Why lefties don't buy newspapers

The tech savvy left don't buy papers.

Ever since Rupert Murdoch ousted the saintly Harold Evans from the editorship of The Times in defiance of his own pledges to safeguard the title's editorial independence 30 years ago - the Australian media magnate has been a bogeyman for the British left.

But while the left-wing media - led by The Guardian - has won a series of historic battles with the News Corp empire, it will lose the long war because young, tech-savvy lefties on the whole don't buy newspapers.

Lefties' hatred of Rupe was fuelled by his cheerleading support for Margaret Thatcher through the eighties, his brutal suppression of the unions when he moved News International to Wapping in 1986 and his continuing apparent use of media power to further his own political objectives.

Revenge has been sweet since The Guardian's Nick Davies and Amelia Hill lobbed the journalistic equivalent of a hand grenade into the boardroom of News International by breaking the news in July last year that the News of the World had hacked the mobile phone of a missing schoolgirl who was later found murdered.

Since then many on the left have rejoiced at each new woe to face Murdoch and the News Corp family:

The closure of Murdoch's market leading Sunday daily, the News of the World. The collapse of Murdoch's bid to cement his hold on the UK media by taking over BSkyB. The decapitation of his newspaper interests on both sides of the atlantic with the resignations of  Rebekah Wade and Les Hinton (with the former facing criminal charges). Dozens of former Sun and News of the World journalists arrested and facing possible trial over allegations of bribery and phone-hacking Rupert's own heir-apparent James, stepping down from his role as News Corp Europe and Asia boss, sent back to the US with his tail between his legs.

Rupert himself subject to lengthy public interrogations - first from MPs on the Culture Committee (remember the custard pie) and then by the Leveson Inquiry.

Murdoch's political power in the UK forever neutered. Just a year ago, James Murdoch exchanged matey text messages with an eager to please UK Culture Secretary. Today, I suspect most UK MPs would rather pick up a rabid squirrel then a mobile phone with text messages  which have emanated from News Corp.

The Guardian phone-hacking investigation was on the whole a journalistic tour de force. But unlike the Telegraph's MPs' Expenses investigation of 2009, there has been no corresponding uplift in sales. Whereas the Telegraph kept its MPs' Expenses scoops for print, The Guardian released all its biggest hacking scoops online at around 4pm on the eve of print publication in line with its digital-first strategy.

The Guardian's web traffic has continued to go through the roof over the last year. But like everyone else, The Guardian is largely so far replacing print pounds with online pennies.

The left-of-centre press has always been in a minority in the UK - but it is becoming even more so, possibly because young lefties are less like to buy a paper than older, more conservative readers.

Looking at the three left of centre dailies: The Guardian sold 367,000 copies a day five years ago, it now stands at 214,128; The Independent 249,536 versus 98,636 today; the Daily Mirror 1,537,243 versus 1,084,355.

Collectively that is a sales decline of 35 per cent.

Looking at the main right of centre dailies, the Daily Mail was selling 2,300,420 copies a day five years ago versus 1,991,275 today; the Daily Express 760,086 versus 568,628; the Daily Telegraph 898,817 versus 576,790; The Times 629,157 versus 393, 187 and The Sun 3,047,527 versus 2,624,008.

That's collectively a drop of 19.4 per cent. Even if you lump the 200,000 odd daily sales of politically neutral ‘i’ in with the left-wing press it doesn't move the dial much. You are looking at around 1.5m daily sales for left-wing papers versus more than four times that for the right-wing dailies.

And don't forget paid-for digital subscriptions to The Times and Sunday Times now stand at around 250,000.

On the left only The Guardian has journalistic fire power to match the Mail and assembled forces of News International. But its trust-fund millions (in the form of holdings in the likes of Emap and Autotrader) won’t last forever.

So the message for left-wingers who care about the media is this. Enjoy your moment of schadenfreude by all means and cheer on The Guardian and Nick Davies from the sidelines. But if you want to support the sort of campaigning journalism which brought this historic realignment of media power about - you need to take your smug grin down to the newsagents and buy a newspaper (or a magazine for that matter!).

Photograph: Getty Images

Dominic Ponsford is editor of Press Gazette

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation