The struggle for tabloid content

Why private information was bought and sold.

There are many ways of creating content for a tabloid newspaper. Sometimes journalists actually find and report stories. Sometimes the content comes free of charge from PR companies or cultivated contacts, or is the mere "churnalism" of press releases. And sometimes, according to former Daily Star journalist Richard Peppiatt, the content is simply made up.

But there is another way for tabloids to obtain content, which does not require the exertion of research, or the gift of unpaid copy, or the fruit of sheer imagination. It is for content to be bought from suppliers. In this way the tabloid press is no different from any other media or non-media business: raw material is bought in, perhaps modified, and then sold to consumers as a company's branded product.

One form of buying content is the traditional "chequebook journalism" deployed for the celebrity or the naughty kiss-and-teller. However, this is just one form of purchasing content. Another form is to buy in from a pool of "inquiry agents" and "private investigators". Some of these diligent folk work for one title; some hawk their wares around a number of titles. Potential "stories" are then sold to editors, or to reporters who have pitched for space in that day's edition. Although this is all under the heady slogan of "freedom of the press", it is just another form of commercial activity, albeit one which casually disregards the privacy rights and dignity of the individuals whose personal details are usually the subject of these transactions.

And where do these "stories" come from? A variety of sources, including unlawfully obtained information, and phone-hacking was just one form of obtaining information. The significant Information Commissioners Report of 2006 demonstrated the sheer scale of this trade.

The way the phone hacking scandal unfolded has made it seem as if it was primarily a News International problem: concerns at the Royal Household leading to arrests in 2006 and the seizure and storage of Glenn Mulcaire's files (which otherwise may have been long destroyed); the on-going civil actions which were informed by that seizure; the work of Nick Davies and the Guardian; and the New York Times splash of September 2010. However, this is observational bias. There is no inherent reason why phone hacking and other "dark arts" were unique to the News of the World. They were just the ones careless enough to be found hacking into the phones at Buckingham Palace; and a great deal of what has happened since has flowed from that one mishap.

Every day the tabloid is filled with content, and all that content originates from one source to another. Over the last ten to fifteen years, tabloid editors - like so many "Masters of the Universe" - have bullied and provoked their staff to getting the most commercially useful copy for every edition. This daily achievement must have been quite exhilarating for all in the newsroom, and the next day it would happen all over again, with previous day's work quickly forgotten.

But it will have left many traces: financial transactions with outside content providers, and computer and telecoms records for how certain information was obtained. This is the sort of evidence which lingers long after the expletives and the intimidation of the busy newsroom are over for another day. And it is this evidence which will come back to haunt the newspaper men and women whose only concern at the time was to get content and then get to print.

The brutal tabloid mentality of being as indifferent to where stories came from as to how the stories affected the lives of the people involved, may now be the ultimate undoing of several newspapers and current (and former) editors, just as it was the reason for their transient -and one day forgotten - successes.

David Allen Green is legal correspondent of the New Statesman.

 

David Allen Green is legal correspondent of the New Statesman and author of the Jack of Kent blog.

His legal journalism has included popularising the Simon Singh libel case and discrediting the Julian Assange myths about his extradition case.  His uncovering of the Nightjack email hack by the Times was described as "masterly analysis" by Lord Justice Leveson.

David is also a solicitor and was successful in the "Twitterjoketrial" appeal at the High Court.

(Nothing on this blog constitutes legal advice.)

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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