Uncorrected Evidence 34

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Oral Evidence

Taken before the Welsh Affairs Committee

on Tuesday 15 January 2008

Members present

Dr Hywel Francis, in the Chair

David T C Davies

Nia Griffith

Mrs Siân C James

Alun Michael

Albert Owen

Mark Pritchard

Mark Williams

________________

Memorandum submitted by ITV Wales

Examination of Witnesses

Witnesses: Mr Elis Owen, Managing Director and Controller of Programmes, ITV Wales and Mr Michael Jermey, Director, ITV Regions, gave evidence.

Q1827 Chairman: Good morning and welcome to the Welsh Affairs Committee. For the record could you introduce yourselves, please?

Mr Owen: I am Elis Owen, Managing Director of ITV Wales.

Mr Jermey: I am Michael Jermey, Director of ITV Regions with ITV plc.

Q1828 Chairman: Could I begin by thanking you for coming along and thanking you also for your written memorandum. So it is on record, our congratulations to you on your 50^th birthday, commercial television in Wales; I understand you are celebrating that this year. Could I begin by asking you a fairly straightforward question about what are the challenges and the opportunities of globalisation for broadcasting and the creative industries and particularly for ITV Wales?

Mr Owen: ITV Wales started off 50 years ago - we started in 1958 - and obviously ITV was at that time one of two channels and then one of three or four channels, and when we had the licence we were the only channel making money out of advertising, the only commercial channel. To get the licence to do that obviously we made public service broadcasting programmes like news programmes, like non-news programmes. Increasingly over the last few years - the last ten years in particular - there has been a growth in the amount of channels on television; there are over 500 channels competing against ITV for advertising. As we go towards digital switchover there will be even more channels competing with ITV for advertising so it is increasingly difficult to justify the public service broadcasting element of our licence, particularly news and non-news programming. Obviously we do make news and non-news programming and Ofcom recognise the fact that they are regulators and say that we should make this news and non-news programming. As we go towards digital switchover it is going to be increasingly difficult and commercially viable to make these programmes. We are obviously going through a review this year with Ofcom.

Mr Jermey: I think in the broader context I would add to that, in specific response to your question, the challenges of globalisation are that whereas we were competing in a market just a few years ago with only one other commercial competitor, we are now competing with hundreds of other channels, with the internet, with Google doing more advertising than ITV1 did across the UK in the past year. Immense competition is a challenge. The opportunity is a more international market where, if ITV can invest in strong UK production, it is possible for franchises like ITV's Hell's Kitchen to be something we can export internationally. You are right in emphasising that there are challenges but there are also opportunities there for ITV.

Q1829 Chairman: Could I ask you specifically about the challenge of maintaining of Welsh identity? How would you define that in this new global world? How difficult is that and how would you characterise it?

Mr Owen: It has been increasingly difficult over the last ten years or so as we went through a period of takeovers by other companies from the old HTV Wales to various other companies to ITV plc because of the commercial problems we have had. There has been a competition for advertising so it has been more difficult to make news and non-news programming. Luckily we have had the backing from those various companies to make the news and non-news programming and keep a Welsh identity. The fact that we are called ITV Wales within ITV plc keeps a Welsh identity as well and I think we have managed as a nation to show that we can actually make these news and non-news programming. However we are going through a period of even more difficulty and there are probably questions about how long we can carry on in the future.

Mr Jermey: I think that is right. Over the past 50 years in Wales and across the UK as a whole there has been a compact, if you like, whereby ITV was given rare analogue spectrum that could deliver enormous audiences and was immensely valuable. In return for that, as well as a healthy cheque to the exchequer, ITV Wales and regions within England provided high quality public service broadcasting in the form of news and non-news programmes. We know that that traditional compact is breaking down. The value of the remaining analogue frequencies is minimal now. A good number of the licences, including ITV Wales, I think you can argue about how commercially viable they are as of today but certainly come 2012/2014 they become commercially non-viable. If we believe that there is value - as I certainly do - in plurality of news provision, plurality of other forms of programming in Wales and elsewhere in England, we, as a society (I do not think it is just down to the broadcasters, I think it is for Parliament, for Ofcom and others) need to find a way through to ensure that that plurality continues to exist. I do not think it is obvious that the market on its own will continue to provide that.

Q1830 Mrs James: I want to develop this theme of the digital switchover a little bit more. What impact do you think the analogue switch off will have on the Welsh content on the ITV channel and in particular what sort of service will we have after switchover in Wales?

Mr Owen: At the moment we are going through a period of review by Ofcom, our regulator, which is looking at this very point of what the broadcasting commitment will be for ITV post digital switchover for ITV Wales. At the moment we make five and a half hours of news programming and four hours of non-news programming. ITV, in their proposals to Ofcom, have said they want to keep a national news service for Wales because they recognise Wales as a nation and to make news programmes that cover the whole of Wales I think is a good commitment towards Wales. Obviously it will still be commercially difficult as we move to the future. That is the proposal ITV put to Ofcom. As regards non-news programming, we make four hours at the moment of non-news programming which is more than the English regions. Ofcom will decide what the number of hours will be again in the future and that review will take place this year. Obviously Ofcom consults thoroughly with everybody, including ourselves, as to what that will be in the future.

Mr Jermey: I think there are almost two phases. There is the phase now to 2012/2014 when I think there will be a significant continuing amount of regional broadcasting in Wales on ITV news and non-news programmes will perhaps be fewer than the mandated number of hours as of today. However, behind your question I think is: what are the economics of public service broadcasting moving forward? I think ITV is making it clear that we perceive our public service broadcasting priorities to be to continue to invest in strong UK production (we invest more in UK production original content than any other commercial channel) which is clearly valued by audiences everywhere; continue to invest in national UK news and, if economically sustainable, to continue with regional news and, in the case of Wales, national news for Wales. I think that last caveat "if economically sustainable" is important. The value of the licence, as I say, has dipped massively. There is massive competition and if we are to sustain original UK production we need to look very carefully at other areas of funding. There is a year long Ofcom review taking place and I think it is a priority for people who are interested in plurality to look at other possible solutions beyond 2012/2014; I do not think that one can assume that the current model will roll on providing the level of public service broadcasting in the commercial sector that has traditionally been there.

Q1831 Mrs James: Another issue that my constituents have been bringing up with me, particularly those who live in blackspots within the constituency, is the geographical coverage which will be post switchover. Is it going to be more or less accessible? Will ITV be just as accessible to people or less accessible?

Mr Owen: That is probably a question to put to Digital UK who are looking after the switchover process. As far as we gather it will be better access for viewers in Wales; the signal will be better through digital signal and more homes can get ITV Wales and BBC1 Wales, the main terrestrial broadcasters in Wales. Already, as part of digital switchover, 50% of the homes who get Sky digital/satellite digital and the default channel there is BBC1 Wales, ITV Wales and S4C. People who could not have had those terrestrial channels before can now get those channels because of the process towards digital switchover. I think it will enhance the coverage in Wales.

Q1832 Mrs James: What about access to other ITV regional coverage? Will it make us able to watch other ITV areas or just specifically what you produce?

Mr Owen: Certainly through the Sky process you can access other ITV regions. I think on the Freeview process you will only get the signal available from your nearest transmitter. The six big transmitters in Wales will deliver ITV Wales to you; if you want the other ITV regions you will have to go through a satellite digital system.

Q1833 Mark Williams: Following on from that, have you, as a company, quantified that problem of coverage? We have heard the figure of 98.6% which involves perhaps 30,000 households so it is a big problem. In my area, as with Mrs James, there are black spots, so how big a problem is that?

Mr Owen: The figure is 97.7%. Overlap viewing always has been a problem in Wales, particularly the north east, the borders and the south east of Wales. There have always been problems with overlapping signals, stronger signals from other transmitters, mainly in England. HTV before and ITV ten years ago tried to grasp that problem and put a new frequency into the Wrexham area so that people in Wrexham who could not previously get ITV Wales could get ITV Wales; that is now available. I would imagine that as part of the whole process of democracy in Wales and devolution it is in our interests and the politicians' interests that we get the ITV Wales signal rather than the default signal from parts of England because the Assembly and the whole democratic process is so important. I would hope that the digital process will actually fill in a lot of these gaps as regards the signal and people will be able to get ITV Wales. It is also up to the viewers themselves; some viewers do not realise that they can get ITV Wales by just switching their aerials. Historically they have stuck with maybe Granada - or ITV West as it is - and do not know that they can switch their aerial and get an ITV Wales signal. A lot of it is historical; it is an education process as well.

