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Local and Regional News

We are debating an immensely important subject—the future of not simply a specific industry or sector, but a sector that is vital to our democracy. It seems rather sad to me, as a relatively new boy, that we have only 90 minutes to debate the subject and not the full three and a half hours that we could have if the business ran until 6 o'clock. Perhaps the Modernisation Committee, of which I used to be a member and on which I cut my teeth, could consider the matter. One example of the fall-out is that we will hear from the hon. Member for Bath (Mr. Foster) for only six minutes, and that is unfortunate. We are all used to local newspapers and to broadcasts on the BBC and ITV to which we can look for local news. Even in the current crisis for local newspapers, 40 million adults read 1,300 regional and local newspapers daily or weekly, some paid for and others free. A quarter of the regional press work force is focused on editorial activities. The sector still employs around 40,000 people, and 110,000 paper boys deliver local newspapers. It is still the largest advertising medium in the UK, taking almost £3 billion a year and accounting for 16 per cent. of all advertising revenue. While some of that is migrating online, about 95 per cent. is still print advertising. However, online is becoming more important for local newspapers. We are debating the local and regional press because they find themselves in a perfect storm. They will not only have to change their business models radically in any event because of the advent of the internet, but they must do it in perhaps the toughest recession the country has experienced in our lifetime. The lifeblood of local newspapers in particular—classified advertising—was already migrating to the internet. Whereas, even five years ago, one would buy a local newspaper to find what jobs were available or what property one could buy locally, one can now do that at the click of a mouse on a range of websites. The recession has made the paradigm shift even more acute. We debated local media as recently as the end of January in Westminster Hall. The Newspaper Society told me then that it predicted a reduction of 20 per cent. in advertising revenue in the third quarter of last year. I now understand that the advertising revenue of at least one major regional news company declined by 55 per cent. in the fourth quarter. Some people predict that about 40 per cent. of the 12,000 estate agents in this country will go out of business during the recession, and that will have an obvious knock-on effect on local newspapers' revenue. I do not need to spout a series of statistics at hon. Members, because we all buy our local newspapers assiduously and we can all see the physical manifestation of what I am talking about, which is that local newspapers are thinner and their coverage is perhaps sketchier than it has been. When we debated local newspapers in Westminster Hall at the end of January, we were all keen to praise the fantastic works that local newspapers do in our constituencies. In my constituency, we have the Herald series, which has a fine editor in Derek Holmes and Simon O'Neill editing the Oxford Mail, and a good local reporter, Emily Allen. I made the point that in my four years in Parliament, three reporters who worked for the local paper for 30 or 40 years have retired. We will not see their like again, in the sense that people are unlikely to work for a local newspaper for 10, 20 or 30 years, so everything is in flux. As I have mentioned, however, it is not the recession alone that is causing the problem, but a shift caused by the internet and changing patterns of media that have been going on for quite some time. The revenue of commercial radio has fallen by 20 per cent. since as long ago as 2003, and some four out of 10 commercial radio stations are no longer profitable. ITV has proposed substantial cuts to its regional news service, but we cannot pretend that the cuts were forced on ITV only in the past few months—they have been a long time coming. We welcome the announcement that ITV is to work with the BBC to share costs, which I understand will be worth some £7 million a year by 2012. However, that is in no way enough to cover the huge gap in the cost of regional news, which is some £60 million. The change is therefore urgently needed. However, although we obviously welcome the Government's decision to look at the market and to get the Office of Fair Trading to hold an inquiry, we are within our rights to ask whether it is too little, too late. We certainly need a dramatic look at the regulations governing ownership and competition. Even in America, the Democrat leader of Congress, Nancy Pelosi, has written to the American Attorney-General asking him to intervene to save local news organisations. She makes a good point, which applies to this country, too:""I am confident that the Antitrust Division, in assessing any concerns that any proposed mergers or other arrangements in the San Francisco area,"" which she represents,""might reduce competition, will take into appropriate account, as relevant, not only the number of daily and weekly newspapers in the…Area, but also the other sources of news and advertising outlets available in the electronic and digital age"" That goes to the heart of my argument. The Competition Commission and the Office of Fair Trading have been very much behind the curve. They refused the decision of the BBC and commercial broadcasters to create Kangaroo because they were looking at too narrow a market. We urgently need to sweep away the rules of media ownership that prevent consolidation of local newspaper groups and alliances between local newspaper groups and commercial radio companies. Five years ago those restrictions would have been appropriate, because they would have allowed one organisation to have a dominant impact on a local area. However, with the advent of the internet, that is no longer possible. There are now myriad local sources to which local people can turn. If we want to find a market solution to what is happening, we have to deregulate as rapidly as possible. We know that the Government have intervened in the past to suspend competition rules—for good or, as some might say, for bad—when the situation was urgent. I submit that the situation is now particularly urgent for the local press. There is a great deal of concern about whether too many local councils are substituting their newspapers for local newspapers. Does the Minister take the same view as the Secretary of State for Children, Schools and Families on the Killian Pretty review of planning applications? It has recommended that local authorities should be allowed to pull planning application notices from local newspapers. The Secretary of State has indicated his opposition to that proposal. I asked the Minister from the Department for Business, Enterprise and Regulatory Reform about this in our debate in January, but he failed to give me an answer. This Minister is more robust and clear sighted, however, and I know that she will give us an answer on the Government's position today. We urgently need the OFT to get on with this inquiry. We need the rules to be pushed to one side, to allow newspapers and commercial radio companies to provide a market solution to their problems, and to consolidate and form alliances as and when they think it appropriate.