House of Commons Scottish Affairs Committee

Crisis in the Scottish Press Industry

Fourth Report of Session 2008–09

Report, together with formal minutes, oral and written evidence

Ordered by the House of Commons to be printed 1 July 2009

HC 401 Published on 13 July 2009 by authority of the House of Commons London: The Stationery Office Limited £0.00

The Scottish Affairs Committee

The Scottish Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Scotland Office (including (i) relations with the Scottish Parliament and (ii) administration and expenditure of the offices of the Advocate General for Scotland (but excluding individual cases and advice given within government by the Advocate General))

Current membership Mr Mohammad Sarwar MP (Labour, Glasgow Central) (Chairman) Mr Alistair Carmichael MP (Liberal Democrat, Orkney and Shetland) Ms Katy Clark MP (Labour, North Ayrshire & Arran) Mr Ian Davidson MP (Labour, Glasgow South West) Mr Jim Devine MP (Labour, Livingston) Mr Jim McGovern MP (Labour, Dundee West) David Mundell MP (Conservative, Dumfriesshire, Clydesdale and Tweeddale) Lindsay Roy MP (Labour, Glenrothes) Mr Charles Walker MP (Conservative, Broxbourne) Mr Ben Wallace MP (Conservative, Lancaster & Wyre) Pete Wishart MP (Scottish National, Perth and North Perthshire)

The following members were also members of the Committee during the parliament.

Danny Alexander MP (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey) Gordon Banks MP (Labour, Ochil and South Perthshire) Mr David Hamilton MP (Labour, Midlothian) Mr John MacDougall MP (Labour, Glenrothes) Mr Angus MacNeil MP (Scottish National, Na h-Eileanan an Iar)

Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk.

Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee are on the Internet at www.parliament.uk/scotaffcom. A list of Reports of the Committee in the present Parliament is at the back of this volume.

Committee staff The current staff of the Committee are Nerys Welfoot (Clerk), Georgina Holmes- Skelton (Second Clerk), James Bowman (Committee Assistant), Becky Crew (Committee Assistant), Karen Watling (Committee Assistant) and Tes Stranger (Committee Support Assistant).

Contacts All correspondence should be addressed to the Clerks of the Scottish Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6123; the Committee’s email address is [email protected].

Crisis in the Scottish Press Industry 1

Contents

Report Page

1 Introduction 3

2 Pressures facing the industry 3 Circulation and profits 3 Decline in advertising 4 Restructuring of newspapers 5 Current changes 5 The case for further mergers within the industry 6 Final reports of Digital Britain and the Review of local and regional media merger regime 7

3 Effect of the current situation on the industry 8

4 Conclusion 10

Conclusions and recommendations 11

Formal Minutes 12

Witnesses 13

List of written evidence 13

List of Reports from the Committee during the current Parliament 14

Crisis in the Scottish Press Industry 3

1 Introduction

1. On 11 March 2009 we agreed to take oral evidence on the current issues facing the Scottish press industry. On 31 March we took evidence from Mr Stephen Boyd, Scottish Trades Union Congress, Mr Paul Holleran, National Union of Journalists, Professor Neil Blain, University of Stirling and Mr Martin Boyle, Cardonald College, Glasgow. On 6 May we took evidence from Mr Tim Blott, Newsquest, Mr Mark Hollinshead, Trinity Mirror plc, Mr John McLellan, Editor of The Scotsman, Mr Jim Raeburn, Scottish Daily Newspaper Society, and Mr Michael Johnston, Johnston Press. In addition to the two evidence sessions, we received a memorandum submitted by the Scotland Office. We are publishing the evidence received with this short report which aims to highlight the issues raised. We are grateful to all those who gave evidence to us. 2 Pressures facing the industry

Circulation and profits 2. Scotland is one of the most competitive markets for newspapers with 17 daily papers printed for a population of five million.1 Over the past 20 years, the traditional Scottish titles have been joined by Scottish editions of English newspapers. The Press and Journal, The Courier, The Scotsman and The Herald sell approximately 260–270,000 copies a day between the four of them, whilst the Scottish editions of the Times, The Guardian, The Telegraph and The Independent sell 75–80,000 per day between them.2

3. The figures for ABC Scottish newspaper circulation for March 2009 were as follows (all percentage figures are on a year-on-year basis):

• Daily Record–358,290 (down 8.55%)

• The Herald–59,546 (down 10.70%)

• The Scotsman–49,113 (down 7.56%)

• Sunday Mail–443,242 (down 8.46%)

• Sunday Post–361,371 (down 9.69%)

• Scotland on Sunday–63,166 (down 11.81%)

• Sunday Herald–41,046 (down 17.70%)3

4. While, year on year, print circulation is declining by approximately 5.2%, the key raw materials of newsprint have increased in cost by 20% in the past year.4 Generally, profits are down, for both Scottish titles and Scottish editions of English titles.

1 Q 153 2 Q 161 3 “More gloom in Scotland”, Press Gazette, 9 April 2009, www.pressgazette.co.uk

4 Crisis in the Scottish Press Industry

5. The main reasons suggested to us for this decline in both circulation and profits were: the recession (although we heard that newspaper circulations were in decline before the current economic crisis); the decline in newspaper advertising (a major source of income for newspapers); 5 and the cost of structural changes being made in response to the growth in alternative news sources to the traditional newspaper format.6 We consider these below.

Decline in advertising 6. According to the Advertising Association, the overall spend on advertising in the UK fell by 3.9% in 2008, compared to 2007.7 However, although advertising in all other media has decreased, the expenditure on internet advertising has dramatically increased. Newspaper advertising is predicted to decline by 12–21% in 2009. Classified advertising revenue in UK regional and local press is estimated to have fallen from £1.8bn in 2007 to £1.4 bn in 2008.8 The Johnston Press reported on 11 March 2009 that total advertising revenues across the group for the first 9 weeks of the year were down 35.9% on the same period in the prior year.9

7. We were told that the move of advertising of public sector jobs by public sector bodies to websites that are owned or operated by, or on behalf of, the relevant public services has had a devastating impact on traditional print media. To date, 32 Scottish local authorities have removed advertising from print media en bloc to the website myjobscotland.gov.uk. The decision of the Convention of Scottish Local Authorities (COSLA) to launch the web portal, part funded by the Scottish Executive, was based on the need “to deliver efficiencies and free up resources for front line services.”10 Holyrood Magazine reported that the transfer of advertising to the COSLA jobs site and local authorities’ own websites was expected to initially save £5m.11

8. In addition to the decrease in job advertising revenue, newspapers told us that they feared that the move of statutory public notices to public sector portals would remove an estimated £10m income from newspapers.12 Witnesses questioned whether the take up of digital media by the Scottish population was sufficient to justify this move. Mr Jim Raeburn of the Scottish Daily Newspaper Society pointed out that the take up of broadband in some parts of Scotland was quite low, e.g. only 32% in Glasgow,13 despite the overall take-up of broadband in Scotland at 53% of homes.14 Mr Martin Boyle of Cardonald College in Glasgow told us that “it is a mistake to only talk about digital media and assume 100%

4 HC Deb, 20 January 2009, col 206 WH 5 Q 51 6 Q 74 7 “UK advertising expenditure down by 9.6% in 4th quarter of 2008 resulting in a yearly 3.9% decline”, Advertising Association news release, 16 March 2009, www.adassoc.org.uk 8 HC Deb, 20 January 2009, col 206 WH 9 Interim Management Statement, Johnston Press Plc, 13 May 2009, www.johnstonpress.co.uk 10“Real life superheroes inspire others to choose a career in local government”, COSLA news release, 5 November 2009, www.cosla.gov.uk

11 “Public sector recruitment advertising finds own home”, Holyrood, 16 May 2008, www.holyrood.com 12 Q 204 13 Q 211 14 Office of Communications, The Communications Market 2008 : Nations and Regions—Scotland, 22 May 2008, p 3

Crisis in the Scottish Press Industry 5

coverage”. He thought that the people dependent on newspapers were people in small towns, the elderly and people who were not yet connected to digital media.15

9. Whilst it is understandable that local authorities will want to reduce costs in the current economic climate, there are concerns that advertising jobs on public sector portals only was likely to limit the field of applicants to those already in the public sector rather than the wider audience of traditional print media.

10. We are concerned at suggestions of a move to publish public notices on public sector portals whilst broadband take-up remains relatively low in some areas of Scotland. We would ask the Convention of Scottish Local Authorities and the Scottish Executive to produce evidence that substantial parts of the population would not be excluded before removing public notices entirely from print media.

Restructuring of newspapers

Current changes 11. The traditional business model for a successful newspaper no longer works. Across the world, papers are merging editorial departments as newspaper groups are finding it necessary to adapt their business models to ensure the future viability of the papers.16 We were told that the huge investment in digital publishing operations and the technology-led integration of editorial production processes is leading to “an enormous paradigm shift” in the way newspapers are produced.17 With current technology, a newspaper can be operated from anywhere in the world.18

12. The National Union of Journalists estimates that nearly 2,000 jobs have been lost across the UK from regional newspapers, television and radio and websites since the start of the financial crisis. In Scotland, the free newspapers, Glasgow East (owned by Johnston Press), Ayrshire Extra (Johnston Press) and Aberdeen & District Independent (independently owned by Keith Barlow) have all closed, and there have been job losses at the Glasgow Evening Times, Herald and Sunday Herald newspapers (owned by Newsquest).

13. As well as merging editorial operations, newspaper groups have introduced new magazines and launched companion websites to compete with the ever expanding number of easily accessible online sources of news.19 There has been heavy investment by newspaper groups in digital publishing. However, Mark Hollinshead, Managing Director of Trinity Mirror plc, told us that to have a very good companion newspaper website, it needed a very good newspaper to feed it with unique content.20 Internet editions were reaching a greater number of readers, but that was not being matched by advertising revenues. Professor Neil Blain told us that someone had calculated that if the New York

15 Q 53 16 Qq 167, 169 17 Qq 94, 191, and Ev 41 18 Q 198 19 Q 147 20 Q 83

6 Crisis in the Scottish Press Industry

Times wanted to have an online business model as successful as its print-based model then its website would have to be one of the half dozen most popular websites on the internet.21 However, S1, an online, purely classified advertising, division of the Herald and Times Group, owned by Newsquest, accounted for 40% of the total company profit.22

Wellbeing of newspaper staff 14. The NUJ told us that it had carried out a health and safety survey in each of the nation titles after it became apparent to union officials that there were rising incidences of stress and mental health problems.23 Mr Johnston of the Johnston Press acknowledged that his staff had suffered stress and anguish during the reorganisation of the company structure, but told us that he had asked to see the NUJ’s audit and would “act accordingly” on the results.24 We are concerned at the reported levels of stress in the current press industry and we welcome the Johnston Press’s commitment to act upon the results of the health and safety audit made by the National Union of Journalists. We would urge the National Union of Journalists to share the results of the audit with the management of all Scottish newspaper groups as soon as possible to enable those groups to respond with an action plan to tackle the problems highlighted by the audit.

The case for further mergers within the industry 15. In the recent Digital Britain Interim Report, the Government invited the Office of Fair Trading (OFT) and Ofcom, and other interested parties, to examine whether any change was needed in the merger regime for local and regional media—with a particular focus on print media.25 Initial responses to the OFT review suggested that the dramatic loss of advertising revenues was threatening the viability of a number of local and regional newspapers, with serious potential consequences for the provision of news, including limiting the ability of publishers to invest in strong local investigative journalism.26

16. The Enterprise Act (as amended by the Communication Act) enshrines in law the need for a free and fair press, specifically:

• the need for accurate presentation of news in newspapers;

• the need for free expression of opinion in newspapers, and

• the need for, to the extent that it is reasonable and practicable, a sufficient plurality of views in newspapers in each market for newspapers in the UK or a part of the UK.27

21 Q 50 22 Q 81 23 Q 11 24 Qq 91–92 25 See “OFT publishes discussion paper on review into local and regional media”, OFT press release, 10 March 2009, www.oft.gov.uk 26 Office of Fair Trading, Review of the local and regional media merger regime: discussion paper, OFT1069, March 2009, para 3.10 27 Enterprise Act 2002, section 58 (2A)

Crisis in the Scottish Press Industry 7

17. Publishers have said to the OFT that, without consolidation, local newspaper titles will be forced to close. Publishers have also argued that print media consolidation would not affect the independence of individual titles.28 The newspapers argued to us that reform of the current regulatory regime would allow newspapers the flexibility to share backroom operations such as IT, HR, administration, credit control and finance, without the loss of the newspapers’ individuality.29 For example, Tim Blott told us that it was important that Newsquest’s Scottish titles reflected Scottish culture:

[…] it is the uniqueness and distinctiveness of our titles that will make them successful, and the fact that they are Scottish titles, the fact that they should reflect Scottish culture, is absolutely vital for our success going forward, even more so in a very competitive environment where we do have the Scottish editions of UK nationals. It is absolutely crucial that we reflect Scottish culture.30

Final reports of Digital Britain and the Review of local and regional media merger regime 18. The Department for Business, Innovation and Skills published the final report on Digital Britain alongside the OFT final report on its Review of local and regional media merger regime on 16 June 2009.31 The OFT report concluded that the existing merger framework as it applied to local and regional newspapers was sufficiently robust and flexible.32 The Digital Britain report supported this view and concluded that if there was compelling evidence that a newspaper title would close in the absence of a proposed merger (and there was no realistic alternative) then a merger would be unlikely to lead to a substantial lessening of competition.33 The OFT also concluded that any merger involving local or regional press might benefit from pre-notification discussion with the OFT. The OFT has undertaken to ask Ofcom to provide views on mergers involving newspaper publishing and/or commercial radio or television broadcasting.34

19. In its final report on Digital Britain, the Government concluded that there was an arguable case for greater flexibility in the local radio and cross-media ownership rules to support consolidation of local media groups. Ofcom was in the process of undertaking a statutory review of media ownership rules.

20. The OFT also recommended that the Government consider the impact on commercial business of local authority publications.35 Digital Britain noted the adverse impact on local newspapers of the increasing trend of local authorities using their own publications or

28Office of Fair Trading, Review of the local and regional media merger regime: discussion paper, OFT1069, March 2009, para 5.2 29 Q 200, Ev 41 30 Q 195 31 Department for Business, Innovation and Skills and Department for Culture, Media and Sport, Digital Britain: Final Report, Cm 7650, June 2009, and Office of Fair Trading, Review of the local and regional media merger regime: Final Report, OFT 1091, June 2009. 32 OFT 1091, paras 1.5, 1.10 33 Cm 7650, Chapter 5, para 70 34 OFT 1091, paras 1.11–1.12 35 OFT 1091, para 1.13

8 Crisis in the Scottish Press Industry

websites to advertise job vacancies and other matters and the declining use by them of paid advertising in the local press. The Government has decided to invite the Audit Commission to undertake an inquiry into “the prevalence of this practice, its impact and to make recommendations on best practice and if restraints should be placed on local authority activity in this field.”36 3 Effect of the current situation on the industry

21. Concerns were expressed to us that the restructuring of the industry had lead to unreasonable working conditions for staff and the heightened risk of a reduction in quality of reporting—in particular the loss of the “regional” aspect of reporting.

22. Professor Neil Blain, University of Stirling, and Martin Boyle thought that, as a result of the restructuring changes in some newspapers, staff were overly reliant on press releases, and the quality of journalism suffered as a result.37 However, journalism colleges continued to work hard to protect the basics of good reporting through their teaching.38

23. Recent coverage of local newspaper closures and mergers has highlighted the important functions that local newspapers performed that no-one else was doing: scrutinising local authorities and police forces, covering court cases, investigating hospital conditions and examining local education affairs.39 Martin Boyle of Cardonald College, Glasgow suggested that without local newspapers to hold local decision makers to account there would be a “democracy deficit”.40

24. The newspapers who gave evidence to us repudiated allegations that the quality of newspapers had declined. Mark Hollinshead of Trinity Mirror told us that high quality content remained a core part of the business: “Great writing, great journalism and great photography, both in print and now online, remain very much at the heart of our future business proposition.”41 However, John McLellan, Editor of The Scotsman, told us that the changes were being made out of necessity to protect the business: “We are not trying to kid ourselves that this is going to bring about a revolution in the quality of the papers. It is about making the business fit for the future.”42 Tim Blott, Regional Managing Director of Newquest said “We are absolutely committed to quality, but […] it is the quality that we can afford to deliver.”43

36 Cm 7650, Chapter 5, para 73 37 Q 70 38 Q 71 39 “What will we lose if regional newspapers are killed off?”, London Evening Standard, 25 March 2009, www.thisislondon.co.uk 40 Q 47 41 Q 94 42 Q 144 43 Q 177

Crisis in the Scottish Press Industry 9

25. We heard from Johnston Press of the steps that their newspaper editors were taking to meet each other on a regular basis and to share good practice with the aim of sustaining or improving the circulations of their papers.44

26. In a recent Westminster Hall debate on Local Press, the Economic Secretary to the Treasury said that a thriving local press is important to the health of local communities and local democracy.45 The final report of Digital Britain stated that a strong, viable and diverse news media was integral to democratic life:

When a newspaper goes under, we lose more than a tax-paying business. We also lose an institution’s memory; archives, values and community relationships that have, in many cases, been built through generations. Worst of all, we risk losing the talent of seasoned editors and journalists.46

We agree. We note the concerns that have been raised that the restructuring of the industry may have put at risk the Scottish press industry’s ability to deliver the high level quality of journalism that the public has grown to expect and that is necessary to properly scrutinise local and regional affairs.

44 Q 187 45 HC Deb, 20 January 2009, col 205WH 46 Cm 7650, Chapter 5, para 58

10 Crisis in the Scottish Press Industry

4 Conclusion

27. The Government acknowledged in its Digital Britain final report that there is a danger that as traditional news publishers come under economic pressure, large parts of the UK could be left without “professionally verified sources of information.”47 The report concluded that Government and business would need to work together to devise new ways of funding the news whilst maintaining a free, independent and active press.48

28. We welcome the conclusions of the Digital Britain and the Review of local and regional media merger regime reports which recognise the economic pressures that the newspaper industry is facing. In particular, we look forward to the results of the Audit Commission inquiry which will investigate the impact of local authority advertising on local newspapers.

29. We conclude that the Scottish newspaper industry is an integral part of Scottish culture which is highly valued both by its readers and by the institutions that it scrutinises. Under pressure from the current economic climate, diminishing advertising revenues and the explosion of alternative news and information sources in electronic format, the industry has been forced to dramatically restructure itself, often at great cost to its dedicated and knowledgeable staff. It is vital that both the Scottish Executive and the UK Government ensure that the Scottish newspaper industry is not made unviable through overbearing competition from public sector advertising, and that the industry able to adapt itself to create sustainable business models, through consolidation and mergers subject to the appropriate safeguards, whilst maintaining high quality, varied and independent journalism that reflects the Scottish identity.

47 Cm 7650, Chapter 5, para 58 48 Cm 7650, Chapter 5, paras 59, 65

Crisis in the Scottish Press Industry 11

Conclusions and recommendations

Decline in advertising 1. Whilst it is understandable that local authorities will want to reduce costs in the current economic climate, there are concerns that advertising jobs on public sector portals only was likely to limit the field of applicants to those already in the public sector rather than the wider audience of traditional print media. (Paragraph 9)

2. We are concerned at suggestions of a move to publish public notices on public sector portals whilst broadband take-up remains relatively low in some areas of Scotland. We would ask the Convention of Scottish Local Authorities and the Scottish Executive to produce evidence that substantial parts of the population would not be excluded before removing public notices entirely from print media. (Paragraph 10)

Wellbeing of newspaper staff 3. We are concerned at the reported levels of stress in the current press industry and we welcome the Johnston Press’s commitment to act upon the results of the health and safety audit made by the National Union of Journalists. We would urge the National Union of Journalists to share the results of the audit with the management of all Scottish newspaper groups as soon as possible to enable those groups to respond with an action plan to tackle the problems highlighted by the audit. (Paragraph 14)

Effect of the current situation on the industry 4. We note the concerns that have been raised that the restructuring of the industry may have put at risk the Scottish press industry’s ability to deliver the high level quality of journalism that the public has grown to expect and that is necessary to properly scrutinise local and regional affairs. (Paragraph 26)

Conclusion 5. We conclude that the Scottish newspaper industry is an integral part of Scottish culture which is highly valued both by its readers and by the institutions that it scrutinises. Under pressure from the current economic climate, diminishing advertising revenues and the explosion of alternative news and information sources in electronic format, the industry has been forced to dramatically restructure itself, often at great cost to its dedicated and knowledgeable staff. It is vital that both the Scottish Executive and the UK Government ensure that the Scottish newspaper industry is not made unviable through overbearing competition from public sector advertising, and that the industry able to adapt itself to create sustainable business models, through consolidation and mergers subject to the appropriate safeguards, whilst maintaining high quality, varied and independent journalism that reflects the Scottish identity. (Paragraph 29)

12 Crisis in the Scottish Press Industry

Formal Minutes

Wednesday 24 June 2009

Members present:

Mr Mohammad Sarwar, in the Chair

Mr Ian Davidson Lindsay Roy David Mundell Pete Wishart

Draft Report (Crisis in the Scottish Press Industry), proposed by the Chairman, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 29 read and agreed to.

Resolved, That the Report be the Fourth Report of the Committee to the House.

Ordered, That the Chairman make the Report to the House.

Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.

***

[Adjourned till Monday 6 July at 9.45 a.m.

Crisis in the Scottish Press Industry 13

Witnesses

Tuesday 31 March 2009 Page

Mr Stephen Boyd, Assistant Secretary, Scottish Trades Union Congress and Mr Paul Holleran, National Union of Journalists Ev 1

Professor Neil Blain, University of Stirling and Mr Martin Boyle, Cardonald College, Glasgow Ev 9

Wednesday 6 May 2009

Mr Tim Blott, Regional Managing Director, Newsquest (Herald and Times), Mr Mark Hollinshead, Managing Directors, Nationals, Trinity Mirror plc, Mr Michael Johnston, Divisional Managing Director, Scotland, Johnston Press, Mr John McLellan, Editor, The Scotsman, and Mr Jim Raeburn, Director, Scottish Daily Newspaper Society Ev 16

List of written evidence

1 Memorandum from the Scotland Office Ev 38 2 Memorandum from Mr Tim Blott, Mr Mark Hollinshead, Mr Michael Johnston, Mr John McLellan and Mr Jim Raeburn Ev 41

14 Crisis in the Scottish Press Industry

List of Reports from the Committee during the current Parliament

The reference number of the Government’s response to each Report is printed in brackets after the HC printing number.

Session 2008–09 First Report Work of the Committee in 2007–08 HC 55 Second Report Credit Unions in Scotland HC 218 Third Report Work of the Equality and Human Rights Commission, HC 176 Scotland

Session 2007–08 First Report Effects of tax increases on the oil industry HC 35 (HC 376) Second Report Poverty in Scotland HC 128 (HC 525) Third Report Child Poverty in Scotland HC 277 (HC 525) Fourth Report Work of the Committee in 2007 HC 278 Fifth Report Experience of the Scottish Elections HC 78 (HC 1098) Sixth Report Employment and Skills for the Defence Industry in Scotland HC 305 (HC 830)

Session 2006–07 First Report Work of the Committee in 2006 HC 308

Session 2005–06 First Report Work of the Committee in 2005 HC 836 Second Report Meeting Scotland’s Future Energy Needs: the Westfield HC 1010 Development Centre (HC 579) Third Report Putting Citizens First: the Report from the Commission on HC 924 Boundary Differences and Voting Systems Fourth Report The Sewel Convention: the Westminster perspective HC 983 (HC 1634)

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Scottish Affairs Committee: Evidence Ev 1 Oral evidence

Taken before the Scottish Affairs Committee on Tuesday 31 March 2009

Members present Mr Mohammad Sarwar, in the Chair

Mr Jim McGovern Mr Ben Wallace David Mundell Pete Wishart Mr Charles Walker

Witnesses: Mr Stephen Boyd, Assistant Secretary, Scottish Trades Union Congress and Mr Paul Holleran, National Union of Journalists, gave evidence.

