Local Newspapers

John McDonnell Excerpts

Thursday 19th March 2015 Westminster Hall

[Sir Hugh Bayley (in the Chair)]

This is a very important debate about the future of local newspapers, and I am pleased to call John McDonnell.

[John McDonnell (Hayes and Harlington) (Lab)]

Thank you, Sir Hugh. I am very pleased with the turnout. I thought that there would be only a few of us, because of the nature of today. I know that some Members have constituency duties and may want to intervene and then leave. I completely understand that, given that we are only a few days from Prorogation.

Let me place it on the record that I am the secretary of the National Union of Journalists parliamentary group. It is a cross-party group of MPs who have raised issues on behalf of the union and journalists generally over a number of years. It is chaired by my hon. Friend and comrade the Member for Great Grimsby (Austin Mitchell). His speech today may not be his last in the House before he retires at the end of this Parliament, but it may well be the last time that he speaks on this subject. He is leaving the House to take up a more productive and fulfilling life outside. I look forward to the articles, novels and updated memoirs that he will produce.

[Paul Flynn (Newport West) (Lab)]

Does my hon. Friend share my distress at the departure of our hon. Friend the Member for Great Grimsby (Austin Mitchell), because that will deprive the House of diversity? Our greatest problem in the House is in getting a House that is as diverse as the nation, and his departure will add to the terrible shortage of octogenarians here. Is that not a terrible shame?

[John McDonnell]

It will be a great loss. I want formally to thank my hon. Friend the Member for Great Grimsby for his services to the NUJ in the House. He has championed a free and flourishing media in this country and the critically important role of journalists. I place on the record all our thanks for that.

As this will be our last discussion on this subject before the new Parliament, I also thank the Minister for having always been willing to engage with the union and the parliamentary group. He has always been accessible, co-operative and keenly interested in supporting the role of journalists. I am grateful for that. I wanted to place that on the record.

This debate was sponsored by me, the hon. Member for Colchester (Sir Bob Russell), the hon. Member for Maldon (Mr Whittingdale), who chairs the Select Committee on Culture, Media and Sport, and a number of others. I also place on record my thanks and the union’s thanks to the Chair of the Committee for the support and focus that he has given to the Committee’s work in seeking to promote vibrant media in this country and, in particular, for the keen interest that he has displayed in the role of the local press and its importance to our democracy. He has always made the Committee accessible to the views of the NUJ. He has enabled successive general secretaries to present evidence to the Committee and has met them when necessary. He has engaged in an ongoing dialogue on the issues facing the industry, and I want to say that I am grateful for that on behalf of the NUJ.

The NUJ parliamentary group has secured, with its allies across the parties, a number of debates in recent years on local media, and has met with some success, if I may say so. Some hon. Members may recall that we were in this Chamber—I think that it was two years ago—to debate the cuts to local BBC radio services, and we fended off the large-scale cutting of those services. Similarly, we have used Adjournment debates, parliamentary questions and early-day motions persistently to highlight the troubles visited on the local newspaper sector. We held a debate similar to this two and a half years ago, I believe. I recall that at that stage we were all hoping, on a cross-party basis, that the economic cycle would lead to an upturn in the prospects of local newspapers as they integrated themselves into the new world of digital media.

The reason why the hon. Member for Colchester, the Chair of the Select Committee and others supported this debate is that although there have undoubtedly been some positive developments, the plight of local newspapers has in many ways and in many areas worsened, and in some areas the position is perilous now.

The Library briefing pack has been circulated. I hope that hon. Members have seen it. The NUJ provided the Library with a detailed briefing setting out an analysis of what has been happening in the local newspaper sector in the two years since the debate. It is pretty grim reading. I will run through some of the main features, but more importantly I want to prompt a discussion about where we go from here and put forward some ideas on that. It is especially important in the light of yesterday’s statement by the Chancellor of the Exchequer, which offered a possible lifeline to some elements of the local press, certainly if the measure is designed properly. I do not think it takes much forensic examination to discern the Minister’s fingerprints on the reference in the Chancellor’s speech, and I congratulate him and thank him for achieving this breakthrough in the recognition by the Treasury that something has to be done.