Q1834 Mark Williams: Which, as you say, is a role for Digital UK. I appreciate what you say about the borders and how important that is; there are some black spots in the west of Wales as well and there is a lot of hope and expectation out there that with digital switchover something can be done for those communities as well.

Mr Owen: Hopefully, yes.

Q1835 Albert Owen: I am getting mixed messages with regards to the improvement of the signal on digital switchover. There are many people in my constituency - and indeed in the whole of south west Wales - who now have difficulty even with their digiboxes getting a signal. I am talking about the non Sky customers. Are you saying that their signal will be improved because they have this equipment when the digital switchover comes?

Mr Owen: Again this is a question which should be put to Digital UK rather than us because they are looking after the whole process.

Q1836 Albert Owen: I appreciate that.

Mr Owen: We obviously understand there are problem areas and what we have been told is that that signal will be a much stronger signal once the process is completed. When digital switchover actually begins and goes through the 12 month process in Wales, by the end of that there will be a very strong digital signal and hopefully the people who do not have a strong signal at the moment will have a strong digital signal so that problem should go away. I presume they can also still get analogue signals at the moment, therefore they can default to analogue if they wanted to.

Q1837 Albert Owen: The reason I am putting that to you is because many people have greater trouble with ITV than they do with BBC currently with digiboxes. I have also put that to Digital UK but I think it is important to hear that. I am very concerned about what you say about the switchover with people on the border losing access to the English regions because they do that by choice. In one breadth you are saying that we need greater competition and yet in switchover you seem to be going down the road of just having one choice. Non Sky customers would not have the choice with the digibox.

Mr Owen: Sky customers can have the choice.

Q1838 Albert Owen: The non Sky customers - the ones who choose not to subscribe to Sky - are wanting a full digital coverage equivalent to what they have now.

Mr Owen: There will be a stronger signal I should imagine because that is what will happen. The digital signal will replace the analogue signal. If the stronger signal happens to be in this region from an English transmitter they will probably get the English signal then. Again there is a lot of tidying up to do as regards Digital UK. As regards the signal, obviously if they want to see the ITV news from an English region that is up to them. We have hundreds of thousands of people telling us that they want to see the ITV world news in Wales. Obviously we cannot cater for everybody, but the fact that part of the full democratic and devolution process created Wales as a democratic entity means our news will be Welsh news for the people in Wales. I am sure the people of central, if they had to take this Welsh Select Committee or they had to take events in the Welsh Assembly, they would like it if it was in central. That map has to be clearly drawn.

Q1839 Albert Owen: I understand that but what does concern me is that much of the Welsh broadcasting is Cardiff-centric and many people in North East Wales relate more to cross border issues which are in very close proximity to them. They find out that when they have the Welsh only option they are getting predominantly South East Wales and vary from their regions and that the Offa's Dyke is maybe a political barrier but it should not be a barrier for broadcasting.

Mr Owen: Obviously that has been a complaint that has happened over the last 50 years of ITV Wales. If we go back historically there have always been people from North Wales complaining that there is too much South Wales news and obviously people from West Wales saying there is too much North Wales news. As a nation it is something we have to grasp as a national broadcaster. What has enhanced that position for us as regards making our service for Wales is that over the last two years we have had satellite news trucks which have enabled us to go to live links throughout Wales. There is one based in North Wales and one based in South Wales. We cover a lot more North Wales stories; physically we can cover them because we can go live to them. In November and December last year there were 42 live links from North Wales. I cannot remember all the stories but 42 times we went live from North Wales in a period of eight weeks. I think that coverage of North Wales is being enhanced with what we have there.

Q1840 Chairman: We are going to be looking at cross border issues in another inquiry later on.

Mr Owen: I agree it is something which obviously should be discussed.

Q1841 Mark Williams: You touched on my question in your earlier comments. In terms of the plurality of the provision of public service broadcasting, being negative now the threat that digitalisation presents to that - you mentioned that economic sustainability is one of the key criteria and an Ofcom year long review and its possible solutions - what solutions would you like to see to counter that threat?

Mr Jermey: I think in the short term - by the "short term" I am talking about the next three to four years or so - I think ITV should be given more freedom by Ofcom to configure the news map across the UK in a way that returns us very clearly to regional broadcasting rather than very sub-regional broadcasting. For instance, in England over the history of ITV, we have seen a process where you had one regional news service for Anglia which became, with subsequent franchise rounds and competition for licences, two separate services for Anglia or three for Meridian or two separate programmes for Yorkshire. In the short term we are proposing a reduction in the number of flagship programmes that ITV makes at six o'clock across England and Wales from 17 to nine. We are not proposing any change in Wales but we are proposing considerable changes in England. That will still mean that ITV is investing very, very substantial sums of money in regional news, more than any other commercial broadcaster, but at a level that is more sustainable, for the remaining period of the licences. I think the issue becomes refocused, if you like, post-2012 or post-2014 at the end of the licences and is there an economic system that could be put in place that continues with plurality in public service broadcasting beyond that date? As I say, the priorities of ITV are investment in UK content so that we can make attractive programmes for the people in the whole of Britain. We invest more than any other channel - let alone any other commercial channel - on ITV1 in home generated UK content; we want to be able to continue to provide the best possible service. We want to be able to continue to provide an absolutely first-rate UK news service and with the return of News at Ten last night I hope you can see how serious ITV is about that. Also, if economically sustainable, we would very much like to continue something which has been part of the DNA of ITV for 50 years, that is strong regional news. Whether it is economically sustainable I think there is a question mark over. If you can tell me what the revenues of ITV1 will be in 2014 or how the television market will be performing against the internet by 2014 I might be able to give you a clearer answer as to the degree to which it is economically sustainable or not, but nevertheless the trend lines I think are fairly clear and if, as a society, we think that plurality - not just in Wales but in England as well - is important, there is a need to look reasonably urgently at some of those other models. We have talked about some of the things that we have been given; we have talked about the possibility of hypothecating advertising minutes which does not seem to solve the whole problem. In other bits of the forest relief could potentially be given to commercial broadcasters. In a sense I am not sure it is for us to purely come up with the answer; there are some great minds in Ofcom and elsewhere looking at these issues. However, I think it is important for all of us who care about public service broadcasting to realise that there is a timetable and a track and that unless some imaginative policy solutions are found this could lead to a reduction in plurality.

Q1842 Mark Williams: The great minds in the House of Commons' Culture, Media and Sport Committee talked in terms of Ofcom quantifying how much regional television should be provided. What are your views on that?

Mr Jermey: I think it is clearly within Ofcom's power and remit to define what the shape of regional news should be.

Q1843 Mark Williams: Notwithstanding what you said about the clash, if you like, between plurality and regions, would you welcome a quota of that type specifying how much regional material should be provided?

Mr Jermey: Provided within regional news or to the network?

Q1844 Mark Williams: Within regional news.

Mr Jermey: Within regional news Ofcom absolutely regulates the number of minutes as a region that ITV news broadcasts to honour its licence.

Q1845 Mark Williams: More generally?

Mr Jermey: More generally, if you are talking about quotas for regional contributions to the network schedules, I think our view is that we are the commercial broadcaster that makes the largest amount of programming outside London as it is and we believe there should be a meritocracy in ideas and that ideas, from wherever the come - England, Wales, Scotland, Northern Ireland or any other part of the British Isles - should succeed on merit and that trying to mandate these things through quotas is not the way to build a successful, creative industry.

Q1846 Mark Williams: Is there a role for Ofcom to potentially identify shortfalls in that provision?

Mr Jermey: Shortfalls in the provision in what sense?

Q1847 Mark Williams: In terms of Welsh regional material.

Mr Jermey: If we are talking about network productions, as I say, ideas will win out and to artificially put quotas on any part of the United Kingdom seems to us not the way to have a strong creative channel that people will want to watch.

Q1848 Mark Pritchard: Competition when it is not around is a good thing for those who have the monopoly and then competition when there are many other people around is not such a good thing. That seems to me what I am hearing from you, Mr Jermey, today, and I think in a way ITV generally has been rumbled; now there is competition the lack of broadcasting philosophy and vision in the management of ITV has now been exposed. Why do I say that? Well, loss of advertising revenues; ITV is often bleating about this, complaining about competition rather than perhaps upping ITV's game on the internet and new media platforms. For example, your internet product I think is very poor; you stream very few programmes. I just see an inconsistency: when the times were good there was very little complaint and now there is more competition there is bleating and complaints. What I would like to hear from ITV, particularly from Wales, is a vision and a philosophy of what ITV wants to do for Wales rather than complaining about competition.

