of the 43 countries that tested children of the same age for primary reading proficiency in the Progress in International Reading Literacy Study, the results of which were published last month. That is a real success, and we know that it is down to the concentration on phonics and is driven by improvements for those pupils who have perhaps struggled in the past. I am very grateful, as I know my right hon. Friend the Member for Hemel Hempstead is, to ministerial colleagues whose efforts over the years have driven those changes.

However, we also recognise the importance of provision for children with special educational needs and disabilities, including children who live with some of the conditions that we have heard about today, including partial sightedness and blindness, dyslexia and other learning conditions. These cohorts may require extra support, so the next reading framework to be published will include guidance on supporting children who are struggling to read, including those with special educational needs. The Government speak regularly to experts, including SEND specialists, specialist schools and English hubs, about how we can support teachers to ensure that children with dyslexia and other learning difficulties can progress well in their reading, and meet the expectations on them by the time they leave primary school.

If I may, I will now turn to the subject of VAT. Of course, as colleagues from across the House know, VAT is a broad-based tax on consumption, and the 20% standard rate applies to most goods and services. Although there are exceptions to the standard rate, these have always been strictly limited by both legal and fiscal considerations.

We did indeed cut the VAT on certain digital publications in the March 2020 Budget to support literacy and reading in all its forms, and to make it clear that e-books, e-newspapers, e-magazines, and academic e-journals are entitled to the same VAT treatment as their physical counterparts.

The extension of the zero rate of VAT to e-publications was introduced to address the inconsistency of approach between certain physical publications and their digital counterparts, so that there is a mirroring between the two; if a publication in physical form has a zero rating, then in digital form it now has the same exemption. There will be categories of publication where, because the physical form does not have zero rating, the digital form does not either. I say that because audiobooks—and podcasts, which the hon. Member for Edinburgh West (Christine Jardine) mentioned—would not come under that approach, if one were to extend it to audio publications. We say that there is no such inconsistency in relation to audiobooks, but I appreciate that that is the point under discussion today.

As colleagues know, any VAT relief would come at a cost to the Exchequer, and it would be very difficult to target. The hon. Member for Motherwell and Wishaw said that the RNIB has asked if this approach has been costed, both for people living with sight conditions and the public more generally. My answer to her is that there is ongoing work on that. I do not have figures that I can give her today, because I need to satisfy myself that any figures I give are accurate, but I take her point, and I will write to her in due course, when I am in a position to do so, because that is a very fair question.

As was noted by the hon. Member for Ealing North (James Murray), who spoke for the Opposition, there is a sense that the law has to try to keep pace with the speed of change in technology, which can be difficult; I think we all acknowledge that. For example, many audiobooks are now provided through subscription, along with other forms of media, such as podcasts, and trying to introduce distinctions between these different types of products would introduce additional complexity into the VAT system.

There is also no guarantee that the benefit of any VAT relief would be passed on to the consumer in the form of lower prices. That is quite an important point. We all assume that the VAT exemption announced in March 2020 was passed on to consumers by businesses, but it seems that that is not necessarily the case. It is not for me to advise either right hon. and hon. Members or charities, but where that benefit is not being passed on to consumers, perhaps publishers of e-books and so on should be asked why.

Audiobooks are enjoyed by a wide range of consumers, so the majority of any relief would primarily be felt by those not living with disabilities that prevent them from accessing physical and digital books. Also, I am obliged to mention, as in any debate on VAT, that it is the third largest tax in the UK in terms of yield, and it allows the Government and the state to provide public services. It is forecast to raise £161 billion this financial year alone. Many public services are supported from those funds, so we have to look very carefully at every request to change or tweak the VAT system, or to use it to meet the laudable aims and concerns of colleagues from across the House.

There was a question about the VAT cut. Some might say, “Hang on a minute; if the Government have imposed the VAT cut, why can’t they force businesses to pass on that cut?” We set the tax framework, and businesses must operate within it, but if a business chooses to absorb that tax relief as profit, rather than pass it on to consumers, that is a commercial decision taken by the business. That may be something that others outside this Chamber may wish to reflect on when considering the issue as a whole.

In conclusion, we understand why my right hon. Friend the Member for Hemel Hempstead called for this debate. We agree that literacy is a vital issue, not just for our youngest citizens but throughout our lifetimes. We are confident that our record over the past 13 years shows that we are making the right decisions for children in school. We believe that the measures that we continue to take to support reading are the best way to target our resources to deliver this wonderful benefit to everyone. However, we do not rest on our laurels; that is why the reading framework guidance will also focus on the needs of children living with special educational needs.

I thank my right hon. Friend for his debate, and I thank hon. Members from across the House for their contributions. I am sorry that I am not able to give quite the news that my right hon. Friend was hoping for, but I look forward to discussing the matter with him in future.

15:48

[Sir Mike Penning]

I thank the Minister for her restricted comments. I fully understand that she will not commit. To give her a little bit of help, the Publishers Association estimates that we are talking about £22 million a year going into the Exchequer. It may be wrong, and I accept that not everybody would pass on a VAT relief.

I should have done this earlier, but I thank the Library, the Publishers Association, the National Literacy Trust, the Macular Society, RNIB, Scope, Glaucoma UK, Sight Scotland, Sight Scotland Veterans and my former colleagues in the military, Listening Books, AbilityNet, Disability Rights UK and the Authors’ Licensing and Collecting Society. One tiny point: I think 57 colleagues signed my early-day motion. I look forward to further conversations with the Minister; we will be back. The Backbench Business Committee was generous to give me 90 minutes here. With those sorts of numbers supporting me, I might be on the Floor of the House with the Minister, perhaps in the autumn, when she might have nicer and more helpful comments for me.

Question put and agreed to.

Resolved,

That this House has considered the matter of VAT on audiobooks.

15:49

Sitting adjourned.