Local Newspapers

Debate between John McDonnell and Austin Mitchell

Thursday 19th March 2015 Westminster Hall

[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.