Q1 Chairman: I would like to welcome our witnesses Mr Holleran: Yes.2 to this meeting. Would you please introduce yourselves for the record? Q5 Chairman: What is the reason for that? Mr Boyd: I am Stephen Boyd, Assistant Secretary Mr Holleran: Some people might suggest that some with the Scottish Trades Union Congress. My main of the employers or publishers are jumping on the responsibilities are economic and industrial policy. bandwagon in respect of the financial crisis and Mr Holleran: I am Paul Holleran, the Scottish taking advantage of opportunities to make people Organiser for the National Union of Journalists. redundant. There is no doubt that there has been a massive downturn in advertising revenues and also falling circulations. The BBC has brought forward Q2 Chairman: Before we start with detailed job cuts as well. They have front-loaded on their job questions, would you like to make any opening cuts. Those are the two main areas that have remarks? impacted. Mr Boyd: We very much welcome this opportunity to provide evidence to the Committee today. Q6 Chairman: Is the pattern of job losses the same Obviously the STUC is very concerned about the between Scottish national papers and Scottish press industry in Scotland. It is an industry that is regional papers? currently characterised by rapidly diminishing Mr Holleran: No. Scottish national papers have employment prospects for our members by serious been far more badly aVected. The regional papers health and safety issues in the workplace, by seem to be managing things in a far more inadequate investment in training, by a succession of constructive way. For the Daily Record and Sunday poor strategic decisions by management, a Mail there is a threat to a quarter of the editorial deteriorating industrial relations environment, workforce at the moment. The Herald/Evening unfortunately, and the lack of capacity is a concern Times and Sunday Herald have just lost in the region because of diminishing employment prospects for of 40 journalists this year. our members, but perhaps even more importantly it undermines, we believe, democracy in Scotland. At the moment coverage of political, economic and Q7 Mr Walker: Out of interest on the national side social aVairs in Scotland is totally inadequate and it of this what sort of pay scale is a journalist on? I is a situation that we would like to see addressed and think there is a misconception that all journalists are addressed very soon. earning hundreds of thousands but they are not at Mr Holleran: I am content with Steve’s statement. all. What is the pay breakdown of a five or six year journalist on a national? Mr Holleran: At the moment the starting rate for reporters in The Herald/Evening Times, Sunday Q3 Chairman: In the Scottish press industry how Herald, Daily Record and Sunday Mail is £25,000. many jobs were lost last year? That is once you have qualified, so three years into Mr Holleran: Journalistically about 250 last year the job you would move onto a pay bracket starting and this year there have been a further 190 so far at about £25,000. since January.1 Q8 Mr Walker: The redundancies are going up right through the scale. Are they trying to get rid of their Q4 Chairman: There have been more job losses in highest earners or are they spread across the Scotland in the last three months than last year? earnings scale?

1 Note from witness: Having rechecked the information, I 2 Note from witness: There have been more journalistic job believe the number of jobs lost in the first three months of losses in the first three months of this year than the same this year to be approximately 120. period last year. Processed: 06-07-2009 19:33:21 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG1

Ev 2 Scottish Affairs Committee: Evidence

31 March 2009 Mr Stephen Boyd and Mr Paul Holleran

Mr Holleran: That is a very important point. In Sunday Mail’s case are aiming to bring in a new recent years there has been a recognition within the production system with 70 journalists fewer before it industry that where there is a need to make cuts then is even brought in. They obviously look at the there is almost a mutually beneficial approach to contradiction where there are not enough people redundancies where people who are near the end of now to produce newspapers. People are not getting their working career, maybe a couple of years away breaks. They then try and bring in new systems from retirement, and also at the higher end of the pay which are more eYcient, and so far those eYciencies scale, would volunteer to go early and we would have not shown up; they have actually been negotiate reasonable redundancy packages and problematic, but they then proceed to make more access early pensions for these people. It is almost job cuts. The only way that they can then restructure like a natural progression and new blood would that and manage it is by the seven-day operation and come in. What is happening this year, which is quite having people working far more unsociable hours. alarming, is that companies appear to be targeting The Scotsman publications at the moment and the shorter term staV, people who have only been there Daily Record and The Herald/Evening Times are all five to seven years and are at the lower end of the pay looking at similar models and their proposals are scale because it is not as expensive for them to make quite unacceptable to most of my members who those redundancies happen. They are getting the believe that the hours that they are being asked to numbers down but it is not costing them anywhere work are not just unsociable but are not family near as much. I think that is hand-in-hand with the friendly, and quite probably will be damaging to current financial situation. That is what is causing their health, so there is major concern. more alarm than anything else, certainly amongst my members where younger people are being targeted. Q12 David Mundell: Am I right in thinking that at the moment or in the immediate past an entirely Q9 Chairman: How many job losses have there been separate group of your members produced, say, The in Scottish regional papers? Scotsman to the Evening News to Scotland on Mr Holleran: It is diYcult to say but probably only Sunday? about 30. Mr Holleran: Yes.

Q10 Chairman: Is that in the last three months? Q13 David Mundell: But the model that it is moving Mr Holleran: From October until now there have towards is a single group of people would produce all probably been 30 job losses in the regional weekly three. Is that right? papers. Mr Holleran: That is correct. I suppose there are two concerns that we have more than anything. One is in Q11 David Mundell: Firstly, on this issue of the respect of the redundancies and the people who seven-day title, because that seems to be a concept remain trying to cope with the increased workload, that is emerging, where the groups, rather than but secondly the whole concept of introducing having the daily paper and the Sunday paper, that seven-day working where the same sub-editors who eVectively a seven-day operation simply produces would be used to doing the Evening News in eVectively the one product, although it may be Edinburgh were then expected to work late shifts to branded slightly diVerently at the weekend. Is that a produce The Scotsman and at the weekend produce correct summary? Scotland on Sunday as well. These three papers have Mr Holleran: Can I give you the long answer to that. their own political identity, their own feel, and the Last year, as the number of redundancies rose, it readership have an understanding of what those became apparent to union oYcials that there were papers stand for, and having one group of sub- rising incidences of stress and mental health editors or picture desk editors producing those problems amongst our members, more long-term papers will damage those identities. Exactly the illnesses. We carried out a health and safety survey same goes for the Daily Record and Sunday Mail.It in each of the national titles and the BBC based on is a major concern to us. We have reports at the the Health and Safety Executive’s management moment from The Herald/Evening Times and standards of stress, and the results were quite Sunday Herald, who are maybe six months ahead of horrendous. The Health and Safety oYcials that we the other two groups with their experiment which dealt with said that they were amongst the worst that they say is very exciting and compelling, but already they had ever seen. Each of the employers the reporters who previously worked for the Evening acknowledged how bad those results were and they Times are being asked to give up their lunch breaks acknowledged that the only way they were so that they can merge with The Herald reporters to producing papers at that particular time was work across the titles. We are seeing a diminution of through the goodwill of the workforce, people quality and of their ability to do a proper job. working long hours, not taking breaks, not taking suYcient dinner breaks in some cases, and working extra shifts all through their own goodwill. What has Q14 David Mundell: Is this entirely a Scottish happened since then is that while we have been phenomenon? If we were currently interviewing your trying to address that issue they have made more equivalent from, say, Liverpool—I am not familiar redundancies and they have brought in new enough with the titles—or other major cities in production systems or, in the Daily Record and England? Processed: 06-07-2009 19:33:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG1

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31 March 2009 Mr Stephen Boyd and Mr Paul Holleran

Mr Holleran: A similar approach was taken by knowing their new patch and I think that has Trinity Mirror at Birmingham where they merged impacted on the cultural and the understanding of Birmingham and Coventry titles and put them into what Scottish newspapers should be. That was a bad a new production system. That was in the summer of starting point. They are now trying to regain that last year. momentum where they are reflecting what goes on in Scotland in the community. However, during that Q15 David Mundell: Overall is Scotland losing jobs period, the profitability of these titles has gone up in the same proportion as the rest of the UK has gone up quite dramatically. To give an example, industry? when The Herald was owned by the Scottish Media Mr Holleran: Proportionally it seems to be much Group their last two years of profits were £12 million higher. and £9 million. Newsquest’s profits in the last two years have been in the region of £21–24 million. They Q16 David Mundell: Is there any explanation for have made massive profits during that period in the why that would be the case? last four or five years and they have done that also Mr Holleran: One of the discussions I have with the by making cuts. Amongst those cuts they have managing directors in Scotland is that they believe closed down a number of correspondents like the that the English-based titles that have Scottish coverage of the European Parliament, for example; editions are in a stronger position. With The Express, they have closed their Brussels oYce, their for example, they would have substantially fewer Strasbourg oYce, they have reduced correspondents journalists than in their Scottish oYce. The Sunday in a number of areas, they have reduced the number Times would be the same or The Times would be the of columnists, so there is less diversity. I think that is same. The Daily Mail would have many more staV.3 part of the problem with the fall in circulation. They have an English base of a newspaper with Scottish pages, so there is a competition element. The cut-price sale of the Daily Star and The Sun has obviously added to some of the diYculties. There is a Q20 Chairman: The decision of the management at problem across the whole industry, there is no doubt Trinity Mirror Plc, which is seeking to merge the about that, but at the moment the Scottish titles newsrooms at the Daily Record and Sunday Mail, seem to be trying to use the same template to find a with the potential of 70 job losses, and the solution. alternative proposals from the NUJ calling for a reduction of around 50 jobs; what are the chances of Q17 David Mundell: In terms of overall job losses, success in the negotiations? what is the number in terms of the back oYce and the Mr Holleran: Unfortunately the negotiations seem people who are not frontline journalists? Do you to have ground to a halt. There is a strike on have that information? Saturday. The Daily Record and Sunday Mail will be Mr Holleran: I think over the last five years since striking on Saturday because the management are some of the newspaper groups consolidated, there moving towards a selection process to handpick has been a cutting to the bone of admin workers and people to make up the figure to 70. At the moment of advertising staV. I think it has been part of a we have around 40 volunteers who are prepared to consolidation. Where groups like Johnston Press or leave as soon as possible, and we have got agreement Trinity have taken on other titles, they then reduce from those who remain to work on a flexible the amount of back-up staV or close printers down, approach and to adopt a new system going in and for example. That has been happening for the last then review what eYciencies are made by the new five or six years. The editorial has by and large been system. Over the years we have seen changes in protected to a certain degree and that has now been technology and certainly the union has played a changed quite dramatically. major role in those changes as one of the biggest training providers. We do not stand in the way of Q18 David Mundell: That is why eVectively the technology but what we think makes sense is proportion of people going are more journalistic bringing new technology in, seeing what eYciencies than backroom? it makes, and if there were certain jobs that are Mr Holleran: Yes. displaced by that technology we would then negotiate redundancies on that basis. It seems crazy Q19 David Mundell: In terms of the content of the to us to get rid of a quarter of the editorial workforce titles for us as potential readers of the titles, what and then bring in a system that they do not even diVerence are we going to notice in the new know is going to work. The BBC did it and it never situation? worked; The Herald has done it and it has not Mr Holleran: In the last five years there have been a worked. There are major technical diYculties two number of decisions that have been made that have years on at both these organisations and you would impacted on the quality of the newspapers in have thought that the Daily Record’s executive Scotland. I am thinking back to a number of management would have learnt from the mistakes of editorial appointments where editors who maybe the BBC and Newsquest. originated from south of the Watford gap were put in charge of national newspapers in Scotland without

3 Note from witness: The Daily Mail would have many more Q21 Chairman: You are saying that around 40 staV in England, with a small staV in Glasgow. people are willing to leave voluntarily? Processed: 06-07-2009 19:33:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG1

Ev 4 Scottish Affairs Committee: Evidence

31 March 2009 Mr Stephen Boyd and Mr Paul Holleran

Mr Holleran: Yes. conditions. I think someone pointed out to him that he actually could not do that under the law, and I Q22 Chairman: The management cannot see any think that is part of the problem with a lot of sense in this which can avoid the compulsory newspaper employers, that they think they are redundancies and keep the staV happy as well. beyond the law. However, we have tried to then Mr Holleran: We cannot see the logic in what they influence that by going in and speaking to the are proposing. managing director and we have successfully persuaded him to accept volunteers as opposed to Q23 Pete Wishart: Can I explore with you what sort the previous position of just handpicking people of discussions you have had with management given who would not be coming back in. That has that we have a strike on Saturday. I am supposing obviously brought some relief to the people who are your answer is that they were not very fruitful and working there. The hours that people are working productive discussions in consultation. What is the now under the new contract are quite horrendous. stake at issue between the unions and the There have been pay cuts, there have been people management in these titles just now? being told they have to work through their lunches. Mr Holleran: I have got to say that the consultation One guy was suspended last week for refusing to negotiation has been far more extensive than it was carry a video camera and he had not had any with Newsquest. Both The Scotsman management training in health and safety. It is deteriorating and the Daily Record management have sat round actually so we are really concerned about what is the table and tried to consult and look at the whole going on there with the people who remain. project and work with us very closely in trying to go forward. We have engaged with senior editorial Q25 Pete Wishart: Management say that this is all management as well, not just the managing director necessary because of falling sales and we are into a and head of human resources, but also with the new generation of the way the media is being senior editorial management, the people with responsibility for designing the system and ensuring reported. At the same time it strikes me that you are its smooth introduction. Without wanting to get any losing your quality editorial and key journalists who of them in trouble, they totally agree with our have a massive track record in covering Scottish strategy and do not see how the system can be politics and Scottish life. It would seem that losing brought in with that many fewer journalists. them and having new people employed who really Whether there is a dictat from Trinity Mirror in do not know the situation is not really going to London that these figures must be met, we can only address falling sales. Do you have a view about that surmise that that is the situation. I get on very well with the way that you are actually going around with the managing director at The Record. He has trying to amalgamate and create these new posts just recently taken on responsibility for all of Trinity under diVerent conditions and losing key members daily titles across the whole of the UK. I do not of staV? How is it possible to enable titles on the know whether Mark is trying to make a name for basis of that approach? himself by being bullish, but it does not seem to be Mr Holleran: It is very diYcult. At one end of the very logical. We have had very few strikes in spectrum we have very experienced journalists who Scotland compared to England. I have been doing have left, and specialists, not just writers but sub- this job for 17 years and we have had something like editors, people who know what is right and wrong five or six days’ strike in that period as opposed to legally but also factually. If someone on the business hundreds—maybe 150, 160—in the last two years in desk has written something that they know not to be England. We have quite a diVerent industrial accurate they can then make those adjustments. relations approach and no-one can accuse us of There has been a massive reduction in that level of wanting to just hit the streets for any excuse—we skill and experience, which is of great concern to us have bent over backwards to avoid it—and we pride and should be to the company as well. As David ourselves on being able to negotiate constructive asked before about the seven-day merger, they moves, taking things forward, but this just seems to believe that the individuals who are left will be able be hitting a brick wall. to provide that kind of cover. We do not see that.

Q24 Pete Wishart: Do you find that the management are equally prepared to discuss constructively and Q26 Pete Wishart: We all know the political sensibly with you about some of these issues? You journalists. We work with these people day in and raised Newsquest and what happened with other day out. I do not think I have ever known a period titles where all the staV were eVectively sacked and where the morale amongst our colleagues in the asked to reapply for their jobs with worse terms and press is so low. In fact, there is also some anecdotal conditions. What part of the negotiation did you evidence emerging where communication oYcers at have with that? Were you consulted that it was going local authorities, for example, cannot believe the to be happening there? calibre of candidates coming forward, people with Mr Holleran: None whatsoever. All the staV were years and years of journalistic experience. What is called into a massive room and an announcement morale like? What opportunities are presented to was made. The editor-in-chief, Donald Martin, just your members if they are in the unfortunate position said that they had all been made redundant and that of losing their jobs? How are they coping with the 250 of them had to apply for 210 jobs with worse current conditions just now? Processed: 06-07-2009 19:33:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG1

Scottish Affairs Committee: Evidence Ev 5

31 March 2009 Mr Stephen Boyd and Mr Paul Holleran

Mr Holleran: They are not coping. I carried out a to be aware of their civic duties here as well as their surgery the week before last and from nine o’clock in duties as newspaper editors because they are clearly the morning until a quarter past six there were pivotal at this moment in time. people coming in all day complaining about the new contracts or the new working conditions or the Q29 Mr Walker: Do you not get into a vicious cycle pressures that they were being put under. I was if you run a newspaper? A lot of people buy getting reports about senior people being in tears in newspapers because they like the journalist and they The Herald. It is quite astonishing actually. It is not like the depth of the research and the stories that that astonishing if you look at what happened. I suppose produces, and when you have fewer journalists what epitomises the levels of loss in morale was when producing more copy you get a deterioration in the I met with the managing director of Newsquest after standards which means you get fewer people willing he made the announcement. They clearly had a to part with 50p a day or 90p a day to buy a figure that they had to arrive at of savings and said newspaper. I do not see what the answer to that is in that they wanted between 30 and 40 journalists to the current approach being taken by the proprietors. go, and there were 51 volunteers. That tells you the Are we just going to have newspapers full of level of morale. basically regurgitated press releases sent into the remaining six journalists manning the oYce? Is that Q27 Chairman: While obviously the morale of the not a danger? staV is low, I have spoken to a number of people Mr Holleran: That is one avenue that certain associated within the press—and we have a session proprietors want to go down. If I can just read on 6 May where John McClelland, editor of The something else to you and this is from the Gannett Scotsman, and Mark Hollinshead, managing website. Gannett are the owners of Newsquest who director of Trinity Mirror, and Donald Martin, own the Herald, Sunday Herald/Evening Times. editor-in-chief Glasgow Herald and Sunday Herald They were announcing last year that they will start will appear before this Committee—if you can give crowd sourcing, which means that they will put them one piece of advice, what would that be? readers to work as watchdogs, whistle-blowers and Mr Holleran: It is very diYcult. John McClelland researchers in large investigative features. “Crowd and Donald Martin have clearly been given targets sourcing involves taking functions traditionally to meet in respect to the amount of savings that they performed by employees, ie journalists, and using have to find. The diVerence is Donald believes he can the internet to outsource them, generally to a large make it work; I am not sure if John believes the level group of people. The compensation is usually far less of cuts will allow him to make the new set-up at The than what an employee might make for performing Scotsman work. There is a lot of concern about how the same service.” To me that is frightening. That they, as editors-in-chief, make the new system work. means this group of newspapers are saying to the I would say to Mark Hollinshead we have put a readers: you give us the news, we will put it straight compromise on the table that we think will allow us onto the web. to try and work in partnership in future to try and get back to a more civilised industrial relations Q30 Mr Walker: There is a growing view amongst position. people who are looking at this amongst academics that actually blogs and this type of reporting is not Q28 Chairman: Stephen, do you have anything to news; it is just a stream of conscience and actually add to this? journalism is a profession and good journalists, as Mr Boyd: I do not have anything to add in terms of we used to have and still do, make their name advice. The point should be made very strongly to all through the depth of their research and their three, going back to the points I made at the start, tenacious pursuing of a story. Stephen, you said that the press industry in Scotland is not currently you were concerned about the impact this may have reflecting the major economic and social issues. We on democracy. Unless journalists are questioning are particularly interested in Scottish democracy, what is coming across their desk then I think you and clearly we have the National Conversation, we have some very real concerns as to what appears in have got the Calman Commission, and these are your newspapers and what informs people’s really important issues for Scotland moving thinking. forward, and public debate as reflected in the Mr Boyd: Absolutely. I do find the statement that newspapers is completely inadequate in reflecting Paul has just read out quite terrifying. Where is the the extent of the issues being addressed as part of quality control? Who analyses this stuV when it that debate and the depth of the issues and really comes through? Who filters it for public trying to illuminate the public as to the key issues consumption? It is not immediately clear to me that that are facing Scotland moving forward. You only the capacity will be there to do that. Paul will tell me have to look at some of our key titles and Paul has if I am wrong, but I think the recent record of the spoken about them in response to David’s question Scottish titles in investigating in the new media about the seven-day titles. The thought that at this approach is pretty poor. If you look at what The moment in time we might lose one of our major Herald and Scotsman papers have done in terms of Sunday titles, for instance, is very, very worrying to their blog and compare it to some of the better titles us. That is one out of a very shallow pool company like the Guardian’s blog pages, it is clear that these of titles that are addressing the major issues in have not been eVectively moderated. We are trying Scotland in any sort of depth at all. I think they have to extend the quality of that website from no Processed: 06-07-2009 19:33:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG1

Ev 6 Scottish Affairs Committee: Evidence

31 March 2009 Mr Stephen Boyd and Mr Paul Holleran investment at all, and I think it reflects very poorly has been a downturn in conditions and the way on the findings. You cannot have it all ways. They management has been behaving in these other titles, either want to invest properly in these new methods whereas DC Thomson appear to have stood still and or they do not. They cannot just expect people to fill there has been no deterioration. I am not being this gap in the quality control. mealy-mouthed, we have very few problems. We Mr Holleran: The alternative route to the one I have have members in Dundee and in Aberdeen and in the suggested there and the one that you have raised is Sunday Post, and very occasionally I will get a phone one that you would compare, say, the likes of the call from a member with personal diYculties. We do Irish Times, for example, which is operated under a not have the same industrial relations problems trust ownership and has certain standards and has there as anywhere else. It is quite interesting that certain criteria for investment and coverage of news their approach to news is the same. It is done in a items and current aVairs. They have to reach certain constructive way with the community and reflects standards and they are covered by those trust deeds what goes in the communities. I would say that their and the money that is generated. Obviously there is model does not seem to be too bad a model. an element of returns that can then be redistributed back into that organisation. I think that would be Q33 Mr McGovern: I have heard that if your what we really believe is the way forward in organisation negotiates, for example, a 3% pay rise Scotland. I have a genuine concern as to the future across the board for your membership, DC of a number of titles in Scotland over the next two Thomson oVers something like 3.25% to make sure years and I really do think that the Government people do not bother joining a union. Is that fairly needs to look at engaging very, very closely with the accurate? industry to be in a position to step in at the right time Mr Holleran: I believe so. if one of those titles is under serious threat as we believe may happen within the immediate future. Q34 Mr Wallace: I had better declare that my father worked for DC Thomson in the 1960s. I think one of Q31 David Mundell: Are the Scottish editions of the its contributions is a successful title and I think both London titles, in your view, a positive factor in the its acquisition of Press and Journal and DC Scottish market or have they contributed to this Thomson The Courier you have to say that with situation? regard to the other titles in Scotland it is doing okay Mr Holleran: I suppose they have contributed to a and it is holding its own against the dropping degree. If you look at the quality of the Times, for advertising revenue and competitive Scottish example, of the Telegraph, where they have a large editions of English papers. Do you think there is group of journalists based in England producing the something that could be learned from The Herald core of the paper and then a handful of journalists and The Record in that? What is it that makes those in Scotland—more than a handful in some cases but two publications successful? As a Conservative it is certainly not comparable with the Scottish national tempting for me to say it is because they have not titles—who then contribute an element of Scottish had the unions, but that is probably not true and it sport and news. People then find that attractive to is flippant, but what is it that is good about the buy because there is far more news and far more model that keeps that balance going? substance to it. There is a competition element to Mr Holleran: Stability, for one. There is also a lack that that certainly the employers would have a view of ambition to be caught up in the ongoing battle to on in respect of the negative impact of the Scottish be the number one newspaper group in the UK titles that are based in England. where Trinity Mirror, Johnston Press and Newsquest and Associated Newspapers have all Q32 Mr McGovern: At the risk of sounding slightly been struggling to become the largest newspaper parochial, I am the Member of Parliament for group and to take over smaller titles and to acquire Dundee West. I am sure that you will be aware that and expand. That has got out of hand somewhat in the press in Dundee is DC Thomson and their recent years to the extent that there has been a lack attitude towards unions. However, on the other side of due diligence in some areas when titles have been of that coin it is my understanding that very few brought over. I can think of Johnston Press buying people employed by DC Thomson ever leave and all the titles in Ireland and Associated buying other there are no compulsory redundancies and usually titles and then realising that they are just black holes they give fairly well advanced severance packages, and they are not actually generating the revenue that whether it is early retirement or voluntary they thought they were and the expansion now needs redundancy. Given this Government’s commitment to stop and they are all now trying to sell and there in the first couple of years that they were in power to are titles being closed—Trinity closed titles—titles trade union recognition and the right to being sold oV or being put up for sale. Those groups representation, could you tell me how hard the NUJ also were chasing returns on their investment in the have worked to try and get recognition in DC region of up to between 30–40%. My understanding Thomson? is that DC Thomson had much less ambitious Mr Holleran: Quite hard for a number of years. Part financial returns when they were setting targets. That of our diYculty has been that in the last five or six greed, as it were, being put into play has changed the years where a number of changes have taken place, way management has treated newspapers in recent such as a new editor has been brought in from years in these newspaper groups and that is where all London titles or new owners like Newsquest, there the conflict has come from. That is why we are now Processed: 06-07-2009 19:33:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG1

