Leveson must mark the beginning of change, not the end

We need a new platform-neutral regulator that no longer treats newspapers, broadcasters and websites as if they live in discrete little boxes.

Could the backdrop for publication of the Leveson report this week be worse? A polarised debate between press and campaigners; serious political divisions; and another media crisis - this time at the BBC - eroding public trust even further.

Lord Justice Leveson must take a bleak view of the prospects for building consensus around his recommendations. But there is a bigger danger and the Leveson report will, at best, address only some of the issues confronting Britain’s media. Economically, our traditional media is under severe strain. Circulations for print publications are falling, advertising revenues migrating online and digital revenues growing at only a snail’s pace for the creators of traditional print and television content. According to media regulator, Ofcom, the only growth in readership for our national newspapers is online, and that is currently not where the money is. The so-called print to digital "profit destruction ratio" could be as much as 25:1. 

In a report published by the IPPR today, I argue that once they have taken delivery of the Leveson report, our politicians will need to look much more broadly at the prospects for growth in our media sector.  Leveson should mark the beginning of the process of change, not the end. We need to take a new approach to media regulation. One which is no longer treats newspapers, broadcasters and online services as if they live in discrete little boxes. That’s not where consumers are today. And it certainly won’t be where consumers are by the time a new regulatory regime comes into force.

True, many people remain excluded from the digital revolution, but more than half of households today have three or more internet enabled devices. According to Ofcom, when people buy an iPad or other tablet device, 25 per cent of people say they read a paper copy of a newspaper less often. A new approach should offer more freedom for media companies to innovate and develop new business models and at the same time deliver more consistent standards across the board. 

To do this, we can build on our current system of independent regulators, but shift the focus on to content rather than delivery methods. So, for example, one regulator to deal with news publishing on all platforms, one to deal with broadcast news content, with its special requirement to maintain impartiality, one to deal with general non-news content across all platforms, broadcast and on demand. Each body would involve the industry and lay representatives, including consumers in developing standards and monitoring and enforcing compliance. But they must have teeth, and it must be a requirement for all qualifying organisations to take part. For that you need a statutory backstop.  

Independent and statutory regulation are not mutually exclusive. Advertising and on demand programming have both. ITV is completely under the umbrella of statutory regulation, but that didn’t stop the broadcaster investigating and breaking the Savile story. The backstop role that Ofcom performs for some sectors should be extended to all media. Stepping back from day to day regulation of content would enable Ofcom to take a broader view, helping to develop consistent standards across media on matters such as the protection of privacy and the public interest. 

A new News Publishing Authority would be created as part of this framework as a replacement for the PCC. It would be platform neutral, dealing with print and online services. It would also deal with news video, ending the current risk that newspapers could fall under a new regulator if they develop opinionated TV-like content for distribution online and on demand. Only news publishers over certain size should be required to sign up, and the new body would continue to perform many of the current functions of the PCC, including handling complaints, offering pre-publication advice to complainants and giving guidance to editors. It should also involve industry as well as lay representation, as now. But it must have recourse to Ofcom’s back-stop powers when needed: to compel membership; arbitrate effectively; and apply effective sanctions. 

The public want stricter regulation and the key is to develop a system that is as sensitive to press freedom and the future economic viability of our media as it is possible to be. And that is what this solution proposes. Assessments of media plurality should become platform neutral too. Judgements on concentrations of power and influence should be taken using a range of measures, with consideration given to the continuing viability of established titles and media groups. 

Setting hard ownership limits within particular media segments – like the printed press – may be politically attractive, but if the result is simply the closure of unprofitable newspaper titles, then what does that achieve for plurality and consumer choice? After the fiasco over News Corp's attempted takeover of BSkyB, the so-called quasi-judicial role for the Secretary of State should be abolished too, with Ofcom taking responsibility for media competition and plurality issues with enhanced accountability to Parliament. The UK benefits from one of the most vibrant and diverse media markets in the world. Alongside a lively free press and an abundance of new media players, we have superb public service broadcasters. In the new world, as all traditional media comes under strain, our broadcasters need more security over their long term status and funding. In the case of the publicly-funded BBC this should come with a greater external scrutiny, continuing to work alongside the BBC Trust. 

