The Cairncross Report: what it says and first impressions
The report of the Cairncross Review was made available to the public at midnight. This is what it recommends.
An online regulator
1. A powerful new state regulator charged with securing better commercial treatment for news publishers – similar to the regulation in place to oversee fair dealing between supermarkets and their suppliers.
2. The same regulator should also protect the interests of the public by ensuring that we have good guidance about what online news is trustworthy and what is not.
3. The zero-rating for VAT that applies to print publications (worth hundreds of millions of pounds per annum to the press) should be extended to digital publications.
4. Organisations delivering public interest journalism should qualify for tax relief under the Charities Act. Failing that (and the review says it looks difficult) there should be tax breaks like those available to some organisations in the creative sector, such as computer game designers.
A new 'Institute'
5. There should be an ‘Institute for Public Interest News’ which would administer an innovation fund worth at least £20 million of taxpayers’ money a year. (Cairncross hints that big technology companies will also contribute.)
6. The Institute would also manage an expanded, publicly-funded version of the Local Democracy Reporter (LDR) scheme. Currently run and funded by the BBC, this has 150 reporters scattered around the country reporting local public affairs such as council activities.
7. Cairncross says the Institute might ultimately resemble the Arts Council, both dispensing public money and encouraging and distributing private sector contributions. She said its budget might eventually match the Arts Council’s – currently more than £600m a year.
Ofcom should investigate the BBC to see whether it is crowding out local journalism; the Competition and Mergers Authority should investigate online advertising, and there should be a general effort to improve media literacy.
Is this a good package? At first glance it seems rather better than appeared likely when then Culture Secretary Matt Hancock set up the review and packed its panel with people from corporate media and old media.
Besides raising the possibility of a better deal from Facebook and Google – and whether the regulator can manage that remains to be seen – Cairncross has not bent over backwards to help the corporate national press.
For sure, some of them would benefit from the waiving of VAT on online business, and since there is no sign that the public is getting anything in return that is to be regretted. They should get nothing until they clean up their act. But I suspect, at least, that what they gain collectively from that would not begin to compare with what they are collectively losing as their declining sales eat into the benefit they get from the VAT waiver on print sales.
Cairncross clearly does not see the nationals as needy or deserving. She notes early on in the report that most of the press companies enjoy healthy profit margins and that many are distrusted by the public. She also throws in a line that will make many executives wince, suggesting they might yet meet the fate of Kodak and Blockbuster, famous companies that failed to adapt to change.
On the face of it the chief beneficiaries of her proposals, at least initially, would be at local level and here, in principle, it seems the benefits should not be focused on the big three companies that dominate – Reach (the Mirror group), Newsquest and Johnston.
There would be some money from the innovation fund and maybe from the LDR scheme, it seems, for some of the independent and often innovative online local news providers that have sprung up over the past decade or so. Some of them might also receive the benefits of charitable status.
But here's the rub. Cairncross has evoked the idea of an Institute with a budget in the hundreds of millions: the bosses of the Mail, the Telegraph and the Sun, as well as of the big three local companies, will be determined to grab the vast majority of that for themselves. They are without doubt already busy persuading ministers to tinker with and cherry-pick from what Cairncross has proposed, and she may have left them openings.
For example, she says – entirely correctly – that her Institute must be commercially and politically independent, and also that it 'might' follow the painstakingly transparent and independent appointments procedures employed in the creation of the Press Recognition Panel (part of the Leveson scheme). She could have been more explicit on the point, indeed it would have done no harm if she had chiselled it in stone, because 'might' is precisely the kind of weakness that the press bosses will exploit.
Do not be surprised if, in the weeks and months ahead, they try to manipulate the appointments system or the structure of the Institute so that they can control it, thus getting their grubby fingers on the cash it will dish out.
Equally, when it comes to the LDR scheme Cairncross appears to acknowledge at least some of its shortcomings and declares that, before being expanded at the public expense it should be independently reviewed. But it’s a pity she did not spell out in detail the terms of that review, and exactly who should carry it out.
Ideally it should be a job for the fully-independent Institute (let us hope it is fully-independent), but again there is some vagueness and with that goes a risk that corrupting forces will intervene.
One of the chief criticisms of the LDR is that all but a few of the journalists it employs work in the newsrooms of the big three locals – the very organisations which for years have been closing papers and sacking journalists while sucking money out of the industry.
One would expect an independent review to ensure this was put right, so that any money spent was guaranteed to benefit the public and journalism and not shareholders and executives. If the review is not fully independent, however, it may well do the bidding of the companies and divert even more public money in their direction.
Decent ideas, bad government
Public service journalism needs to be saved at both local and national level and Dame Frances Cairncross seems to have come up with some decent ideas to help. I strongly suspect that those ideas are not what the people who run the press corporations were expecting and that they will now be looking for every possible way to bend her report in their own interests.
More worrying still, this matter of the future of public service journalism is now in the hands of the government, and this government is the puppet of the national papers, with ministers capable of doing the most dishonest things in the effort to keep editors and proprietors happy.
The greatest possible vigilance is in order, and even that may not be enough.
Finally, thank you
On the subject of vigilance, the report provides a summary of the public responses to the Review’s call for evidence last year. On page 145 you will find the following:
Approximately 85 per cent of the responses to the Call for Evidence were from the general public, and the large majority of those appeared to have been directly prompted by an article by Brian Cathcart, Professor of Journalism at Kingston University and founder of Hacked Off, a press campaigning body, claiming that the review was a vehicle for Government to subsidise the national press, by “pav[ing] the way for the delivery of public subsidies to the Daily Mail, the Sun, the Mirror and the rest of the national and corporate press”.’
If you were one of those who wrote in, and you really were prompted to do so by my article on Byline, then thank you.
Did we make a difference? I would say the VAT waiver is a subsidy, so maybe not. Then again, I would also say those very undeserving papers will probably gain less from this package than I feared or they hoped, so maybe yes. What I am certain of is that it was worthwhile and right to show Cairncross and the Review panel how we felt.