Let me put on the record again what the Chancellor said:

“Local newspapers are a vital part of community life, but they have had a very tough time in recent years. Today, we announce a consultation on how we can provide them, too, with tax support.”—[Official Report, 18 March 2015; Vol. 594, c. 776.]

The details of that consultation have not been released yet. I am told that it may not be before the general election, but I expect whoever is in government to pursue the consultation. I think that it will be a worthwhile exercise enabling us to have a wider dialogue on what sort of support can be provided to the newspaper industry.

[Philip Davies (Shipley) (Con)]

Does the hon. Gentleman agree that in many respects the Chancellor understated the importance of local media? It is not just that they are important to community life and local life. They are an essential part of local democracy—of holding people to account in a politically neutral way. That is not always the case with other elements of the media. On that basis, does he agree that local councils sending out propaganda masquerading as independent newspapers will never be a substitute for a good local press?

[John McDonnell]

The Government have taken action on that matter and introduced a code of practice, which they have also enforced in some areas, so in that debate, things have moved on dramatically. I am aware that the hon. Gentleman has in the past tabled early-day motions on the subject and participated in debates on it.

I want to focus on what is happening in the industry at the moment. Many of us have taken the view that we simply cannot go on the way we are, or we risk losing the local newspapers that, as the hon. Member for Shipley (Philip Davies) said, we all value as the bedrock of local democracy in many ways.

[Pauline Latham (Mid Derbyshire) (Con)]

The Derby Telegraph, which is my local paper, is the midlands’ newspaper of the year and still sells 25,000 copies every day, but more importantly it has 71,000 unique users on the website every day. That is something that local newspapers are having to adapt to, and the question is how they fund it. The problem is that people will not pay for local newspapers, but they will go online—and there are adverts everywhere. I would like to see the end of adverts, and perhaps people subscribing to local newspapers on the web.

[John McDonnell]

The important thing about the Chancellor’s statement yesterday was that it recognised that the local press is moving to a new model, exactly as the hon. Lady says, and it recognised also the need for Government intervention to support the transitional period. As I said, I think that that came from the dialogue and discussions that the Minister has had with the Treasury, and I welcome it.

[Jeremy Corbyn (Islington North) (Lab)]

Will my hon. Friend recognise that there are different models for local newspapers? In my area, we have the Gazette group, which is based outside London and covers a very large number of areas, and it is barely a local paper because of that. We also have the Camden New Journal group, which is a worker-owned group that grew out of a strike and provides excellent, high-quality free newspapers in Camden and Islington and has a good readership as a result. Does my hon. Friend think that that model could be developed in other parts of the country?

[John McDonnell]

That is one of the issues that I want to raise later. If there is to be Government intervention and support, it has to be done in a way that maximises the public interest; it must not simply get swallowed up as a reduction in business rates and then be given out to shareholders or—as we have unfortunately seen happen in recent years—go towards the salaries of some chief executives, which are exorbitant to say the least, and which many of us have criticised.

I want to reinforce the point that hon. Members have made about the importance of local newspapers to democracy overall. The reporting of the activities of local politicians, local councils, local Members of Parliament, NHS bodies, the police and others in the local community is important to hold them to account. It is critical to have a local newspaper that will shed light on their activities.

Let me briefly explain what has been happening in recent years. The NUJ has published a chronology of closures and job losses in local newspapers over the past nine months. It is a shocking roll-call of cuts on a significant and worrying scale. I will not go through it in detail now, but I will place in the Library, for Members’ information, the short report that the NUJ has provided. It illustrates the range of titles that have gone in the past nine months, and the scale of cutbacks of journalists, sub-editors and photographers. It is worrying that the trend that we discussed in this Chamber only two and a half years ago has continued at such a pace.

I will draw in the key elements of the briefing that the NUJ has provided to Members. Between 2005 and the start of 2012, 242 local papers were shut. The NUJ’s detailed roll-call from the past nine months confirms that that trend has continued with the loss of further newspapers. Whole areas of the country are local news-free zones. There are hon. Members from Wales here; Port Talbot, which has a population of 50,000, has had no local newspaper since 2009.