Without a new regulatory settlement, in a few years time the rich media mix the UK enjoys today of old and new, serious and frivolous, impartial and opinionated could disappear. A traditional industry that is already struggling economically will be hamstrung and unable to compete with new media players. There’ll be no shortage of choice, and aggregation software will help us find it. But will it be worth reading or watching? Leveson will be important. But let’s not get sidetracked into yesterday’s arguments about whether or not a "dab of statute" signals the death knell for free and investigative journalism. There are bigger risks and they require a broader view and a more comprehensive solution. 

Nigel Warner is a former government media policy adviser and author of Life after Leveson, published today by the IPPR

Hugh Grant, one of those leading calls for stricter press regulation, meets David Cameron during last year's Conservative Party Conference in Manchester. Photograph: Getty Images.

Nigel Warner is a former government media policy adviser and an associate fellow at the IPPR.

Alison McGovern
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Forget universal basic income - this is how we can include voters in economic growth

The links between economic growth of the country and that of the people, families and towns have broken. The state can fix them again. 

Economic policy is always boring, until it’s too late.

Pensions. How they are funded, who they cover, what happens if they fail. Boring. Until it was too late.

Mortgages. Who has them, who needs one, who should have one. Boring. Until it was too late.

Finance. Capital markets, their products, their structure, their risk profile. Boring. Until it was too late.

You see the point I’m making. It’s easy to look away from numbers. The data doesn’t necessarily tell us an obvious story. And then one day, a catalyst sparks an unforeseen, if, with hindsight, predictable event, and we all wonder why we didn’t see it coming.

Something similar happened with the Brexit vote. Of course, it was a perfect political storm: an overconfident Prime Minister calls a referendum that he only needs to have to pay off his right flank, safe in the knowledge that the mainstream voters and the leadership of the Labour party will carry him through. Except he forgets that there is someone more despised than even his right flank - him. 

But beneath all of that, the Brexit vote revealed a divided country. Between those who felt that Britain as it was before the referendum offered them a decent enough – if imperfect - future, and those who felt it offered them nothing of the sort. 

Could we have seen it coming? Perhaps we could. Take two graphs.

Real wages are still, today, on average below what they were in 2008, nearly a decade ago. At the point of the referendum, average wages were yet to return to the level they hit eight years earlier. The difference between real and nominal wages is inflation. People have watched prices steadily drift up while their wages have remained stubbornly flat. Not an overnight shock, but a long drawn out crisis all the same.

Vast numbers of pensioners (over 60 per cent of them) voted to leave the European Union, and pensioners incomes have not seen the same fall as incomes for the working age population (in fact they rose by 19 per cent in real terms in the last 10 years). But it is important not to overinterpret the data with hindsight. After all, there are nearly 32m British people of working age. That surely should have been enough to carry the vote, had far too many people had so little reason to back the status quo.

In the years running up to the crucial Brexit vote, the economy was, by and large, moving ahead. But in the case of the most crucial, most noticeable, economic transfer - a person’s wages - the economy was not moving ahead at all. In fact between the crash and the 2015 general election, wages largely only fell, and since then, pay has struggled to make up ground, against a picture of an otherwise ‘growing’ economy.

Worst of all - nearly 4m households in measurable (and therefore known) poverty include someone at work. Of the 17m Brexit voters, some were wealthy retired voters who always hated Brussels. But how many more simply had too little to lose, and couldn’t stand David Cameron?

The problem with all this though, and the reason we didn’t see it coming, is that no one’s life is a graph. I mean, we are all data points. But no one feels like a data point. And people are notoriously bad at providing logical, graph-like, mathematical reasons for their political judgements. "My individual wages have failed to keep pace with growth in the economy at large," said no person on no doorstep, ever. Unhappiness with what is on offer manifests itself in lots of different ways but it isn’t likely to be an analysis of the macro-economy.

We all know of course that people are much more likely to connect with politics (and politicians) emotionally. That is how we make our choices. But our emotions are informed by the facts of our life and are responses to the facts we see. So, whilst the graphs above cannot tell us all we need to know about why Remain lost, they do tell us about some facts likely to impact on the choices we make.

The challenge is to work out how we can change the trends shown on the graph, and how this in turn will affect those who lost out over the past decade. What can be done to repair the link between economic growth and economic growth for all?

This challenge is to create "inclusive growth". Or as I think of it, making sure there is a hard chain which links growth in the economy overall to the growth of wages and incomes of the many. When the country rises, so must all within it.