Mr Jermey: There is no complaint about competition at all. We are very happy to be a competitive channel in a commercial market. The complaint, if you like, is that whereas hundreds of other channels have no regulatory burden on them at all, there is an expectation in some minds - I am sure not yours, Mr Pritchard - that the same sort of regulations, the same sort of quotas, the same sort of public service expectations can continue regardless of the competitive environment in which we are operating. We welcome new technologies like the internet; we are launching products on the internet which are successful. We are still Britain's most successful commercial channel; we are still investing more money in UK production than any other commercial channel and more than BBC1. What we want is a playing field that correctly recognises that we no longer have the monopoly advantage which historically undoubtedly ITV once benefited from. We are increasingly - and in a few years with digital switchover - in a very, very similar position to one of hundreds of other channels. The degree of regulation needs to properly reflect the degree to which we are a competitor with others.

Q1849 Mark Pritchard: Is Ofcom not assisting you in that under your existing licensing arrangements, for example non-news output is at five and a half hours which is going to decrease to four hours. We know that Ofcom is looking to actually reduce in some English regions non-news output to half an hour and that decision for Wales will come later. Even without any action on your part Ofcom is assisting ITV in saying that you will no longer have such a burden of these requirements.

Mr Jermey: On a point of fact, for non-news programmes it is four hours moving to three in Wales and in England one and a half hours to half an hour. Ofcom is recognising that the burdens and the commercial challenges faced by ITV are getting greater and is reducing the number of mandated programmes but most of the hundreds of channels we are talking about, most of our competitors on the internet have no regulation by Ofcom; there is no requirement on them to produce any programmes over and above what they choose. I am not suggesting for a moment that ITV wants to be there; we want to continue a news service in Wales, we want to continue providing non-news programmes in Wales. What I am pointing out is that as you approach digital switchover - we are 80% of the way there and at some point we will become 100% of the way there - unless there is some motivation given to a commercial broadcaster to provide programmes that it would not provide if the market just existed, then one cannot necessarily expect those programmes to continue to exist. ITV may well decide that there are some things that have been done traditionally under a public service broadcasting compact that we want to continue to do for commercial reasons and that may be a very good thing, but I do not think it is reasonable to assume that the same burdens that have existed on ITV historically can continue in a world where all the rules have changed.

Q1850 Mark Pritchard: Finally, as a contradiction perhaps in what you are saying - unless I have misinterpreted what you are saying - you want freedom to develop more of these new platforms. I just sense that you might be crying out for some future subsidy.

Mr Jermey: No. We have made it quite clear within ITV that we do not think that taking direct subsidies is something that is in our interests as a commercial broadcaster.

Q1851 Mark Pritchard: So you would rule it out if it were offered?

Mr Jermey: It sometimes depends on your definition of subsidy.

Q1852 Mark Pritchard: It comes back to my first question as to your philosophy as a broadcaster.

Mr Jermey: Our philosophy as a broadcaster is that we are a commercial broadcaster and we prefer to exist largely in a commercial world. For 50 years there has been a form of subsidy and it may be at the end of an Ofcom review this is something you may point to and say is still a form of subsidy for providing public service broadcasting, but our instincts are commercial and our instincts are that we prefer to provide high quality programming for the people in the whole of the UK and indeed viewers in Wales in a commercial environment.

Mr Owen: We also have ITV Local as well which works very successfully and does provide another platform to show news programmes and our non-new programming.

Q1853 Nia Griffith: Can you see a scenario in which there might be a shift away from nationally regulated media to more internationally regulated media? How might you see that developing?

Mr Owen: By the last Communications Bill our regulator is Ofcom in the UK and we are regulated by Ofcom. There are bits and pieces in European legislation we have to adhere to - human dignity and things like that - but at the moment Ofcom is our regulator and will remain so unless there is another government act which changes that.

Q1854 Nia Griffith: Do you see potential in expanding elsewhere and competition coming in here?

Mr Owen: Us expanding elsewhere?

Q1855 Nia Griffith: Yes.

Mr Owen: As ITV Wales

Q1856 Nia Griffith: Yes.

Mr Owen: Our service is to ITV Wales. ITV as a company will sell their programmes throughout the world I would imagine as part of their philosophy of making programmes for ITV. Our programmes have gone all over the world already. As regards specifically to ITV Wales hopefully we will make programmes for ITV network as well which will go round the world and hopefully there will be independent producers in Wales who have the ambition to make programmes for Wales, the UK and the rest of the world. The ambition is there, the market is there. As regards regulation, to go back to that, it is strictly Ofcom in the UK and in Wales.

Q1857 Nia Griffith: You may be aware that there has been a recommendation from the House of Commons' Culture, Media and Sport Committee that public funds, including the licence fee income, should be made available on a contestable basis beyond the BBC to sustain plurality and introduce market forces to the provision of the public service content. How do you react to that? What is your view on it?

Mr Owen: As Michael just said just now, ITV are not into public funding per se as regards our programming; we are a commercial broadcaster. There might be some indirect means in future that we do go for some funding. In a way what we have done over the last 50 years of ITV in Wales has been public funding because to gain the licence from ITV the various companies providing television in Wales had to promise a specific amount of news and non-news programming which we fulfilled. So in a way that has always been there. As for public funding per se, I think the philosophy of ITV is not to go for that.

Q1858 Nia Griffith: You mentioned earlier on the devolution settlement. To what extent do you feel that the current devolution settlement is suitable as it relates to broadcasting and the creative industries?

Mr Owen: Certainly we have covered the Welsh Assembly, Westminster, the European Parliament and local elections in Wales thoroughly in our news and current affairs programming. We have done much more news and current affairs programming because of what has happened in Wales over the last ten years. As a broadcaster I am quite proud of what we have done as regards news and current affairs programmes regarding the new democratic system in Wales and its devolution.

Q1859 Nia Griffith: I am thinking more particularly about what we call a reserved matter, something that is regulated from Westminster.

Mr Owen: Are you talking about Welsh Assembly regulating broadcasting?

Q1860 Nia Griffith: I am asking the question really whether you feel this is the appropriate way or do you feel there should be some sort of change?

Mr Owen: As a commercial broadcaster our regulator is Ofcom; we are independent of government. I would hope as a commercial broadcaster we remain independent of government. We have a regulator and we are not controlled by Westminster or by the Welsh Assembly in Cardiff. We are a standalone, independent commercial broadcaster.

Q1861 Albert Owen: Just to take the devolution issue a little further, I am being critical here but why do you not go head to head with the BBC and have prime time political programmes?

Mr Owen: We are gong head to head with the BBC at half past ten after the News at Ten as we did last night.

Q1862 Albert Owen: What about weekend programmes?

Mr Owen: Plurality means plurality of choice and to have two programmes going head to head all the time would mean there is no plurality really. If you have two programmes, one a week from BBC and from ITV, going out at the same time limits the choice of the people.

Q1863 Albert Owen: Timing is important to people.

Mr Owen: You will be pleased to know the timing of any political programme this year is 11 o'clock; it was 11.30 last year so there is a better timing for that programme this year. The reason we went to a Thursday night rather than a Sunday was because the viewing figures are much better on a Thursday than on a Sunday.

Q1864 Albert Owen: Thank you; I wanted to raise that directly with you. Concentrating on your memorandum where you refer to the economic contribution that ITV makes to local jobs and the local economy, you make particular reference to the Welsh Media Park. To what extent is that Media Park and ITV Wales' other operations that you mentioned in the north feeding into a pan-Wales economy rather than just a Cardiff-centric?

Mr Owen: To start with the Welsh Media Park, at the moment you have 17 other media companies on the Media Park so we are part of a kind of creative industries process there. There is not just ITV Wales there now, there are other companies making dramas for BBC, S4C and other broadcasters. The Media Park is a very viable operation and we want to expand that operation to make the creative processes in Wales and the creative initiatives in Wales part of a media hub in that part of Cardiff. We are going through a process of developing that site. That will create eventually, if it went to full fruition, over 2000 jobs in Cardiff. We are very proud as a broadcaster that we have other sites throughout Wales as part of a news operation, particularly in North Wales. We have a base in Newtown and an office in Carmarthen; also we have people based here in Westminster and in Cardiff Bay. It is a pan-Wales organisation and hopefully that benefits the people of Wales.

