Newspaper groups' profit margins criticised in parliament

Newspaper groups were accused of “creaming profit and not investing” by MPs in parliament today.

On a debate in the House of Commons on the future of local and regional news, a number of MPs praised their papers, and criticised cutbacks.

Austin Mitchell, Labour MP for Great Grimsby, said: “I think what’s overdone is the companies’ loss of profitability.

“When you look at the figures, Trinity Mirror had an operating profit [margin] of 19 per cent, Johnston Press 29 per cent.

“Compare that with Tesco – six per cent. Why are they out to make such huge profits out of the media?”

Bob Russell, Liberal Democrat MP for Colchester, said: “Newspaper conglomerates have been allowed to build up massive profits over the years.

“They have not invested properly, yet they still want to cream off as much profit as they can. The government must act.”

Ed Vaizey, Conservative MP for Wantage and Didcot, and shadow culture minister, said the industry decline was clear.

“One major regional news group has seen its advertising decline by 55 per cent in the fourth quarter,” he said.

“We all buy our local newspapers assiduously, and we can all see the physical manifestation of what we’re talking about. The papers are thinner and the coverage is sketchier.”

Vaizey added that the government should “sweep away” legislation that stopped local newspaper groups merging.

‘Like the town losing its collective memory’

A number of MPs criticised the Guardian Media Group‘s recent cutbacks in Greater Manchester, Surrey and Berkshire.

Ann Coffey, Labour MP for Stockport, spoke of her fear for the Stockport Express. “To lose it would be like the town losing its collective memory,” she said. “I urge the Guardian Media Group to think again.”

Andrew Gwynne, Labour MP for Denton and Reddish, said: “I believe the founding fathers of the Manchester Guardian would be appalled at this situation.

“In particular, founder CP Scott, who said a newspaper was ‘much more than a business. It has a moral as well as a material existence’.”

Junior culture minister and Labour MP for Stevenage Barbara Follett said: “We must explore partnerships at a local level – private and public sector ones, and ones which involve local government, which has tended to turn to other methods of getting its news across.

“Is there potential here for a new national network of local media consortia?”

She added she had recently spoken to one journalist asked to take a week’s unpaid leave, and another asked to reduce their hours.

“These are the human tragedies behind the figures,” she said. “This is something the government does care about, we are doing something about it.”

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