Scottish Affairs Committee: Evidence Ev 7

31 March 2009 Mr Stephen Boyd and Mr Paul Holleran seeing the deterioration in journalism and now as the story from that community for four or five miles. financial crisis kicks in there is a lack of substance There are rumours, and I do not know if you have there. There are less good journalists, there are no any views on this and whether you can tell this strategic approaches other than to try and push Committee, that DC Thomson are considering things into merged titles and converge with the buying The Scotsman if Johnston Press fail there. Is internet, but you need to be able to invest in that and that something you would welcome given the way you need to do it in a strategic approach to oVer, as that PDM have actually engaged themselves as a Charles said, a quality journalism that is going to management or do you know any more in this attract people and attract advertisers. I think that is connection to be a realistic quote? the diVerence. There has been stability with DC Mr Holleran: I was hoping you were not going to ask Thomson that has not existed with these other me that question. Singing the praises of DC groups as they have clamoured for bigger and Thomson will put me in a really diYcult position. better things. However, if I am being honest, certainly lots of people’s views in Scots publications on the editorial Q35 Mr Wallace: What strikes me with DC side amongst my members is that that would not be Thomson is that you have good editorial but also an altogether bad thing in the sense that many years good management, including the family that is ago Johnston Press were seen as a real organisation, involved in it. It is a good solid management. a family-driven organisation that was newspapers Mr Boyd: It is local management. through and through. Most people believe that they have lost that now in the clamour for bigger profits Q36 Mr Wallace: Do you find that across the other and expansion and that while they still make the right noises about editorial quality, they are finding titles the management is not very good quality on Y average and that you have got a few who are it di cult to deliver because of those financial exceptional or you have editors who are suddenly constraints. A DC Thomson takeover will probably having to be group managers as well as editors and be welcomed by a lot of people in Scots publications that is part of the problem? at the moment. Mr Holleran: I would say it is one of the biggest problems I have had to face in the 15–16 years that I Q39 Mr McGovern: I was just reminded there that at have been doing this job is poor management, either the end of my previous question about DC Thomson through lack of training or just people who maybe and their engagement or non-engagement of trade appear to be good journalists or editors who are unions, I was once told, and I am not sure if this is promoted but not given any management training an urban myth or not, that Winston Churchill, who and that has been a big problem. was MP for Dundee from 1908–22, when he lost his seat he made a particularly disparaging speech about Q37 Mr Wallace: On the matter of the revenue Dundee and DC Thomson refused ever to publish squeeze, how many local authority free giveaway his name in their papers again. During the Second newspapers in Scotland are funded by advertising or World War they would only refer to him as “the show any advertising? I now represent a seat in Prime Minister” and would not publish his name. I Lancaster but I used to be in Aberdeenshire. Some feel the same fate might now befall me. Perhaps I counties in England have been stealing revenue from should echo Ben’s comments that they have got a advertisers but they have been putting out their great staV and good management. The question is council free sheet funded by advertisers. which Scottish regional newspaper jobs have been or Mr Holleran: I do not think that is the problem. I will be relocated? think one of the problems is the threat of falling Mr Holleran: What do you mean “relocated”? advertising revenues or the removal of advertising revenues from government advertising in the papers. Q40 Mr McGovern: Going back to the DC Thomson I think that is something that certainly some of your analogy, and this is being covered in the next colleagues in Westminster have certainly been question at the same time, it is my understanding lobbied on and at Holyrood. So the removal of that DC Thomson, and people have referred to this, advertising revenues by local authorities and by that while the printing is done in Dundee they have central government to their own web portals is a satellite oYces in Fife, Perth and Forfar, various major concern across the industry.That is just one of locations, and they just send stories in. If that would a number of areas of concern. I am not apply on a national basis, speaking about The Sun, scaremongering here but I think there are major The Star, The Record or The Times, if there are job fundamental concerns that we have as to the future losses of the Scottish journalists who are facing of some of the titles and I think something more losing their jobs are being oVered relocation and, if drastic needs to be put in place to protect the future so, how many? of some newspapers. Mr Holleran: There does not appear to be any threat to district oYces at the moment. Certainly The Q38 Pete Wishart: Whatever the reason for Record are not suggesting closing the Aberdeen Aberdeen’s success of DC Thomson and The oYce or reducing any of their staV in Edinburgh or Courier, and also to a certain degree the Press and Inverness. At the moment we are not really seeing Journal, they are able to locally editionalise. If you that. The Herald is maintaining their presence in the move through a large constituency in Perthshire you Highlands as well. I do not really see that as a major would find a diVerent billboard representing a news issue at the moment but it may change. Processed: 06-07-2009 19:33:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG1

Ev 8 Scottish Affairs Committee: Evidence

31 March 2009 Mr Stephen Boyd and Mr Paul Holleran

Q41 Mr McGovern: Do you have a view on which lost all their independence and also means of facilities could be transferred out of the region which production. Is that a worry as well across the board is served by certain publications and which are for some of your members? important to remain within that region? Mr Holleran: Yes, because you then have to contract Mr Holleran: That is a bit of an issue for some of the printing which can be a concern. What happens in regional papers, some of the smaller weekly titles at some cases is that some newspaper groups will buy a the moment, like the Clyde & Forth Group, for rival paper just because they have a more modern example, who own Dunfermline Press, have started press and will close the old clapped-out press down, moving. It is a pity that Katy Clark is not here consolidate into one press and then transfer the because it aVects her local paper. A lot of their printing to that press. There are lots of manoeuvres papers in Ayrshire have all been moved into one that have been taking place for a number of years oYce in Ardrossan. So papers from Largs and like that. Millport, from Ayr, from Irvine, they have all been put into Ardrossan and more people are working from there. We have not lost any jobs. There have Q44 Chairman: What are the principal dangers been no editorial jobs lost there other than presented by regional newspaper monopolies? Do secretarial and admin staV. The company say we do you believe that government should take any action not want to lose jobs but we need to make savings. against these monopolies? We can understand that but we would then have Mr Holleran: I have worked in the industry since I concerns about the local identity of reporters left school, which was about 35 years ago, and I have moving 20/30 miles from one oYce to another village seen a contraction in the size of the number of or another town and not having that same companies that own newspapers. There are five or six large newspaper groups who have a crossover of relationship with the public. In itself that type of cut, national and regional titles. That has reduced quite while it is not getting rid of journalist jobs, it is dramatically over the years. That has led to, I reducing the journalists in that town and moving believe, extensive damage to the quality of them to another area where there is more journalism and also to local identities. I think it is a centralisation. Other groups like the Scottish problem that we could see being exacerbated if Universal Newspapers have put all their sub-editors newspaper groups buy smaller titles and then in one place, like maybe in Irvine, they have put transfer them into one central oYce. That is one of them together, another one at Hamilton, so they our growing concerns. Lots of small titles have would maybe get rid of jobs in a number of other closed in the last year—Trinity have closed over 40 towns and put them all in one area. There was some or 50—which is a major concern that a big concern that that would impact on the identity of the newspaper group can buy a number of titles and then local papers and that is something that obviously start closing them down. Johnston Press in Scotland would be done for the reason of savings but again we bought the Argent titles. Argent were an East think it impacts on quality journalism. Anglia-based company and Johnston Press bought the Argent titles last year. They have closed one of Q42 Mr Wallace: Can I ask about the printing their titles down and are now moving the staV from presses. Coming out of my constituency in those titles into one production centre which people Lancashire is The Scottish Express on the Richard have concerns about as well. That consolidation of Desmond-owned presses. How many of the titles are this handful of newspaper companies we have major now in trouble because they do not own their own concerns over. We think that was the start of the presses and therefore they are up against higher costs deterioration in the industry as they concentrated from getting their papers printed? more on expansion and gobbling up rivals and Mr Holleran: It works both ways because moving into certain areas and certainly could be Newsquest, for example, I think have quite a accused of setting up cartels in some areas in respect lucrative contract with Associated Newspapers with of advertising prices. That has led to a change in the Daily Mail. They make quite a bit of money out management style and an approach to the way of that. You can understand the Daily Mail, which newspapers are run and not seen as newspapers that has a Scottish edition, printing in Scotland. There are part of the community, part of the democracy, seems to be quite a bit of ongoing negotiation at the but seen more as statistics and how shall we get the moment with the likes of Trinity, the Daily Record share prices up. That now seems to be backfiring as plant there, and with Johnston Press about companies have over-expanded. The banks are now upgrading their presses. At the moment there is a lot saying to them you are in danger of breaching your of interest in that area. Some of the weekly groups covenant with us, you are not reaching the profit maybe are feeling vulnerable because of that covenants that you previously gave us—the development. A lot of printing presses have closed covenants on profit, the levels that you previously down in the last 10 years. suggested—and there is major concern towards two or three of these major newspaper groups at the moment who are running into major cash-flow Q43 Mr Wallace: My local one has to compete with diYculties. I do not think I am exaggerating—I am the big print rounds of the big papers. It would be sure Mr Hollinshead when he comes to your next like flicking a gnat away from them for the big boys hearing will back this—there are major concerns in just to say you do not have a slot anymore and that the industry as to the future of some of the would just finish those smaller papers. They have newspaper groups. Some people I know, certainly Processed: 06-07-2009 19:33:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG1

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31 March 2009 Mr Stephen Boyd and Mr Paul Holleran

Ms Bailey, chief executive at Trinity Mirror, is Burnham is looking at some proposals for closer suggesting that the Government should loosen some cooperation between the BBC and regional and local of the regulations on ownership. We think that papers. I am not even sure if that goes far enough. I would probably be a counterproductive move and wonder whether there is a need to look at a model that the Government at this stage needs to look at a that could take away the onus from profit-chasing diVerent model for the media in this country, not and maintains the levels of the quality of journalism. follow on the route it has been going for the last 10 years where this clamour for expansion and move Q45 Chairman: Can I thank the witnesses for their towards now seven-day merging of titles with a view presence. Before I declare the meeting closed would to trying to maintain profit levels, it is just not the you like to say anything in conclusion or perhaps way forward in our view and there needs to be a something we have not covered in our questions? Mr Holleran: In conclusion, it is about people who diVerent approach. Our preference would be are losing jobs. It is about the people who remain something along the lines of a trust group, like the trying to cope with the new workload. It is also Guardian Media Group. They are not a great about the future of journalism and the quality of the example as they are not perfect by any means, or the newspapers. There is a downward spiral at the Irish Times; that type of trust which would be there moment. Fewer quality journalists can only mean to protect the quality of the journalism as well as fewer readers and fewer advertisers and it is a protect the company from obviously misinvestment downward spiral which ends up in a position that I which is certainly what has happened in the read out before that Gannett are promoting, and newspaper industry in the last few years in Scotland something needs to be done about it otherwise there and in England. That type of trust would provide will be no accountability in this country in a short some protection so that we would have at least one number of years. or two national papers in Scotland and the regional Chairman: Thank you very much for your papers would be protected. I noted that Andy attendance.

Witnesses: Professor Neil Blain, University of Stirling and Mr Martin Boyle, Cardonald College, Glasgow, gave evidence.

Q46 Chairman: Good afternoon and welcome. deficit. I think that is a very useful way of looking at Before we start detailed questions, do you have any newspapers. They are not just economic things; they opening remarks? are part of the social and democratic fabric of our Professor Blain: May I pick up on a very brief point country. From that point of view they are incredibly from the last session which was about the success of important. It would be wrong to rush towards the the Press and Journal and The Courier in Dundee internet and think that it solves all of our problems. and Aberdeen and whether or not change of I do think that has caused some of the issues we have ownership in The Scotsman would make a at the moment. The current business model is not diVerence. I think the Glasgow and Edinburgh working. No-one knows what the future business situation is diVerent from that in Aberdeen and model will be and that is one of the greatest Dundee because the media tend to be rather diYculties. Bloggers tend to produce “comment and Glasgow-centric. People in Aberdeen and Dundee froth”, was one of the ways it was recently described, have more reason to feel that they need a local and although there are some good ones out there, newspaper, which I think is a major factor. I am not qualified, trained journalists with experience who sure that the transfer of ownership will solve The talk to you on a daily basis, who have knowledge of Scotsman’s problems. the courthouse, of Parliament, et cetera, are Mr Boyle: As trainers and educators in journalism invaluable. You do not see bloggers in Parliament; we welcome this opportunity. We think it is a very you do not see bloggers at the local council or at the important time in the media and we are delighted to courthouse. be part of it. Professor Blain: I completely agree with that and I would extend the point. Martin is talking about local Q47 Chairman: What are the key civic and papers. The economics of all Scottish newspapers democratic functions of newspapers in our society? are in a sense local. We are seeing, for example, at the Do you believe that these functions are being, or moment the Manchester Evening News in some could be, performed by other media? diYculty and the Guardian Media Group having to Mr Boyle: I think that they have an incredibly make cuts. For the purposes of considering the important role in society. At the moment they are the economics of London and non London newspapers, only place where questions are asked, particularly of The Herald, The Scotsman, the P&J and The Courier local government. Local newspapers perform a fall into roughly the same sort of category that function that no-one else is doing. They hold local Martin is talking about there. The famous dictum of decisions to account, they ask the questions and I C P Scott about comment being free but facts are heard recently someone say as local newspapers sacred—facts, as many other people have point out, disappear in England, and potentially start are expensive—and the investment which goes into disappearing in Scotland, we have a democracy the newspaper coverage of factual material is Processed: 06-07-2009 19:33:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG1

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31 March 2009 Professor Neil Blain and Mr Martin Boyle considerable. You said can any other media replace get the full coverage. Does the fact that I am now what a newspaper does? It is true that an increasing accessing that via computer rather than actually number of people are turning to the internet to get buying hard copy have a detrimental eVect on the their news but they are browsing news by and large. journalist? Does DC Thomson make money out of They are getting news often in bite form and the my accessing their website? more in-depth detailed coverage which print Mr Boyle: They are trying to make money through newspaper provides can be made available on the advertising revenue. Essentially for every hit on the web but, by and large, people do not seem to use the website they are saying to advertisers we have X internet in that way. I think the depth of news number of readers regularly coming to this site. The coverage which people engage with is diminished. By simple economic view is that if you have a product the nature of television only a fraction of the number that you give away for nothing you do not have a of reports which can be covered by the serious press product. At the moment that is what the newspaper can be covered by television. A programme like industry is struggling with. They have gone from one Channel 4s Dispatches, for example, can only on a traditional well-established business model to weekly basis handle one issue in depth. A newspaper essentially no business model that works. We can all or the availability of two or three newspapers can read the Daily Record now for nothing here and that cover several. The implication is that with a change is the problem. of medium something could be lost, and possibly is being lost. Q50 Chairman: If the majority of newspapers are providing information on the internet and one or Q48 Pete Wishart: What is accounting then if it is two do not, then most of the people will think in not the internet? Obviously the crisis collapse in terms of advertisements that they might lose out. Scottish newspapers preceded the financial crises. Professor Blain: Almost everyone is moving to the What has accounted for it? internet to some extent. There is an assumption built Professor Blain: If we look at the Scottish situation, in here at the moment that you keep the print it has a slight complication because both in the editions going because you know, as Martin has just United States and in the United Kingdom said, you have a business model there that you newspaper sales are diminishing. Newspapers are understand that can make money. There have been having to go onto the internet. The Guardian in some calculations done in the United States—as Britain probably took the lead in doing this with everyone probably knows it is not just the British Guardian Unlimited. What happens is that when newspaper market which is in decline, in the United newspapers shift onto the internet they do not get the States it is also in very steep decline—looking at very revenue back which they lose from their readership big selling newspapers in the States, like the New who leave the print edition. If you ask why do they York Times. Somebody calculated a year or so back do it, the answer is they do not really have much that if the New York Times had to have a business choice. They could not not develop a new model as successful as its print-based model then its technology because it does look as though that is website would have to be one of the half dozen most where younger media consumers are headed, but popular websites on the internet; in other words, you they do it at a loss and the loss is becoming quite would have to have an extraordinary number of hits serious. The diYculty of Scotland is compounded by because the advertising model is diVerent. You are the fact that since the middle of the 1990s it became probably selling a smaller number of adverts which easier for London-based newspapers to distribute in are expensive if they reach a very large number of Scotland because of developments like satellite readers. One of the ironies when newspapers go onto printing and therefore you have the irony that the internet is that they are reaching, and can prove London papers have done increasingly better in they are reaching, a larger number of readers, but Scotland, but the overall context is one of decline. that is not being matched by advertising revenue for The other question is demographic and has to do a number of reasons, one of which is that there are with age. We do not know what the under 25s are other internet sites, for example, the home sites of going to do in the future. They do not seem to watch internet providers and various other internet sites a lot of television or read newspapers or, for that which are also taking the advertising, so the matter, listen to the radio very much. They interact advertising is being spread around the internet with social networking sites, mobile telephony and quite widely. so on. They might come back to more traditional media and they might not. If you are in the Q51 Mr Walker: The current downturn in revenue is newspaper business you need to assume that the obviously being worsened by the dip in advertising growth area will be the internet but it is just not revenues that we have seen over the last year. When producing the revenue to fill the gap. the economy recovers do you expect to see newspapers lagging behind in that recovery? Q49 Mr McGovern: I am not particularly familiar Professor Blain: Yes is the answer to that. There is with computers and information technology. I buy a the general newspaper market; we are talking about number of newspapers every day but the local press the Scottish market. The sales of indigenous Scottish back in Dundee while I am here in London, I just go newspapers have been in steep decline well before the to the DC Thomson website and get The Courier and present economic downturn. 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31 March 2009 Professor Neil Blain and Mr Martin Boyle benefiting from all the resources which London this; optimists saying at a certain age people will newspapers have. There is nothing to suggest that return and they will want hard news and if, for that will change if there is an economic upturn example, The Scotsman and Herald were both to get because the relative disadvantage of Scottish into terminal diYculty, and for that matter the P&J newspapers in resource terms will be maintained, but and The Courier, there would then be an outcry and at the same time in a wider context newspapers are something would happen and one quality Scottish selling fewer copies in any case. The only sensible newspaper would be saved and these young people answer one can give to that is whatever proportion would return to reading in their late 20s. There is of the problem is caused by the current economic another view which says that there is a diYculty downturn may well be rectified but it will not really which is that in depth information on political, make much diVerence to what is becoming an overall economic and social issues is not going to meet with decline in the newspaper market and really quite a the same level of engagement over the next five or 10 frightening decline in Scotland for indigenous years and that this is something we should worry Scottish titles. about and need to do something proactive about. It Mr Boyle: The problem we have here anyway is I isadiYcult one to predict. suspect the economic downturn has hastened this but we would have got to this position anyway. We Q53 Chairman: Which groups of people are most have spoken about the problems with the business dependent on newspapers for their information and model, we have spoken about the problems of the do you think this will continue to be the case? internet; those pressures were driving us towards this Mr Boyle: At the moment the people that we see position. In reality, irrespective of financial continually dependent on newspapers are people in problems, over the next five to 10 years the business small towns, the elderly and people who are not yet model problem is going to exist. The chances are at connected to digital media. It is a mistake to only a local level, and I think probably Dundee we have talk about digital media and assume 100% coverage, a pretty good example, we have a paper which is 100% uptake and complete literacy with it because always going to have a loyal following but in reality that does not yet exist. Certainly with the generation what we are going to have is more and more people coming through colleges and universities just now moving away from that model and five or 10 years we are heading towards that but in small and where the business struggles to find another viable medium-sized towns and communities across one because they have not identified one yet. Scotland there is a big group there that is starting to miss out on crucial news as quantity and quality Q52 Mr Walker: What concerns me is that young both drop. people seem to be moving away from newspapers Professor Blain: It may very well be also that in but they do not actually seem to be seeking in the certain local markets local newspapers, assuming numbers you would expect that equivalent news on that they can retain a reasonably sound economic the internet. It seems that they are not really base, will still be popular enough to survive. I am interested in civic and civil society. We have a thinking of newspapers like the West Highland Free number that move towards being interested in single Press and so on. It is diYcult to predict, particularly issue type subjects—global warming, saving polar when in Scotland you can get people living in some bears, and I do not mean to be pejorative but I get of the far flung areas who in some sense end up lots of letters from people who are very much feeling doubly distanced from the sources of concerned about that—but what we are not seeing is information. They are a long way from London and youngsters demonstrating an interest in what shapes they are also a long way from Glasgow. It may well their society and what shapes the world in the way be that some local markets of that sort survive for that perhaps we did 10 or 15 years ago. certain kinds of local newspaper. A lot of concern in Professor Blain: This is a diYcult one to predict. Scotland recently has been for dailies precisely like Only recently have there been available these The Scotsman, the Herald, and the P&J. competitor technologies which take up a lot of the attention of young people. We have seen massive Q54 Mr McGovern: The first question that I development in an area like mobile telephony. We intended to ask if it is possible in cover terms and have seen the internet which, historically,not so long that question was is the decline in the circulation of ago the web was devoid of content and now it has Scottish newspapers been reflected in similar lots of content. What is diYcult to predict is are the markets in other countries? The supplementary to young people that we are identifying, I think you are that question is have any papers in similar markets right, really not reading newspapers, not watching in similar countries shown that they are able to buck television very much, probably not absorbing very the trend? If I were to ask not so much a question but much news at all, or are they, as it were, going ask you for a view or an observation: when I was first through a phase and will they in their later 20s, or elected here my wife and I went on one of these open when they are 30, return to what is left of the top bus tours and the bus went down Fleet Street and traditional media? If not, the implications for the apparently the only major publisher still in Fleet democratic process are quite worrying because it Street is DC Thomson but I cannot get The Courier becomes harder and harder to know on what basis of here in Westminster, which I regard as ironic. Also information people make political judgments and a about two or three months ago, prior to that we were wide variety of social and cultural judgments. 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Ev 12 Scottish Affairs Committee: Evidence