Q1865 Albert Owen: Is one of the criticisms on a UK level that too much is concentrated in the London area and the south east and that your competitors, the BBC, are doing something about that by moving jobs out? There is a danger that in Wales it is disproportionate and the majority of jobs are in the Cardiff area.

Mr Owen: Most of the jobs are in the Cardiff area as regards ITV Wales but you have a very heavy presence in those other areas. Satellite news gathering enhances our process in Wales.

Q1866 Albert Owen: Moving onto the sourcing that ITV does with the other creative industries, and again linking it into your previous response, creative industries in North West Wales and North Wales find it difficult perhaps liaising with you because of your Cardiff-centric views; they have to develop independently and there is a lack of joined-up thinking between the creative industries and media in Wales.

Mr Owen: As regards the creative industries in Wales for our non-news programming 25% of our programming is made by independent producers and we have an open competition for those programmes. People give in their ideas, we go through them, we shortlist them and then we get people to make the programmes. There are two or three independent companies in North Wales we always use. We encourage programmes from North East Wales and one successful programme - Fishlock's Wild Tracks - has been made for the past ten years by a North Wales company. So we are, I think, using a lot of North Wales independent people as regards the creative industries in Wales.

Q1867 Albert Owen: Do you see that growing as the Media Park grows as well? Will it not just be drawing business into the Media Park and into the Cardiff area?

Mr Owen: Because of what we said previously about growth, it is difficult as we go on producing plurality of choice we have in Wales. We discussed this earlier on. I would hope that people in Wales would see beyond ITV as well and try to make programmes not just for ITV but for other broadcasters. We are trying to create an atmosphere where people can make programmes not just for Wales but for other parts of the UK and maybe - hopefully - other parts of the world.

Q1868 Albert Owen: Do you see this relationship with the creative industries in Wales growing?

Mr Owen: Very much so. Just to quote The History of Mr Polly which was a drama done in peak time by ITV Wales that went out this year for ITV network, that had money from the Welsh IP fund as part of the funding. It was made in Cardiff; it was partly funded by the Welsh Assembly through the IP fund and was very successful on ITV. There was part funding - to go back to a previous question - but that has actually benefited programmes begin made on the network.

Q1869 Chairman: Could I come back to this question of Welsh identity which I asked at the beginning. Are there any lessons to be learned from other regions or nations in Europe in terms of how the creative industries are interfacing with broadcasting in the way that you are describing now? Are you learning lessons from elsewhere?

Mr Owen: I think we have learned lessons through the process of what has been going on through Ofcom in the last few years. It is recognised in the UK that the nations are slightly different things than regions. Broadcasting systems elsewhere are so different to broadcasting systems in the UK. There are different forms of regulation so you cannot really directly compare. Some broadcasters abroad are funded by governments for example and we would not want to go down that road; we went to be a completely commercial channel. There is no real direct comparison to the system we have in Britain, I would not have thought.

Q1870 Chairman: The evidence you have given this morning has been very instructive for us. Is there anything you feel that we have not covered that you would like to add at the end of this session?

Mr Owen: No, I think we have gone through a thorough process as regards most of the questions we have covered. I think plurality is the one you touched upon and I think plurality is something in the future that everybody should be aware of. If it happens and ITV does less programming I think we are all still involved in plurality and somewhere or other something has to be found for plurality to continue.

Chairman: Could I thank you both for your evidence this morning and again for the written evidence that you have given. If you feel later on that you might want to submit anything further we would be very grateful to receive it and also maybe we will see you again when we are exploring broadcasting in the context of cross-border issues. Thank you very much.

Memorandum submitted by the National Union of Journalists

Examination of Witnesses

Witnesses: Mr Meic Birtwistle, National Executive Council, Mr Jim Boumelha, National Executive Council and President, International Federation of journalists, Ms Kate Carr, Chair, Welsh Executive Council, Mr Lawrence Shaw, Assistant Organiser for Wales and Mr Martin Shipton, Father of the Chapel at Media Wales, National Union of Journalists, gave evidence.

Q1871 Chairman: Good morning and welcome to the Welsh Affairs Committee. For the record could you introduce yourselves, please?

Mr Birtwistle: Meic Birtwistle, representing Wales on the National Executive Council of the National Union of Journalists.

Ms Karr: Kate Carr, Chair of the Welsh Executive Council of the NUJ.

Mr Shaw: I am Lawrence Shaw, the Assistant Organiser for Wales for the NUJ.

Mr Boumelha: I am Jim Boumelha of the National Executive of the NUJ and I am also President of the International Federation of Journalists.

Mr Shipton: I am Martin Shipton, Father of the Chapel of the NUJ at Media Wales as well as being Chair of the Cardiff and South East Wales Branch of the NUJ.

Q1872 Chairman: Could I begin by asking you this very general question about how globalisation is a threat or is it an opportunity or both to the various industries that you represent?

Mr Birtwistle: I was going to say first of all that one of the things we would like to stress is that our written evidence was submitted nearly a year ago and therefore in order to partially answer that question we would like to bring you up to date with some of the changes that have happened since then. I think this will show that we do perceive much of globalisation as a serious threat to our members. We have recently seen the announcement of some 230 further job losses at BBC Wales; that is on top of the previous 220 job losses. Management will say that there will be some new jobs coming in in terms of possibilities for independent companies and in terms also of the fact that there may be some new jobs created, but those will not, for the most part, relate to programme making about Wales. That is a very serious blow, the loss of some 450 jobs altogether. I know you have just been hearing evidence from ITV Wales and we are seriously concerned about the economic state of ITV as a whole and the dangers that that places on broadcasting in the nations and regions of the United Kingdom. We are seeing the number of news organisations in England seriously reduced; that is not going to directly affect Wales at the moment but clearly we feel that it is only a matter of time before there is a possibility of a loss of ITV regional news, ie news on Wales. There is an intention, as we understand, to cut back the non-news output from I think four to three and a half in 2009 (I would have to check that). This is part of a process that is very long running and, as we say, it may well be the case that it is only a matter of time before we lose the news output. There is also the possibility that ITV could be bought out due to the parlous economic state of ITV at the moment and we do not know who then would then control ITV.

Q1873 Chairman: Are you saying that these are all the consequences of globalisation?

Mr Birtwistle: Globalisation is part of the effects that are causing this. In the print industry there is a further 17 job losses at The Western Mail on top of a whole series of job losses over a period of time. In the last few months we have seen the intention to transfer the print operation of The South Wales Argus to Gloucester which is following on from an announcement that The Evening Post in Swansea has transferred its print operation. Things are being centralised at a United Kingdom level; they are going to London. We have seen a political devolution developing in Wales over the last decade or so, but at the same time ironically we are seeing cultural centralisation occurring in London. More and more power is going back to the centre and in terms of specifically ITV and also we would argue in terms of the BBC the job cuts that are being implemented - which obviously affect quality of output for BBC Wales - are being dictated by London. We see that clearly as part of the process of globalisation.

Q1874 Chairman: Do any of your colleagues want to supplement the comments you have made and perhaps you could then move onto opportunities?

Ms Karr: I think we recognise that there are opportunities and threats. Some of the opportunities are obviously providing greater reach, the potential to reach new audiences, for example particularly with the Welsh language. We have Welsh language audiences overseas that we could be reaching in new ways. There are a number of opportunities there both economically and culturally. The threats are perhaps obvious. There has always been room for improvement in the coverage of Wales as a nation, but with fewer owners and fewer journalists where we have potential for investment into some of these new services we are finding these large companies are not putting the investment in, they are more interested in taking profit out so the opportunities are being wasted that they may have through some of the new media. Instead of opportunities to reach these new audiences we are ending up with a lot of look-alike media, a media McDonald's (a phrase that Martin has used previously) providing junk journalism which is a huge waste.

Mr Shipton: One of the manifestations of globalisation which I detect is the increasing monopoly of a small number of large companies who own media companies. The day of the local, independently owned newspaper is almost gone in Wales. The big players are not Wales-based companies; they have their headquarters in London, sometimes they have ultimate ownership in other countries like the United States (that is certainly the case so far as Newsquest is concerned which owns, for example, South Wales Argus). Also what has happened as a result of this increasing concentration of ownership is that over the years there has been an increasing demand on the part of shareholders for shareholder value. During my working career I have seen a transformation from a situation where, for example in the 1980's, regional newspaper companies used to be content with a profit return on turnover of around 10% - at least they aspired towards 10%, they did not always get it - but now we have a situation where, for example, Trinity Mirror (which owns the company that I work for) is out of Wales making a profit return on turnover of between 35% and 40%, approaching 40%. That is a huge turnaround and inevitably what that means is that the quickest way to increase profit margins is to reduce labour costs and that means fewer journalists and fewer journalists means the likelihood of less comprehensive coverage, so that is a major threat.