[Rehman Chishti (Gillingham and Rainham) (Con)]

The hon. Gentleman is talking about the closure of newspapers; I want to give an example from my area. Before the Medway News closed, there was talk of merging it with the Kent Messenger, which is a brilliant paper. However, the burdensome regulations surrounding the merger prevented that from happening. The Office of Fair Trading stated that the Kent Messenger would have an unfair advantage on advertising, which is complete nonsense because people can get advertisements online as well. As a result, the merger did not go ahead. Medway News closed and jobs went, and people were left without a brilliant local newspaper. The situation could have been different if the regulations had been designed properly. Does the hon. Gentleman agree that that needs to be looked at?

[John McDonnell]

There is a whole range of such anomalies, which we need to inquire into. That is one of the reasons why the NUJ is promoting the idea of a proper inquiry—it does not have to be a long-winded one—into some of the details of regulation. That might assist in protecting titles and protecting jobs and services.

As I said, some areas of the country have become local news-free zones. The staff cuts have been staggering, and the NUJ’s survey concerning Trinity Mirror and Newsquest revealed that the lack of staff meant that basic services were not being provided. Council meetings and court cases were not being covered. Local businesses were not being held to account.

Some Members may recall that some time ago, we expressed our disappointment about the decision by the Press Association to scrap its “Lobby Extra” package, which provided a House of Commons service for 15 regional titles. Many of us thought that that service was vital, because it covered regional newspapers such as the Liverpool Echo, the Manchester Evening News and the Express & Star, many of which no longer employ staff Lobby correspondents. If newspapers are unable to report on our activities, they will not be able to hold us to account and our democratic links with constituents will be undermined.

The number of job cuts in some areas has been extremely worrying. Johnston Press annual reports from 2007 to 2012 revealed that the number of full-time journalists fell by 44% from 2,774 to 1,558, and the trend has continued this morning. The Daily Mail and General Trust has admitted that half its 4,200 staff in the Northcliffe Media regional newspaper division have been cut since 2008. As we have heard in our discussions elsewhere, local and district offices are being closed, so reporters are working much further from their local communities. That issue was raised at our cross-sectoral seminar with the Minister some time ago.

We also find that papers are being edited in hubs. I agree wholeheartedly with Michelle Stanistreet, the NUJ general secretary, who has said:

“Readers are not stupid. They can tell when their newspaper is being produced from a different county—and in some cases country. They can tell when they are served up rehashed, reconstituted fare. They feel robbed when they can no longer speak to the local reporter on their patch and when their voices go unheard.”

We should be concerned about the fact that that has become a common phenomenon. We should also be concerned about the fact that regional newspaper group publishers have significant local monopolies. The resulting lack of competition may undermine standards and the quality of journalism.

As we have discussed, the decline in the sector has been blamed on the transition to the internet, with a lot of content being made free. Another problem is the drop in advertising revenue, which has been caused by the recession and falling circulation. As many of us have argued for some time, it is not as simple as that. There is a depth of anguish about what has happened to local newspapers over the past 20 years.

Throughout the ’90s and until about 2005, local newspaper profit margins ranged from approximately 20% to 35%. Between the start of 2003 and the end of 2007—I am sorry to pick on Wales all the time—the profit margin of Media Wales averaged 34%, and it peaked at 38% at the end of 2005. In a normal business, profits on that scale would be reinvested in the industry long term. As the hon. Member for Mid Derbyshire (Pauline Latham) said, such reinvestment would fund the transition to the new model. That did not happen, unfortunately. I hate to say it, but some of the company results make it clear that instead of being reinvested, those profits were creamed off and used for sizeable shareholder dividend pay-outs. In addition, the pay of newspaper executives was enormous, and I will give some examples later.

Another issue that has affected the sector over the past 10 years is the rapid closure of local presses. Johnston Press in the north has closed presses in Halifax and Leeds. As a result of such closures, any new entrant to the regional newspaper market is forced to choose between bearing the virtually prohibitive expense of a new press, entering into contract arrangements with potential competitors, or printing outside the UK and building import costs into their overheads from the outset. That is a dangerous pattern. That all happened while profits were at a high level. In any other sector with profits of more than 30%, it would be almost unthinkable not to plough that money back into the industry. I do not want to use phrases such as fixing the roof when the sun shines, or having a long-term economic plan, but we would expect someone somewhere in the sector to wake up to the need for such things.