31 March 2009 Professor Neil Blain and Mr Martin Boyle here in Westminster. I just wondered if you had a Mr Boyle: There is that assumption that you will go view on that in addition to my earlier question. online and that people do not want to have paper in Every day we were able to get a Herald here and for their hands anymore, so if you are outside that small some reason that has stopped. Do you have a view circulation area that you are quite happy to go and on that? Also the question on similar markets in find it on the internet. I think that idea has started to similar countries and whether they have managed to grow more. buck this trend? Mr Boyle: There are very few examples of papers Q56 Mr Walker: It is much nicer to read a significantly bucking the trend. There are one or two newspaper with your toast and marmalade than to but generally they are seen as the exceptions at the go online with your toast and marmalade. There is a moment. England is certainly badly hit by local titles culture I think that it is nice to pick up a newspaper disappearing and the analogy there has been a town and hold it. losing its collective memory. For that type of thing Professor Blain: The entire aesthetics of newspapers to be happening and the threat of that to potentially have disappeared, including the sports titles. I think move towards Scotland is certainly something that SheYeld still has The Green’un, the Saturday sports concerns us greatly. edition. We used to have these up and down the Professor Blain: If you look at Ireland, the Irish country. There is a very great deal of them lost Times is very well distributed. The Irish Times is run because of the retreat of printers. by the Irish Times Trust which is comparable to the Scott Trust which runs the Guardian Manchester Q57 Chairman: The Newspaper Society and the Evening News. The Irish Times has actually been Society of Editors have called on the Government to used as a model by more than one Scottish consider eVective ways in which Google and others newspaper editor in the past for the sort of national could be prevented from profiting from third party Scottish newspaper which ought to exist. It is a fact content without recompense to or consent from that even with the advantages which Ireland has as those who generated the material. Are you aware of a very distinct country and the advantages which the any successful models for doing this? Irish Times has being run by a trust, that in fact Irish Professor Blain: Could you open up that question newspapers are also having to fight a defensive battle for us a little more, please? against London titles as much as, for example, RTE, indigenous Irish broadcasting, has an enormous Q58 Chairman: These two organisations are asking amount of competition on its hands from London. the Government that they use eVective means in This does not sound very optimistic, but even when which Google and others could be prevented from you have most of the advantages which you can making profits. imagine going for you, because I heard our Professor Blain: It is very diYcult to do that. It is predecessors in the previous session say that their very diYcult to regulate international media and it is ideal model might be a trust rather like the Scott very diYcult to regulate one provider in the internet Trust for a Scottish newspaper, even if you have that without regulating lots of providers on the internet. you are still in a competitive situation. You were Mr Boyle: I do, as a Society of Editors member, talking about “bucking the trend”. I am not sure if absolutely understand where they are coming from. anyone is moving in the right direction, but if you Paul’s members who he represents are slogging at the look to the Irish media you probably have a slightly coalface and finding it incredibly tough and the better model there for survival than we have in conditions are worsening and they are finding it very Scotland, but they are still feeling the competition hard. To see Google, et cetera, use that for absolutely from London. This is partly a problem in Scotland nothing for profit is obviously diYcult. It is a as any small Anglophone country is going to have a reasonable problem that information does cost lot of competition in broadcasting and the press money. It is something we have spoken about quite from bigger producers producing very attractive a lot today. Sending journalists out to the court, to products in the English language. If you are in parliaments, et cetera, is a hefty undertaking. Norway or Denmark your audience in a sense is captive in the way that ours is not. The language Q59 Chairman: Do you think then that the problem is a very important one here. It is in Newspaper Society and the Society of Editors are miniature the problem which London broadcasting asking something which is not achievable? producers have with people bringing out very Professor Blain: No. It probably is in theory expensive American broadcasting products. It is to achievable but it is part of a much larger debate some extent an English language diYculty. about intellectual property rights. I do not think anyone contests that there are very sound ethical arguments which would wish to restrict the free use Q55 Mr McGovern: Do you not agree that it is which people make of other people’s intellectual something of a paradox that elected Members here property in the present day. It is not just the internet, in Westminster want these newspapers but cannot as we know; it is music downloads, it is pirate videos; get them but at the same time they want us to it is a whole area of things. The practice of doing it support them? can be legally complex and of course very expensive. Professor Blain: Yes, it is very odd. That is a change It may be that this is the kind of issue which is worth because it used to be much easier to get both The pursuing. 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31 March 2009 Professor Neil Blain and Mr Martin Boyle but it may be the kind of restriction which has to be Q61 Pete Wishart: As a professor who has obviously sought as part of a larger settlement about engaged and involved with students that must intellectual property. I agree that it is unfair, but in concern you quite a lot because what you are practice these things, as we have seen in the field of actually suggesting is because of changing music or cinema, can be very diYcult to regulate. technologies that young people are not as informed as they should be or as informed as perhaps our generation was. What are you doing to try and Q60 Pete Wishart: These are the very issues that address that? How are you getting this content onto Digital Britain caps review was set in place to try and the places where young people are accessing that tackle and look at and there are some useful things information? How do we bridge that gap? If you in there about responsibility that should be placed guys do not have the answer to that, who has? on the internet by providers, for example, and I Mr Boyle: The original question was what are we think the Google thing that was asked by the Chair doing? One of the things that I personally strongly is a perfectly feasible example. Why should other believe is that journalism training needs to remain people’s intellectual property be used on these sites focused on core journalism skills. We cannot be too without any sort of recompense? Can I challenge this seduced by Twitter, by Google, by Facebook and assumption about a generation lost to the media. I lose sight of the fact that there are core things that journalists need to be able to do. The guys who come do not accept that at all. I have got a 17-year-old son to interview you to ask you questions need to be able who is oV to university after the summer and he is to do certain things. For us we still base all of our particularly well-informed and his peer group are training on news writing, shorthand, law and public particularly well-informed young people. I think it is aVairs. Each journalism student is trained how to do to do with proliferation in news availability. There is those basic skills before they go out to learn how to something like four or five full-time news channels do anything else. For us it is under the auspices of on TV and whether it is Facebook or whether it is NCTJ. The National Council for Training of MySpace, the news appears and emerges on these Journalists is UK-wide. It guides journalism training things, and also the way that they find the down a specific training route which is essentially information that they require on the internet geared towards ensuring that journalists are as well probably much more adeptly than I will, or Jim will, informed and as well trained as they could possibly or the Chairman would. They do have this ability to be. For us, shorthand, legal knowledge, knowledge do it. Your responsibility is in preparing the next of political aVairs has to always be at the centre of it generation of journalists and how they engage with because journalists are and should be professionals. that. What are you doing as professors and the It is a special skill and we do not want to move away teachers to try and make sure that the new from that. journalists of the future are prepared for the new Professor Blain: It is relatively easy for those of us technologies? who have journalism or media students to answer Professor Blain: I think you are right to caution your question because, by and large, a lot of what we against sweeping generalisations and we do demands that they know a great deal about what acknowledged that earlier about how people use the is happening in the news and they tend to be the media. One encounters a rather extreme set of claims types of students who are doing this anyway. If you here about that. As somebody who heads a consider the 50% or so, let us say, of the Scottish department which teaches journalism students, population now in tertiary education, I think there is journalist students by the nature of what they have a broader question about those who do not have any chosen do tend to engage a great deal with the news, specialist interest in news about what is happening as do students in most forms of media education. I there. I do not think that is something that can be would agree with you to a point. One of the things picked up for the first time in the tertiary colleges or we are finding is that younger people, and students the universities. In a sense this process has to be for example, are consuming news information just wound back down into schools. I view with on diVerent media now. For example, there is some nervousness, for example, the de-emphasising of the degree of convergence where people want to pick up teaching of history. I am old enough to remember information from broadcasting on their computer. that one of the central subjects I studied at primary We would have to get into quite a lot of detail about school was a thing called “general knowledge”. I think these are things that you have to wind back which groups are engaging with news and which are right to the very beginning of the education system not and that would have to do with socioeconomic and then keep them there. As you have said, there are factors and age factors. I think there is a general a lot of well-informed people in the 18–25 or 16–25 tendency for there to be less viewing of television, year group around, but I think there is a trend less listening to radio, less reading of newspapers by towards disengagement with the kind of media under 25s but I agree with you they are certainly not which give people a broad range of information in a generation lost to the media, however the question relative depth. We are talking about something is whether in switching media, whether in moving to relative which is nonetheless quite significant. social networking sites, moving to mobile telephony, there is a degree of disengagement with hard Q62 Chairman: You will be aware that UK information of the sort which has been carried by advertising expenditure in newspapers has fallen by traditional media. People are getting diVerent results 12% while overall advertising expenditure has fallen measuring this with diVerent groups. only 4%. 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Ev 14 Scottish Affairs Committee: Evidence

31 March 2009 Professor Neil Blain and Mr Martin Boyle

Mr Boyle: The move towards advertising on the Professor Blain: The one thing I find just informally internet and towards spending on the internet, and from talking to groups of students about what they Google overtook television channels last year for the read—and I do not know how we got this far in first time in attracting advertising revenue, has without mentioning Metro—is that if they do pick certainly hit newspapers. When you can clearly look up the newspaper and if it is the only one they look and see that newspaper sales are going down, at it is the Metro. In Glasgow they pick it up as they advertisers are going to move away from that; it is a get on the underground in the morning. If you just natural reaction. do an informal study of who is reading what you see an awful lot of Metros. I do not know if there is a lesson there and, if there is a lesson, I am not quite Q63 Mr Walker: There are also fewer jobs being sure what it is for traditional print newspaper advertised and fewer properties being advertised in producers in that. newspapers as well and if there are fewer of those on Mr Boyle: At the moment what we have to look at the market there is just less revenue. is the traditional print producers have a problem in Professor Blain: There have been very significant that things like Metro and the internet are working decisions, as we know, like councils deciding to better. What we need is possibly a period of remove advertising en bloc. The core point is that for assessments, protection and help to ensure that we certain kinds of advertisers if you are looking at year do not lose vital titles as they try to find a new way on year very substantial declines in the circulation of through this problem. They are going to have to find newspapers you start to think this is not the best a new way through it because what they have at the place any more. All of us now—we do it in the moment is not going to work. universities—still like to place most adverts in Professor Blain: Let’s imagine for a second that print certain key print publications, but I suppose if it newspapers just stopped existing and you might say came to a choice that you could only do one or the in that case would not the advertising revenue which other we would all tend now to go to the internet. they have been enjoying in print form eventually migrate to the internet so that they would become Q64 Chairman: We see this change in advertising viable? The answer appears to be no because during revenue, 2007 on 2006 is -0.3%; 2008 on 2007 is that process a lot of that revenue which finds itself -12%. How do you think it will be this year into such a diVuse number of internet sites that they compared to last year? would simply never get that back and it would not Mr Boyle: I think it is only going to continue. I be just that they did not get all of it back; they would would like to hope that it is not going to continue get a fraction of it back. There is a kind of paradox exponentially like that but I do believe it will be a here which has been recognised for some time. The continuation of that. With the move away from local newspaper industry itself knows that it is moving government adverts from newspapers onto the towards the internet but it also knows that that spells internet and so on, even the classifieds, taking it the end of financial viability and nobody is very sure down to the smallest level and people selling their what to do about it. The Americans looked down cars, used wedding dresses and so on, those sort of this road slightly further than we did and they still things are moving to Autotrader.co.uk rather than have not really come up with an answer either. It the Greenock Telegraph and that has a big hit on a does suggest the need for some very proactive paper of that size. response if particularly societies take the decision Professor Blain: We sometimes forget that there is that we need to do something to preserve at least a still a steady take-up of internet use by a significant proportion of what we have got. The 17 or whatever proportion of the population who have not been it is titles that we have in Scotland on a daily basis “wired” so if you think of the damage which has just now are just not going to survive. The Scottish been done to traditional media in terms of market is very heavily crowded. It is often seen as the advertising revenue by only a substantial proportion most competitive market there is because of the of the population habitually using the internet, when presence of both Scottish and English newspapers in you have a scenario when a very large number, the it. Despite the fact that the Scots are very major overwhelming majority habitually use the internet, newspaper readers, we are simply not going to have that suggests a migration of even more revenue than that number of titles in 10 years. It is not possible. now. Unfortunately, it is very hard to find an optimistic scenario for this sort of revenue returning. Q66 Chairman: How does the size and structure of the Scottish press industry compare to that of other Q65 Chairman: How many free newspapers are there countries of similar size? Do the closures and job in Scotland? Is this proportional to the number in losses currently being experienced represent a the UK as a whole? If not, what are the reasons for movement to a more press newspaper industry? this? Professor Blain: It is hard to compare one country Mr Boyle: I would say it is fairly similar. It generally with another because there are some small countries looks the same across the board. More have been which maybe have only one or two very successful lost in England than have so far in Scotland newspapers. That, in a sense, is one of the diYculties certainly. I think it is around 50 closed in England. that we face in Scotland that because of a At the moment that has not crossed north of the competitive situation with a number of Scottish border. editions of London newspapers and those remaining Processed: 06-07-2009 19:33:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG1

Scottish Affairs Committee: Evidence Ev 15

31 March 2009 Professor Neil Blain and Mr Martin Boyle titles which are published in Glasgow, Edinburgh or written by a third party via a press release that is elsewhere, we have many more newspapers than any barely checked and it is shoved in. How can we other comparable small country. reverse that? Mr Boyle: That is undoubtedly the case. I share the Q67 Pete Wishart: Is that actually correct? Are you concern 100%. As a former journalist moving from including the English editionalised titles? a newspaper into academia, some of the papers I V Professor Blain: I am thinking of what we might call worked in now have one half or one third of the sta “dailies” and not necessarily including my local doing exactly the same thing, quite often on half the paper, for example, fighting well for survival, the wages as well. That has an enormous impact on all Paisley Daily Express. It is unusual to have because sorts of things and quality is the first one. On a paper Y we have got the Scottish Daily Mail, The Sun, The when I was there with a reasonable sta ng level we Record and so on. It is unusual to have in that sense have someone at the local council most days; we national dailies in that number. The Sunday market would have someone at the court for anything is pretty crowded as well. approaching a good story; we would have someone there for every single fatal accident inquiry. Now they cross their fingers and hope for a press release Q68 Pete Wishart: We do not have as many most of the time. You are tied to a phone and a desk. exclusively Scottish titles as, for instance, in Ireland These are well-trained, well-intentioned and Denmark, comparable nations. We have more professionals who genuinely want to do a good job titles because we have a peculiar situation where we and, quite often, cannot. That is only going to aVect get UK-based titles editionalised in Scotland, so it is the quality of our titles. not really like with like, is it? Professor Blain: It has always been the case that the Professor Blain: But it is that which is really causing Scottish newspapers relied, for example, more on the problem. If you get a situation where the Daily press agency reports than the London papers Mail has been selling consistently between, let’s say because they have generally been less well-resourced. 115,000–120,000 in Scotland, which, as has been In some ways the answer to your question rather pointed out, is now more than The Scotsman and depends on where we are talking about. It is perfectly Herald sell between them. The Telegraph and The possible that London, Paris and various other places Times now sell between them more than The will still, because of the size of their markets, be able Scotsman which is a situation one could never have to support reasonably well-resourced print titles, envisaged a number of years ago. even if the overall numbers are reduced, which they probably will be. The trouble is with a country of five Q69 Pete Wishart: The Courier sells more than The million people like Scotland is that is a much more Scotsman and The Herald combined. open question. I heard at the end of the last session Professor Blain: Yes, and the Press and Journal is still somebody saying well the answer is the Scott Trust selling just 80,000. Although this situation is very or an Irish Times trust in Scotland, but the Scott artificial having London-based tartan editions or Trust only happened because one of the Scott family editions wearing a kilt in Scotland, that is the one decided to give quite a lot of money for a variety of which we face. It is never very easy to propose reasons to set up that trust. It usually needs a something which is counterfactual. What would the proprietor to do that but the big Scottish newspapers Scottish newspaper industry be like if the Mail, the are owned by public limited companies which have Scottish Sun, The Telegraph, The Times, The shareholder obligations, shareholders who have Guardian and The Independent were not there? I do profit expectations and I do not know how you not know if there is any point in speculating because magic a trust situation out of a plc. they are there. What it does imply is if we are collectively worried about that eVect, there needs to Q71 Chairman: Can I thank the witnesses for their be a Scottish newspaper good enough and of a high attendance. Before I declare the meeting closed, enough quality to sell more copies than either The would you like to say anything in conclusion or add some area which we have not covered? Scotsman, nor The Herald or the P&J are doing Mr Boyle: The future of local, regional and national just now. press in Scotland is incredibly important. It is going to go through five or 10 years of intense pressure. Q70 Mr Walker: There are only two careers I would There are going to be continuing drives for profit, advise my children not to go into: politics and there are going to be continuing drives for survival journalism. Journalists seem to be distraught about and that is going to impact on quality. From the the quality of politicians and politicians seem to be training at colleges and universities through to a distraught about the quality of journalists and number of groups we are trying to protect that as journalism; and bankers, although there are massive much as possible and it is good that we are now compensations still to being a banker! I do have a discussing the potential avenues that we can look at. genuine concern as far as the press in the evidence Professor Blain: I would add that rather than being given before where you have fewer journalists being optimistic or pessimistic about the future of the asked to produce more copy and that has to impact Scottish press, it might be better to be determined to the quality of journalists and their ability to do their save at least one quality Scottish newspaper. job and you will eventually get newspapers that are Chairman: Thank you. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [SE] PPSysB Job: 431413 Unit: PAG2

Ev 16 Scottish Affairs Committee: Evidence

Wednesday 6 May 2009

Members present Mr Ian Davidson

Mr Jim Devine Mr Charles Walker Mr Jim McGovern Mr Ben Wallace David Mundell Pete Wishart Lindsay Roy In the absence of the Chairman, Mr Davidson was called to the Chair

Witnesses: Mr Tim Blott, Regional Managing Director, Newsquest (Herald and Times), Mr Mark Hollinshead, Managing Directors, Nationals, Trinity Mirror plc, Mr Michael Johnston, Divisional Managing Director, Scotland, Johnston Press, Mr John McLellan, Editor, The Scotsman and Mr Jim Raeburn, Director, Scottish Daily Newspaper Society, gave evidence.

Q72 Mr Davidson: Good afternoon. Welcome to this Mr Blott: From the perspective of the Herald & meeting of the Scottish AVairs Select Committee. Times, we are still profitable but our profits are Perhaps I could ask you to introduce yourselves for considerably down year on year. Part of that is down the record. to the recession and part of that is down to Mr Raeburn: Jim Raeburn, Director of the Scottish structural change. Daily Newspaper Society, which represents seven members companies. Those seven are Aberdeen Journals, D C Thomson & Co, The Scotsman Q75 Mr Devine: When you say “Herald & Times” Publications Ltd, Scottish Daily Record and Sunday are you talking about the parent company or just Mail Ltd, the Herald & Times Group, News about the Herald and the Times? There have been International Newspaper Scotland and Associated major recent redundancies. The Herald part of the Newspapers in Scotland. company was very profitable. Mr Blott: I am Tim Blott. I am the Managing Mr Blott: That is a good point. There are four Director of the Herald & Times in Glasgow. businesses that form the Herald & Times Group. Mr Hollinshead: I am Mark Hollinshead. I am the There is a printing business, there is an internet Managing Director of the Nationals Division of business, there is a newspapers business and there is Trinity Mirror plc, which comprises the Daily a magazines business. The newspapers business has Mirror, the Sunday Mirror, the People, the Daily undoubtedly suVered considerably.When we bought Record and the Sunday Mail in Scotland. the business in 2003 the newspaper business Mr McLellan: John McLellan, Editor of the represented more than 60% of our profits. It now Scotsman and recently appointed Editor in Chief of represents, and will do this year, probably just over The Scotsman Publications Ltd which includes 30% of our profits. Scotland on Sunday, the Evening News in Edinburgh and the Herald and Post series. Mr Johnston: I am Mike Johnston. I am the Q76 Mr Devine: What would that be in figures? Divisional Managing Director for Scotland for Mr Blott: I am sorry, we have not published our Johnston Press. I am also Managing Director of The audited accounts for 2008. Scotsman Publications Ltd, of which John is an Mr Hollinshead: The Daily Record and the Sunday editor, and I am also here today wearing my hat as Mail are of quite specific interest. It remains a President of the Scottish Newspaper Publishers profitable business, but the organisational/structural Association which represents the weekly press in change we are undergoing at the moment is a critical Scotland. business imperative to ensure the future viability of our business and of, in particular, two iconic Scottish Q73 Mr Davidson: Thank you. Are there any newspapers. Historically, Mr Devine, the business opening statements that anyone wants to make? I has been profitable, but, looking forward, given the presume you have seen the evidence from the issues that Tim has highlighted in terms of increased previous hearing that we had. Is there anything you newsprint prices and a reduction in discretionary V want to say now or do you just want to go straight expenditure which is a ecting newspaper purchase into questions. currently and a cataclysmic downturn in advertising Mr Hollinshead: Straight to questions. across the whole of the UK, not just in Scotland, that Mr Davidson: Okay. That is fine. requires us to cut our cloth accordingly and look to the future in terms of how we protect the future shape of our business for all our employees. Q74 Mr Devine: I am wondering about your profit levels of your newspapers at the moment. Are they down? Were they up before the current economic Q77 Mr Devine: When you say “still profitable,” crisis? Has it been reflected or are they profitable at how much do the Daily Record and Sunday Mirror the moment? make? Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

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6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Mr Hollinshead: Our statutory accounts will be Q82 Mr Devine: Can I be clear that your S1 business filed—October 31, I think, is the deadline—and we is mostly classified advertising. will release an interim management statement next Mr Blott: It is classified advertising. Wednesday at our AGM, but we are looking at mid- teens as a forecast currently. Q83 Mr Devine: It is cars, it is jobs. It is not a newspaper. It is not news or anything similar, is it? Q78 Mr Devine: Is that up or down? Mr Blott: It is not from our newspaper websites, that Mr Hollinshead: That is significantly down. is true. Mr Hollinshead: I think it is worth defining the two elements of the internet to which Mr Devine is Q79 Mr Devine: How about the Scotsman, John? referring. You are referring to companion Mr McLellan: We are not making a profit this year, newspaper websites. Tim is referring to more vertical but on the details I will defer to my commercial markets, where we are looking at particular colleague. classified pillars: cars, jobs, homes—which are Mr Johnston: The situation for Johnston Press and, across the board generally still profitable, albeit job more specifically, The Scotsman Publication, Mr sites are under equivalent pressure compared to their Devine, is that the business made a small profit last print brands. Companion newspaper websites are a year. Revenues are significantly down. Revenues are whole new venture for us. Generally they make a down about 40% year on year. The Scotsman small profit but we are starting to see some real Publications is currently going through a period of changes in worldwide trends. For instance, about re-organisation, and that re-organisation is nine weeks ago in the USA the Seattle Post absolutely fundamental to ensuring the Intelligencer closed as a newspaper—a very, very sustainability of the business. The re-organisation famous newspaper. It was making significant losses obviously aims to ensure a profitable business, a and they were forced into the very diYcult decision modestly profitable business at year end. Obviously to close the newspaper. However, they decided we are in the hands of what happens in the current simultaneously to retain their newspaper companion economic climate, which is extremely hard—in fact, website, which would be manned by 20 journalists. probably the worst that anyone within the industry After just three weeks of operation of the online side has seen. The situation for Johnston Press, the on its own, its traYc reduced by circa 25%, if I recall holding company, is that the company is trading the facts correctly, which indicates that to have a profitably at an operating level, but it is quite well very good companion newspaper website you need a publicised that it has an issue with debt that was very good newspaper to feed it with unique content. accumulating through a series of acquisitions. That is a key strategic challenge for the whole However, operating profit is significantly down year industry and one with which all my colleagues are on year. The weekly papers in Scotland are trading wrestling. profitably but at a much reduced level on the levels that they were trading at last year. Q84 Mr Devine: Before we move oV Mr Blott’s point, where he said 40% of the profits together were Q80 Mr Devine: Was that the reason for your press from the S1 site, that is only the classified release on Friday? advertising site. Mr Johnston: It was not a press release. We are Mr Blott: It is. currently in discussions with the National Union of Journalists about the content side of our operations. We have had a number of re-organisations across Q85 Mr Davidson: I think we are really wanting to this year that aVected all departments. We have to pursue the question of news, as such, rather than scrutinise the whole of our business from top to simply other forms of advertising. Coming back to bottom. Mr Devine’s point about the internet element of the Mr Raeburn: My only comment is backing up that newspaper, is that profitable? which Michael has just made. Certainly our public Mr Blott: As Mark suggested, slightly profitable. It companies, Johnston Press, Trinity Mirror, were certainly would not be able to sustain the business quoted earlier this year as saying that in the first two overall. months of 2009 revenues were down 36/38%. I suspect that is representative of what is happening in Q86 Mr McGovern: Mr Blott, I think you said there the industry. That comparative period was when we are four factors in the Herald, one of them being were seeing a downturn at the beginning of 2008, so magazines. The only Herald magazines I am aware that indicates how very diYcult the situation is. of are the Saturday and Sunday supplements. Are they a completely separate entity? Q81 Mr Devine: You referred to the impact of the Mr Blott: That is a separate division. It includes The internet. Do you know of any newspaper in the Scottish Farmer, The Great Outdoors, and some of world that has made a profit from going on to the our niche publications. internet? Mr Blott: We make a profit with our internet Q87 Mr McGovern: It is not the supplement on the business. Last year our internet business, which is Saturday and Sunday. called S1 in Scotland, accounted for about 40% of Mr Blott: It is not the supplement on the Saturday the total company profit. and Sunday. It is a separate division of our business. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG2