Q1875 Alun Michael: You refer to this as if it is something relatively new. My working career goes back even longer than yours, Martin, and when I was employed by The South Wales Echo in the mid-60's it was owned in Canada so it is not a new development.

Mr Shipton: That is quite right, Mr Michael, but of course the problem is that as time has gone on these companies, whoever they are owned by, want more and more profits. Whereas the Canadian owners of Thomson would have been content with a much smaller rate of return back in the 60's, now the Trinity Mirrors want to have a much higher rate of return and that has added extra pressure. I am not disputing what you say, but I just say that the process has accelerated.

Q1876 Alun Michael: I would suggest to you that the view taken by the Officers of the Chapel in those days was quite similar to what you have expressed now.

Mr Shipton: I am sure that is so.

Q1877 David Davies: I want to suggest that maybe it is not national foreign ownership that is the problem. If I could shamelessly plug two local papers in Monmouthshire, The Monmouth Beacon and Chronicle, they are owned by Ray Tindle (this is not a public listed company, it is privately owned) and do only want local stories and they will get quite annoyed if they get anything with a national flavour. To what extent do you think, as journalists, as well as making points here you may have to encourage editors to look at local government stories, Welsh Assembly stories within Wales to try to make sure that that level of interest amongst the public for local issues is there?

Mr Shipton: This of course is a manifestation of the need and the opportunity for a specifically Welsh media. We can talk about the specific needs of Wales in this context because clearly with the devolution process going ahead there is a greater degree of divergence in policy terms between what is happening in England and what is happening in Wales. The problem at the moment is that because, for example, a very high proportion of people who live in Wales do not buy newspapers that are published in Wales, many of them are not aware of these policy differences. What can be said is that the move towards multi-media forms of providing journalism creates an opportunity - I suppose this does emanate from globalisation ultimately - to reach people with Welsh news via the internet who currently are not accessing material by not buying the newspapers. If they can get for free from the internet news that currently they have to pay for then that is a great opportunity for media companies to be able to extend their coverage and to reach a greater proportion of the population of Wales.

Ms Karr: The Brecon and Radnor Express was a locally owned paper within the community that employed a number of journalists and that was bought out by Tindle, the number of journalists greatly reduced and we believe the quality of news greatly reduced. There are opportunities within those community papers on the internet and within the papers themselves; we are keen to see the processes at local government level, Assembly level and here properly covered by the media. However, when you take away from the journalists the ability to do their job by reducing the resources and the staffing levels so significantly I think that is what is at the root of people's frustration at not seeing the work that is being done reported.

Mr Shaw: The papers that you mention there from my own experience would employ maybe two reporters in each case. The North Wales Chronicle in Bangor now employs just one reporter covering the entire town. I do not think it is going to be possible for that level of staffing to be able to provide the actual news and the range of coverage that is actually needed.

Q1878 David Davies: I do not want to too shamelessly plug those papers but they have slightly more than two journalists on them. They do report on very good local stories and second to none for that I think.

Mr Shaw: Do they have the resources to actually cover the Welsh Assembly?

Chairman: Can we move on? I do not want to get into the minutiae of local coverage.

Q1879 Mark Pritchard: Ultimately newspaper groups are not charities; they need to sell copy and they need to sell advertising in order to pay the salaries of the journalists the majority of whom, as you quite rightly identify, are doing a good job and working hard. Hopefully it is a virtuous circle rather than a negative one. My disappointment about the press is that many newspapers are being very slow to adapt to new platforms such as the internet. If you look across newspapers - not only in Wales but across the country - the internet product offer is actually very poor indeed. I do not know whether it is because of some of the senior managers of these newspapers or editors are perhaps not in the technological age, but they put perhaps one or two people in a room and say, "That's the internet, boys and girls; put them over there" rather than saying, "Well actually, we need to be prioritising this in order that we get the volume on the internet and the traffic and we can then go out and sell the advertising space and then we can continue to employ journalists". There will always be a need and demand for news stories alongside the advertising on the internet so in a sense it is not just about globalisation - Mr Michael is absolutely right about his point - it is about the industry, your industry, getting its act together, catching up and providing an offer that people want to look at.

Mr Shipton: I think it is certainly the case that a lot of newspaper companies have been slow in embracing the internet. Media Wales is in fact currently involved in moving over to a much more internet based operation and as a Union we have been fully involved in discussions about this and within the next few months that is going to come to fruition. I suspect that one of the reasons why there has been a certain delay - not exactly reluctance, but a certain delay - in pushing these things forward is the fact that the sort of advertising revenues that companies have got used to from newspapers are not really of the level that are going to be replicated online. This is a problem.

Q1880 Mark Pritchard: Can I just interject to say that we are talking about the volume. If I am somebody who wants to advertise my product - say I am a sports manufacturer - if I see the traffic increasing on the website you referred to then I would be prepared to pay more money. That is my first point. Secondly, going back to globalisation and the positive, in fact the audience potential is global and far bigger; it is regional, sub-regional, national, whatever. The audience potential is far greater than any delivery van delivering your hard copy newspapers.

Mr Shipton: That is absolutely right but of course what one has to bear in mind is the fact that while, for example, a lot of exiled Welsh people will be looking at the Western Mail, for example, online, local advertisers who want to sell their goods in Wales are not really going to get much value out of people in London or Patagonia looking at The Western Mail internet site. That is an issue. The point remains that the levels of revenues that it is possible to get from advertising are not as easy to attain from the internet as they are from newspapers. The companies, certainly my company has got plans to try to improve and increase the level of advertising they get from the internet but at the moment we are talking in single figures percentage in terms of the overall revenue of the company.

Q1881 Mark Williams: I think you have already given an answer to the question I was going to ask about the difficulties in terms of viability of promoting a Welsh identity and the trend very much towards London. Turning to a positive, something you have been working on in terms of your Media Plan for Wales that you have been calling for, how do you perceive that addressing the global as well as the domestic pressures that you have outlined? Who should be responsible for devising such a plan?

Ms Karr: I think what we are trying to achieve through the media policy is for a range of bodies and organisations to actually look at these issues and to consider adopting plans and policies. Part of this is around raising awareness of a lot of the issues we are talking about today. We are perhaps having this debate quite late in the day; these are issues, as you rightly say, that have been going on for a very long time. We have to get people to start addressing some of those now and there are a number of different things that can be done at different levels. I do not know whether you have had receipt of the proposed Media Policy; if not then we will send it to you.

Q1882 Chairman: What is it?

Ms Karr: A proposed Media Policy which addresses some of these issues, some of the things we would like to get people thinking about. It is about audiences; it is about organisations as audiences as well, seeking to hold the media to account, to actually question quality and to want a quality media and to be seeking proper coverage of the organisations that are actually making the decisions that affect their lives.

Mr Boumelha: If I might inject the thinking of the International Federation of Journalists which deals with the global journalists' organisations of which the NUJ is a member, which deal with the many instances throughout the world where concentration of ownership and the pressure on diversity has become quite a big problem. Because it has a standing with international organisations such as UNESCO or the United Nations it has quite a lot of experience in terms of working with commissions or with national institutions to set out media policies. Can I just say that in the past few years some of the concerns have been raised in some ways throughout the first discussion have concentrated on the fact that news and information sources were dominated almost everywhere in the world by multi-media conglomerates, the voice of the local people rarely heard. There is also the question of culture and resources which are spoilt by an increasingly multi-cultural vision of the world. You will see it in the concentration of the written media in Wales.

Q1883 Chairman: Mr Boumelha, please could you raise your voice? We are having great difficulty hearing you.

Mr Boumelha: Finally there is the question of the quality of information; that is a very big question and that relates to what has been described in terms of cuts in resources which means that quality has suffered. Hopefully if there are steps being taken to discuss media policy, that those experiences of what has been happening in some situations that are similar to Wales can be taken into account. I do not know whether the Media Policy would be the impetus to have some specific regulation or something that is very specific to Wales. There are certain principles that are general; it is a question of concentration of industry and ownership which is obviously discussed in every single media. The question of cultural diversity is very specific and could be specific to Wales.

Q1884 Mark Williams: I think you articulated what should be in a policy; who will be responsible for drawing that up and who will be responsible for implementing such a policy?

