Saving the Observer

Support Press Gazette's campaign and protect media pluralism

Thomas Jefferson once declared: "Were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate to prefer the latter." Jefferson was right; newspapers are an essential, not an optional, part of a healthy public realm.

With this in mind, I'd urge you all to support Press Gazette's campaign to save the Observer after the title was threatened with closure by the Guardian Media Group.

The loss of the Observer would leave the Independent on Sunday, whose own future is far from secure, as the only quality liberal-left title in the Sunday market.

The Independent on Sunday's circulation was down 19.98 per cent year-on-year in the latest ABCs and its parent company, Independent News and Media, may buckle under the weight of an overdue £179.6m loan.

The Sunday Times (up 2.74 per cent year-on-year), which will shortly launch a stand-alone website, may be seen by some as a guarantee of quality journalism but it has shifted considerably to the right since the days of Harold Evans.

All newspapers are running to stand still as readers, particularly the youngest, migrate to the internet. In the UK the last recession claimed three papers: Rupert Murdoch's Today, the News on Sunday and the left-wing Sunday Correspondent. It is naive to believe that this recession could not sound the death knell for a similar number of titles.

I have long thought that the government should emulate a scheme planned by the French president, Nicolas Sarkozy. He has promised to introduce a programme that will offer every 18-year-old a free subscription to a newspaper of their choice, ensuring that some will catch the reading bug early on.

Labour ministers should view Sarkozy's intervention with more than mere curiosity. They more than most have an interest in guarding media pluralism.

George Eaton is political editor of the New Statesman.

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George Osborne's mistakes are coming back to haunt him

George Osborne's next budget may be a zombie one, warns Chris Leslie.

Spending Reviews are supposed to set a strategic, stable course for at least a three year period. But just three months since the Chancellor claimed he no longer needed to cut as far or as fast this Parliament, his over-optimistic reliance on bullish forecasts looks misplaced.

There is a real risk that the Budget on March 16 will be a ‘zombie’ Budget, with the spectre of cuts everyone thought had been avoided rearing their ugly head again, unwelcome for both the public and for the Chancellor’s own ambitions.

In November George Osborne relied heavily on a surprise £27billion windfall from statistical reclassifications and forecasting optimism to bury expected police cuts and politically disastrous cuts to tax credits. We were assured these issues had been laid to rest.

But the Chancellor’s swagger may have been premature. Those higher income tax receipts he was banking on? It turns out wage growth may not be so buoyant, according to last week’s Bank of England Inflation Report. The Institute for Fiscal Studies suggest the outlook for earnings growth will be revised down taking £5billion from revenues.

Improved capital gains tax receipts? Falling equity markets and sluggish housing sales may depress CGT and stamp duties. And the oil price shock could hit revenues from North Sea production.

Back in November, the OBR revised up revenues by an astonishing £50billion+ over this Parliament. This now looks a little over-optimistic.

But never let it be said that George Osborne misses an opportunity to scramble out of political danger. He immediately cashed in those higher projected receipts, but in doing so he’s landed himself with very little wriggle room for the forthcoming Budget.

Borrowing is just not falling as fast as forecast. The £78billion deficit should have been cut by £20billion by now but it’s down by just £11billion. So what? Well this is a Chancellor who has given a cast iron guarantee to deliver a surplus by 2019-20. So he cannot afford to turn a blind eye.

All this points towards a Chancellor forced to revisit cuts he thought he wouldn’t need to make. A zombie Budget where unpopular reductions to public services are still very much alive, even though they were supposed to be history. More aggressive cuts, stealthy tax rises, pension changes designed to benefit the Treasury more than the public – all of these are on the cards. 

Is this the Chancellor’s misfortune or was he chancing his luck? As the IFS pointed out at the time, there was only really a 50/50 chance these revenue windfalls were built on solid ground. With growth and productivity still lagging, gloomier market expectations, exports sluggish and both construction and manufacturing barely contributing to additional expansion, it looks as though the Chancellor was just too optimistic, or perhaps too desperate for a short-term political solution. It wouldn’t be the first time that George Osborne has prioritised his own political interests.

There’s no short cut here. Productivity-enhancing public services and infrastructure could and should have been front and centre in that Spending Review. Rebalancing the economy should also have been a feature of new policy in that Autumn Statement, but instead the Chancellor banked on forecast revisions and growth too reliant on the service sector alone. Infrastructure decisions are delayed for short-term politicking. Uncertainty about our EU membership holds back business investment. And while we ought to have a consensus about eradicating the deficit, the excessive rigidity of the Chancellor’s fiscal charter bears down on much-needed capital investment.

So for those who thought that extreme cuts to services, a harsh approach to in-work benefits or punitive tax rises might be a thing of the past, beware the Chancellor whose hubris may force him to revive them after all. 

Chris Leslie is chair of Labour's backbench Treasury committee.