Cairncross Review

With your indulgence, Mr Speaker, before I make my statement, I invite the House to join me in paying tribute to one of our sporting greats, Gordon Banks, who sadly passed away earlier today. He was one of football’s finest-ever goalkeepers and a vital part of England’s World cup winning team, and his performances for club and country leave behind an exceptional legacy. The tributes in the past few hours are testament to his personal qualities. He was a fierce opponent on the pitch but a kind and generous man off it. I am sure the thoughts of the whole House are with his friends and family.

With permission, I would like to make a statement on the publication of the Cairncross review. I would like to thank Dame Frances Cairncross for leading the review and the expert panel and officials who worked with her to develop it. It comes at an important time. In her report, Dame Frances paints a vivid picture of the threat to high-quality journalism in this country. There are about 6,000 fewer journalists now than there were roughly a decade ago. Print circulation of daily national papers fell from 11.5 million in 2008 to 5.8 million in 2018. In the same period, circulation of local newspapers halved.

As the review makes clear, there are many reasons for this, but the main driver is a rapid change in how we consume content. The majority of people now read news online, including 91% of 18 to 24-years-olds. As this shift has taken place, publishers have struggled to find ways to create sustainable business models in the digital age. As the review sets out, between them Google and Facebook capture the largest share of online advertising revenue and are an increasingly important channel for the distribution of news content online. They also hold an array of data on their users that news publishers cannot possibly hope to replicate, which further strengthens their position in the digital advertising market.

This combination of market conditions threatens to undermine the future financial sustainability of journalism. Even publications that have only ever been online are struggling. This should concern us all. Dame Frances notes that while high-quality journalism is desirable, there is one type of journalism that society and democracy cannot do without, and that is public interest journalism. This is the type of journalism that can hold the powerful to account and is an essential component of our democracy. It helps us to shine a light on important issues, in communities, in courtrooms, in council chambers and in this Chamber, but this type of journalism is also under threat, especially at the local level, and the review cites numerous examples of what happens to communities when a local paper disappears. Dame Frances’s report comes at a vital time, therefore, and I welcome her focus on public interest journalism.

I want to set out to the House how the Government intend to respond to this important issue. There are many substantial recommendations in the review. There are some that we can take forward immediately and other more long-term recommendations where we will consult with stakeholders about the best way forward.

First, I will deal with the recommendations we are able to progress immediately. Online advertising now represents a growing part of the economy and forms an important revenue stream for many publishers, but this burgeoning market is largely opaque and extremely complex, and it is impossible to know whether the revenue shares received by news publishers are fair. The review proposes that the Competition and Markets Authority conduct a market study of the digital advertising market. The purpose of this study would be to examine whether the online marketplace is operating effectively and whether it enables or prevents fair competition. It is right that policy makers and regulators have an accurate understanding of how the market operates and check that it is enabling fair competition, and I have today written to the CMA in support of this study. I will also urge Professor Jason Furman to treat the review as additional evidence in his ongoing inquiry into digital competition in the UK, whose findings are due to be published in the spring. I recognise that online advertising has given rise to a wider set of social and economic challenges, and my Department will therefore conduct a review of the way in which online advertising is regulated.

The Cairncross review cites the concerns of publishers about the potential market impact of the BBC on their sustainability. They argue that the BBC’s free-to-access online content makes it harder for them to attract subscribers. The review also questions whether the BBC is straying too far into the provision of “softer” news content—traditionally the preserve of commercial publishers —and suggests that that might benefit from the scrutiny of Ofcom.

Let me be clear: the Government recognise the strong and central role of the BBC. As the review states,

“the BBC offers the very thing that this Review aims to encourage: a source of reliable and high quality news, with a focus on objectivity and impartiality, and independent from government.”

However, it is right that the role of the BBC, as a public service broadcaster, be appropriately transparent. The review recommends that

“Ofcom should assess whether BBC News Online is striking the right balance between aiming for the widest reach for its own content…and driving traffic from its online site to commercial publishers (particularly local ones)”.

Of course, some of those questions were addressed as part of the charter review process, but I have written today to ask Ofcom to look carefully at the review’s recommendations and identify any new concerns that deserve attention. For instance, there may be ways in which the BBC could do more to drive traffic to commercial sites, particularly the local press.

Another recommendation is a proposal for two separate forms of tax relief for news publications, one of which is intended to bolster the supply of local and investigative journalism by enabling it to benefit from charitable status. The review notes that in the United States philanthropic donations provide, on average, 90% of the total revenues of non-profit news publishers. Although we have a different media landscape, as the review points out, charitable status could reduce the costs for those producing essential public interest reporting, and could pave the way for a new revenue stream through philanthropic donations. I recognise that that avenue has been explored before and that some hurdles will have to be cleared, but I believe that we should pursue it. I have therefore written to the Charity Commission, and look forward to hearing how it can help in that regard.

