Cairncross Review

Lord Watson of Wyre Forest Excerpts

Tuesday 12th February 2019 Commons Chamber

[Tom Watson (West Bromwich East) (Lab)]

I thank the Secretary of State for giving me advance sight of his statement. I also thank him for his warm words about the late Gordon Banks, who was not only a great goalkeeper—perhaps the greatest ever to wear three lions—but a true gentleman. Not everyone will know of his contribution to civic life in the Potteries and in Staffordshire as a whole, from support for veterans to dementia care. To the people of Staffordshire, he was not just a sporting hero but a community hero. He will be greatly missed.

As the Secretary of State said, the release of the Cairncross report is a milestone—a small milestone—on the road of our enormous task of addressing digital and news publishing. Finding the right solutions requires creative policies and cross-party partnership, and Opposition Front Benchers are ready to work with the Government where we can. I thank the Digital, Culture, Media and Sport Committee for the rigour of its ongoing work in relation to the harms caused by digital disruption. I look forward to reading its next report, and I commend its Chair, the hon. Member for Folkestone and Hythe (Damian Collins), for maintaining a determined cross-party unity of purpose in the face of corporate obfuscation from companies such as Facebook.

As we have heard, this review addresses an urgent issue: we have lost 6,000 frontline reporter jobs since 2007; newspaper circulation rates have fallen by half; 350 local news titles have closed; and half of Britons are now worried about fake news. Meanwhile, the emerging tech companies continue to increase their bottom lines with ever-increasing advertising revenues, extracting value from content produced by others while taking little responsibility for the destruction they leave in their wake.

Some of the review’s recommendations in this regard are particularly welcome. We said last summer that Labour would extend charitable status to public service journalism, so I am pleased to hear that the Secretary of State has today written to the Charity Commission to pursue that further. We have also publicly supported increased media awareness courses and reporter training schemes, and I am glad to see that the Government might soon be adopting that approach as well. But in other areas I am afraid that the review is barking up the wrong tree.

I understand that the Secretary of State is duty bound by this report to write to Ofcom asking for an assessment of BBC News Online’s market impact, but that could be counterproductive, because while local titles are closing it is the BBC that produces exactly the sort of public interest and publicly trusted content that the review was designed to encourage. Does the Secretary of State therefore agree that it will be a big mistake if the Government choose to pick a fight with the BBC over this, or to raid its budgets even further, rather than tackling the real problem: a distorted digital market?

It seems to me that the problem is clear: savvy tech platforms have developed targeted behavioural advertising that allows companies to direct their products towards certain audiences. Only they can do that, because the data needed to segment markets is overwhelmingly owned by emerging data monopolies, so the only way to reach consumers is through a decreasing number of digital giants. This is all part of surveillance capitalism.

Mergers and acquisitions by digital giants have meant that over half of all digital advertising revenues in the UK are now hoovered up by two companies, Google and Facebook. This is a duopoly. It is the main cause of the 70% reduction in print advertising revenues that has hit newspaper bottom lines so hard, and the dominant position of these social media giants means that in negotiations with news publishers they do not play fair.

I understand that this is a difficult problem to solve: these are global companies so big that they see themselves as being above the law. So let me say to the newspaper industry that I know the situation looks bleak, and it may be disappointed that there are not harder recommendations in this review, but even in these dark days of Brexit and increasing division in politics there is one man who is uniting this House: Mark Zuckerberg. He insulted us all when he refused to attend the Select Committee on Digital, Culture, Media and Sport. He may think that the UK market and our institutions are not a priority for him, but I hope he knows there is now a new resolve that transcends our party differences to deal with abuses by his company and others.

I appreciate that the Secretary of State has asked the Competition and Markets Authority for a market study of digital advertising, but does he agree that this review was actually tasked with looking at that in its terms of reference? It is not his fault that the review has ducked this part of its responsibilities, but the reality is that commissioning the CMA to look at this kicks the can down the road again.

We need a bolder, quicker approach. Having looked at this problem for a couple of years now, I think there is a position and a process that we could all coalesce around. First, we need to address the immediate symptoms of market abuse caused by the data monopolies: the harms, the hate, and the fake news. To do that we need a new duty of care obligation on social media companies, enforced by a tough new regulator. Last week a Minister indicated that the duty of care could be enforced by criminal sanctions, not just civil penalties, if companies are found to be in breach. Can the Secretary of State confirm that the Government are considering this?

Secondly, we must address the root cause of the problem, which I believe is a distorted digital market. A review by the CMA is all well and good, and we welcome it, but we need to modernise competition laws to make them fit for the data age to really address abuse in the digital market.

Thirdly, once we have dealt with the symptoms and the causes of the problem, we must improve the health of our digital markets by shaping a digital public sphere to bolster our media sector and protect our democracy. I envisage an online sphere where citizens can access trustworthy news from professional reporters and researchers, content from public institutions, central and local government and public service broadcasters, and public services like our great galleries and collections without being surveilled or targeted by advertisers and having to give up their personal data to transact for services. I hope we can commit today to take our lead from the Digital, Culture, Media and Sport Committee and work in a spirit of unity to deal with the destructive dominance of the tech giants.

[Jeremy Wright]

I am grateful to the hon. Gentleman for his comments. I also welcome his undertaking to work with us; there is undoubtedly a broad measure of agreement across the House, and it would be sensible for us to work together. I also agree with what he said about the Select Committee’s work in this space, and we all await its further and final report on the issue of misinformation, which is due imminently.

On the BBC, the hon. Gentleman mentioned two aspects of what the review says. The first was the issue of market impact and the BBC. As I said in my statement, without prejudging the outcome I think it is appropriate to invite Ofcom to see whether more can be done here. I do not imply criticism in that request, but it is sensible for me to follow through on that recommendation of the review. But as the hon. Gentleman will recognise, the review also congratulates the BBC, and indeed the News Media Association, for the development of the local democracy reporter scheme and suggests that it may well be expanded. Again, it would be right for us to pursue that, and it is a recognition of the positive contribution the BBC is making in this space.

The hon. Gentleman also talked about the dominance of Google and Facebook, and that is undoubtedly a stark feature of the review. It is sensible to follow through on the review’s recommendation to involve the CMA, as it clearly has a role in determining whether the processes over which it holds sway are being appropriately applied, but I do not believe we should stop there, which is why I intend to begin a Government-centred review of the broader policy implications surrounding the online advertising market. That will follow on from the Furman review of competition issues which is already under way.

The hon. Gentleman mentioned the work the Government are doing on online harms, and he knows that we are considering a number of the issues he has mentioned, including of course the penalties that ought to be available when online platforms that have understood their responsibilities choose none the less not to exercise them. He also knows that I am committed to ensuring that those penalties are meaningful. He will forgive me for asking him to wait a little longer for the detail, but we will publish the White Paper shortly.

Finally, I agree entirely with what the hon. Gentleman says about the importance of trustworthy news. It is fundamental to our democracy and our society that we can trust what we read, and that there is a means whereby citizens of this country can read proper and informed scrutiny of what those in power are doing. That applies at both national and local level. The purpose of the Cairncross review was always to make a substantial contribution to that debate and to offer some ways forward. I believe it has done that; I have not suggested, and neither has Dame Frances, that it presents all the answers to these very complex problems, but they are problems with which we are right to wrestle as a democracy, and we are right not to let go of the importance of the scrutiny we are all rightly subject to.