Some of the examples have been absolutely staggering. My hon. Friend the Member for Great Grimsby (Austin Mitchell) and I have waged something of a crusade with regard to Trinity Mirror over the past 10 years, and I have looked back at some of the interventions we made in Adjournment debates and so on. Trinity Mirror covers a whole range of titles from the Liverpool Echo to the Oldham Advertiser and the Rossendale Free Press. What did Trinity Mirror do with its profits during the good times? It appointed Sly Bailey as chief executive in 2003. In 2005, if I remember rightly, we raised concerns about her management skills. When she left last year, she was given a £900,000 payoff. She pocketed more than £14 million during her time at the company, despite the fact that the work force was cut in half and the share price plummeted by 90% during her tenure. That is absolutely extraordinary. To quote Michelle Stanistreet, general secretary of the NUJ:

“Trinity Mirror owns some of the best-known and respected newspaper titles in the UK. In 2003, when Sly Bailey took over as chief executive, it was a FTSE 250 company worth more than £1 billion and with a share price of 380p. Now, less than ten years later, the same CEO presides over a company that is a shadow of its former self—with a share price of 30p.”

Despite that, Sly Bailey received the £900,000 payoff on leaving. That is simply payment for failure. We can see why journalists on the front line who are losing their jobs are so angry about what happened during that period. Half the jobs have gone, and the company has been driven into the sand. Her successor has just had to announce £10 million-worth of cuts. The company is currently losing another 92 jobs. Fifty-three new jobs have been created in its national and regional titles, but the company is moving towards a shared content model of producing material that is not local, which will start to undermine the quality of the press.

It just goes on. Newsquest publishes 200 newspapers, and audit figures show that its circulation dropped by 10% in the last round. Roy Greenslade, the expert commentator on the press industry, argues that that drop is partly due to short-term thinking. Newsquest has increased the price of its papers, and the result has been an immediate sales plunge. There is a real management issue in this sector. Newsquest is owned by an American company called Gannett. In February 2014, Gannett issued one of the biggest shareholder payouts that we have seen. Gannett’s chief executive said:

“We remain on track to return approximately $1.3 billion to shareholders through dividends and share repurchases by 2015.”

Yet staff on the company’s papers have had a pay freeze for four of the past five years. A typical Newsquest journalist earns about £21,000 a year, but Newsquest’s outgoing chief executive, Paul Davidson, was paid £0.5 million in 2012 and his fellow directors took a performance-related payment of nearly £300,000. Understandably, there is phenomenal anger among staff. The company has cut 5% in the past year, which includes compulsory redundancies. That cut was driven through by abysmal management. Newsquest has also moved paper production from the north down to Newport. The Northern Echo will now be edited 270 miles from where it is distributed. It just goes on and on, and I worry about what is happening generally.

Johnston Press is an example of catastrophically bad management. The company publishes 200 titles, and its chief executive has announced a new project to produce a paper with 75% of its content provided by readers, not journalists. Chris Oakley, a former editor of the Liverpool Echo, says:

“In the boom years, the Stock Market valued Johnston Press at more than £1 billion and investors and analysts applauded as the company ran up nearly half a billion in debt.”

Johnston Press, relatively speaking, is now more indebted than Greece. Between 2005 and 2007, the company spent £1 billion on acquisitions, including £250 million for 11 paid weeklies and 10 free sheets in rural Ireland. Two years later, after spending all that money, the best offer when it tried to sell those titles was £40 million. That is a scandalous waste of resources that almost destroyed the company overnight.

Last year, Johnston Press made an operating profit of £57 million, but its debt is now £360 million. That debt is owed, among others, to RBS and Lloyds, which are charging a 13% interest rate compared with the Bank of England rate of 0.5%. The company could be destroyed purely and simply because of the punitive interest rates charged by those publicly owned banks. The NUJ has been campaigning for the banks to renegotiate the terms, otherwise the company will fail and everyone will lose out—not only the journalists who will lose their jobs but the banks that will have to try to retrieve the money they paid out.