As I explained earlier, there are areas in which we shall need to consult further and respond in further detail. For instance, Dame Frances recommends the establishment of an institute for public interest news to promote investigative and local journalism. She proposes that the institute should act as a convener for organisations with the means to support public interest news, including the BBC and online platforms. It would also be tasked with generating additional finance for the sector, driving innovation through a proposed new fund, and supporting an expansion of the BBC’s local democracy reporting service. That BBC-funded scheme is a shining example of what can be done. The first of its kind in the industry, it is embedding 150 journalists in local publishing firms to produce local democracy reporting, particularly relating to local councils. I met some of those reporters last week. So far they have produced 50,000 stories between them, all of which might not otherwise have been heard. The Government will explore, with others, what more can be done in that regard.

The review calls on the Government to do more to incentivise the publishing industry’s transition to digital. It proposes an extension of the current scope of VAT exemptions so that they apply to online payments for all news content, not simply print news content, and a new tax relief for public interest news providers. I know there is passionate support for that in the publishing sector, and we share its ambition for a healthy and sustainable industry. As the House knows, the Government always keep taxes under review. Any decision to amend the UK tax regime is, of course, a matter for the Chancellor of the Exchequer as part of the annual fiscal cycle, but I will discuss the matter further with the industry and with my colleagues at the Treasury.

I want to highlight two recommendations that cover similar ground to work that the Government are already doing. One is the sensible proposal that the Government should develop a media literacy strategy, working with the range of organisations already active in this space. Evidence suggests that there is a correlation between media literacy and a greater propensity to pay for news, so improving media literacy will also have an impact on the sustainability of the press. Ensuring that people have the skills they need in order to separate fact from fiction is the key to long-term success in tackling this issue, and I am pleased that Dame Frances has focused on it. We welcome the recommendation, which relates closely to our ongoing work to combat disinformation. Last month the Minister for Digital and the Creative Industries, my hon. Friend the Member for Stourbridge (Margot James), hosted a roundtable on media literacy, and the Government are looking into what more we can do to support industry efforts in that area.

The other recommendation that I want to highlight is the call for the creation of new codes of conduct between publishers and the online platforms that distribute their content. The codes would cover issues relating to the indexing of content on platforms and its presentation, as well as the need for advance warning of algorithm changes likely to affect a publisher. Their development would be overseen by a regulator. The review also proposes that regulatory oversight be introduced as part of a “news quality obligation”, requiring platforms to improve the way in which their users understand the origin of an article of news and the trustworthiness of its source. Dame Frances recognises that platforms are already starting to accept responsibility in that regard.

Those two proposals deserve the Government's full consideration, and we will think about how they can inform our approach. Our consideration will include our work on the online harms White Paper, which is due to be published shortly.

The review sets out a path to help us to put our media on a stronger and more sustainable footing, but Dame Frances makes it clear that it is just one contribution to the debate. We cannot turn back the clock, and there is no magic formula to address the systemic changes faced by the industry. However, it is the role of any responsible Government to play an active part in supporting public interest journalism. We will consider the review carefully, and will engage with press publishers, online platforms, regulators, academics, the public and Members of the House as we think about the way forward. I remain open to further proposals that may go beyond the recommendations or scope of the review.

I know that this issue is of great concern to Members in all parts of the House, and today’s review is an important milestone. At the heart of any thriving civil society is a free and vibrant press. The Government—and, I have no doubt, the House—are committed to supporting it through changing times, and ensuring that it can continue to do its job. I commend my statement to the House.

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 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.

I very much welcome Dame Frances Cairncross’s report, which I believe addresses one of the greatest challenges to properly functioning democracy today. Does my right hon. and learned Friend agree that the priority must be to facilitate more professional journalists to report on the proceedings of local councils, local courts and other local institutions, which are currently all too often going unreported? The BBC’s local democracy initiative at least starts to address that challenge, so will he look at ways of expanding that initiative, perhaps by bringing on board to it the technology companies that are currently distributing the content but doing nothing to help collect it?

I agree with my right hon. Friend. A large part of the answer is, as he says, to ensure that there are more professional journalists in the right places at the right times to provide the scrutiny that we all agree is important and necessary. As he has heard me say, the local democracy reporting scheme is a good example of how that might be achieved in the times that we currently live in. I should like to take this opportunity to pay tribute to my right hon. Friend for the part that he played in bringing that scheme into existence in conjunction with the BBC. It is a good thing, but he is right to say that there is scope for further expansion, as Dame Frances Cairncross has also pointed out. That expansion must be paid for, and I will certainly look into his suggestion and pursue further how we might persuade those who are benefiting from the current arrangements to ensure that their worst excesses are mitigated.