The hard links in the chain are what should have kept our country together. They are the rules that should have meant that the British economy doing better meant individuals, families, towns, cities all doing better too. You can see from the graphs above that the rules worked between 1997 and about 2005. Our country grew, and we all grew in capacity with it. But then the model stopped working. And 11 years later people were asked to vote for the status quo, even though the status quo was clearly failing the many.

We will never be able to see the trends until it is too late. We need rules that shape our markets, including the labour market, to achieve an outcome that people can see and feel in their pockets. Analysis of the past is only any good if it can help shape the future. 

It’s not enough to say that somehow our economy is rigged against people, as if this was one great fiddle. Rather, we should remember that policy choices have consequences. 

Now some people suggest that the correct response to falling wages, and precarious work, is some sort of universal benefit, or citizens’ income. But recent Fabian Society research demonstrated that the vast majority of people – about 80 per cent - feel positive about their work even despite the story told here about wages. So even if it were practical for government to raise taxes in order to transfer something in the region of the state pension to every person in our country, it hardly seems like it would be popular. 

If people, in general terms, actually like their work, the problem is then making sure they get paid enough and get promotions. It means recognising what the past decade has taught us: that the growth of the economy must mean economic growth for all within the economy, or else there will be consequences.

So, the question remains: what are the hard links in the chain between the economic growth of the country as a whole, and economic growth of the people, families and towns within it?

Unfortunately, this is where the boring stuff still matters. You can get paid more if you have better prospects. That means a buoyant labour market, and the skills to participate in it.

Now the government say that they are addressing the challenges in our economy by investing in infrastructure, through an industrial strategy. And along with buzzy new ideas like universal basic income (where citizens are guaranteed a certain income), everyone in politics loves announcing campaigns for new railway lines (me included). Trains are big, fast, expensive and showy. But travelling to work by train tends to be the preserve of those who already have a high-skilled job and are commuting some distance. We should worry a little more about those who get the bus to work.

Then take those who work in low-pay sectors like care, retail, hospitality, or construction. Each sector has its own challenges, but one thing that unites of all these sectors is the likelihood of people working in them to be working below their potential skill level. Hopefully our new metro mayors will be able to provide better education opportunities for those at or near the minimum wage. But what about in those areas without mayors? Do they fall even further behind? Skills transfers matter much more for future growth than a massive financial transfer like universal basic income.

And in case anyone should think that I have forgotten, with less than 15 per cent of people in the private sector represented by a trade union, it is little wonder that workers have insufficient power to command better wages. Our labour market leaves too many people on their own, without the strength of collective bargaining to get them a good deal.

Universal basic income fails for another crucial reason. It would fail for the same reason that tax credits were economically effective but open to political challenge. For most people, the part of government, of the state, that they wish to defend are the things they can see, they can touch, emotionally engage with. The hospital their child was born in, that cared for a sick parent, the school they went to, the park they played in with their grandchild. They prefer to earn their wages, and do a job they enjoy. Transfer payments from the state are always harder to defend, as the history books attest. 

So for me, truly inclusive growth means making the most of the institutions we already have – colleges of further education for example – and building new ones like universal quality childcare. Many members of our workforce are prevented from returning to work after the birth of a child, simply because of the cost of childcare. Universal free childcare would allow many more women to go back to work or have the time to gain more skills, should they want to. Moreover, good quality childcare would benefit all of our children by narrowing the attainment gap. These hard links in the chain - the links that ensure that growth in Britain involves economic growth of all of those people and places within it - are, in fact, the institutions of the state. 

These are the platforms Labour governments have built for ordinary people to stand on. But these are the very institutions under attack from current government policy. If we’re going to rebuild the chain, then the government must change tack. We need to develop new ideas and solutions and the all-party parliamentary group on inclusive growth can be a place to bring people together across the party divide. Theresa May has spoken about an economy that works for all. Now’s the time to protect the institutions that can deliver that economy and inclusive growth, before it is too late.

The APPG on Inclusive Growth's 'State of the Debate' event with the OECD, World Economic Forum, RSA and IPPR is on Tuesday 21st February at 6.30pm at Parliament. See www.inclusivegrowth.co.uk for full details.

Alison McGovern is Labour MP for Wirral South.