Ev 18 Scottish Affairs Committee: Evidence

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Q88 Mr McGovern: Which profits are more that would make them sick or stressed, but it is a profitable and which parts are maybe making a loss diYcult time. To answer your question “Are or are less profitable? industrial relations good?” I think industrial Mr Blott: All parts of our business are making a relations are pragmatic. I think everyone profit. Our magazines, our printing, our internet and understands the terribly diYcult problem that the our newspapers businesses are making a profit but industry faces, which is the hardest problem that it there has been a significant change in the balance of has faced in anyone’s lifetime. To go back to the web profit over the last five/six years. Certainly the issues that were being raised earlier— majority of our profit was driven by newspapers five/ six years ago and now it is not. Q93 Mr Wishart: If we could stick with industrial relations just now. I am grateful for that. Q89 Mr McGovern: As the Chair said, news was Mr Johnston: I think we drifted oV the web issue— previously the big profit maker. Mr Blott: Yes. Q94 Mr Wishart: Yes, but we are on to something Q90 Mr McGovern: In order for the four, what is it else, if you do not mind, just to give the opportunity now? to the other people being here. We keep hearing from Mr Blott: As I suggested before, newspapers now the union that this is the sharp practice of the adds up to just over 30% of our profits, our internet management involved. We want you to have the business generates about 40% of our profits, our opportunity to say how you would characterise printing business generates about 20% and about industrial relations and morale in the Mirror Group 10% is our magazines business. just now. Mr Hollinshead: We are referring specifically to the Q91 Mr Wishart: We had the unions here a couple of Scottish Daily Record and the Sunday Mail Ltd, not weeks ago and we were hearing of some horrific and the Mirror titles. As Mr Holleran indicated at the appalling situations of stress in the workplace, of last hearing, we have “consulted extensively”—I people being unable to cope because of the new think those were his words—with the Scottish Daily conditions that were forced upon them. We heard Record and the Sunday Mail with not only myself examples of journalists missing lunch breaks or but senior editorial management and our working extra shifts just to make sure this could administration team. We did get a disappointing and happen. We see strikes in the newspaper industry unfortunate conclusion where industrial relations akin to what we saw in Wapping in the early 1980s. did break down, Mr Wishart, which resulted, as you We are seeing people being sacked and asked to re- are aware, in industrial action. We are now back apply for their jobs. How would you characterise around the table with regard to negotiating a morale and industrial relations in the newspaper sensible solution as to how we move forward and, as industry in Scotland just now? I said in my first remarks, to protect the future of our Mr Johnston: I will speak for Johnston Press. We newspapers. The changes that are taking place are have not had any strikes. There is a very diYcult technology led. They look at an element of our situation that both the management and the trade business, the editorial production aspect of our union side face, and for all employees. I work pretty business, because you need content. Great writing, closely with the trade union side. I did see the great journalism and great photography, both in print and now online, remains very much at the heart evidence that Paul Holleran gave. With regards to Y the stress and anguish of the staV, I do not disagree of our future business proposition. They are di cult with him. It is an incredibly diYcult time. Hard times. I have worked in the newspaper business for decisions are being made and people are having to 27 years. I went through the transformational leave the business, but at the same time, in my own change that took place in the late 1980s, which was company—and I know the same applies to the rest of an enormous transformation from hot metal to the industry—we are fully committed to health and single key, and we are now about to embark on an safety legislation. We meet all our requirements. My enormous paradigm shift in the way we produce our own company operates its health and safety newspapers which is going to impact on our morale consultative committees and—- and we need to consult with our workforce, with our journalists, with our advertising colleagues and with our circulation colleagues to make sure that they Q92 Mr Wishart: Do you think that industrial understand how we move forward. relations are quite good just now? Mr Johnston: Let me finish. We have employee forums and so forth, so there is input from the trade Q95 Mr Wishart: I think everybody around this union side and from the employees. The trade union table accepts and acknowledges the challenges in the side have spoken to us about the situation. They newspaper industry, and we have all seen the figures, have apparently done an audit in parts of the but it does not seem to be the right strategy almost industry. I have not seen that audit, although I have to pick a fight with the unions. We saw the example asked to see it. It was first raised with me about eight at the Herald titles, for example, where everybody months ago and I am still waiting today. Certainly, was made redundant and asked to reapply for their as soon as I see or have anything raised to me, I jobs. What sort of sense does that make, when you would act accordingly. It is not in anyone’s interest need the journalists to work with you in order to for people to work antisocial hours, to work hours bring these titles back? I will ask that directly to Tim. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

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6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Mr Blott: I was interested in Paul Holleran’s Mr Johnston: The Scottish Daily Newspaper Society evidence before the Committee. I think he pointed is a trade body. It is an association of companies in out a slight irony and I will reinforce that irony. In the daily sector in Scotland. It has no part to play a sense, D C Thomson are seen within the Scottish within trade union negotiation. publishing industry as a very good employer. Their attitude towards the unions is perhaps diVerent from Q100 Mr McGovern: So how can you quote that some of the three companies represented here. I about trade union negotiations in an answer to my would say that The Herald, the Record and The colleague? Scotsman have traditionally had a very strong union Mr Johnston: I do. My job is Managing Director of environment. The other publishing company that I The Scotsman Publications Ltd. I enter into would quote in Scotland that probably sells more discussions with employees and trade unions all the newspapers than any other is News International. time. That is how our business works. As you alluded to in terms of Wapping, News International similarly does not have a strong union Q101 Mr McGovern: You either cannot or you are environment. I would say that the morale within refusing to answer my question. those particular businesses and in terms of the Mr Johnston: I am answering your question. I fully evidence that has been supplied before and amongst consult with trade unions. I pre-consult with trade the journalists may be seen as even higher than unions. We have a very business like relationship amongst the heavily unionised businesses with trade unions, where, on all of the organisational represented at this table. That is the irony of the changes that have been looked at and any that have situation. I would say, as a former journalist myself, been implemented at Scotsman Publications or that morale is shifting sands: morale can move from within Johnston Press companies where there is a Monday morning to a Friday afternoon and trade union participation, we fully consult. With journalists are not necessarily the most positive. regard to D C Thomson, D C Thomson are a member of a trade body that talks about marketing Q96 Mr Wishart: How is sacking all your journalists and lobbying and does not have any input in day-to- and then asking them to re-apply for the job going day trade union and employee negotiations. to improve morale? Mr Blott: We have been negotiating with the unions Q102 Mr McGovern: Mr Raeburn, you wanted to for some considerable time to try to address some make an input into this. anomalies in their terms and conditions. Every year Mr Raeburn: There is an important distinction we try to address this situation in terms of voluntary between a trade association and an employers’ redundancies. Every year the union would accept the organisation: the latter engages in industrial voluntary redundancies and not address the fact of relations matters; a pure trade association does not. the anomalous terms and conditions. In the end, in Employment relations matters are all for individual desperation, rather than continually losing very companies and not for their representative body. good staV, we decided that we needed to take Mr Davidson: We understand that, but the Sunday somewhat desperate action. All I would say, much as Post in D C Thomson was referred to by yourselves the newspaper company was criticised at the time for and I think it is reasonable for my colleague to taking such drastic action, is that we did not incur pursue clarification on that matter. any industrial action, the jobs were dealt with and we did not lose one day’s work during that process. Q103 Lindsay Roy: Gentlemen, I think you would accept that, as employers, when an individual Q97 Mr McGovern: Mr Blott has possibly pre- indicates their perception of high levels of stress empted the question, but the question I want to ask amongst the workforce there is an obligation on is to Mr Johnston. In your position as President of management to look at that and to see to what extent the Scottish Newspapers Publishers Association and that is the case. How have you dealt with this Vice-President of the Scottish Daily Newspaper perception? Have you looked at it clinically and Society, could you tell me if DC Thomson are come up with some outcomes or ways in which to members of either of these? alleviate stress or, indeed, is it a diVerent perception Mr Johnston: They are members of the SDNS. that you have? Mr Hollinshead: Across Trinity Mirror we take staV welfare very, very seriously indeed— not just in our Q98 Mr McGovern: When you mentioned to Mr nationals operations. One of my first challenges Wishart about consulting with trade unions, et when I moved to Glasgow in 1998 was to knock cetera, who exactly do D C Thomson consult with? down an old, antiquated, unfriendly building and Mr Johnston: I do not know. You would have to ask move to a bright new, open-plan, ergonomically D C Thomson. friendly environment that is now on Central Quay. As part of that process, the objective was to ensure Q99 Mr McGovern: But you are President of the all health and safety criteria were exceeded. I think Association which includes them. You mentioned in we have achieved that with our move to our new answer to an earlier question, presumably on behalf premises. We have a staV gymnasium, which is of this Association, the consultation with the unions. staVed by two full-time members of staV. To cope I am asking you, in relation to one of your members, with their part of the stress management policy, each who do they consult with. individual has free access to a personal fitness plan. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG2

Ev 20 Scottish Affairs Committee: Evidence

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

We have a staV restaurant which has healthy option Q106 Lindsay Roy: I accept what you are saying, but opportunities—across the week and not just on a I was really wondering, given that Mr Holleran gave fad-by-fad basis. We have an employee counselling his advice in March, if any of the employers have service; we have an occupational nurse facility which said, “Let’s have a fresh look and see if there are can be called on by employees; and we have an on- underpinning factors that we are not aware of?” Has site Reiki and masseuse facility which our staV have there been any initiative to follow this through? to pay for but at highly subsidised rates, for them to Mr Johnston: I have seen Mr Holleran three times engage in that sort of stress management policy. We since March and on every occasion I have picked up take it very, very seriously indeed. It is a critical that issue with him. Most recently I saw him three business imperative to make sure that all our days ago. employees operate in such an environment. Q107 Mr Davidson: He is now happy, is he? Q104 Mr Davidson: You are not seriously saying to Mr Johnston: Mr Holleran is never happy, because us, though, that the threat of dismissal and the Mr Holleran is fighting hard for the things that he drastic changes in working conditions that there represents of course. have been at your newspapers are balanced by healthy options in the canteen and the use of a Q108 Mr Davidson: Has the situation improved in masseur, are you? Mr Holleran’s eyes? I did not have the opportunity Mr Hollinshead: No, I am not saying that at all. I to be here at the last meeting, but some of the was asked the question how we relate to the stress- evidence he gave us was really quite worrying, from related policy and environment. our perspective, and I am sure from the perspective of the staV. Are you saying that the situation has Q105 Lindsay Roy: I think that is a highly now been considerably improved? commendable thing to have been doing in terms of Mr Johnston: My issue with it is that I do not know. environment. I was looking more at inquiring into Mr Holleran obviously here mentioned a health and whether this has been a result of perceived safety stress audit that he has carried out across the harassment, intimidation, or just changes in work Scottish press and I have not seen that health and practices that people cannot cope with? I am safety press audit. I have asked to see it, because I interested to see what work you have done, as have told him that it is absolutely our case that we employers, to find out what are the root causes of the would not want issues to do with stress and stress or the perception that there is a high level of antisocial hours. He accepts that, but he has yet to stress? show me the figures or show me the details. If he Mr Johnston: At Johnston Press we have very robust shows me the details, then I will act immediately. policies and procedures with regards to any harassment or inappropriate behaviour or Q109 Mr Davidson: To follow up the point that Mr grievances. We take those all very seriously and we Blott made about your relationship with the staV in follow tried and tested procedures on those. You The Herald and the other group papers, Mr Holleran refer to the situation in which we all find ourselves did tell us about the procedure that had been in the industry, which is going through a very, very followed, when people were being told that jobs were diYcult time. Yes, people are feeling that it is a going. I do not know if you saw the evidence he gave diYcult time and, yes, there are diYcult us. Mr Wishart asked him whether or not there had conversations being had and so forth, but I can been consultation and discussion, and he said, “All assure you that if there was any evidence of any sort the staV were called into a massive room and an of harassment or intimidation, both the announcement was made. The editor-in-chief, management side and the trade union would be very Donald Martin, just said that they had all been made active in taking that up. I have not had a case redundant and that 250 of them had to apply for 210 referred to yet. If it was, I would robustly investigate jobs with worse conditions.” Is that true? it and follow procedure. With regard to health and Mr Blott: They were diVerent conditions. safety, as I said earlier we have a strong commitment to health and safety. We fully comply with all Q110 Mr Davidson: So apart from that, the rest of it legislation and we go further than that. We have the is true. health and safety consultative committee, we have Mr Blott: They were called into a room. What Mr employee forums and so forth, and anything that is Holleran missed out was that Mr Holleran was also brought up or raised with us as an issue we would meeting with us at the same time. absolutely treat as a serious matter and investigate. If I believed there was any area of stress, I would investigate it as a serious matter. As part of our Q111 Mr Davidson: They were all called into the recent reorganisations, we have investigated shift room and they were told that they had all been made patterns and so forth. We have consulted very redundant. Is that true? thoroughly with the trade union side and those shift Mr Blott: They were told that their jobs were at risk patterns have been agreed with the trade union to of redundancy. reflect proper working practices. We are not in the business of making people work long, anti-social Q112 Mr Davidson: At risk of redundancy. They hours that are going to impact adversely on their either were or were not told that they were health. redundant. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

Scottish Affairs Committee: Evidence Ev 21

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Mr Blott: They were being told that their jobs were the rather thinly veiled, underlying threat that if they at risk of redundancy. did not apply under the new terms and conditions then they were going to lose their jobs? Q113 Mr Davidson: So they were not actually sacked Mr Blott: That was a possibility, yes. at that time. Mr Blott: No. Q120 Mr McGovern: Was that a probability? Mr Blott: It was a possibility. Q114 Mr Davidson: But they were told the figures: 250 had to apply for 210 jobs? Q121 Mr McGovern: Which? Not a probability? Mr Blott: Yes. Mr Blott: If they did not apply for the job, they would not have a job. They would not have had a job Q115 Mr Davidson: Is that the best way of dealing if they did not apply for one. with these situations, do you think? Mr Blott: As I said earlier, we had tried to consult Q122 Mr McGovern: They would not have had a with the unions over a number of years to try to job. address these anomalous terms and conditions, Mr Blott: Not if they had not applied for it, no. without success. Albeit that it was drastic action, it did address the situation, and, as I have said before, we did not have a day’s industrial unrest. We Q123 Mr Davidson: So it was not so much a risk, it discussed and consulted with the unions and the was: “Accept this or you are sacked.” matter was drawn to a close. Mr Blott: Under employment law, you are not allowed to make somebody redundant immediately. They have to be put at risk and then there has to be Q116 Mr Davidson: Would you have taken it more consultation process. The staV were told that their seriously if they had had industrial action? The jobs were at risk of redundancy. suggestion seems to be that because the staV did not go out on strike, it was okay and they were happy with the situation, but that, I must tell you, is not my Q124 Mr Davidson: Yes, but my understanding is impression. that that was pointed out to Donald Martin at the Mr Blott: I do not think any of us are saying that meeting, that he could not make everybody people would be happy, given the current challenges redundant, and that was the stage at which it was within the industry, but we have to address the agreed that the jobs were being put at risk. That is in challenges within the industry and each individual Mr Holleran’s evidence for the last meeting of the company is going to address that in the way in which Committee. they feel it is best. Mr Blott: That is not my understanding.

Q117 Mr Davidson: Each individual company has to Q125 Mr Davidson: Were you there? deal with it in the way they think is best. If anybody Mr Blott: I was not at that meeting. Neither was Mr in any other industry had dealt with their staV in this Holleran. He was with me. way, do you not think The Herald and the Evening Mr Davidson: Indeed. Times and the Sunday Herald would have been thundering about Victorian employers and it not Q126 Mr McGovern: You said in an earlier response being the way to treat staV, not modern and so on that the new terms and conditions were not so much and so forth? detrimental, they were diVerent. You are a manager. Mr Blott: I think you will find that within the public Could you quantify that? Could you say they were sector that has been done in Scotland. I think you better? will find that The Herald and the Evening Times . . . Mr Blott: They were the same terms and conditions It was a point made by the First Minister in that I am on. Holyrood: “Would The Herald have not condemned this action?” The Herald did not condemn that Q127 Mr McGovern: The same salary? action taken, I think, by Glasgow City Council. Mr Blott: Not the same salary. I said the same terms and conditions. The same amount of holiday, the Q118 Mr Davidson: You lose me slightly there. The same amount of sickness— Herald did not condemn the action taken by The Herald. Is that what you are saying? Mr Blott: By another organisation which did exactly Q128 Mr McGovern: How did it compare to what the same thing; that is, saying to their staV, “We wish they had previously? Was it better? Worse? you to apply for your jobs under diVerent terms and Mr Blott: In some cases they would have been worse. conditions.” Q129 Mr McGovern: And in some cases better? Q119 Mr McGovern: To pursue that point, you Mr Blott: In some cases they would have been the contradicted the evidence we heard previously or same. you said it was not quite complete and that the fact was that people were called in to a room and told Q130 Mr McGovern: In some cases better? that their jobs were at risk and that they should Mr Blott: No. reapply under diVerent terms and conditions. Was Mr McGovern: Thank you. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG2

Ev 22 Scottish Affairs Committee: Evidence

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Q131 Mr Wallace: I apologise for being late to the with regard to regulation of the relationship to do opening. I have listened to what you have said and I with the merger rules. The other issues are to do with am under no illusion about the pressures the media how government approaches funding for media and industry is under. I think it is all very well having this the suggestion that there would be public lovely conversation about people in tears and going intervention in other media when the newspaper to gyms but I recognise that the viability of industry has no public subsidy—so a distortion of newspapers, full stop, is under pressure. We are in the market-place—the suggestion that there would danger of talking about the employment issue. Is it be a change to do with public notices and the impact not the case that one of the diYculties you face in that has on the democratic fabric of our society and trying to run an eYcient newspaper is the the ability of local authorities to set up as competitor employment law itself is now so burdensome and publishers with their own publications selling there are so many obstacles it makes it very hard to advertising. Y e ciently ensure that the paper is running at Mr Wallace: On that, you have done quite well out maximum. In other words, you have to do it by of the public sector— making everyone redundant or on notice, rather than calling people into the room and saying “I’m terribly sorry but we are going to have to cut out this Q135 Mr Davidson: To be fair, we do have those and that” and there are real challenges about the down as questions to which we are going to come day-to-day running. In fact, you spend a lot of your later. We thought we would flog this issue to death money going through these employment law hoops. first and then move on. The end result is the same: the taxpayer is not going Mr Johnston: Obviously I cannot bear not putting to bail you out if you go bust. How much of a barrier is the current employment law to you running your my pennyworth in. I cannot say anything about the oYcial businesses? I do not mean maximum profit, I Glasgow Herald because I do not— mean eYcient as in responding to the market if people do not buy your newspapers. Mr Blott: I would agree with everything you have Q136 Mr Wallace: The question was about the said. I would say that a large proportion of burden of employment legislation and whether it management time is dealing with HR issues for those was too much. You did talk about restructuring. very reasons, as opposed to sometimes dealing with Every editor who comes before us talks about the the normal business activities. need to restructure to reflect the market. How much of that restructuring is facilitated by employment Q132 Mr Wallace: Could I ask for the view of other law or how much of it is hampered by employment newspapers. law? Mr Johnston: I am not sure I do agree with you. The Mr Johnston: We have an editor here who has been environment we have is one that fosters proper involved in restructuring. Maybe he would be the consultation and communication. At Johnston Press person to ask. we are believers in a thing that we call trade union Mr McLellan: I find myself agreeing with both my pre-consultation. We involve trade unions at a very colleagues here, in that I do think that some early stage. I have found it of great benefit to be able streamlining of the process for all concerned in to discuss how we take the business forward with reducing the amount of uncertainty there is amongst organised labour. We take consultation extremely employees but I also agree with Michael that the seriously and we follow our legal obligations right consultation process is highly valuable. When it is down the line. I have not found those to be entered into positively and with an open mind, then unacceptable. I think they are often a fair check, to solutions can present themselves which were perhaps be perfectly honest. not previously considered. That the law contains a requirement for us to consult is not a bad thing. Q133 Mr Wallace: Does that make your workers Where we get into diYculties is when we get into any happier? You might go through all the hoops consultations about consultations. It is a process and enjoy going through the hoops but are they that can grow arms and legs, and at some point happier? decisions have to be taken. Certainly, in our early Mr Johnston: I cannot judge how happy or unhappy experience, with some of the comments that have the workers are. been made in the light of our announcements last week, to a great extent I agree that people are going Q134 Mr Wallace: My impression is that they are to be unhappy because we are in a bad situation. We not any more happy there or at the Mirror Group or are not going to be able to keep people happy all the anywhere else. time. We have been criticised in the last week for not Mr Johnston: I think we are fundamentally missing specifying in which areas we want to make staV the problem here. This select committee is about the reductions, in not being more specific and therefore crisis in the Scottish newspaper industry which is people do not understand where the cuts may fall. If very real. That crisis has been caused by a number of we had been specific, we would then have been issues. The first issue is obviously an extremely accused of not consulting with them and making our serious recession. The second reason is a significant minds up before we had had time to talk to staV.We structural change within our industry. The other are really in a no-win situation in these issues are the environment in which we currently sit circumstances. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

Scottish Affairs Committee: Evidence Ev 23

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Q137 Mr Devine: You did say that morale at News Mr Hollinshead: John and I came up through the International and morale in Dundee is higher than Thomson training scheme many years ago and it was what it is in your other three papers. Are you a very good scheme and it set the gold standard for suggesting that trade unions are lowering morale? the industry. There are two forms of management Mr Blott: Within the Scottish newspaper industry, training. There is obviously generic, in terms of but particularly within some of the indigenous press leadership and motivation and improvement, but and particularly amongst the companies represented there is also very specific training, in terms of human here, we have a higher proportion of union resources delivered, in terms of employment law— membership in our companies as opposed to those we have a two-year legal update in terms of changes two companies that were described. As I have said in law, as Mr Wallace was alluding to—and very about morale, and as a former journalist myself, as a specific technology driven training courses: how to former member of the NUJ, I know that morale can recruit people, how to manage people. This is change. It is a very stressful job. I do not believe that embedded in our overall business and is critical to the morale is any diVerent within my particular our success. company or Mark’s company or Michael’s company compared with News International, but I was Q143 Mr Davidson: It has been suggested to us on a contrasting the evidence that Paul Holleran gave number of occasions, both formally and informally, previously to this Committee. that many of the people in senior management in newspapers might have been really good journalists Q138 Lindsay Roy: I think we would all recognise but they have been promoted not necessarily beyond that change is inevitable and you will not keep their abilities but out of their skill set. Do you think everybody happy all the time. You said consultation that is grossly unfair, Mr Blott? is not a bad thing. I would have thought it might be Mr Blott: I think it is grossly unfair. I think there is more positive to say consultation is a good thing. extensive management training done within all three Mr McLellan: Okay. of our companies. I know within Newsquest that we carried out a management training programme across all our first line managers and senior Q139 Lindsay Roy: Where I am coming from is a managers about 18 months to two years ago to comment from Paul Holleran, and I want your view ensure that all our managers were up to scratch. Like on this. He seems to feel that there is an issue here Mark, we continually, through our HR process, about relatively poor management. He says that identify managers who might have skills weaknesses people who have been good journalists or editors are and address those. promoted but are not given any management Mr Davidson: We are now going to move on to training and that this has been a big problem. Is that follow Mr Johnston’s agenda of items, to the case? Have you been trained, for example, in newspaper strategy. leadership and management? I know you have HR personnel. What is the background there in terms of Q144 Mr Wishart: This is interesting to me. It is consultation and working with unions? about what you guys are doing to address the very Mr McLellan: Certainly in my time as a young news- real crisis, as you said Mr Johnston, in the desk executive I had quite intensive management newspaper industry. It seems to me that there is only training—when Thomson Regional Newspapers one approach that has been deployed here and that is were still around. We had people management, we to merge your titles, to merge your Sunday title with V had business management—many di erent things your main titles. Newsquest have pioneered this which were not specifically aligned to the journalistic fantastic great innovation that has now been picked end of it. up by other titles. Is there any evidence from anywhere that this would have any success? What Q140 Lindsay Roy: Generic? evidence is there to suggest that merging titles in this Mr McLellan: Yes, and there were courses on which way will produce results? you rubbed shoulders with people from other Mr McLellan: The results we are looking for is to disciplines, advertising, production and what-not, reset our business on a profitable level. We are not and we still have similar setups within Johnston trying to kid ourselves that this is going to bring Press. People who are starting on the management about a revolution in the quality of the papers. It is rung at news-desk level are given the opportunities about making the business fit for the future. to go on people management courses and gain general management skills. Q145 Mr Wishart: What studies did you look at? Which examples did you use to come back on this particular strategy of merging titles? What research Q141 Lindsay Roy: You would be saying that the did you do to see if this would work? perception put forward by Mr Holleran is not Mr McLellan: As far as business strategies are accurate. concerned, that is only one arm of what we are Mr McLellan: All I am saying is that there are doing. The launch of websites, which is now opportunities for people to gain those skills. something which is taken as read, that required—

Q142 Lindsay Roy: How about the other businesses Q146 Mr Wishart: So you did not do any research of involved? any background eVect? Processed: 06-07-2009 20:29:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG2

