Industry leaders have given a warm welcome to plans to cut business rates for local newspapers announced in George Osborne’s Budget yesterday.
Delivering his sixth and final Budget before May’s general election, the Chancellor revealed a consultation would be held on business rates relief for local newspapers in England.
He told the Commons: “Local newspapers are a vital part of community life. We are announcing a consultation on how we can provide them with tax support.”
Today the Edinburgh Evening News revealed that the plan could also be extended to Scottish titles by the Scottish government.
The Chancellor’s tax break would be designed in part to help the industry adapt to the challenges of the digital age.
Further details of the announcement were contained in the 124-page Budget document accompanying the Chancellor’s statement which has now been published on the Treasury website.
It said: “Local newspapers are an important source of information for local communities and a vital part of a healthy democracy.
“To support them as they adapt to new technology and changing circumstances, the government will consult on whether to introduce a business rates relief for local newspapers in England.”
Any changes would not automatically apply to local newspapers in Scotland, Wales or Northern Ireland as the level of business rates there are devolved to the respective assemblies in Holyrood, Cardiff and Stormont.
However the Scottish government today indicated it would follow the outcome of the English consultation.
A Scottish government spokesman said: “The Scottish Government will monitor the debate around the UK government’s consultation, reflecting feedback from across business in Scotland.”
Scottish Newspaper Society director John McLellan said: “This is obviously very good news for our colleagues south of the Border, but the conditions which apply there are similar to those in Scotland and we hope the Scottish Government will also undertake a review of the way in which Scotland’s local newspaper publishers are taxed.”
Bob Satchwell, executive director of the Society of Editors, said: “It’s very welcome news that the Chancellor recognises the importance of local newspapers to their communities.
“They have had a tough time with the combination of structural change and a deep recession which has affected advertising and circulation revenues.
“But they are fighting back quite brilliantly and winning new readers on all of the different platforms on which they are delivering the news.
“Anything which helps at this time of transition is clearly welcome, so long as there are no strings attached.”
Lynne Anderson, deputy chief executive of the News Media Association, which represents local papers, said: “We await with interest the full details of the Chancellor’s proposed consultation on business rates relief for local newspapers.
“Publishers have never sought direct public subsidy and will continue fiercely to defend the independence of the press from political or statutory controls. But local newspapers are vital to democracy and it is good to see the government exploring different options to support a dynamic and vibrant local press.”
Johnston Press chief executive Ashley Highfield said: “We are delighted the Chancellor has recognised the crucial role local newspapers play in communities across the country.
“We hope today’s announcement will help our industry continue to thrive.”
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Tell me, why should tax payers subsidise (via lost revenue) local rags where companies like JP, Newsquest and Trinity will not even invest in enough staff? To think some of these firms actually won Investor in People awards before shedding thousands of them. Now that is irony for you.
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Sure our lot will love it….
Profit margins keeps dipping just under 40 per cent and need to hit that to boost the special dividend..
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Taxpayer – because they’re all mates!
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Scoop. You got it! A lot of the JP papers in particular are just publicity sheets for their local MP. Never a questioning word. I guess its payback time in a small way. Local papers are now like the toddler who can’t stand on his or her own two feet and need a prop!
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British newspapers have long enjoyed indirect state subsidy at taxpayers’ expense. During the Cold War, import duties on Scandinavian newsprint supplies were relaxed to benefit the national press.
I’m not saying it is right or wrong. I am saying it is hypocrisy to pretend otherwise. .
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Why should any business that’s been badly managed,reduced its staff levels to breaking point for those that are left and paid handsome bonus and salaries to the board be nailed out and propped up?
If the chancellor really valued the role of the regional press he would surely have taken action earlier when huge job losses occurred and quality content was abandoned in favour of RGC via email or camera phone.
The regionals are not suffering from the state of the economy more the effects of mismanagement by those in charge
Stand on your own two feet or go down as a result of your own actions like any other business
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MPs and newspaper management. What a corrosive mix!
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Right… so I escaped the rip-off culture of newspapers but am now expected as a taxpayer to subsidise corporate businesses.
Help for the true independents who have kept their town centre offices open and not completely destroyed their editorial teams, yes, I can see the public-spirited nature of that. But subsidies for the big boy clowns, please NO.
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A waste of my money and that of other taxpayers round here. If my local garage goes out of business next week due to inept management, am I meant to subsidse it now then?
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I bet the boardrooms of the likes of JP, Local World and Gannett (NQ) are delighted to be in line for a big dollop of taxpapayers’ money.
In the US and many other countries newspapers and magazines are subject to sales tax or VAT. In the UK they are exempt, a form of subsidy they have received for many years.
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“Why should any business that’s been badly managed,reduced its staff levels to breaking point for those that are left and paid handsome bonus and salaries to the board be nailed out and propped up?”
How about because – rightly or wrongly – newspapers are considered to have a social value beyond being just “any business”? Much as with the VAT zero-rating for publications.
I think the more difficult question here will be how you define a newspaper, and how you can justify giving the support to some media organisations and not others.
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A newspaper – collection of stories/facts etc printed on paper with headlines, words and pictures?
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The average taxpayer will be thinking, what a lot of arrogant wotsits those local newspaper people are.
I hate to break it to those of you wearing rose-tinted specs and musing on social values but when the going gets tough, get real.
Local newspapers are like any other business (excluding oil and banking of course) but even reducing business rates won’t halt the decline.
Adapt or die was the ‘controversial’ mantra a decade ago.
It still rings true today, I’m afraid.
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Simples – that definition covers magazines, parish newsletters, election pamphlets, and plenty more…
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Therethere – I don’t believe for a moment that a cut to business rates will make much bottom-line difference at all to many individual newspapers, let alone to the industry as a whole. (Though if it persuaded a few to stay in town centres rather than relocate to business parks, I suppose that would be a small win.)
And unfortunately it is risibly unlikely that any bottom-line benefits which are felt will be reinvested in serving the community.
So it’s not a matter of wearing rose-tinted sub-editorial eyeshades, but simply of recognising how and why a rates cut for this particular industry would be *justified*.
Having said that, I’m now unsure as to whether the HTFP consensus is to welcome anything that might give newspapers a break, or hope they die and drag their managements down with them…!
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