The next member of the big four is Local World, which was created in November 2012 by the merger of Northcliffe regional newspaper group and Iliffe News and Media. Northcliffe’s owner, the Daily Mail and General Trust, was paid £52 million and took a 38.7% stake in Local World. Iliffe’s owner, the Yattendon Group, has a 21.3% stake in the business. Trinity Mirror paid £14.2 million for a 20% share. Local World has no presses and no pension fund liabilities, but it has 110 newspapers. It is the new kid on the block, but its founder, David Montgomery, is an old hand who has been around a long while—he was previously at Trinity Mirror. He is reinventing the model so that it is virtually without journalists. He has already got rid of sub-editors. Barry Fitzpatrick, the NUJ deputy secretary who negotiates on behalf of the workers, says:

“This is a very dangerous vision. What he appears to be suggesting is that the police, schools, Tesco and other organisations can put their press releases directly into the local paper, without verification or comment.”

That undermines the very product that Local World is trying to sell, which is extraordinary.

[Pauline Latham]

I thank the hon. Gentleman for giving way again. His speech makes me realise that the Derby Telegraph is a fortunate paper and that my area has been lucky with Northcliffe Media. In recent years, the Derby Telegraph has become much more of a campaigning newspaper. It has uncovered stories such as the Al-Madinah school scandal, which it broke. The newspaper has also campaigned to keep train making in this country, which was a big, cross-party campaign. Recently, the Derby Telegraph helped to raise a lot of money in the name of a BBC Radio Derby journalist who has malignant melanoma—the campaign by the radio station and the newspaper is raising money to fight melanomas. The sort of things that the Derby Telegraph has done has brought in more readership, and more people are getting involved. Working with the local radio station, the newspaper’s numbers have been boosted considerably.

[John McDonnell]

Individual newspapers and managements attended the meeting that the Minister convened with different sectors of the industry. The meeting demonstrated that, with good management, it can be done. An element of creativity and community engagement is needed, but the core of success is always quality journalism. If a company undermines the quality of its product, the whole operation will eventually be brought into crisis, which is what has happened as a result of short-term profiteering by poor management. Greedy executives have walked away with packages of hundreds of thousands of pounds while their workers on the front line have been sacked.

The hon. Lady makes a good point that quality journalism has exposed local scandals. We spoke to Shaun Lintern, the journalist who broke the Mid Staffs hospital story. He basically said that such a story could not be broken with the resources available now because there are not enough staff on the ground.

I have demonstrated what has happened in recent years. Wages on local papers are now extremely low. Newsquest has had a pay freeze for four of the past five years. Typically, a journalist now earns £21,000 a year, but trainee journalists in Yorkshire are earning 7p above the minimum wage. Journalists in Cheshire and Merseyside earn as little as £14,500. Traineeships are one way in which people get into journalism, but trainees who have worked at one newspaper group in London for years earn some £16,000. That is in the capital, and it is just above the London living wage at best. Those trainees do not receive London weighting. Another high-profile paper in the capital now pays journalists £18,000, which is a scandal. It undermines the quality of the job, professionalism and the workers themselves if they are not paid properly.

[Rehman Chishti]

The hon. Gentleman is highlighting the brilliant work of local journalists such as those on the Medway Messenger. The chairman of the Kent Messenger Group, Geraldine Allinson, told me that where local journalists have done a brilliant job and their story has been used by, say, the BBC or other nationals, they have not been credited. When the BBC’s charter comes up for renewal, it might say, “Yes, we’ll do it,” but when charter renewal goes away, there has not been such collaboration with local newspapers to ensure that journalists get the credit they deserve.

[John McDonnell]

The BBC has entered into relationships with the local press in some areas, and the dissemination of information in that way has been fairly constructive. The NUJ is calling for a short, sharp inquiry on the future of local newspapers because we want to look at the whole architecture in which local media operate.