Ms Karr: We would certainly like to see something at Assembly Government level in Wales. Obviously you will be aware of the commission that has been set up in Scotland. Both yourselves and the Assembly might like to consider that idea. Apparently in Ireland they are looking at setting up a print commissioner. The idea of a media commissioner or even to get existing commissioners looking into some of these issues and how they affect their areas could be built into that. Areas that we think should be covered with that are issues of plurality, of quality, of training. Again there are several issues around training. There is a huge amount of media courses and fewer and fewer media jobs. We would like to see places in Wales becoming centres of excellence. We have some excellent training courses which are well-recognised in Cardiff, but there needs to be better cross-over. Somebody needs to be looking at how that links into the media organisations and retaining those skills.

Q1885 Mark Williams: Are you actively lobbying on that basis the National Assembly in the first instance?

Mr Birtwistle: We think it is a joint responsibility. Clearly broadcasting is primarily your responsibility and the Assembly has powers of scrutiny so they obviously look at some of these issues. What concerns us - and it is great to be here today and it is great that you are looking at this subject - is that we gave evidence back in 1999 when the Welsh Select Committee looked at the questions specifically of broadcasting and devolution and we specifically looked at this question of the democratic deficit. We are looking at it again now and we think that the democratic deficit has deepened and the degree of cultural non-representation has become more acute. If nobody looks at it again for another eight years then we fear the process would be driven specifically by globalisation. A commission needs to be set up urgently we feel. Who should have responsibility? We think that there should be a degree of joint responsibility potentially, but obviously Parliament at the moment is the lead player in the question of having responsibility specifically for broadcasting.

Q1886 Mark Williams: What response are you getting from ministers on this issue?

Mr Birtwistle: We are kicking it off now.

Ms Karr: Where we have had some discussion there has been a good deal of support and a recognition that we need to grow a stronger media industry in Wales, but it has to happen at a number of different levels; it has to involve all levels of government.

Mr Shipton: Always when one is considering these issues it is very easy for us here today to agree that there is the need to do something, but in terms of actually exercising leverage it is not so easy. One possible route could involve the issue of cross-media ownership and looking at that. While there are no fixed proposals that we would come up with, it is certainly something that needs to be looked at because the current system of regulatory control is dated from an era where there were very strict demarcations between print and broadcasting journalism. As we enter a new multi-media age the current regulatory controls relating specifically to cross-media ownership are outdated. For example, I have taken advice on this and I am told that while, under current circumstances, it would not be possible for Trinity Mirror to enter some kind of partnership with ITV to provide some kind of local news service in Wales because of the issue of Trinity Mirror not being allowed to enter the broadcasting field, it is possible - or it would be possible - for Sky television to do so because the regulations relating to satellite television are later and freer than those that relate to terrestrial television. So while it would be possible for Rupert Murdoch to come into Wales and do a deal with ITV Wales, it would not be possible for The Western Mail to do so and that seems to be a complete inconsistency. Currently there are, I believe, a number of investigations or a number of bodies - the Office of Fair Trading, Ofcom and, I think, the Competition Commission - who are looking at the issue of Sky television's share ownership in ITV but that is only because of the terrestrial element of ITV. If we were to reach a situation where some consideration was being given to perhaps relaxing the current restrictions on cross-media ownership, it might be possible to exercise some kind of leverage by saying that if we are to relax these rules we would expect some commitment from companies towards a public service element. I just throw that in as a possibility and I think it is something worth examining.

Q1887 David Davies: Going back to something you said earlier, do you think that the current media studies courses, particularly the GCSEs, are a useful qualification for anyone wanting to go into journalism?

Mr Shipton: I think the problem we have is that at the moment a lot of educational institutions - we are talking right the way up to higher education here - are opening more and more courses for more and more students to do media studies at a time when, as we know in Wales, the actual opportunities for working journalists are diminishing. What appears to be happening is that in the higher education sector the market for education is determined by what the students want to study rather than the need that industry has for graduates in those particular fields. I think a lot of people are being led up the garden path to take media studies courses, whether at GCSE or at degree level, perhaps thinking they are going to enter journalism when in fact there are not going to be jobs available for them. That is an issue that needs to be addressed.

Mr Birtwistle: I agree totally but, having said that, my understanding is that those taking media studies degrees have a high possibility of achieving employment but not necessarily within a media. It is a very useful form of academic currency and obviously at a lower level my understanding is that it relates to the question of citizenship as well in terms of how people understand the society that they live in, in addition to purely being a stepping stone to employment.

Q1888 Albert Owen: You have answered in great detail some of the issues that I wanted to raise about the serious concerns that you have with the Welsh media and in particular the print media in Wales. I look forward to reading the Media Plan and some of the answers that you feel are in that Media Plan. I know this is a Welsh Affairs Select Committee but my friends in the media in different regions in England are saying exactly the same thing, that regionalism per se has been lost in the United Kingdom. I would put it to you that there is also regionalism within Wales and many people in my part of Wales feel there is a drift to other parts of Wales and indeed across the border into England. I am very concerned about what the written press in Wales is doing to cater for Welsh speakers. This week we had the interim report with regards to Y Byd (The World) which is a Welsh medium daily newspaper that has been proposed. How do you think the Welsh language media can be successful with the impact of globalisation?

Mr Birtwistle: Can we just say that we agree totally that what is happening in Wales represents a clear indication of what is happening in the rest of the United Kingdom and in Europe, if not the world. The advantage that we have in Wales is obviously that we have a Welsh Affairs Committee that we can come and have these discussions with and we have the Assembly where we can express these views as well. We are better served than our English counterparts specifically but we see their pain with regards to ITV; that is something that crosses borders. With regards to the question of regionalisation within Wales the problem that we face is that the cutbacks that occur in terms of ITV, every time they lose a couple of people, every time the BBC loses 230 jobs, then the ability of the BBC to represent the different regions and the different areas and the different cultures within Wales is eroded. That is exacerbated. The BBC management will come here and say they are creating new jobs and they will speak of the successes of Torchwood and Dr Who et cetera, but Torchwood and Dr Who do not produce cultural output for the people of Wales; they do not represent the people of Wales in terms of their lives. It is great; there are fantastic being acquired, but all the time the 10% cutback in budget will seriously erode the ability of the staff of the BBC to represent all those different areas of Wales. On the question of Welsh language journalism, specifically print journalism, we have heard that this report has come out with regards to the possibility of Y Byd. We have a number of members of Y Byd (although it is not up and running as a paper at the moment) and we have a number of members at Golwg so we represent a number of journalists working in the Welsh Language print sector. Clearly it needs to be strengthened and clearly it requires public money to do that. Public money is supplied to the print industry in a number of ways, primarily through advertising, by central Government, by the Welsh Assembly, by county councils, et cetera. That is all public money going into print journalism in Wales. Clearly the question of how, across the board, Welsh language print journalism is to be supported needs to be carefully examined, but we would go back again to our point that, although it is costly, it is vitally important that there is plurality. There must be plurality in Welsh and in English, in print and in broadcasting because otherwise at the moment there is a danger that further erosion of ITV is meaning that the BBC is the only game in town with regards to broadcasting, radio and television, specifically in Welsh but also increasingly in English. We need to ensure plurality but centrally we need to preserve the BBC; there is no point robbing Peter to pay Paul otherwise that will just steal from an operation that is working relatively well to give to a more speculative venture potentially.

Q1889 Albert Owen: On this topical point about Y Byd being set up as a standalone daily newspaper (that is the proposal) do you think there are other ways that Welsh speakers can get Welsh language print, ie distributed as inserts in other newspapers? It does happen in The Daily Post in north Wales, albeit on a weekly basis, but it is a useful distribution mechanism.

Mr Birtwistle: That is perfectly possible but if you look at the success of S4C which is very well publicly funded one of the reasons for the success of S4C is its relative autonomy. It does not face the sort of issues that ITV has faced and that the BBC has faced where the control is firmly in an organisation based in London. Obviously they are scrutinised by the DCMS but there is a degree of independence there. Therefore we would prefer to see, if possible, autonomous Welsh language newspapers because there are cultural differences, as we said before, and on occasion the larger English language culture tends to overawe the Welsh language culture.

Q1890 Nia Griffith: I wondered really what numbers of journalists we have who want to work in the written media who feel confident about doing so through the medium of Welsh.

Mr Birtwistle: It is increasing. I think the levels of literacy amongst Welsh speakers have increased gradually over the years and I think there are policies to strengthen that. I know in Scotland our Union has been involved with the Scottish Parliament in terms of encouraging Gallic language journalism courses. That is potentially something, if required, that can be looked at but I know that a number of the university colleges deal with Welsh language journalism but not specifically print.

