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Dyson at Large: An open letter to George Osborne

Dear George,

Many thanks for launching your consultation paper last week, asking whether the government should provide business rate relief for the publishers of local newspapers.

George OSborneI thought it might be helpful to send my thoughts in this open letter, so that other interested parties can take part in the debate here on HoldtheFrontPage, the trade website for the UK’s regional media.

My input can be summarised in three words: ‘Yes’, ‘no’ and ‘maybe’. But let me explain.

The ‘yes’ case:

If you’re talking about local newspapers owned and run by companies whose bosses live and breathe with the communities they serve, then I would definitely back rate relief.

I mean newspapers like the News & Star in Cumbria, owned by CN Group Ltd, a local company with its headquarters in Carlisle, and The Leader in Mold, owned by NWN Media Ltd, a company with its headquarters in the same North Wales town.


These newspapers and their sister titles are just a few examples of publications that are run by what I’d call real local newspaper companies, and there are several more of these up and down the UK.

They’re often family-owned, are certainly independent, small to medium-sized companies, and have been diligently publishing newspapers for generations.

I believe they deserve tax breaks in whatever form the government can afford because in many cases they’re making very little profit, and their owners are not paid salaries that dwarf that of the Prime Minister’s.

Instead, they have at least tried to retain local offices, investing their surpluses and sometimes their reserves in maintaining enough local reporters, decent paginations and low cover prices that pays real respect to local readers, businesses and democracy.

Like everyone in the industry, they’ve been hit by the double whammy of cyclical economic and the structural change brought on by the internet, and have had to cut some costs.

But despite profit margins shrinking to low, single figures, these SMEs have still attempted to keep meaningful editorial resources at the centre of the towns and counties where their newspapers circulate.

Also deserving of rate relief are the much smaller entrepreneurs behind new start-up publications, such as The Wokingham Paper that launched earlier this year, and the Times of Tunbridge Wells that started printing in March, and countless other hyperlocal titles that have emerged in recent years.

All the above are true local newspapers that it would be a real tragedy to lose, and it would be noble for you to support and encourage them as they try to balance on their teetering journey across the print-digital tightrope.

The ‘no’ case:

But if you’re asking whether automatic rate relief should be considered for local newspapers owned by the big public limited companies, then my opinion is that such assistance is not needed.

I just cannot see your government allowing big publishing companies to be the recipients of taxpayers’ handouts when they’re still making hundreds of millions of pounds a year in profits.

For instance, Trinity Mirror this year paid £7.5m in final dividends to shareholders after a successful 2014, while Newsquest has just found the millions needed to purchase the independent Romanes Media Group, absorbing a daily, 19 weekly paid-fors, nine weekly frees, various associated websites and 270 staff onto its balance sheets.

None of that is wrong, of course: it’s how listed companies work, and it’s what makes the world of business and finance go round.

Yet why should any such companies, who do all the above to please a stock market of expectant shareholders, succeed in holding out begging bowls for small fortunes in business rate relief from your government?

This, I believe, would be seen by politicians, taxpayers and other businesses as the government underpinning share prices, dividends and executive pay in a way that would never happen in any other industry.

The ‘maybe’ case:

But perhaps I’m being too negative; so what if your government and those publishing giants got together and tried something really different?

Yes, consider providing them with rate relief too, but only if it’s structured and ring-fenced in a way that can be seen to be genuinely assisting the industry through distinct projects, and not just maintaining general stock market finances and reputations.

Such rate relief might, for example, be calculated collectively and paid into central funds, perhaps administrated by a body such as the News Media Association (formerly the Newspaper Society), and used for agreed investments that are not part of larger plc balance sheets.

For instance, there might be a fund that subsidises offices for journalists in cities where rents are unsustainably high, or one that helps support street vendors or newsagents in impoverished areas where low revenues mean they would otherwise be unviable.

There might be another fund that guarantees certain levels of court reporting or local government scrutiny, or perhaps one that backs digital experiments in urban areas to the benefit of the general public, rather than the bottom line.

There might even be one that assists start-up titles that are launched in areas where the big publishers no longer want to operate in print, helping people who still want to take part in the community through newspapers.

Such assistance would need to be carefully negotiated and regulated, as you wouldn’t want any publishers – large or small – ducking responsibilities that could and should be afforded, or evading the sorts of operational investments that reasonably go with running a media business.

But if rate relief can be constructed to help stem the decline of local newspapers’ roles in local democracy, and in a way that prevents exploitation by big publishers, then yes – maybe it should be attempted.

I hope this is a useful contribution that sparks other comments and debate, and am grateful for your attention on the important subject of how to maintain a vibrant local newspaper industry.

Yours sincerely,

Steve Dyson


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  • July 15, 2015 at 11:18 am

    “If rate relief can be constructed to help stem the decline of local newspapers’ roles in local democracy, and in a way that prevents exploitation by big publishers, then yes – maybe it should be attempted.”

    Nail on head there. Totally agree.

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  • July 15, 2015 at 11:36 am

    Or, in other words, should we reward those publishers who refuse to respond to market forces? I’m all for protecting local democracy, but I don’t see how subsidising newsagents or commercial property landlords achieves that. Just seems like market tinkering with inevitable unintended consequences. Any government help would need to channel into encouraging new ways of reaching readers (which you also mention) rather than protecting old and broken ones. That would still run the danger that you are giving incumbents an advantage over market entrants, which would be a disaster. Again you also mention that these newcomers, and the innovation they bring, should be given the same support, but I can’t see how this can be structured and regulated? Anyway, thanks for a thought-provoking piece!

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  • July 15, 2015 at 1:28 pm

    Great piece. Mind…how many of the small-to-medium-sized companies have asked for that rate relief? I bet any noise has come from the very publishing giants who don’t need it – just so they can bump up the divi & the CEO’s salary & bonus. It also provides them with another excuse to cover up their own dismal performances.

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  • July 15, 2015 at 2:25 pm

    Any other business that can’t succeed wouldn’t be given such luxuries. It is time that these outlets found other ways of increasing readership and income.

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  • July 15, 2015 at 7:15 pm

    Many of these smaller publishers are making exactly the same cuts which the big boys did just a few years ago. The yes argument is all a bit rose tinted and the no argument a little bit vengeful.

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