The Cairncross Report: first impressions

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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.

Frances Cairncross

Tax breaks

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 around 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.

Plus...

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.

Impressions

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.

This article first appeared on Byline.com and is reproduced with permission. You can read the full version here.

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