Ms Karr: I believe Aberystwyth University runs a course in the medium of Welsh but again I am not sure that is focussed on print, but that could be something that could be addressed. There are a number of journalists currently operating online at a high standard of written Welsh.

Q1891 Albert Owen: Is there anything that Wales can learn from other bilingual countries, ie the Basque Country, Catalonia in Spain or indeed in the Irish Republic? Do you have any comments on that?

Mr Boumelha: Certainly at the level of countries where there is a strong multi-cultural situation and multi-languages there are a lot of things to learn. The current mandate of the European Commission is to preserve cultural diversities. It is very clear in the article of the treaty. Today, with the enlarged Europe with other cultures and other languages there is a necessity to apply the regulatory tools that exist. There are parallels; there is no doubt about it. The main debate at the moment is precisely how to implement the instrument that exists and how to allow national government also to be inspired by these instruments; there are no national regulations.

Ms Karr: I think it comes back to globalisation offering threats and opportunities as well because obviously there is a threat that we lose our cultural identity, but the opportunity is that the more that we build that, the more the rest of the world takes notices of Wales and what is happening in Wales because we are distinct and different.

Mr Birtwistle: That was one of the things we wanted to raise with you, that one of our concerns is what we term currently "invisible Wales" whereby - I know you are aware of this - Welsh representation in British print and to a degree in British broadcasting is appalling basically. There has been a lot of debate recently about the Britishness of Britain but we have an increasing concern that the debate in fact is Englishness that is being presented and in fact the Englishness of the south east of England to a large degree and that Wales is losing out in this. If we turn to the print newspapers we do not see representation of Welsh political life; we do not see the representation of Welsh political culture. We think that is very dangerous for a number of reasons. It is dangerous in terms of cohesive Britishness as a concept; it is dangerous with regard to the large proportion of our population in Wales who do not look specifically at the Welsh media and they need to understand the political questions that are happening in Wales. This again leads back to the question of globalisation and the fact that everything seems to be going culturally back to the centre, in this case London if not further abroad potentially in terms of what may happen to ITV. This is of great concern and it was to some extent the concern that was represented by the report of the Welsh Select Committee in 1999 and we hope it will find place in your report as well, that this is a very, very worrying trend.

Q1892 Mrs James: There were claims made seven years ago on The Welsh Mirror and The Welsh Mirror actually tried to address this deficit and carried regional stories, et cetera. Why, in your opinion, did The Welsh Mirror fail in that case?

Mr Shipton: My understanding is that it simply was not producing enough revenue and it was as simple as that. They tried it for two or three years; they obviously had targets, I do not know what the targets were.

Q1893 Alun Michael: Not enough extra revenue.

Mr Shipton: Not enough extra revenue, yes, because obviously The Mirror was circulating in Wales and clearly in order to justify the extra investment which they made by employing specific journalists who operate in Wales which had not really been the case before, they clearly had set targets - this is Trinity Mirror - about what they wanted to achieve in revenue terms and it just did not work out.

Q1894 Alun Michael: Can we look at the issue broadcasting and the Welsh economy for a moment? In your memorandum you say one thing specifically: "Placing more emphasis on the economic role of the media rather than its importance in the political and cultural life of a society" and this is something you warn against. There is always a tension between whether it is financial or news or culture that is contributed to by the media, but how would you suggest that a balance can be struck between that important element of economic viability and the provision of public service content, especially in view of the comments that have been made earlier about convergence and the challenge that that provides?

Mr Birtwistle: I think this came out to some degree when Ofcom was set up. There was the usage of the terms "consumer" and "citizen" and we felt there was an increasing tendency for the consumer to be more important than the citizen. We think that that trend needs firmly to be challenged. It is questions such as the democratic deficit; it is questions such as cultural representation.

Q1895 Alun Michael: My question was not whether this was an important issue to deal with, but how can we strike that balance?

Mr Birtwistle: The one has to be placed in the form of the other when drawing up policy due to the nature of Wales. With regards the question of The Mirror, sometimes Wales is not going to supply the sort of profit that would attract people to cover it. Sometimes it has to be argued that for the benefit of the United Kingdom as a whole that Wales needs to have a voice.

Q1896 Alun Michael: As with S4C.

Mr Birtwistle: Yes, as with S4C and as regards other things. One of the things that is very upsetting - you probably remember this better than us to some extent - is the way in which previously national newspapers had Welsh correspondents and now they do not. Now there has been an almost total collapse. I think Golwg ironically has somebody based in the Assembly; I do not think any other newspaper has currently got anybody based full time in the Assembly. What happens is that the companies and the organisations argue that they cannot afford it. We think they can.

Q1897 Alun Michael: Are you talking primarily about broadcasting in this context?

Mr Birtwistle: Yes.

Q1898 Alun Michael: There is still a challenge of that balancing of economic viability in the provision of public service content; how can we get that balance?

Mr Birtwistle: One of the ways you will not get it, we would argue, is by further cutting the BBC.

Q1899 Alun Michael: I think we have probably got the drift of the negatives; I was hoping for a little bit of positive.

Ms Karr: Perhaps it does come back to regulation and we are entering a situation where, before too long, ITV may be able to pull out of Wales completely because of lack of regulation after digital switchover. Perhaps that is one of the ways in which it can be addressed. There is an issue around independent companies and a strong independent sector in Wales as well in relation to broadcasting and clearly we want to see a thriving independent sector but not damaging the corner stone of the broadcasting industry in Wales.

Q1900 Alun Michael: I think the problem has been quite well identified during the discussion but I think finding the solutions are more difficult and it might be that you want to supplement the answers on this. Can I just come onto one other question because I am aware we are short of time, and that is what do you see as the consequences of the introduction of digital audio broadcasting for the provision of service for the Welsh audience? Do you see that having great significance compared perhaps to the impact of digital television switchover or do you see it has not likely to have the same impact?

Ms Karr: It is difficult to say at the moment. There are concerns over the cost; it is expensive to get a radio station onto the spectrum and obviously we want to be sure that the existing services are provided to all audiences in Wales. There has been a problem in the past with television services; Channel 5 is not available terrestrially (clearly that changes post digital switchover) but we need to be sure with radio that the entire nation is able to receive those services and with the right quality. I think perhaps the impact is not going to be quite as great as digital switchover.

Q1901 Mrs James: I want to turn now to the independent commercial media. To what effect is the current climate conducive to the growth and survival of that sector, particularly in Wales?

Mr Shipton: With regards to independent broadcasting companies that have been set up, we have seen a number of them created and they have been very successful. However, what we always seek to remind them and the people of Wales is that these independent companies are built on the back of public money; they are built on the back of money that has come via the BBC or S4C. One of the things that worries us in the future is that there have been two quoted on the Stock Exchange, for example, and that sounds very good but we have concerns there as to whether they will stay in Wales in the future. Will there be a temptation for them to be bought up? Will there be a temptation for them to forget where they came from? We are slightly edgy. We understand the desire to create larger independent companies and to encourage that; I think there are a number of organisations that are seeking to do that. Arguably it creates greater security for our members and members of our sister unions who work there; it offers greater possibilities with regards to training and questions like equality. Having said that, the bigger they become, will they be making themselves more attractive to independent broadcasters to swallow and therefore again what will be the relationship that they have to Wales in the future. We have mixed feelings about it. We can see advantages in terms of increasing quality and better employment rights but we do not know where exactly this process is going to end up.

Q1902 Mrs James: You make the very valid point that it has been built on the back of public investment in a way. Do you have any ideas on how we can retain the profit from that, the payback from that, within any future contracts et cetera? It seems as if we have paid for these companies to become big players and we are not benefiting from it or may not benefit from it.

Mr Shipton: What I was going to say relates to the print media and for the print media it is very difficult to conceive of a situation where you are going to get many new Wales-wide newspapers launched. We have heard about the report on Y Byd which was out yesterday, the difficulty for the Welsh language publication. A couple of years ago there was an attempt to launch a national newspaper in English, The Welsh Globe, and it was not ultimately able to go ahead because it could not raise enough finance. The problem here is circulation; we know that newspaper circulation generally is declining and that is why newspaper companies are moving into the web. What is very important is advertising revenue and I think what finally killed the concept of The Welsh Globe was that they could not be certain that they would get sufficient advertising revenue because the existing companies, predominantly Trinity Mirror of course, have already got the advertising market sewn up so that to start any new publication is extremely difficult simply because they are not going to get enough revenue to sustain publication.

