Business rates relief for Scottish newspapers to be extended following fears of 'death knell' for industry

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Newspapers in Scotland will benefit from 100% business rates relief for a further 12 months after MSPs warned a failure to extend the measure could prove the “death knell” for the industry.

The Scottish Government on Tuesday said it planned to extend the rates relief for newspapers along with other industries including retail, hospitality, leisure and aviation.

Finance Secretary Kate Forbes said the move would go ahead “providing the UK Budget in March delivers the funding we require”.

John McLellan, director of the Scottish Newspaper Society, said: “We are both delighted and also relieved that the Scottish Government has accepted the will of Parliament and recognised the massive challenges facing independent news publishing in Scotland and this will go a long way to ensuring that titles large and small can survive what remains an extremely precarious financial landscape.”

The Scottish Government’s announcement came a week after opposition MSPs backed a Conservative motion calling for an extension to the 100% business rates relief to newspapers during 2021/22 instead of allowing it to end in March.

They also urged the Government to ensure its advertising budget spend is “invested in a way that supports innovative journalism and regional and local news”.

They said it would only cost about £4m across the whole year to take the measure, which was opposed by the SNP last year but voted forward by Scottish Parliament.

Conservative MSP Maurice Golden urged Holyrood on Wednesday (10 February) to think of the 3,000 people who are directly employed by the Scottish newspaper industry.

“It is the number of people who face a direct threat to their jobs and will be worried about how they will support themselves and their families, and all because this SNP Government plans to cut off support when it is needed the most,” he said.

“That could be the death knell for the sector, and it is being done regardless of the value that the papers—especially the local ones—provide to their communities.”

He added that extending rates relief could “bring those papers back from the brink before they are lost forever”.

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The Scottish Government approved £3.4m extra in public sector advertising spend with the news sector last April but that support is also due to end next month, even though Conservative MSP Graham Simpson said it had so far “helped to cover” the collapse in ad revenues.

Simpson, who moved the motion, said measures are needed to “buy the industry some time”.

Speaking of the “crucial” trusted journalism delivered by local newspapers, Labour’s Colin Smyth said: “The decision by the Scottish Government to extend rates relief for other sectors into the next financial year but to axe that relief for newspapers and pull back on advertising really is a case of trying to undermine that role and kicking a sector when it is down.

“That decision will mean job losses in weeks and ultimately a loss of unbiased local news, fuelling the rise and rise of online fake news.”

A working group has been set up to consider the future of public interest journalism but MSPs said the sector cannot afford to wait for the working group’s report due by the end of the summer.

Members of the working group earlier supported extending non-domestic rates relief for news publishers.

MSPs narrowly voted against an attempt by Ivan McKee, the Scottish Minister for Trade, Innovation and Public Finance, to amend Simpson’s motion to make the issue part of the ongoing budget process instead.

McKee said the Scottish Government was against rate relief for newspapers because it is a “blunt tool that does not provide targeted support to those that need it most, including local newspapers, and that it might provide the biggest benefit to those that need it least”.

“I note that the NUJ has called for support to go only to employers that are investing in their productions and not to those that are making redundancies, cutting pay, curtailing front-line journalistic roles, paying executive bonuses or blocking trade union organisation,” he said. “Blanket rates relief would not meet the NUJ’s criteria for protecting journalism.”

[Read more: At least 265 UK local newspapers have closed since 2005, but pace of decline has slowed]

The News Media Association is continuing to urge Chancellor Rishi Sunak to expand the business rates relief scheme for local newspapers, urging that title closures could be “imminent”.

The existing scheme provides a “helpful but modest” discounts on local newspaper office space of £1,500 and the NMA suggested increasing this to 80%.

Northern Ireland has already extended rates relief for local newspapers.

The National Union of Journalists on Friday welcomed new support for freelances announced by the Scottish and Welsh governments but said longer-term support is needed and the schemes extended to cover those who have been excluded.

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