Ev 24 Scottish Affairs Committee: Evidence

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Mr McLellan: I am not saying that at all. I am saying night or early in the morning who seem to have that you have alighted on one particular area of nothing else to do, so some of them must have 60, 80, activity, which is—- 90, 100 or more entries a month. I just wondered whether or not there was any element of repetition. Q147 Mr Wishart: But it seems to be the only one. Mr Johnston: There is a number of diVerent Tell us what else you are doing. There is stuV in measures. I have given you Unique Users, which are websites, obviously. unique computers using the site per month. There is Mr McLellan: If you give me a minute to speak, then obviously a core audience, so we know how many I might be able to tell you. We have launched repeat visitors we have, those people who visit more websites, we have launched product after product than once. We know how many pages they view. which have enhanced the publications, new Pages is another measure. For the Scotsman, it is magazines, and improved the papers themselves. currently between 12 and 15 million, depending on The process of change within the paper has been time of year and the month. ongoing as long as I can remember. We are now in a process where we are having to save money. We have Q152 Mr Wallace: On the comment that the only to find ways of making our editorial operation more aim of some strategic recovery has been merging eYcient. If you can find other ways of making us Y titles, I am conscious that there should perhaps be more e cient that does not go down this route, then three other places on the table, such as the Sun, the I would welcome to hear it. It is purely a question of Scottish Times and the Daily Mail, who undoubtedly saving money from the editorial function, but to have eaten into your circulations for all sorts of accuse us of not having any other approaches to reasons. How much of your decline in market developing our businesses just completely ignores share—and I accept the market has shrunk—has the developments that have gone on for years, year been due to bad strategic decisions of proprietors? after year after year. The best example I can give is the Daily Record,I have to tell you. Some whiz kid in the Mirror Group Q148 Mr Wishart: This is your opportunity to tell us decided to introduce the Mirror into Scotland at half exactly what you are doing, because it seems to us the price of the Daily Record. That was the same that your only strategy and your only approach that group. I do not understand. That is a strategic seems to be deployed is the one of merging the titles. bungle that would have damaged its own stable. Obviously you are going at your websites. We can see Mr Hollinshead: That happened in early 1998. I your activity, we look at your websites and we are joined in May 1998. interested in them. You are talking about new titles, but I think this is something all the newspapers have been doing for the past 10 or 20 years anyway.Where Q153 Mr Wallace: I am not trying to put the blame are the great ideas? Where is the new thinking about on you. That is a strategic decision. If you look on trying to get the Scottish newspaper industry up and these figures which the Scotland OYce gave, some of running? There must be something beyond just your demand has not collapsed, it has gone merging titles and sacking journalists. elsewhere. Some might be competitors to the Mirror, Mr Johnston: I will give you one. Scotsman.com, the Record, the Sun. How much of that has been which is our internet arm, now has 2.5 million users strategic failures? The Sunday Herald launching a month. It reaches a quarter of all Scots every itself. month. It is growing the audience in Scotsman Mr Blott: On that particular point I think we should journalism. stress that Scotland is probably one of the most competitive newspaper markets in the world: 17 Q149 Mr Davidson: You say it reaches a quarter of daily papers. To take up Pete’s point about what is all Scots every month, how do you know that it is the big idea, we are talking about profitable diVerent Scots as distinct from the same ones doing businesses. We are competing against the Scottish it constantly? editions of UK titles that are losing money today. Mr Johnston: This is the gold standard that people For instance, the Times and the Sunday Times, it was measure it by. It is called Unique Users. These are announced, are losing over £1 million a week. The unique points of contact. I do agree that it could be Independent is losing money. The Guardian is losing somebody who has four diVerent computers who is money. We are competing against Scottish editions rushing from one to another, but it is how the which are probably producing more Scottish content industry measures itself. It is what everybody uses. now than they have ever done in their history. That does increase the pressure on the indigenous press. Q150 Mr Davidson: Fine. I just wanted to be clear whether or not it is suYciently regulated. Q154 Mr Wallace: Are you saying that some of the Mr Johnston: These are audited. There is an Scottish editions are being more of a loss leader than organisation called ABCE—Audit Bureau their parents? For example, are you saying that the Circulations Electronic—and it is very rigorous. Sunday Times (Scotland) or the Daily Mail (Scotland) is making a conscious decision to Q151 Mr Davidson: Fine. Thank you. Like many of unfairly compete with you by having a Scotland my colleagues, I sometimes look at your stuV on the edition, and they do not care how much money the internet and we see the mixture of cranks and loonies Scotland edition loses, it is just about taking out the who reply to your various political comments late at regional or national titles? Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

Scottish Affairs Committee: Evidence Ev 25

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Mr Blott: I am not saying that it is unfair Consumer behaviour has changed dramatically. Tim competition. talks about reading frequency. Reading frequency is at the heart of the challenge here. How do we get the Q155 Mr Wallace: But it would be. It would be Saturday reader of the Daily Record to buy Jim unfair practice to loss-lead on purpose. Traynor’s column on a Monday. How do we get Jim Mr Blott: It would but I have no evidence that that Traynor’s column on a Monday to promote and is the case. I am suggesting that for Scotland to have attract Joan Burnie’s column two days later. 17 daily papers for a population of five million is Reading frequency is very, very important. That is highly unusual. Within that particular market it is the key strategic challenge. In the last year we have increasingly diYcult under the current seen the bottom of the pyramid start to disappear, circumstances in order to make a profit. Our prime and the bottom of the pyramid in publishing terms aim as businesses is to make a profit. As you have is the free weekly newspapers. Ms Clark was due to heard, the majority of us are making a profit but a be here today. Over in Arran, just last week, one of number of our competitors are not. There is no her newspapers closed. It had one revenue stream. It doubt that 40 years ago, 30 years ago, a lot of the UK was a free newspaper and it closed. Across the UK nationals pulled out of Scotland because of high over the last year 63 newspapers have closed. labour costs, because of union militancy. They came back, post-Wapping, into the Scottish market-place Q158 Mr Wallace: The Citizen group. with lower overheads and were able to capitalise on Mr Hollinshead: What is the next level in the new technology in order to strengthen their Scottish pyramid? Let us talk about Ayrshire, Mr Wishart. editions. That has had an impact on our businesses. The Ayrshire Post is one of our titles. It is very, very important to you, Pete, in that you— Q156 Mr Wallace: What proportion of your reduced demand for newspapers, reduced market share, has gone to those other competitors, those UK editions Q159 Pete Wishart: Perthshire. and what proportion have just gone because they Mr Hollinshead: Perthshire Advertiser is also one of have stopped reading newspapers? ours. It is very, very important for you to Mr Blott: That is a greater diYculty for each of us. I communicate to your community and to your am not trying to dodge the question. constituents. Part of the revenue profile of the Perthshire Advertiser,oftheEast Kilbride News, the Hamilton Advertiser, the Wishaw Press, and the Q157 Mr Wallace: I have asked for a quantity. What Airdrie and Coatbridge Advertiser is public sector do you think? advertising—public notices on that roundabout in Mr Blott: In terms of market share, when you ask Airdrie. How has it changed and how is it aVecting why does Scotland have the most number of the local democratic process? How many people newspapers probably in the world, it is because a lot know about it? Now it has migrated to the internet of people were buying more than one newspaper. less people will know about it. This is the important The reduced frequency of buying newspapers and point: yes, the Scottish Government is under the multiple copies of newspapers has had an eVect and V cosh to reduce costs, they have now half a billion less is having an e ect at the moment, so people may still funding this year compared to last, so they are be buying the Herald but not six days a week—but looking at their cost base—I am told—and maybe three days a week. They may have once advertising is on the agenda. Public sector bought the Herald and the Daily Record and another advertising is moving away from paid-for weekly title. Now they only buy one title. newspapers, and the likes of The Herald and The Mr Hollinshead: That is a very,very important point, Scotsman—public notices’ advertising is moving Mr Wallace. We are seeing a period of enormous away. That has to have a significant eVect on the political and economic and social and technological V future profitability of those newspapers. I think this change. Those four key variables a ect consumer is the main reason why successful publishers have behaviour. Twenty years ago there was no Scottish come here today to talk about the future of the Sun. There was no internet. There was no Metro— Scottish press. How can we work with government which you see every morning down here but it is also to demonstrate the eVectiveness of press in the in Scotland, in the North East, in Manchester and in Scottish marketplace? This is critical for our future the Midlands. There was no raft of free weekly viability in terms of how we liaise with government. newspapers which happened in the early 1980s. The We are not looking for funding; we are looking to Daily Record at 48 pages I am told quite often was a demonstrate the value and eVectiveness of our very,very successful newspaper, and advertisers were medium, and I think that is the critical point here. queuing up to get into the paper. The media landscape has changed beyond recognition and it continues to change at an enormously rapid rate. Q160 Mr Wallace: I do understand, but I want to get The key strategic challenge now that Mr Wishart an idea of the quantity of market share that you was talking about is about our ability to adapt and suspect has gone to new arrivals on the block, as our ability to innovate. We are doing that. opposed to the traditional drop-away of how people Technology is at the heart of innovation. If you can use newspapers. Some of these sales of the Sun have streamline your business by using technology here in come from somewhere. a better way, we have to embrace that change. That Mr Hollinshead: Price is a very powerful marketing is one of the key levers we are pushing forward. tool. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG2

Ev 26 Scottish Affairs Committee: Evidence

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Q161 Mr Wallace: You do recognise that some of slimmed down—it is not the full paper—to cater for that crash you are facing—the double-whammy— the afternoon commuter market, in a key time has gone to your other— segment in a specific place with a specific Mr Hollinshead: Of course. demographic, to sample our product to a diVerent Mr Raeburn: It has happened to diVerent degrees type of audience. and diVerent levels of newspapers. If you take, let us say, certain quality newspapers, take the Press and Journal, The Courier, The Scotsman and The Herald, Q164 Mr McGovern: I am concentrating on the price they are selling 260-270,000 copies per day between that the reader has to pay. the four of them. Take the four corresponding UK Mr Hollinshead: It is free. titles with Scottish editions, The Times, The Guardian, The Telegraph and The Independent, they are selling of the order of 75-80,000 per day. So, in Q165 Mr McGovern: Is that a loss leader? relative terms, the Scottish quality newspapers are Mr Hollinshead: No, it augments our overall performing well against serious competition. proposition to our advertisers, in that it broadens However, at other levels, the Daily Mail has made our readership base. We demonstrated through big inroads, selling 125,000 and others likewise, continuous research that the PM product has through price cuts and marketing promotions. The attracted—81% of its readers are under the age of 45, News of the World has just announced it is going to which is a mirror image of the Daily Record.Sowe 50p. are introducing a tempered-down version of paper to a new audience, to attract them.

Q162 Mr Wallace: The Sun has overtaken The Record. Q166 Mr McGovern: The original question was that Mr Raeburn: Yes, at diVerent levels, what I am Mr Wallace said that if the Sundays were putting out saying is the pattern is not always consistent. If I can a paper which they were selling for less than what it come back on what Mark was saying just to try and cost to produce it, as it were, then how could a free quantify the potential losses that newspapers might newspaper not be a loss leader? have from what is happening in the public sector, we Mr Hollinshead: Because it attracts advertising. If had a meeting very recently with the First Minister— you look at the Metro, the Metro is a very Mr Davidson: I am sorry, you are talking about the successful— loss in advertising from the public sector. Can I say, Mr McGovern: That would apply to the analogy that we are going to come on to that? Maybe we will take was made earlier on as well. that in a moment. Before I ask Jim McGovern to Mr Wallace: A lot of the “freebies” will not be highly come in, you mentioned Linda Clark. We discussed resourced newspapers and they will be balanced by this before you came in. She is due to give birth the advertising revenue. within the week, so, on balance, we thought it was Mr Davidson: I think, on balance, we will let the reasonable that she was not here today. I do not visitors answer the questions. Any comment on that? know whether or not you would take the same view, Mr McGovern: I do not agree with the answer, but if as employers, but we decided that it was reasonable that is the answer, that will be recorded. if she was not here. David Mundell: I hope it is not Linda Clark who is due to give birth because that would be a big story! Q167 Mr Davidson: Could I bring us back to the Mr Davidson: I am sorry, Katy Clark. point that Pete was raising about the merger of The Mr McGovern: This question, either for Mr Blott or, Herald, the Sunday Herald and the Evening Times, probably, Mr Hollinshead, is in response to a about the question of the loss of quality,because that question from Mr Wallace. Mr Wallace was making has been one of the concerns? I think we can a point about Sundays, possibly, national papers understand the issue of streamlining, but the issue that have got Scottish editions using the Scottish for us in relation to a number of the points that were editions as a loss leader. I think Mr Blott said that raised earlier on is about whether or not the resulting would be unfair. loss of journalistic jobs results in a loss of quality Mr Wallace: It would be. You are not allowed to across the three of them? Can you assure us that that use— will not happen? How do we measure? Surely, there is inevitably bound to be a degree of overlap which reduces the diVerentiation between the titles with Q163 Mr McGovern: In Dundee the Evening their diVerent characteristics? Telegraph has had a monopoly, almost, for many, Mr Blott: I would like to quote a slightly diVerent many years, but recently The Record have started analogy. If you had three journalists going to the putting in a paper, Record PM, free of charge in same event producing the same story, yet with the Dundee. That sounds to me like a loss leader. Are we same photographer, for three separate newspapers, agreed that that is fair or unfair? then that might be seen as being wasteful. It is an Mr Hollinshead: It withdrew from the Dundee eYcient use of your resources, which should not marketplace about six months ago, but we did diminish the quality. Merging the editorial launch a late afternoon edition which is very much departments is not just being done in Scotland it is Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

Scottish Affairs Committee: Evidence Ev 27

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston being done across the world; there are countless behavioural change, and we are seeing massive examples of where newsrooms are being merged, technological development. We have to be aware of UK titles in London have merged, and there will be all these key variables that aVect our industry. more mergers— Q170 Pete Wishart: There are impressive international examples. Closer to home The Courier Q168 Mr Davidson: I think we understand that. Our and the Press and Journal seem to be doing okay, anxiety has not been so much a journalist from The thank you very much. Herald, the Glasgow Herald and the Evening Times Mr Hollinshead: If you have evidence to suggest that all turning up at the same story; our anxiety would they are out-performing the marketplace, I would be that in the future none of them would turn up like to see it, because they are not. because the numbers have been so reduced, and none of them would be writing various things up, and you would be reduced to recycling press releases. How Q171 Pete Wishart: That is what they are telling us— can we be assured that that is not the direction of that they are doing all right. travel? Mr Hollinshead: We deal in this business every hour Mr Johnston: I think this goes to the very heart of of every day. We understand our circulation figures what we are here for today. The fact of the matter is because we sold The Record in 6,450 outlets that a lot of the things that are being done are an yesterday. At four o’clock today I will know how attempt by the industry—which is not publicly many we sold and I will know how many Press and funded, it is an industry that needs to make a profit Journals have sold and how many Couriers have to invest back into its product, it is making diYcult sold. It is our key currency; we understand decisions and they are painful decisions—to ensure circulation, and if you would like us to supply the sustainability. So I take on board your point but ABC figures for you and the long-term ABC trends what we are trying to look at is how best to use a we can demonstrate that the Sunday Post, The limited resource; how best we can use that resource Courier and other titles are all in the same boat here. in an eYcient way to ensure that we maintain our products. This is being driven by harsh economic Q172 Mr Devine: I am still one of these sad reality; the newspaper industry is in a very diYcult individuals who reads seven or eight papers every place, it is not publicly funded. Yes, it is possible, in day, and I actually live in the village where Susan certain places—and I hope it will never happen Boyle lives. What is striking about that, and it is a within my organisation—that you will have no good example, it is just about the sensationalism. journalists. You have seen it happen in the States, You get into almost cut-throat. I have to say, Tim, it V where papers are shutting. It is a harsh economic is a ecting your paper as well. Only last weekend reality.We do not get hand-outs; we are not the BBC, your political journalist ‘phoned me. I told him that we do not get a licence fee. his facts were wrong; I told him his figures were wrong and yet he still printed the story where the figures were absolute nonsense. You do get the Q169 Mr Davidson: We understand there is a bit of impression, at the moment, we are easy targets, so we special pleading to come later on. just sensationalise everything that MPs are doing— Mr Johnston: I am not pleading, I am just saying that their expenses and allowances and everything else— the things that are driving the industry at the and that is a concern with regards to the quality moment are about sustainability and ensuring there newspapers. We cannot get The Herald down here is a Scotsman, a Daily Record and a Herald for the now. We can get the Daily Record, we can get The future. They are painful and, in some ways, they are Scotsman, we can get The Courier and we can get distressing, but it is the harsh reality of the place we other newspapers—we can get The Irish Times,we find ourselves. can get The Irish Independent—yet we cannot get Mr Hollinshead: We have to adapt and innovate. The Herald. I just find that a major concern. Just to use the American analogy again (I know Mr Blott: You can get The Herald. In fact, all the there is not always a direct correlation), the Boston Westminster MPs have been given access to the Globe, one of the most famous newspaper brands in electronic version of The Herald. You can read The the world, is on its last legs; the San Francisco Herald every day; that was an oVer that was made. Chronicle Examiner is in Chapter 11, The New York I am not sure how many of you have actually taken Times has recently had to mortgage its building for it up. $250 million and take a slice of investment from a Mexican steel tycoon. We are in a position where Q173 Mr Devine: I was not aware of it. major newspapers across the world are closing as we Mr Blott: I will send you the details to ensure that speak. You are looking at four publishers today you can get access to the electronic version. who, in a very, very challenging marketplace, are looking to adapt and innovate their business model Q174 Mr McGovern: Is it a complete newspaper or to ensure the future viability and safeguard the just various articles? future of their newspapers. That is the situation we Mr Blott: It is a complete newspaper and it is an are in. We are seeing political influence on our ad electronic version, and you will be able to read it as revenues, we are seeing dramatic, unprecedented you would a paper version. The fact is it is economic circumstances aVect our advertising uneconomic for us to be able to deliver papers down revenues, we are seeing social change and to London. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG2

Ev 28 Scottish Affairs Committee: Evidence

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Q175 Mr McGovern: The Irish Times do. They can you are also introducing crowd sourcing—to use the do it viably, somehow. term, I think, you yourselves use? It does look to us Mr Raeburn: The Irish Times is a trust. as if this is substituting journalists by unpaid— Mr McGovern: I do not know the details. Mr Blott: I think you are quoting evidence from Paul Holleran, as opposed to what we have actually said. What I said was that we have launched a series of Q176 Mr Davidson: Can we move on? We have mini-community sites, allied to our evening covered quite a number of the questions already, but newspaper, and to our S1 internet business. I have if we could touch on the question of new methods of not used that term “crowd sourcing”. I have said journalism, you have already dealt a bit with the that we encourage people to provide us with question of online newspapers and what their impact information. has been. The question of crowd sourcing gave us Mr Johnston: As the only publisher of weekly some pause for thought earlier on. We understand newspapers here, which are a very important and that Newsquest are moving down this direction. vibrant part of the Scottish publishing scene, we are Maybe you can just clarify for us the extent to which no strangers to crowd sourcing; crowd sourcing is an that is just something that is being driven by the American jargon expression for parish pump—for desire to do it on the cheap, and to what extent you parish correspondents, for the letters of concern, for are going to be prepared to sacrifice quality in order comment, and so forth. One of the great strengths of to find other sources of information. the internet, which I think you are highlighting, is Mr Blott: I would say that if crowd sourcing is being that the internet allows even more participation and in touch with the public and encouraging the public even more interactivity, and I see no harm in that. to supply information, that is something that With regards to crowd sourcing, as you call it, or newspapers have been doing since the year dot. So I parish pump, as being the only thing you do and the do not think we are doing anything diVerent. What basis of your newspapers, no, I think journalism will we have done is launch community websites always be pre-eminent but, as Tim says, there is no alongside the Evening Times and, indeed, with our harm in encouraging people to interact with your S1 business. So we do encourage people to provide products. In fact, it has always been the measure of a information to us, but we have always encouraged successful weekly,or even daily,newspaper as to how people to provide information to us. many letters from local people there are and how strong the letters section is. With regard to your comment about recycled press releases in The Q177 Mr Davidson: I looked at The Scotsman today Scotsman, I would very much like to hear from my before I came in, and I could see what were, quite editor about that because we do not recycle press clearly, a whole number of recycled press releases releases in that term. Obviously, press releases are from outside organisations, without any part of the news information scene, but The interpretation being added to them, and the like. Are Scotsman has never, during my tenure, to my you just simply lifting what people are giving you knowledge, published a recycled press release. and slotting it in, in which case, those commercial Mr McLellan: Rather than hearing from me, I interests, for example, who have operations that are would like to hear from you exactly which press there to generate these stories are going to influence release this was you are referring to. the agenda unduly? To what extent are they out there investigating things, digging things up and examining things? Q179 Mr Davidson: I will take you downstairs Mr Blott: I think that the record of The Herald,in immediately afterwards. Mr McLellan: You do not have it to hand? terms of investigating and campaigning, is actually improving substantially recently, as opposed to going the other way. Certainly, from a recycled press Q180 Mr Davidson: I do not have a copy of The release, I know from my own journalistic days, Scotsman with me but perhaps someone could run dealing with press releases, challenging information down and fetch a copy of The Scotsman. is a basic tenet of what a journalist does. I think the Mr McLellan: Do you have a copy of the press only publications that I would be aware of that use release as well? press releases without even changing them tend to be the very low-cost free newspapers, rather than Q181 Mr Davidson: They do not send them to me. I quality newspapers. I would like to remind the can understand a press release when I read it. Committee that on this table we probably employ Mr McLellan: So you did not see the press release? more journalists than any others in Scotland. So it is quality that matters to us as well as it will matter to Q182 Mr Davidson: Let us see if we can get a copy of the people on this Committee. We are absolutely The Scotsman. committed to quality but, as Michael quite rightly Mr McLellan: And the press release as well, because V pointed out, it is the quality that we can a ord to you are making a very serious allegation about my deliver. journalists. So you have not seen the press release.

Q178 Mr Davidson: Can you understand our Q183 Mr Davidson: That is absolutely correct. anxiety, at a time when you are telling us how, Mr McLellan: So you are making an unfounded collectively, hard-pressed you are financially, that allegation then. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

Scottish Affairs Committee: Evidence Ev 29

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Q184 Mr Davidson: Let us read them and we will see Telegraph and Argus, which is a title that Tim Blott whether or not our audience thinks it is a press knows very well; the previous editor moved on to release or not. work at our Dalkeith centre on the Midlothian Mr McLellan: Without seeing the press release? Advertiser. We encourage our editors to meet on a Mr Davidson: Let us have a look at it and we will see. quarterly basis to exchange good practice but it is Could we move on to the question of democratic often much more than that, if possible, and we have function? mentoring systems. I think the opportunity to learn and to cross-fertilise ideas with colleagues is very Q185 Lindsay Roy: Previous witnesses have said to good and we, also, obviously, have a robust training us that newspapers, obviously, play a key role in programme, both for young trainee journalists but providing news coverage and critique of local on up through to people looking to become editors government decisions and policy. Are you satisfied or aspiring to news desk positions—positions on that that is adequately covered in the Scottish daily newspapers. Having journalists exposed to press—that there is a breadth of coverage— each other, I think, is incredibly important. particularly,looking at things like local government? Mr Blott: Just on that analogy about how many Mr McLellan: We employ a large number of journalists you employ, if we take it back to the journalists who spend most of their time scrutinising competitive environment, as I have already said, the what goes on in local government. We have an people around this table employ more people in Evening News city council reporter, we have a Scotland; the Scottish editions of the UK national transport correspondent, we have an environment do not employ in proportion to their circulation. I do correspondent and we have a health correspondent, not know how many journalists work on the Scottish and—to pick up some of the issues that we were Sun, but I doubt that it would be anywhere near the talking about earlier—The Scotsman has the same. numbers employed on the Daily Record. Then you take that down a level to weekly newspapers where there are journalists attending Q188 Lindsay Roy: You spoke about creativity in council meetings up and down the country on a terms of business understanding, innovation and the daily basis. ways that you are looking at structural change. Mr Blott: My answer would be, as a former reporter There is also a need to see what is happening in terms on local government, I would like to have more of innovation elsewhere to enhance that market journalists covering and scrutinising aVairs within penetration and to stabilise and enhance circulation. local government. Albeit, I think, like John, we Mr Hollinshead: I think we have all covered the employ a number of people to do it, I would like to theme today that unit content and great journalism employ more, but it is, again, a question of what I is at the heart of our business, but we have to adapt can aVord to employ. and we have to innovate and, as Mr Wishart has Mr Johnston: Again, Mr Roy, as you know, we have pointed out, merge newspapers. I think there are five journalists in your constituency at the some misconceptions in the marketplace about what Glenrothes Gazette. that actually means, and I would like to, if I can, ask a question back, in terms of your definition of a Q186 Lindsay Roy: I was coming to that. merged newspaper as you understand it currently Mr Johnston: A large part of what they do is to and then, perhaps, we can explain what that means. scrutinise what is happening within the local That is adapting your business model to make sure authorities, the council and all other bodies within that you do have a healthy future moving forward. the Glenrothes areas. Again, it does go back, even at the weekly level, to what Tim says with regards to Q189 Pete Wishart: It is not a mystery at all; it is what is aVordable, but we are absolutely committed exactly what you guys are doing, which is merging to the level of journalism and the number of newspapers. The first example was The Herald titles journalists that we have. where The Herald was merged with the Evening Times, which was merged with the Sunday Herald, Q187 Lindsay Roy: I was just going to come to that, and the same thing is happening in your titles, too. because it seems to me, trying to look at this as That is what we are referring to. objectively as I can, that the Glenrothes Gazette is Mr Johnston: We are not actually merging titles. actually an example of good practice; it seems to have stabilised its circulation—in fact, maybe Q190 Pete Wishart: It is all coming under one increased it—and there is a greater market headquarters. penetration. I wondered to what extent (I know it is Mr Johnston: The Sunday Mail is not going to a competitive business) there is that sharing of become the Sunday Record. practice across the business. If there are examples of magazines or weekly newspapers that are increasing Q191 Pete Wishart: I totally understand and their circulation, what kind of analysis is there about appreciate that, but it is the same journalists that are why that is—assuming that goes on? going to be providing the content for both the titles. Mr Johnston: To use the example of the Glenrothes Mr Hollinshead: There are journalists who are Gazette, a title which I know, obviously, very well, uniquely attached to the (let us call it) DNA of the the current editor of the Glenrothes Gazette, cut her titles they work for. We have several great sports teeth at Edinburgh under John’s tutelage, and her writer who work for the Sunday Mail, and they are predecessor had been previously at the Bradford unique to that paper; Gordon Waddell’s column is in Processed: 06-07-2009 20:29:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG2