I should like to join the Secretary of State and others in paying tribute to Gordon Banks. The sporting world has indeed lost a giant. In Scotland, we lost another sporting giant yesterday. Kat Lindner was 39, and her untimely death has shocked everyone across the sporting community in Scotland, particularly at Glasgow City where she was formerly a player. She moved to Scotland in 2005 from Germany, and she won every domestic trophy with City. She appeared for the team 173 times and scored 128 goals, helping the club to five league titles, two Scottish cups and two league cups. She is survived by her partner of 16 years, Laura Montgomery. She was not just an athlete but a well respected academic at my own alma mater, the University of Stirling. I am sure that the Secretary of State will join me in marking her sad and untimely death.

We on these Benches—I am a little isolated here today—very much welcome the Cairncross review, and I pay tribute to Frances Cairncross and to Enders Analysis, which supported her work. The review comes at an important moment for our democracy. After the mess of the Vote Leave campaign, the scandal of Cambridge Analytica, the death of Molly Russell and the huge damage that online harm is doing to our young people, the public expect more. My team and I met representatives of the NSPCC recently, and they gave us some statistics. One in seven children between 11 and 18 have been asked to send self-generated images, and 7% of 11 to 16-year-olds have sent naked or semi-naked images. It is so important that we get this right and that we do the necessary work on self-harm. The recommendations to create a better balance between publishers and platforms, and to persuade online platforms to act in a more responsible way, are hugely important.

The issue of fake news has been mentioned, and I am sure that many people believe that it is damaging our democracy and, indeed, the reputation of the tech companies that have a duopoly in this area, as the shadow Secretary of State said. We must take this very seriously. I hope that the Secretary of State will not simply kick the can down the road in regard to the Competition and Markets Authority, and that he will consider adopting as many of the recommendations as possible.

I absolutely agree that the BBC’s local democracy initiative has been very positive. However, we have before us the huge issue of the licence fee—a tax on the elderly. I know that that is not a mess of the Secretary of State’s making, and I say gently to him that his predecessors appear to have held the BBC to ransom over this issue. That is unacceptable, and I want to work with him and colleagues across the House to ensure that the BBC can be properly funded and that our over-75s get to keep their free licences.

I agree entirely with what the hon. Lady has said about Kat Lindner. Her death is clearly a great tragedy, not just for her family, friends and partner but for all those who have been inspired by her success in the sport that she pursued.

The hon. Lady made reference to a number of aspects of the Cairncross review. She is right to say that we should insist on the platforms taking responsibility for what they can do. One thing they can do is to ensure that the issue of so-called fake news, misinformation and disinformation is addressed robustly. They have the capacity to do that, and as Dame Frances recognises in the review, some good work has been done by the platforms on this, but there is clearly a great deal more that they could achieve. The hon. Lady is also right to say that it is in the interests of the online companies to do that. If they do not do so, they will cause ongoing damage to their reputations, and I know that they will want to take that very seriously.

The hon. Lady mentioned the licence fee concession and its impact on the BBC. She will forgive me if we do not engage in that debate at this point, but I would say that what we expect and hope for from the BBC is something that can be delivered, irrespective of the debate that goes on about the licence fee concession. I know that the BBC is keen to follow up on some of the recommendations in this review and to see how it can help further. The hon. Lady is also right to say that we should pay tribute at every opportunity to those brave journalists who bear witness to what happens not only in this country but around the world, and who, at considerable risk to themselves, take the chance to deliver those messages and bear that witness for our benefit. Marie Colvin and others deserve our thanks.

The hon. Lady rightly picked up the fact that the Cairncross review refers to the possibility of an independent regulator taking responsibility for some of the things that Dame Frances has described. That is something that we are considering in the context of the online harms White Paper, and it might well be that some of the recommendations in this review are best dealt with when bringing forward that White Paper. There will be a Government response, which I think will come in tranches. Some of it will come very quickly, some will be brought into the online harms White Paper, and some will take a little longer.

Following up on what my right hon. and learned Friend said, not only was Gordon Banks the greatest goalkeeper that the world has ever seen, but he was my childhood hero, which is more important.

I welcome my right hon. Friend’s statement. The review is overdue and most welcome, and I want to make two particular points about it. First, it is absolutely right to ask for the BBC to be looked at. If a subsidised organisation is able to become a publisher, which it was not prior to the arrival of the internet, then it is now in the same space as others that do not benefit from such a subsidy and have to earn money. That has caused a problem, and we must look at how the BBC operates given the amount of money that it receives and at what damage or problems that causes.

