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06 February 2020

Lords Push For Swift Action Over Cairncross

Peers have challenged the Government to act swiftly to implement the recommendations from the Cairncross review to help the news media industry as it tackles the challenges posed to its business model by the tech giants.  

In a topical question for short debate this afternoon, Baroness Kidron outlined the challenges facing the news media industry and questioned why the Government hadn’t done more to help the sector following the Cairncross report.

“Sadly, the Government response does not comprehensively answer Dame Frances’ nine recommendations nor does it fully address the two intrinsically linked systemic points that she highlights; notably the impact of platforms as mediators on the quality of the news and the asymmetry of power between platforms and publishers when it comes to revenue." she said.   

Talking about the social platforms, she said that the business model “enables disinformation to masquerade as news. It’s not without consequences.” She called for the Minister to explain what the Government was doing to create codes governing the relationship between news producers and the platforms.  

Baroness Kidron, Conservative, said: “My Lords I do not understand why the Government commissioned a review on such an urgent matter only to wait a year, only to hear that we will wait several more.”

Talking about the tech giants’ dominance of digital advertising, she added: “This dysfunctional business model hits the local press the hardest,” referencing The Yorkshire Post editor James Mitchinson’s recent call for a fair deal between the platforms and the publishers.    

She asked the Minister if she wanted to see “as many of us would” the Competition and Markets Authority move to a full market investigation.

“My Lords this is not an adequate response to the crisis in local journalism,” she added. “Leaving whole parts of the country out of sight is not sustainable for our democracy.”

Baroness Bonham-Carter of Yarnbury, Lib Dem spokesperson for Culture, Media and Sport, said the party welcomed the fact that the Government was considering removing VAT on digital news publications.   

Lord Wakeham, Conservative, called for “a thorough review and reform” of the media competition and ownership regime to allow the industry to consolidate and effectively respond to the commercial pressures it faces.  

He said: “I’ve learnt for sure over many years that you cannot have a free press unless you have one that is commercially viable. Newspapers have to be able to make profits to survive and that is what is in jeopardy now.

“Today the competition is with the giant tech platforms which are vacuuming up the advertising market at an ever increasing rate.

“Publishers need the strength to be able to take them on, not each other, and that strength comes from the combined weight of consolidated, strong and successful companies.”

Lord Black of Brentwood, Conservative, called for the Government to act swiftly to implement the Cairncross recommendations because “the grim truth is that help is needed now, if many local newspapers are to survive while they bridge the gap between print legacy and digital future.”

Lord Black said VAT zero rating on digital products could make a “rapid difference” for newspapers trying to build subscription models online and called for clarity on strategic initiatives for Government to pursue.

Other financial measures including tax reliefs would be welcome and would give time forCairncross's structural measures to take effect, Lord Black said. 

He added: “Would my noble friend agree that the best way forward is to identify a handful of strategic issues where action to support the industry during this transformation can be taken speedily and, preferably, without the need for legislation which will take far too long?”  

Lord Faulks, IPSO chairman, outlined the ways in which IPSO supports journalism, including helping readers identify high quality content.

He added: “The giants of social media have in my view at last begun to respond to the challenge of hosting often unreliable news and disinformation but if they fail to make real progress then the Government may have to intervene in a substantial way.”

Lord McNicol of West Kilbride, Opposition Whip, said: “My Lords we need to ensure that local journalism is, where possible, protected and promoted and, as outlined beforehand, local media outlets are a vital community resource.”

Responding on behalf of the Government, Culture Secretary Nicky Morgan said she had held discussions with the industry, including with the News Media Association, and outlined the actions the Government had already undertaken.

“The Chancellor will consider the case for a range of potential tax incentives to support the news publishing industry this year including policy options on VAT, notwithstanding recent litigation in this area."

She added: “In answer to my noble friend Lord Black, there will of course be a budget in March and any changes in relation to tax would be made at such a fiscal event.”  

In response to Baroness Kidron, she confirmed the Government was working on codes, and said that she didn’t disagree with Lord Black’s point that there were a large number of reports and initiatives and clarity was needed.

The Government was looking for a “suitable legislative vehicle” to repeal Section 40 of the Crime and Courts Act 2013, as laid out in the Conservative Party’s manifesto, she added.