Ev 30 Scottish Affairs Committee: Evidence

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston the Sunday Mail and is not going to be in the Daily might have issues for some other colleagues round Record; Billy Sloan is a great entertainments this table, but I recognise that you saw that very writer—he is the editor of that section—and he is quickly and adapted very quickly to the coverage of identified with the Sunday Mail; he is not going to be the Scottish Parliament. I am not particularly happy in the Daily Record. When we talk about merger, we with some of the coverage that we have seen of the talk about the technology-led integration of the Scottish Parliament, and I am particularly happy editorial production process; we do not talk about that the party of government in Scotland still has not the unique aspects of the journalism which one title that supports it. I cannot think of any other generates, in the instance of the Daily Record, 1.1 nation in the world where the party of government million readers every day and, for the Sunday Mail, does not have a title that, at least, gives half support. 1.4 million readers in a typical week. We are not in I wonder if any of you have any issues with that, the business of deteriorating the quality of our which is something sorely lacking in the heart of newspapers, but we have to exploit the technology Scottish democracy. change. Mr Johnston: I am struggling a bit on that because I am not quite sure what you define as a paper that Q192 Pete Wishart: I am grateful for that, and that supports— is reassuring, but I was not suggesting for a minute that the Sunday Mail was going to become the Q194 Pete Wishart: The Daily Record, for a start. Sunday version of the Daily Record. I think what we Mr Johnston: In my own papers, The Scotsman and are trying to explore here is whether this coming the Scotland on Sunday both ran editorials ahead of together of titles is going to impact on the quality of the elections that you are referring to that did come the journalism. I do not think I have had an answer to a statement about the party in government, but to that, and questions have been put by the Chair that does not mean we are not there to scrutinise and and by myself about what impact this is going to to challenge. At that point, I have to say, the have on quality journalism. You give the example of Scotland on Sunday and The Scotsman both said, on three journalists chasing the same story.Our concern balance, it probably was time in Scotland for the is not about three journalists chasing the same SNP to have a chance in the Scottish government. story—I think the Chair said this—but if nobody However, that being said, we have still remained true turns up. What is the overall impact on the quality to our position as newspapers speaking up for of these titles with the coming together (if you do not Scotland in challenging what goes on in want to call it “merger”) of those existing titles? Westminster, referring to Scotland, and in the Have you got any evidence about how this has Scottish Parliament regarding Scotland. worked before where titles have come together? Has Mr Hollinshead: We have to be alert to the changing it had an impact on the standard of the titles? What political landscape. I will confirm the exact figure, if are your models? What is your understanding and you so wish, but in the last election over 45% of Daily what would your view be about bringing all these Record readers voted for the SNP. So all is not as it titles together? seems, when you look purely at the historical Mr Hollinshead: Our business model is based on our positioning of the paper. Yes, you clearly understand ability to improve and make more eYcient the the positioning of the Daily Record, but we have to editorial production process, which, over time, as have our finger on the pulse of the nation, and we economic conditions improve, will enable us to adapt our position as times change. Of course we do. reinvest in frontline journalism. We employ over 200 journalists in Scotland. We cannot be everywhere at Q195 Mr Davidson: Could I just follow up the point once; therefore (back to crowd sourcing), we have that Lindsay started about democracy and the come round and round to the original business extent to which you cover stuV? It is not just about model: “stringers” in villages gave birth to the first local court cases, is it? It is not just about the council; newspapers that appeared on this planet. That is it is also about the culture of the society, and how it all started, but the new technology highway is V particularly the Scottish titles. I have always facilitating that in a di erent manner. That is where thought, to some extent, The Scotsman existed to we are at. validate the lives of the Edinburgh bourgeoisie, in a sense, which reflects back to them. It was something Q193 Pete Wishart: Could I ask a further question that ought to be supported and defended, in my on the democratic side? I think all of us round here view. If you are losing out as a result of competition do appreciate the work that is done by local from English-based dailies, then, clearly, that newspapers, and being professional advertisers has element is being squeezed out because the lifestyle already been mentioned in this, but that newspaper columns of the English-based dailies do not reflect sells loads and loads of copies and I am in it lots of the Scottish perspective, in the way that they would times, so I am very, very happy about that. I want to in The Herald or The Scotsman, to some extent, and congratulate you on something that you have done The Record as well. We have concentrated pretty in the course of the last 10 years, given this week we much here on news, as such, but there is also the are celebrating 10 years of the Scottish Parliament, cultural aspects of life, and I am not quite clear how and that is when you put together the Scottish press you are likely to be aVected in the new economic pack in Holyrood, I think you quickly identified that circumstances and the pressures on staYng, in that the centre of political attention was going to be in regard; whether or not some of these Scottish aspects Edinburgh and not so much down here. I know that of life will be seen as a luxury that cannot be Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

Scottish Affairs Committee: Evidence Ev 31

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston aVorded—in which case there will be no avenue for Mr McLellan: Devolution will just send you up a the nation to speak as a nation in cultural terms. Is blind alley; it is not about devolution, it is about this something that you are conscious of, aware of newspapers identifying a market that they were not and are positively doing something about? Or is in. The one name no one has talked about this there a danger (as, probably, we would see it) that afternoon is the Scottish Daily Express which, at its this is something that will be squeezed out, in a sense, peak in the 1960s, was selling over 600,000 copies. and that it would be too easy to take stuV from other From the early-1970s until the Daily Mail came in, sources that are perhaps easier rather than being it left Scotland pretty much alone to indigenous more original? titles, and it was only as the London papers woke Mr Blott: Mark’s point earlier, which I would echo, up—not to any kind of changing political landscape is that it is the uniqueness and distinctiveness of our but, simply, to the fact there was a market that they titles that will make them successful, and the fact were not touching—that things began to change. that they are Scottish titles, the fact that they should The Mail was 20p for the best part of two years; it reflect Scottish culture, is absolutely vital for our had an editorial budget of £7-8 million, I think (do success going forward, even more so in a very not quote me on that, but it was certainly above £6 competitive environment where we do have the million) just to add on to what they were producing Scottish editions of UK nationals. It is absolutely in London. That is a huge economic power to throw crucial that we reflect Scottish culture. at the Scottish market, which paid dividends, but Mr McLellan: I would echo that. It would be crazy they had the power of the English advertising of us to ignore what are our unique properties, and markets to fund that. we have no intention of doing that, but I think the other side of it is that you cannot underestimate the Q198 Mr Devine: Could somebody do that today? power of this place—London—as a capital city and Mr McLellan: I doubt very much whether anybody as a centre of British culture. The success of the Sun would put that level of investment into this and the Daily Mail, in particular, shows that people marketplace now. in Scotland are, perhaps, not as insulated to wider Mr Hollinshead: The barriers to entry are cultural issues as might otherwise be the case. We dramatically reduced. You do not have to buy a hear constantly about The Irish Times and The Irish press plant any more, you can contract out; the Independent; I think the distance between Scotland technology enables you to operate a newspaper from and London is far less than it is between Dublin and anywhere in the world. So, yes, it could happen, but London, and the fact that the Scottish people are unlikely, but the barriers to entry have decreased prepared to buy London titles, with all the faults and significantly. the lack of Scottishness that they have, shows that Mr Davidson: I wonder if we could move on to the Scottish people are prepared to swallow that, and section dealing with government action. that is a challenge we have to face. The only way we Mr McGovern: Despite my colleague Mr Wishart can face it is by honing the things that only we can do celebrating the 10th anniversary of the Scottish well, and it would be madness for us to ignore that. Parliament, I would prefer to celebrate the fourth anniversary of my election to this place, which was yesterday! Q196 Mr Wallace: Following up on the Mr Wallace: Do not hold your breath! “Scottishness” of it, before devolution your titles were the reliable daily source of more Scottish- focused news, because broadcast was predominantly Q199 Mr McGovern: On the subject of the diVerence British. It had a flavour but it did not have the local between the national press and the local press, drive or influences as, perhaps, it does now. Post- obviously you are aware that we heard the evidence devolution, where you have a Scottish BBC press previously from the NUJ, and as a former shop corps in Holyrood, you have got a much more steward (although you guys might be more familiar political path, much more sensitive to how broadcast with the terminology “Father of the chapel”) I hold is covering local issues in Scotland and debate the trade union evidence in great store, but they have around the Scottish Six, and all that sort of thing. said that the Scottish national newspapers are in a However, some of your readership who just think: worse situation than that of the local newspapers. “If I want something Scottish I will buy the Do you feel that the UK Government is looking at newspaper, Scottish title, because the broadcast will this problem closely enough, and do you think you not give me enough” have now had that answered, are getting a fair deal? Or is the Government because you have got Scottish Newsnight and focusing largely on local newspapers? independent radio as well filling out more Scottish Mr Hollinshead: I think we need to raise the topic of colour in a diVerent media. the regulatory regime, in that currently major Mr McLellan: Devolution, I think, is a bit of a red newspaper companies cannot merge because of the herring, because the media inroads were made by the issues of intensity of competition at a local level, and Mail and the Sun long before devolution was on the issues related to plurality. That is an anachronism on cards. The Daily Mail, in particular, started their the current media landscape. In a specific locale now campaign in Scotland pre-1992. you have the absurd position—it was down in Berkshire last year—where you could not have two newspapers reside side-by-side in contiguous Q197 Mr Wallace: Is that losing readers not to geographies because the regulations indicated that papers but to broadcasters? that would decrease the levels of competition. Today, Processed: 06-07-2009 20:29:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG2

Ev 32 Scottish Affairs Committee: Evidence

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston as we have clearly,hopefully,articulated, in a specific Mr McLellan: I find it all rather ironic, really, given locale there are electronic directories on line, there the experience that I had some six years ago, to find are local directories, there is local radio, there is myself here today where we are talking about the regionalised television, there are free newspapers, Scottish press and talking about the competition, there are paid-for weeklies, Scottish editions of unfair or not, from the London nationals and how English newspapers all adding to media choice, and the London nationals are encroaching on the giving the advertiser, in particular, a broader Scottish market. Six years ago there was an opportunity. Currently, we believe, strongly, that opportunity to create a strong Scottish publisher those laws should be relaxed to enable us to look at which was blocked, not for competition reasons but the opportunities the broader landscape presents for political reasons. Despite assurances being given ourselves. that the independence of two major, daily newspapers would be maintained, that was Q200 Mr Davidson: Could you clarify “to look at the prevented. We could have had a strong Scottish opportunities that the broader landscape oVers”? publisher able to withstand the encroachment of, What do you mean by that? Presumably, you mean certainly, the likes of The Times, but it was deemed allowing you to buy something. What would that not to be acceptable at that time, and it did not go mean, say, in Scotland, in realistic terms? You have through. got a Sunday paper, and a daily paper. What else would you want to buy? Q204 Mr Davidson: Do you feel that this is being Mr Hollinshead: Hypothetically, put the issue of two now looked at by the review that Andy Burnham is local newspapers sitting in contiguous geographies. having on these things satisfactorily, and that the Currently, with the current regulatory regime, they Scottish dimension is being taken into account, or cannot come together. We believe, with the internet, do you think we have not moved forward at all? with local directories, competition has broadened What is there that he should be picking up and since then. If those two newspapers could come considering making his recommendations in this together they could share backroom opportunities, regard? in terms of information technology, HR, administration, credit control and finance, which Mr Blott: From my perspective, we welcome the would enable them to invest— opportunity to come here and to discuss the challenges that we face within the Scottish press industry. From the Andy Burnham inquiry, Q201 Mr Davidson: I understand that, but you are similarly, we welcome the interest from the UK assuming “contiguous” means that there is, as it Government and the recognition of the fact that were, an impervious barrier between the two and both local and daily newspapers are facing that there is no overlapping, and that they are significant challenges. We do not know until, really, entirely separate. I can understand the point about the publication of the Digital Britain report as to sharing resources where there is no, as it were, what the outcomes from that process will be, albeit competition in those circumstances. However, that when the guidelines were published for the presumably, the arguments about competition Digital Britain report there was only a very small would be where there actually is an overlap, where reference to the actual press industry as opposed to there would be, in particular, two newspapers which, online, broadband or broadcasting. I think what we under your proposal, would become one, and that would want, as Mark has suggested, is a relaxation clearly would be a lack of competition. in the cross-media ownership rules. As John has Mr Hollinshead: In newspaper terms, but you need suggested, there have been restrictions in the past on to overlay the other media opportunities which now the press owning other media which are far more present themselves to the commercial community.So restrictive than, say, broadcast media owning the a local motor dealer in a specific geography is press, and we would want a level playing field. Also, probably already advertising in those two as has been intimated, changing the rules on newspapers, but he has a multitude of further statutory notices will have a big impact on our commercial opportunities from which to choose. revenue streams. Similarly, where government is spending on advertising—and we believe that it is Q202 Mr Devine: Livingstone had the Livingstone proper value that they should spend that advertising Post and the Livingstone Herald and they merged, revenue in our newspapers—those are three areas and we have now got the Herald and Post. where we would urge this particular Committee to Mr Hollinshead: I do not know the exact history of support the Scottish press industry. that. Mr Hollinshead: We strongly believe that there should be relaxation in the regulatory regime, before Q203 Mr Devine: You are saying, basically, they there is nothing left to regulate. could not have— Mr Raeburn: I think it is fair to say that Andy Mr Hollinshead: This is under two diVerent owners. Burnham appears to be somewhat more sympathetic You do have some markets where you have one to the position of the press than is the case with the owner in one postcode and another in another Scottish Government. The Scottish Government say postcode who, at this moment in time, with the they would like to see a strong, sustainable press, current regulatory regime, cannot come together covering in depth national and local politics, but at under the same common ownership. the same time is in the process of denying our Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

Scottish Affairs Committee: Evidence Ev 33

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston industry a substantial stream of revenue that is whereas in Lancashire, you own Coast to Coast, the strongly supporting the Convention of Scottish Johnston Press, in my parts, and you own the Local Authorities (COSLA) in moving local Blackpool Gazette, Yorkshire Post, Lancashire authority recruitment advertising to an electronic Evening Post—who was an editor for the Evening portal. According to the Scottish Government’s own News, and an excellent editor—but because it is a figures for the 2005-06 financial year, local authority region of England the competition regulations are recruitment advertising was worth £13.5 million and not as tough, because they look at it as England and across the whole of the public sector was worth £37 you are not really cornering the market in the same million. The trend is clear, I think, that the Scottish way. If you take it into Scotland, you get into Government has intentions to encourage all public Scotland being viewed as a country and, therefore, sector recruitment advertising to move in that you are eVectively blocking out the middle part. In direction. With public notices the First Minister one sense, the Johnston Press—not exploits it—gets made very clear when we met him what he intends away with it in England in a way that it probably for public notices, which are worth, across the public would not do if it proposed the same thing in sector, another £10 million. You cannot take £13 Scotland. million of local authority recruitment and another Mr McLellan: It depends if you are talking about a £10 million of public advertising and, potentially, regional or a quasi-national title. That is where we £47 million at 2006 prices, without damaging our fall into the national category, but we are, eVectively, newspaper titles. So any encouragement that you regional titles. If it was a question of whether or not can direct in the way of the Scottish Government to either Newsquest or Johnston Press owned the give a fairness of treatment with what the Culture, Evening Times and the Evening News, I think you Media & Sports Department are doing here, would would find yourself in the same situation as with the be helpful. Blackpool Gazette and the Lancashire Evening Post. However, when you talk about The Scotsman and Q205 Mr Wallace: I want to follow up on the The Herald it becomes much more complex. regulatory regime. I recognise, John, you are Mr Hollinshead: We need an up-to-date definition of st probably referring to the Barclays Herald/Scotsman the market that is relevant to the 21 Century. That idea of a merger. I recognise the strength of that is the critical point here. option and I remember being up in Scotland at the time it was all tied up: “Nasty Tory Barclays buying Q207 Mr Davidson: Given that this is being The Herald” and the journalists of The Herald did reviewed, at the moment, we are a bit hesitant about not want to be owned by right-wingers, and all that intervening directly in something that somebody else rubbish. The question was, instead of being blunt about taking apart the regulatory regime, whether it is already doing. Have you any reason to believe that should be more sophisticated. You are perfectly able your views are not being taken fully account of in the to have backroom functions merged, and put in reviews that are under way into all of this? Chinese rules. Chinese rules appear in all sorts of Mr Johnston: With regards to the regulatory regime? other industries, so you could maintain editorial, even employment, conditions and journalistic Q208 Mr Davidson: Yes. departments totally separate within a regulation but Mr Johnston: One would hope that they are being allow you to merge your backroom function. When listened to. colleagues get concerned about the merger of titles, it is where backroom is not clear from journalistic editorial; there is no clear blue water. Should we not Q209 Mr Davidson: We would be a bit hesitant, as a be seeking a more sophisticated regulatory regime Committee, about intervening in a review that rather than a looser regulatory regime? somebody else is taking, unless we were strongly of Mr Johnston: I think we would have to be very the view that it was not, perhaps, being done careful that what may, at first sight, be a move to a properly. If, on the other hand, we feel that they are sophisticated regulatory regime does not turn out to doing it properly we will maybe draw some things to be an over-complex and unenforceable or their attention, but we would not kick up in the way nonsensical blueprint for a regulatory regime. That that we might otherwise do. That is why I wanted to is across the piece. The press companies are united in be clear about whether or not you felt you were their view that the current regime is completely V getting, at the moment, a fair hearing, without outdated and reflects a di erent time and does need prejudging the result, of course, because, overhaul, but I think it is important that the regime presumably, you will not be happy unless you get the that comes out of it is one that leads to a stronger result you want. press and one that is capable of being managed and Mr Johnston: I think we are coming on to other run in a coherent way. areas, because I am very aware that I jumped the gun a bit earlier on, where we have great concerns in Q206 Mr Wallace: There is an attitude that, with all Scotland; other areas that have been highlighted to due respect—I am a Lancashire MP—penalises do with public subsidy, and all those areas. With the Scotland because Scotland is a country as well as, in regulatory regime, the indications, from what I have a sense, a region, when it comes to competition heard (and my colleagues may have diVerent views), policy. On the one hand, Scotland gets penalised, are that it is being looked at fairly robustly and there Processed: 06-07-2009 20:29:22 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG2

Ev 34 Scottish Affairs Committee: Evidence

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston is a view—I do not know what is going to come out think the issue is we believe we oVer good solutions, of it—that the current regime is not correct, not cost-eVective solutions that allow local authorities sustainable and reflects a world that has moved on.1 to advertise for staV across the marketplace. They have been cajoled into using this site, and the result Q210 Mr Davidson: You have submitted to that? is that they are just churning and people are moving You have expressed views on that and that is being internally within the public sector. That was not the dealt with, and you are not unhappy about that intention that was sold for this project in the first mechanism at the moment? place, which was to bring fresh talent into the Mr Hollinshead: We have submitted our views. Scottish public sector and to raise the profile of the public sector as an employer of choice. Q211 Mr Davidson: Could I move on to this question of what you describe as the public subsidy, and just Q212 Mr Davidson: Can I just clarify that? When put it to Mr Raeburn: eVectively, what you are you said “cajoled”—by whom are they being saying is that it would be the job of local government cajoled? and the Scottish Government to subsidise the press Mr Johnston: John Sweeney told them in a written by using channels that are more expensive than those answer that he would say that if they were looking to that they could otherwise use. As a council taxpayer, make savings this is one of the first places they I can understand why, say, Glasgow City Council should look. would want to advertise its jobs in the cheapest possible fashion—by its own website, or what-have- Q213 Mr Davidson: Separating the question of jobs you. You, quite understandably, would rather they from public notices, for a moment, I think, Mr Blott, placed adverts in papers, which would subsidise you were discussing earlier on how the profitability yourselves. I am not quite clear about the of your own internet sites was based, partly, on jobs. justification for Glasgow ratepayers subsidising Presumably, if the public sector can do the same newspapers. thing more cheaply, then to do anything other than Mr Raeburn: I do not like the word “subsidising” that, eVectively, is then a subsidy to yourself. I because as an industry we have never asked for understand your unhappiness about the use of the public subsidy, nor are we doing that just now. What term “subsidy”—farmers always hate it, even V V we believe we are o ering is the most cost-e ective though it is exactly what they get, and nobody likes solution for recruitment advertising, and public to accept that they are actually in receipt of a notices. In addition to a printed newspaper, as subsidy—but the special pleading that you are Michael has indicated, we have a very substantial putting forward for the job seems to me to be much readership of the online edition of our newspapers— weaker than the argument about public notices. I think, across the Scottish titles, something like 5.2 Mr Blott: Perhaps I could explain. Actually, it was million unique users per month—and the range of the Labour administration which set up the jobs newspapers that we have from local newspapers to portal project, and what they did, which made an the regional and Scottish national titles is providing awful lot of sense, was to provide software which V a cost-e ective method of attracting the best quality provided a back-oYce HR function across all of the and range of applicants than what you would get in public sector. It was not an advertising medium, it having the narrowness of a local authority website, was never set up to be an advertising medium, and, especially if you are wanting to attract high-calibre indeed, even the people who eventually won the outside people. The argument on the public notices tender would not say that that was an advertising is even stronger because public information notices product; it was specifically set up as an HR product. should be maximising the opportunities to reach the It has subsequently been used as a means to try to public. The argument about putting it on a website, reduce public spending on recruitment, but the democratic argument is extremely weak. If we specialised recruitment sites, particularly within the take Ofcom’s Nations and Regions report from last public sector, do not necessarily generate response. year, it showed the take-up of broadband in parts of So if you advertise a job on the internet you may get Scotland is quite low. In Glasgow, Scotland’s biggest hundreds of thousands of applications; what you city, the take-up of broadband is 32%. Compare that then need to do is to try and sift those applications against the household penetration of newspapers. It down to what you need. On this particular site, is that kind of situation that demonstrates the cost- unless you were looking for a public sector job, then V e ectiveness. If you want a cheaper solution, yes, put you actually limit the field of applicants. What it on the website, but is the cheapest solution the newspapers do and what our websites do is provide right one? The measure should be the cost- a causal and general population who will look at V e ectiveness, and I believe through the newspapers that sort of opportunity; so they are not people who V we o er that. work within, necessarily, the public sector. It limits Mr Johnston: The other issue that we have with the the choice. portal that we are discussing—the Scottish jobs portal—is, first of all, it has been set up with significant public investment, but the second thing Q214 Mr Davidson: I do understand that, being is, is it achieving, what it was supposed to achieve? I involved in a local economic development company which provides a whole number of services to 1 Note from witness: I meant to say that the current regime “is jobseekers who would assist them to access a variety not correct, not sustainable and does not reflect a world that of specialist sites. I am not sure that this is something has moved on”. that is not best left to the organisations themselves Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