I repeat the statement in the NUJ briefing, which was sent to all of us. It believes that journalists should be at the heart of local communities, speaking and listening to readers. It believes that there is a strong future for local papers that enjoy high levels of trust among their readers, but the sector is in a precarious position. That is why year-on-year cuts, pay freezes and increased work loads are creating low morale among journalists at local papers and undermining the product that companies are seeking to sell. Professional journalism, community journalism and investigative journalism could be casualties in the coming years if we do not act soon.

The NUJ has been running a country-wide campaign with Co-operatives UK and the Carnegie Trust to consider how good journalism could be funded. An issue that has come up, including at our seminar, is that the NUJ believes that this Government’s Localism Act 2011, which we supported, should be amended to give local newspapers protected status as community assets to prevent newspaper titles from closing overnight and allow new owners—including, as my hon. Friend the Member for Islington North (Jeremy Corbyn) said, co-operatives and other community initiatives—time to put together bids for the paper. Newspaper groups should not be allowed to close a paper and lock away a title that has resonance in the local community. Legislation is also needed to prevent newspaper owners from refusing to offer titles for sale before closing them. They should at least be offered to others who might want to make them a going concern.

The NUJ asks the Government to open an inquiry into the future of local papers to explore how Government could support new models of ownership, such as co-operatives and community ownership by readers, and investigate how Government subsidies and tax advantages could work for local newspapers. I welcome yesterday’s statement, but tax concessions and reductions in business rates should not be allowed to go towards featherbedding companies with increased shareholder dividends or into high salaries for executives.

We should consider how local papers could be funded or part-funded, as others are, on a public service model. If local papers receive public subsidies through tax concessions or otherwise, there should be a public benefit test. Do they report council meetings? Do they report what is happening with local statutory agencies, and hold them to account? We have also been proposing for a while that the use of industrial levies should be investigated: for example, a 1% levy on pay TV operators such as Sky and Virgin Media would bring in about £80 million a year to fund the development and transitional costs of the local newspaper sector. A 1% levy on the five big mobile phone operators could generate £208 million a year. On boardroom greed, one proposal that has been debated is to link chief executives’ and executives’ pay not just to performance but to their employees’ pay, and to ensure trade union and proper representation on remuneration committees, so that there is more transparency and openness.

As we have seen today, despite all the travails of the local newspaper sector, the recognition of its importance is prompting Government and all parties to consider seriously how we can intervene to support it in this period of transition into the new digital age. It will survive and thrive only on the basis of preserving and promoting quality journalism. Without that, a local paper is undermined as a product and will wither on the vine. I urge whoever is in government next to seize the NUJ proposal of an open and engaging inquiry involving all stakeholders into delivering a way forward to enable an essential public service to flourish once again.

[Sir Hugh Bayley (in the Chair)]

As 10 Members are trying to catch my eye and we have just under two hours until we start the winding-up speeches, that makes something like 11 minutes each.

--- Later in debate ---

[Austin Mitchell]

There are alternative ways for the BBC to help out the newspapers financially. It now observes a requirement to buy stories from the local television stations—indeed, it has begun to buy stories from Estuary TV in my constituency. That is a good thing. There is no reason why the BBC should not buy stories from local newspaper journalists, provided that the money goes to the journalists, not to the directors and chief executives of the newspaper.

[John McDonnell]

Also, provided that it is additional, because otherwise it would be effectively top-slicing.

[Austin Mitchell]

Yes. That is the argument. It must be an additional subsidy. I must admit that when I was a television journalist, my first recourse was to steal stories from the local newspapers. There is no reason why such stories should not be developed and sold by local newspapers. We have had too great a website imperialism by the BBC. It might provide competition, but it is also taking viewers, readers and news stories away from local newspapers. I agree with the need for a degree of co-operation with the BBC.

In a previous debate, Ms Mensch, the hon. Member for Corby at the time, spoke of subsidising local newspapers. I would be in favour of subsidising local newspapers, as they do in Sweden, but I do not think that that would be a politically acceptable way to finance them. We must look at alternatives. One that has been mentioned since the Government have begun to take action against council free sheets, which were a problem and were unreasonable competition, would be subsidy from local government for advertising and carrying news information, not only provided by but paid for by local government.