Mr Shaw: As Martin has already said, the percentage of turnover that is profit is higher than that of the banks in some respects. I think it really is worth looking at the astonishing levels of money that are still being made in newspapers despite what they say about declining circulation. On the issue of new technology as well journalists are actually very keen to embrace the technology in a lot of instances. I do not think so perhaps with The Western Mail but certainly with other titles within Wales, the kind of top down approach of saying, "We are going to have this internet thing" but without consulting with the journalists themselves and how best that can be done is what is creating the problem and what is stunting the growth of good internet based media in Wales.

Q1903 Mrs James: On my point about retaining investment, is this something for future discussion?

Mr Birtwistle: It is tricky. We would say that it is still vitally important that you retain a strong public sector broadcast. That must be at the key of it and we are concerned that that is being chipped away at. Our sister union members work in these companies. Maybe the degree of scrutiny in the independent sector is not as acute as of S4C and the BBC and, to some extent, ITV. I do not know whether you have asked TAC, for example, to come to give evidence before you because they have been re-establishing themselves after a degree of hiatus and that is a question which could be put to them. To some extent they are falling off the radar screen at the moment and as a sector, specifically in broadcasting, that has increased maybe they should be brought more clearly into the picture or into the sights of the various bodies that are responsible and the Assembly to some degree.

Q1904 Mrs James: Last time I counted there were over 50 independent television producers in Cardiff alone.

Ms Karr: I think Wales needs to ask itself as well what sort of independent sector it wants to develop. I do not think this necessarily just applies to the media: if something is a success a bigger organisation is going to want to buy it. There is a wider issue as well that if you go down a path of outsourcing because something is cheaper, what happens when you have outsourced so much that you do not have the ability to do these things in-house any more and it has grown into a bigger and bigger global company which is going to turn round and bite you in the proverbial.

Q1905 Nia Griffith: What I was going to ask about the democratic deficit has actually been covered in the comments you have made about the Media Policy and the ideas you have to try to address the market failures as you put it. I think really I would just like to finish on whether you are optimistic about the future or not. You have given us quite a gloomy view of where we might be if you came back in eight years' time; can you give us one or two indicators as to perhaps how that could be turned into an optimistic vision?

Ms Karr: I think whether we are optimistic very much depends on the response we get as we try to engage people in this debate and actually involve people. There are opportunities there I believe. We are not about preventing companies from making money. What we are trying to say is that if you invest properly in your journalism then you will see the rewards of that. I think it would be interesting to explore further the possibilities for a commission or a media commissioner at different government levels; we would like to see that explored further. I think it is partnership work between people like yourselves, between the business owners, between the public service broadcasters and actually the public themselves to engage in the debate about the media which obviously in the last 12 months has really started now, and for all of us to want to fight for quality media.

Mr Shipton: I take the view that there will always be a market for excellence and if newspaper owners and broadcasters are prepared to invest in journalism they will reap the rewards because there will always be a market, people will always want to know what is going on. On a Welsh level there will inevitably, as a result of the devolution settlement and increasing moves towards policy divergence et cetera, be the need in the future for a distinctive Welsh media and therefore despite all the concerns that I have I do remain optimistic. So far as my own company is concerned which is currently about to enter a very new era, we at the NUJ Chapel have been pleasantly surprised by the degree to which the emphasis has been placed on the need for quality journalism in the future in the discussions that we have had with the management. That, I think, does augur well.

Mr Birtwistle: If you are concerned that we sound unduly pessimistic then we would say that as journalists maybe our watchword is pessimism of the intellect and optimism of the will and I think it stands us in good stead. I think that we are optimistic that our members and our co-workers produce high quality output, that Wales is very well regarded specifically in the broadcasting field, throughout the world. That shows that it is not a question of cultural poverty on our part, it is the fact that we are not being heard effectively.

Mrs James: I wanted to bring up the issue of how little control Wales has over its own media but I think we have explored that fully. You have also made some suggestions about the implications for that. Unless you have anything to add to that I think we should go onto the next question.

Q1906 Albert Owen: Just to add onto that, when you talk about the Welsh media, Mr Shipton, I think you have to mean the whole of Wales and that is an issue. When you talk about the BBC jobs I certainly opposed the cuts. There has been decentralisation from London to Manchester which benefits many people in North East Wales and has the potential to have the creative industries there. Bearing that in mind, with regard to the creative industries, do you agree with the Culture, Media and Sports Select Committee of this House that the protection if intellectual property and enforcement of copyright is more important now than ever before?

Mr Shaw: I think there is a real issue there. We obviously represent the freelance journalists who make their money by selling content to media providers, and photographers in particular are finding things very tough at the moment. Certainly in the context of North Wales the amount of money that is being paid by Trinity Mirror per picture makes is almost not worth photographers getting in their car to go and do the job for the amount of money they make from it. When you then see those images being put on the internet without any extra payment being made to those photographers or those journalists who have provided copy, it does have a great impact and it does mean that a lot of people will actually be turning away from doing that work and will be looking to other areas. We are certainly losing a lot of freelancers. An interesting point that we have had raised is around the Welsh Assembly. The Welsh Assembly has contracted a number of photographers to work for the Assembly, to do jobs across various areas of photography and one of the things they have insisted on is that when a photograph is taken the copyright is then signed over and I am afraid that from the NUJ point of view that is not sustainable. If the Assembly uses a photograph it should pay once for that photograph and then if they want to use it again they should pay again rather than just buying the actual image from those freelance photographers because it does create a real problem. I think it is a very major issue for a lot of freelancers.

Q1907 Albert Owen: That is not just a Welsh dimension or a UK dimension; we have seen in America that it is an international dimension. Do you see international regulation as possibly dealing with this problem because of the internet?

Mr Boumelha: Can I just try to add the international dimension? As well as pluralism and diversity intellectual property is also an important issue. It does kind of tie in with the worst aspect of globalisation and if we take the concentration of ownership when today there are ten multi-million dollar corporations that dominate the whole kind of media landscape you will see there is no regulation to individually protect property but also property that could even belong to a group of people or to a culture. If there are no regulations they will try to use it to make maximum profit. Something that has come out of Wales and could be syndicated throughout the world without any regulation to recognise where it is coming from and how it is going to be regulated and organised. Obviously it is a free for all and the people who own it can do whatever they want with it. I think at that level organisations like the United Nations and the World Intellectual Property Organization (WIPO) are quite important and for the last ten years there have been very tightly fought battles between the lobbyists representative of multi-nationals to try to preserve their interpretation of international laws. You cannot take that out of the equation and certainly there is more work in order to establish a media policy and I would have hoped that there would be some thought as to how that should be expressed.

Q1908 Albert Owen: Under the current devolution settlement as it relates to broadcasting and the creative industries, do you think it is suitable? For the benefit of this Committee and its report what can be done to improve it?

Mr Birtwistle: We think that there has to be a sharing; there has to be scrutiny clearly exercised. We are happy to some extent that we can come and express our concerns to you and we can go and express our concerns to the Assembly so it is great to have a choice, but clearly at the end of the day it is Westminster that tends to hold the purse strings and therefore it is primarily the responsibility of Westminster. Maybe there needs to be a sharing of responsibility in this field and maybe this question of a commission that we are only beginning to grapple with at the moment - as you will see - maybe that will be an opportunity to look again at that responsibility and how control or regulation of the media in a hands-off way can be implemented more regularly. It is a bit fitful at the moment is how we would put it; there are gaps in between. We have a spate of redundancies and then we go back to the question maybe and we can lobby you and we can lobby the Assembly. Maybe the creation of a commission which had an on-going responsibility and where there was a degree of shared input of the two bodies would enable us to have a tighter democratic control or at least a better understanding of the influences that are affecting the media. We obviously would like to take this opportunity to thank you for having allowed us to come here and for having chosen to deal with this subject and to allow us to express our views to you.

Chairman: Could I thank you all for your evidence today. It is always a challenge to us when we have five witnesses and I think it has worked very well, although occasionally it seemed as if it were a seminar rather than a select committee. That said, we do look forward to receiving your Media Plan and anything else you wish to submit to us. We note the fact, as you pointed out, that your evidence to us was some time ago now and things have moved on; we have noted all of that. We note also that as the session progressed you did move from a sense of pessimism to a sense of optimism and as the late, great, Raymond Williams talked about the resources of hope I think you began to identify with that and I am sure it has informed your Media Plan which we look forward to reading. Thank you very much.