Scottish Affairs Committee: Evidence Ev 35

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston and that we should not necessarily recommend the Mr Johnston: I think it fails to grasp the problem, to subsidy on. Where I think you are on much stronger be perfectly honest, because what we are saying, it ground is the question of public notices where, seems to me, is that the BBC gets the money and then certainly in a constituency like mine, the take-up and we would get some content from them. The issue access to the internet is much, much lower than here is the BBC employs very few journalists in the elsewhere, and it is part of a democratic society. I field and we employ lots, so surely the other way think that is something that we would want to reflect round would be some sort of agreement the other on in our report. way, I would have suggested. That has not been Mr Blott: Where you quoted, perhaps, Glasgow as floated, but my organisation has something an example, the Glasgow local authority do not approaching 50 journalists in Fife (I do not know want to use the local portal site and they are being how many the BBC has, but I suspect it is perhaps told that they should. They believe that they would two or three).2 be better oV getting a good quality response by advertising with local newspapers. Q218 Mr Devine: In Scotland? Mr Johnston: In Fife. Q215 Mr Davidson: So they are being bullied by the Scottish Government into taking this course of Mr McLellan: I think there is a danger it is a Trojan action? Horse and that the BBC establishes more local Mr Blott: Yes. As are a number of other public sector services and then continues to justify its presence and organisations who are being told, as Michael its expansion on the basis that it is serving local suggested: “You need to save money; one way of newspapers, and all that happens is you have the saving money is to put all your jobs on this public BBC getting bigger and bigger and bigger. So, whilst sector recruitment portal and not in local the principle of partnership is not something that should be dismissed at all, and we will have to look newspapers”. V Mr Davidson: I think we are clear about the nature at partnerships in lots of di erent ways as we move of the issue there, and we will reflect upon that for on, anything that involves the BBC justifying getting your report. more public money, I think, has to be treated with a great deal of caution. V Mr Raeburn: On that issue of subsidy, there are clear Q216 Mr Wallace: I just think there is a di erence signals that Ofcom want to subsidise regional between the public notices; it is not the same as the television news including Scottish television, and it job portal. There is an irony here, I have to say. A does concern us that there is one part of the media number of your titles campaigned for years against getting the prospect of favourable treatment and wealth creators and capitalists and everything else, assisting it, possibly, with its own website and now you are entirely dependent on public sector recruitment and providing unfair competition job advertising. If you had actually embraced against the press. wealth-creation in Scotland there would be many Mr Davidson: Two things: I did get somebody to go more private jobs. The Herald and The Record and get me a copy of The Scotsman, and in the first banged on for years about the evils (I did not bring in The Scotsman on that one, I have to tell you) and six pages I have identified three articles that I think now you are dependent on the public sector and you are press releases. I am quite happy to debate that are coming crying to mother. I am sorry, on the jobs with you afterwards. I particularly like the one: “Woolwich in mortgage move”, which gives a full list front, if we can open Scottish newspapers and there V are lots of private jobs being advertised there, in the of their latest o erings with no byline. That will private sector, maybe we would not be in such a come down to you. The final point we would want to position, but we are not. You have to bear some of ask you is whether or not there are any final that responsibility. comments that you want to make or, upon reflection, Mr Blott: Our volume of public versus private sector whether or not there is anything you would want to has changed according to the recession, but we were give us in writing before we draw up our report. more private-sector dominated in terms of our Lindsay, you have another point? recruitment volumes than public sector. It is merely the recession that has changed it. Q219 Lindsay Roy: Rightly and understandably,you Mr Wallace: The proportion of jobs advertised in have indicated that part of your core function is to the public sector in Scotland is far higher than the make a profit. Also, though, you have spoken about rest of the United Kingdom. quality, and I think these two are, obviously, interlinked. Quality can mean you are meeting Q217 Mr Davidson: That was just to confirm that customer needs for people buying the papers or the Thatcherism is alive and well! Could I just pick up services that you provide, but quality can also mean on a point that Jim was going to ask before he had the standard. Have you got any indications of where to leave? Recent reports have indicated that the we are in terms of standards of journalism? Are you Government is disinclined to give direct subsidy of happy that there has been consistency? Do you feel any sort to the press. However, it might favour the there has been an improvement? Or do you feel there BBC oVering support in the form of shared has been a decline? resources. Is that something with which you would have any truck or which would seem to you to have 2 Note from witness: Johnston press has approaching 30 any potential? Or is this just somebody flying a kite? journalists in Fife. 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Ev 36 Scottish Affairs Committee: Evidence

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Mr Hollinshead: As we said right at the start, quality Q224 Mr Walker: I think it is so sad, to be honest, and unique content is at the heart of our business, what you now regard as quality journalism. I think and we employ many, many industrious, creative it is so sad that you genuinely think that is quality journalists who are recognised as the best in the journalism. Do you have any higher aspiration than business. British journalism abroad—there are more that? It is terrible. I think you have summed up what Scottish and English editors working in foreign is wrong with the media, if that is what you cite to newspapers than you probably thought. We are not this Committee as quality journalism. It is really in the business of deteriorating the quality; we are in bad news. the business of looking forward and adapting our Mr McLellan: This issue of payment has just been business to make sure that we can retain that quality debated at great length by the Press Complaints and develop that quality. Commission. By denigrating the payment to individuals for stories in newspapers you are not actually attacking the newspapers, you are attacking Q220 Lindsay Roy: I accept that entirely. The thrust the people that sell their stories. So your comment is of my question, really, was: what kind of indications more directed against everybody out there who has are you getting back that give you a notion of where a— you are in relation to a quality kitemark? Are people saying that the quality of journalism is improving? Is Q225 Mr Walker: You have created the market. it consistent? It may be consistent at a very high Mr McLellan: The market is there because people standard or not. What is the feel that you have, as have things to sell. Markets have two sides: sellers editors and as journalists? and buyers. Mr Hollinshead: The readers vote every day. That is the measurement of quality: the readers vote every Q226 Mr Walker: If a dime of taxpayers’ money day. Mr Devine talked about the Susan Boyle story, went to support you lot, it would be 10p too much. which came out of the West Lothian Courier. That is Mr McLellan: We do not pay a penny for stories; we picked up because we had a local journalist on the operate in a diVerent marketplace, but there is patch who found that video, put it on to the internet competition for stories. People want to make money and it was a worldwide phenomenon. That was a and people want to read their stories. If they did not Daily Record quality scoop. We had the first the papers would not get sold. interview with the honeymooners back from Mr Johnston: Could I just say one final thing, Mexico. That is quality journalism; that is because this is pretty pertinent. We have obviously investigative journalism—finding out where they focused in on one issue here, but please, for God’s are, who they are and where they live. However, sake, do not forget the weekly press and the other every day, the key measurement of quality is what daily titles. The Scottish newspaper industry is much the reader thinks and how they pay for the bigger than just the Daily Record and one particular newspaper. story. I hear from Mr Walker a view on the entire Mr McLellan: I think Mark is absolutely right. Scottish media based on— Quality is a very diYcult thing to define. It depends which bit of the marketplace you are talking about. Q227 Mr Walker: It is a general view about media; If I put my Press Complaints Commission hat on, as you just happen to be here. Like you say: we get far as I can see, the quality of journalism is as high everything we deserve; perhaps you get everything now as it has ever been, if not higher, and the way in you deserve. which we regulate our industry has never been more Mr Johnston: Does the Glenrothes Gazette really rigorous. deserve to be talked about on that basis— Lindsay Roy: That is one good indicator. Q228 Mr Walker: I am not talking about the Glenrothes Gazette. You are. Q221 Mr Walker: The people who had flu from Mr Johnston: It is one we talked about earlier. Mexico. How much did you pay them? Did you pay them anything to get the story? Q229 Lindsay Roy: I would be happy to talk about Mr Hollinshead: There would have been a it and acknowledge the success it has achieved. payment, yes. Mr Johnston: The Glenrothes Gazette faces exactly the same problems as everybody else; the same Q222 Mr Walker: How is that quality journalism? problems from government intervention; the same That is not research. It is like the guys with the problems regarding structural change in the market; biggest chequebooks getting the story. the same problems with the economy; the same Mr Hollinshead: The original story, in terms of problem with jobs, public notices and what is going identifying who they were, where they were and to happen about whether ITV3 and STV will be where they lived was not paid for, no. subsidised to produce the news. All these things will impact on the Glenrothes Gazette equally as the Daily Record. Q223 Mr Walker: So you identified them. They did not have a publicist calling you up? Q230 Mr Davidson: Are there any final points? I Mr Hollinshead: They had a publicist after the know, Mr Johnston, you had an agenda of items. I event, yes. think we have pretty well covered all of them. Processed: 06-07-2009 20:29:22 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG2

Scottish Affairs Committee: Evidence Ev 37

6 May 2009 Mr Tim Blott, Mr Mark Hollinshead, Mr John McLellan, Mr Jim Raeburn and Mr Michael Johnston

Mr Johnston: You have, thank you very much. Mr McLellan: So we put in some information of interest to people to broaden the coverage of the Q231 Mr Davidson: Thank you. We try our best. Are paper, and because it is not a Sunday Times insight there any other points that anyone wants to raise or investigation it has no place in the paper? I cannot are there any points on which you would wish to begin to argue that point because it is ridiculous. submit additional information to us in writing? Mr Raeburn: I may well put in a written submission Q235 Mr Davidson: Indeed. That is my view as well: after we have had our council meeting next week.3 I do not think that could be argued. Mr Hollinshead: Minor issues apart, in terms of Q232 Mr Davidson: We will not be producing—I press releases or not, I think we just need to conclude think I can safely say—our report before then! Did on the broad strategic backcloth. We are somebody have a final point? experiencing unprecedented economic conditions Mr McLellan: Yes. I want to respond to the points which are aVecting the Scottish press and the media that you made, because I do not think it would be community as a whole. In parallel, we have seen fair for it to go unanswered. In a spread about major structural change in consumer behaviour, general improving conditions out in the broad, driven by technology and the internet, and to make economic situation, we have carried some one major point: let us modernise our thinking on information about good deals coming from a large the regulatory regime and identify the new mortgage lender. The story is not a press release that marketplace and really, really understand has been shoved straight into the paper; it is part of competition at a local level is more than two weekly a general package of good news about things newspapers sitting next to each other. happening out there in the housing market. For you Mr Davidson: We are having this hearing because we to say that that is a press release just shoved in the recognise the important role that the press plays in newspaper is arrant nonsense, and I think you owe the life of Scotland, not only politically, culturally The Scotsman an apology. and economically; we recognise you are in diYcult times and we are looking for ways in which we Q233 Mr Davidson: Maybe you could just clarify for believe government can be helpful without simply me exactly in the context of everything else on that shovelling money at the problem. Hopefully, our page whether or not it has got anything at all to do report will reflect that. Thank you very much for with it; the fact that it is not bylined; the fact that it coming. is quite clearly a “puV” for the Woolwich— Mr Wallace: You referred to a press release in Mr McLellan: It is a story. there—one of the other ones. I have just checked the Scottish Government website, the Scottish military Q234 Mr Davidson:—and on the page before that chief’s story is not the same as the press release and the page before that, as well, there are also two, issued by the Scottish Government. what appear very much to be, press releases of events Mr Davidson: How is it diVerent? that have been happening in the Scottish Mr Wallace: It is constructed diVerently and it does Parliament—neither of which has got any editorial not carry the quotes of the First Minister. The only comment whatsoever—which vindicate my view words in common are the names of the Admirals that The Scotsman, regrettably, is tending to just attending and the word “unprecedented”. regurgitate other people’s press releases. Mr Davidson: Indeed. Thank you. So it is not like the press release at all you are saying? Thank you very 3 Ev much. Processed: 06-07-2009 20:31:21 Page Layout: COENEW [SE] PPSysB Job: 431413 Unit: PAG3

Ev 38 Scottish Affairs Committee: Evidence Written evidence

Memorandum from the Scotland OYce 1. The Scotland OYce is pleased to have the opportunity to comment on the Scottish AVairs Committee inquiry into the crisis in the Scottish press industry.

Background on Scottish Press Industry 2. The Scotland OYce is aware that the Committee has heard witnesses and will be gathering further evidence on such matters as: — The historic role of the Scottish press in covering regional, Scottish, UK and international news from the distinctive perspectives of the four major Scottish cities and their environs. — The rise in competition from the London press with special Scottish editions. — The decline in sales of Scottish newspapers at a greater rate than that experienced by the Scottish editions of the London press. — The rise in competition from digital media and the corresponding falls in newspaper advertising revenues. — The impact of technology in changing production methods and traditional roles within newspapers. — The concerns about the viability of both the major national papers and some strictly local titles and about reductions in jobs within the industry. 3. The table at Annex A shows the trends in circulation for the national press from June 2005—March 2009.

UK Government Position 4. The Government’s position is informed by several principles: — A free and viable press is essential to enable the people of the UK to participate in all levels of government. This requires a plurality of ownership. — The Government should not seek to intervene in the management of individual newspapers. — The Government should not seek to intervene in the commercial management of individual businesses. 5. The Government’s regulation of business does however impact on the newspaper industry in various ways, particularly in the regulation of monopolies and mergers, including the ownership of media, and of intellectual property.

Regulation of monopolies and mergers 6. The UK’s digital economy accounts for around 8% of GDP and has been one of the fastest growing successes of the past decade. More importantly, the digital economy underpins our whole economy and builds our national competitiveness. Over the last 10 years the UK has been consistently closing its historic productivity gap with the other leading European economies, based largely on our take-up and adoption of digital technology. 7. The Digital Britain Report assesses the UK’s readiness to exploit the dramatic shift to digital technology as the basis of huge parts of our economy and private lives and one part of this is how the news media are meeting the challenge. 8. It is important for the UK that we enjoy content over digital networks that relates to our culture and experiences as a society and informs us as citizens in a democracy.Our track record in creativity and technical innovation in existing media provides an excellent base, but this needs to be married to development of business models that enable content creators to flourish on new platforms. The market will always provide some of this content, but we need to decide what else we require, and make policy decisions to achieve that. 9. Action 14 of the Interim Digital Britain Report invited the OYce of Fair Trading (OFT) Ofcom and other interested parties to “to undertake an exploratory review across the local and regional media sector” to inform whether change to the merger regime is desirable or necessary. The OFT is close to completing its review and is due to issue a headline report by the middle of May and Ofcom will be consulting later in the year. 10. The Communications Act 2003 requires Ofcom to review the media ownership rules at least every three years and to make recommendations if in Ofcom’s view changes to the rules are needed. The rules are designed to strike a balance between ensuring a degree of plurality on the one hand and providing freedom Processed: 06-07-2009 20:31:21 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG3

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to companies to expand, innovate and invest on the other. Ofcom is expected to submit its review of the current ownership rules, alongside any recommendations for change, to the Secretary of State for Culture, Media and Sport later this year. 11. The government recognises the important role the media plays in society and believes it is essential to have a balance of views expressed in the media. To date plurality of voice in media has been secured through statutory rules which seek to ensure that the most influential media in any community are not controlled by too few people or express too narrow a range of views and interests. These include cross-media ownership rules which prohibit the ownership of newspapers, radio stations and or a Channel 3 licence in a single market. There are also statutory obligations that provide for impartiality and accuracy in broadcasting. Changes of ownership involving newspaper enterprises are also subject to the same competition based regulation as mergers in other sectors—to prevent unacceptable levels of concentration in markets. These regulatory arrangements provide an appropriate means of controlling media ownership.

Intellectual Property 12. The Newspaper Society and the Society of Newspaper Editors argue that some internet providers are undermining the economic position of newspapers and infringing copyright by taking news gathered by the newspaper industry, and republishing it on the web. The operation is financed by advertising revenue which the internet providers receive. 13. Copyright law is determined by a combination of UK laws, EU Directives and international treaties. Copyright is primarily a civil law matter and it is mainly for rights holders to sue if they feel their rights have been infringed. The UK Intellectual Property OYce (IPO) is responsible for the UK’s copyright framework, but it does not function as a regulator. 14. The Government is encouraging the newspaper industry and internet providers to collaborate in the investigation and implementation of initiatives such as Automated Content Access Protocol. Automated Content Access Protocol marks webpages to identify the intellectual property owner.

Proposed Solutions 15. A number of solutions have been advanced by diVerent voices in the newspaper industry, including: — direct grants and subsidies to newspapers; — free newspapers for all schoolchildren; — imposing a duty on local authorities to advertise in the local press; and — top-slicing the BBC licence fee to support local papers. 16. There is however no unanimity of views and some within the industry have argued that some of these solutions would threaten the independence of the press. 17. Government policy on these proposals will be informed by the OFT review, Ofcom’s Media Ownership Rules Review and the report by the UK-wide Power of Information Task Force, published on 2 March 2009 at http://poit.cabinetoYce.gov.uk/poit/, which contributes to thinking about the way that most people regularly use the internet.

Media Summit 18. To further inform the direction of travel, the Government held a local media summit, hosted by Culture Secretary Andy Burnham on 28 April, in which key figures from across the media industry came together to discuss the challenges facing local newspapers. The event looked at various ways to support local news providers and is part of the ongoing programme of work looking at the future of media as part of the Digital Britain project. Speakers at the event included Stephen Carter, Minister for Communications, Broadcasting and Technology, Ed Richards, Chief Executive of Ofcom, and Alan Rusbridger, editor of The Guardian. They discussed issues around new models of ownership and collaborative ways of working particularly around training, along with ways for the industry to modernise and become part of the digital age. The discussion at the summit will feed into the Digital Britain report to be published by the Government later in the summer.

Conclusions 19. The Government awaits the conclusions of the Scottish AVairs Committee’s important inquiry with great interest. Processed: 06-07-2009 20:31:21 Page Layout: COENEW [E] PPSysB Job: 431413 Unit: PAG3

Ev 40 Scottish Affairs Committee: Evidence Annex A SCOTTISH NATIONAL PRESS CIRCULATION TRENDS, JUNE 2005 TO MARCH 2009 Jun 05–Nov 05 Nov 05–Apr 06 Apr 06–Sep 06 Sep 06–Feb 07 Feb 07–Jul 07 Jul 07–Dec 07 Dec 07–May 08 May 08–Oct 08 Oct 08–Mar 09 Daily ExpressDaily MailDaily MirrorDaily Mirror & Daily RecordDaily RecordDaily StarDaily Star SundayDaily TelegraphFinancial TimesGuardian 466,783Herald (Scotland)IndependentIndependent On Sunday 83,098Mail On Sunday 461,517News Of 127,567 The WorldObserver 47,986People 418,797Racing 84,069 30,584 Post 437,142Scotland on 126,916 Sunday 24,676Scotsman 92,921 44,321Sun 6,007 417,196 10,543Sunday 75,672 Express 424,138 82,286 29,753Sunday Herald 124,807Sunday 23,484 15,865 Mail 91,594 40,516Sunday 12,407 325,824 396,626 Mirror 122,298Sunday 5,825 11,749 Post 407,835 75,061 79,913 30,499Sunday 124,993 SportSunday Telegraph 24,323 16,385 88,439Sunday 318,886 387,039 37,099 Times 125,519 12,363 77,681 402,813 20,498 10,139 71,376 5,459 126,807 78,272 32,526May 2009 3,987 31,436 23,464 16,158 306,616 372,888 123,388 90,744 34,947 74,894 11,467 56,006 398,392 65,710 22,437 128,288 57,842 70,778 9,420 81,693 30,851 5,775 504,324 29,516 4,015 308,241 368,342 355,040 120,491 39,066 24,912 15,830 93,927 34,471 382,031 10,835 69,251 56,258 63,380 125,802 22,376 22,600 60,170 69,562 14,435 76,675 35,452 9,556 500,366 n/a 5,695 294,916 365,626 366,822 115,841 28,400 78,746 37,377 4,085 24,670 15,760 362,601 92,848 32,766 69,142 52,444 121,506 60,045 9,950 22,182 21,837 54,205 67,614 12,738 74,183 29,299 483,548 295,222 350,764 399,423 117,531 8,481 26,122 5,562 77,209 34,455 23,594 16,359 n/a 3,765 86,911 31,267 117,766 66,977 53,298 57,658 21,668 9,437 21,804 478,914 55,286 66,313 10,657 289,950 333,705 418,003 72,744 30,070 113,577 24,336 9,495 74,866 32,055 5,206 16,204 24,422 85,159 28,896 3,869 65,223 49,632 55,556 n/a 21,180 465,223 22,553 278,151 403,113 9,735 53,554 109,669 63,097 28,241 9,735 23,256 74,304 32,249 8,672 23,035 16,109 85,058 5,099 64,939 46,714 291,628 53,812 3,735 463,910 270,084 22,207 402,823 105,568 22,500 50,644 60,642 9,385 9,055 21,081 69,157 32,125 16,030 7,895 281,806 452,728 62,639 5,223 43,509 52,053 400,071 21,994 3,813 22,611 48,419 8,756 19,736 8,513 68,937 29,777 275,548 432,691 379,781 59,466 42,226 50,073 20,770 22,122 3,634 44,869 18,450 272,850 67,281 28,102 415,866 7,981 369,032 42,006 48,270 20,831 42,464 3,498 260,478 68,385 25,634 7,623 20,111 252,540 70,590 n/a Processed: 06-07-2009 20:31:21 Page Layout: COENEW [O] PPSysB Job: 431413 Unit: PAG3

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Memorandum from Mr Tim Blott, Mr Mark Hollinshead, Mr Michael Johnston, Mr John McLellan and Mr Jim Raeburn We write to express firstly our appreciation of the opportunity the Committee gave us on 6 May to discuss the increasingly diYcult trading conditions confronting the daily and weekly newspaper industry in Scotland. Our concern is about the whole future of our industry but it is also based on a fundamental belief, which we are sure the Committee will share, that a strong, sustainable local press providing depth of coverage of the UK and Scottish Parliaments and local politics is in the best interests of democracy in a devolved Scotland. We should add that our member companies employ an estimated 6,000 people in Scotland. We will briefly reiterate the tremendous pressures under which newspapers are currently operating. These are: — Long term decline in sales of printed newspapers. — Economic downturn severely aVecting advertising revenues. — Migration of classified advertising to the internet. — Changes in communications technology with instant news available from online publications, video, mobile telephony, podcasts etc. We are in unprecedented economic times with our industry suVering from a cyclical downturn as well as major structural change. The impact of this combination has resulted in sharply deteriorating revenues necessitating action to reduce costs including, regrettably, the loss of jobs. In order to address these challenges, our respective members have invested substantial resources in their digital publishing operations which are now firmly established as an integral part of the publishing mix. While this investment is yielding significant growth, digital revenues generally are still at the stage where they represent a relatively small proportion of total income. The industry’s problems are, as we explained, being exacerbated by the loss of local authority recruitment advertising to the CoSLA electronic portal and the prospective loss of public notices going online. According to a Scottish Government analysis of advertising expenditure by the Scottish public sector in 2005–06 over £37 million was estimated to have been spent on recruitment advertising, £13.5 million (37%) of which was by local government. We consider it essential that there should be an independent evaluation of the cost eVectiveness of CoSLA’s electronic portal. You will understand our strongly held belief that our daily and weekly newspapers and their online services have long been an essential meeting place for people seeking new employment. It is our view that any financial savings claimed by CoSLA need careful scrutiny against the value of securing the best people through the services of the newspaper publishing industry. We are also deeply concerned about the proposed removal of the obligation on local authorities and others to place public notices in regional and local newspapers. We consider that there would be a serious risk of such action leading to more secretive, less open government and to many grass roots issues being decided without consultation and debate. We highlighted how broadband take-up in parts of Scotland is quite low eg 32% of households in Glasgow according to Ofcom’s Nations and Regions survey in 2008, and compares extremely poorly against the household penetration of newspapers. We do not understand how the Scottish Government could contemplate disenfranchising large numbers of the public by relying on less eVective information channels. The Scottish Government analysis referred to above also showed that over £10 million was spent on public notices, 57% of which was by local government. The industry’s greatest fear, which we believe to be well founded, is that the Scottish Government is planning to persuade the whole of the Scottish public sector to move its recruitment advertising and public notices to electronic portals, involving an estimated combined loss of £47 million at 2005–06 prices. It is wholly incompatible with the Scottish Government’s stated desire for a strong, sustainable Scottish press to think that up to £47 million of revenues can be withdrawn without severe consequences for its whole future. It contrasts with the position of the UK Government with the Culture, Media and Sport Secretary, Andy Burnham, indicating that he is minded to instruct local authorities that, in the interests of local democracy, they should not be competing with local newspapers and should be supporting them with advertising and other means. More generally, we are concerned about local authorities and other public sector bodies using their privileged position of public funding to provide services fully met by daily and local newspapers operating in a commercial environment to generate revenues based on audience reach. They can have a profoundly negative eVect on the financial viability of our newspapers and their related websites. We readily acknowledge the pressures on the Scottish Government to reduce public spending but our belief is that the most eVective use of any advertisement spend is with our newspapers. We would also welcome the support of the Scottish AVairs Committee in the current OFT review of regional and local media. We are asking that rules on newspaper and cross media ownership and competition be amended to take account of the realities of the Scottish media landscape and to allow flexibility in meeting the exceptional circumstance in which the industry finds itself. 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The Committee’s recognition of the scale of the problems facing the newspaper industry and its support on the above matters would be greatly appreciated. Tim Blott Managing Director Herald and Times Group Mark Hollinshead Managing Director Scottish Daily Record & Sunday Mail Ltd Michael Johnston Divisional Managing Director Johnston Press Scotland and President, Scottish Newspaper Publishing Association John McLellan Editor-in-Chief for The Scotsman Publications Ltd, Editor of The Scotsman Jim Raeburn Director Scottish Daily Newspaper Society May 2009

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