Another option would be Departments. The Department for Work and Pensions publishes a lot on its website. People without internet access are penalised in their relations with the DWP. Why should not that Department pay for the material to be published in local papers? We could and should treat local papers as community assets under the Localism Act 2011. That would give them a degree of protection and might stop decisions such as those of Local World to turn daily papers all over the country into weekly papers, in order to generate a higher rate of profit. We could put restrictions on the pay of the chief executive, because many of the attempts to move to weekly rather than daily papers are simply to generate more profit, and the rate of profit of local newspapers is, frankly, obscene—we are talking about 20% to 30% profit to pay higher salaries to chief executives and higher dividends to shareholders at the expense of the journalists, who are being fired and losing their jobs. That is damaging.

I have a press release with me, which I received only today from West Yorkshire about an argument of local journalists with the Johnston Press, which runs weekly and daily papers in Yorkshire and is proposing to fire 19 more people from editorial jobs. The chapel for the weekly newspaper says:

“Our members believe passionately in the importance of local journalism but are being prevented from giving readers the level of news and sports coverage they deserve because of a lack of staff and investment in our papers—and any further jobs cuts will only add to this problem.”

Nineteen job cuts are proposed by a group whose chief executive is on a salary of £400,000 and whose chief financial officer is on £250,000. They used to have their bonuses capped at 100% of salary, but the bonus cap has now been lifted, so they will be eligible for bonuses of up to 180% and 150% of their pay, respectively, simply for closing down journalists’ jobs in future.

We have to look at every opportunity to restrict the ability for newspapers to be turned into weeklies or, more importantly, to be closed. There should be a period in which they can be offered to alternative community groups, perhaps even based on crowdfunding. And while I am on the subject, why can we not also look at tax incentives? We give tax incentives to people who invest in films, even if they are sometimes used as a tax avoidance racket, so why can we not give tax incentives to invest in newspapers, in particular newspaper start-ups or community newspapers? Indeed, why can we not look at an industrial levy on Sky, Virgin or the mobile phone operators? Small levies on those companies would produce a major subsidy for the newspapers.

There are 100 ways to skin a cat and it is not beyond the wit of man or Government—perhaps it is beyond the wit of Government, but not of man—to devise ways in which to help papers through their financial situation. To conclude, therefore, it is important for us to have an inquiry to look at the various ways in which we can stop the decline in journalist training, pay and numbers.

--- Later in debate ---

[John McDonnell]

I thank the Backbench Business Committee for providing the opportunity for this debate. If nothing else, the debate has given hon. Members the opportunity to name check local journalists in a shameless attempt to ingratiate themselves with their local press, so this debate has made one valuable contribution to the next few weeks.

We have reached consensus on a number of points. First, there is consensus in this House on the value of the local press to our society. Secondly, there is cross-party commitment to support and assist the securing of the local press’s future. Thirdly, there is consensus that the next Government must act on this issue. Following the Chancellor’s statement yesterday, I welcome the Government’s first step in the direction of recognising the need to intervene and support local media.

A range of ideas have been discussed today, some of which the NUJ supports. Members of Parliament should recall that the NUJ represents members within the BBC and on local council publications, so we do not want to see anything that in any way undermines their position or their professional capacity to operate. With regard to the BBC, we do not want to see resources diverted; we want to see additional resources, which must take into account any future discussions on the licence fee and the charter. We want a discussion that enables us to discern a way forward.

A general consensus has emerged in support of some form of review.

The consultation that will be introduced, whoever is in government, on proposals for financial support, whether in the form of business rates or otherwise, could be expanded into a Government inquiry. I would welcome another Select Committee inquiry, but it is important that whatever review takes place does so alongside a Select Committee inquiry. There is a difference: a Select Committee brings forward ideas and views, while a Government-inspired consultational review leads to action with the Government imprimatur. That is absolutely critical.

Finally, whatever way forward is taken and however the Government intervene to secure the future of local newspapers, I think that we have all agreed that the future of the local press can be successfully secured only if it is based on an investment in quality journalism. I hope that we have framed the nature of the debate for the new Government when they come to power.

Question put and agreed to.