Tories Reject Labour's Plans to Subsidise Local News

Government subsidies for regional news will stifle innovation and lead to demands for more public money, according to the Tories.

The Conservative stance means there is a very sharp division between the two major parties over how Government can support the local and regional news industry.

As I reported previously, Labour plans to support regional news consortia bringing together newspapers, local TV news and bloggers.

Three pilot schemes will be announced soon. Word in the industry (I can't verify this) is that they will be in Scotland, Wales and north west England.

The projects will get some public cash, probably from the licence fee, although this is only supposed to be temporary.

Jeremy Hunt, the Tory shadow culture secretary, made it clear the Conservatives oppose this idea, in a speech last week.

He said: "Let's look, for example, at what the government is proposing on local news. Essentially it wants to prop up the failed regional news model with licence fee cash.

"Why is this so flawed?

"Firstly, because it will set in stone the current failed model and stifle any possibility of better local news models emerging.

"Once the licence fee is paying for regional news, then all the efforts of those people receiving the subsidy will be put into lobbying ministers and Ofcom as to why it should continue. What they will not be doing is developing the new business models for local media that are being opened up by the internet.

"Secondly it will undermine one of the most successful elements of British broadcasting, namely the fact that our broadcasters compete on their ability to attract viewers not subsidy."

The Tory proposal was to reform the rules regulating media ownership so that it was easier for existing media companies to invest in new platforms, such as local television stations, he said.

Local rather than regional channels (eg, Birmingham, rather West Midlands) could be included on existing digital television broadcasts, known as multiplexes, he said.

"I am a big supporter of the idea that we need to create space for community and volunteer-led local TV stations. But I also recognise the challenge of making them commercially viable - as we have seen from the struggles of the brave and spirited Channel M in Manchester.

"Another option is to use space on existing multiplexes to create a national network that local programming could affiliate to. This has the advantage that costs are dramatically lowered: local affiliates only need to finance around four hours of programming a day outside prime time. Advertising can be sold nationally with local opt-outs. This is the system that has worked successfully in the US and other countries for many years.

"Who might want to invest in such a model? We could set up a new network, although given that we already have as many networks as America with a fifth of the population many would question whether there is room for one more.

"But becoming the backbone for a network of local affiliates could be an opportunity for ITV, 4 and five - either on their main channels or subsidiary ones. As for the local affiliates, one could imagine investment from a combination of new players and existing local newspaper groups."

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