Secondly, I agree with the deputy Leader of the Opposition, the hon. Member for West Bromwich East (Tom Watson), that the elephant in the room is the social media companies. Adam Smith makes it clear in “The Wealth of Nations” that this kind of monopoly cartel is damaging to people as individuals and to the functioning of a democratic society. At some point, social media companies will need to be broken up, and the way to do that is to make them publishers and responsible for everything on their sites. Just watch what will happen after that.

I am grateful to my right hon. Friend. On the BBC, there is a balance. It is right to ask Ofcom to consider whether further measures ought to be taken to ensure that the BBC is using its position for good, and it is important at least to ask whether it is facilitating good local content or effectively squeezing out good local providers. However, that is a matter for Ofcom. I repeat that the review also rightly praises the BBC, and the local democracy reporting service should be praised and expanded.

Turning to social media platforms, my right hon. Friend will know that the Government are engaged in several overlapping pieces of work, and the online harms White Paper will address many of the issues he describes. There is an ongoing question as to whether it is appropriate to apply the label of publisher to online companies. However, I am less interested in the label and more interested in what those companies do, how we ensure that they fulfil their responsibilities to the users of their services and then, of course, what should happen if they do not fulfil those responsibilities.

The market dominance of the duopoly affects all our communities, including places such as Wrexham, where The Leader, the local paper, and Wrexham.com, the new kid on the block, are under threat due to multinational organisations. It is entirely right to confront the monopolistic situation, and I encourage the Secretary of State to take up the line proposed by the Opposition Front-Bench spokesman and be much more aggressive with the CMA in its dealings to break up that situation so that we can have honest news organisations right across the UK.

The hon. Gentleman knows well that the CMA is rightly independent and will make its own judgments. However, I hope that he will recognise that I have wasted no time in engaging it on this issue. As for the online platforms, he will have heard what I said about the position they hold within the online advertising market in particular, but we must make a distinction here. We must recognise that advertising has changed, probably irrevocably, which is Dame Frances’s view, but we must also ensure that the behaviour of online platforms is not squeezing what is truly good and useful about local journalism and what is essential to the conduct of our democracy.

I say with too little pride that when BBC Children in Need showed a programme about MPs playing football, I let in a goal at Wembley, but Gordon Banks let in more.

When it comes to professional and public interest journalism, the recommendations in chapter 6 of the Cairncross review are important for everyone to read. With the Secretary of State having referred to how the BBC is helping local journalism, may I take this opportunity to say that today is the last day for responses to the BBC consultation on age-related licences? I hope that the Secretary of State will consider whether the Treasury could make it possible for the value of the licence concession to the over-75s to be taken into account in the old-age pensioners free tax allowance, so that the money can be recycled into the BBC. That would be a far better way of making the licence means-related than any of the other suggestions in the consultation.

My hon. Friend makes an interesting suggestion, which I am sure both my Department and the Treasury will want to consider. He will expect me to say that the BBC has not yet come to any conclusions. The consultation process in which it quite rightly engaged is only now coming to an end, and it is right that the BBC has the opportunity to consider what has been said and to bring forward its proposals, which we will then consider and respond to.

I associate myself with the remarks of the Secretary of State and the hon. Member for Livingston (Hannah Bardell).

As someone who lived through the reduction in the number of jobs and the shrinking circulation figures, and whose family was directly affected by them, I recognise everything in this report and welcome its recommendations. Many of them, such as a new institute for public interest news and tax breaks for non-profit and charitable organisations, are very welcome. Less welcome, though, is the sideswipe at the BBC for the local democracy reporter scheme, which is vital in protecting local democracy, although one problem with the scheme may be that it has been consumed by the four biggest players. In taking this issue forward, perhaps the Secretary of State might consider some way of protecting local and hyperlocal publications by ensuring they are part of the scheme so they are not eaten up by the bigger organisations.

I take the hon. Lady’s point about hyperlocal reporting. As we seek to expand what is currently provided, it is important that the scheme focuses on the very local provision that people are particularly keen on having. However, to be fair to Dame Frances and, indeed, to the BBC, I do not think she was taking a swipe at the BBC’s local democracy reporter scheme. I think her view of that scheme, like mine, is that it is a very positive move that has worked well on the scale at which it currently operates, and there is capacity for it to do more if we can find a way to expand it, as we discussed a little earlier.

Although there are questions to be asked about the BBC’s engagement in this space, and we will ask those questions, the Cairncross review’s view on the local democracy reporter scheme is, broadly speaking, positive.