Front Page Favours, Bungs & ReliefMore Details Emerge of Press’ Cosy COVID Relationship with Government
More evidence emerges that, while Boris Johnson’s Government stepped in to prop up his old employers in the press during the pandemic, the favour was returned with helpful coverage
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Leaked WhatsApp messages between Matt Hancock and George Osborne have revealed he asked the then Editor of the Evening Standard to run a favourable front page story on COVID testing as the lack of uptake was “hard for my target” as Health Secretary.
This came at the same time the newspaper received a share of tens of millions of pounds from Boris Johnson’s Government – “bungs” that were later “dressed up as COVID relief”, according to Dominic Cummings. And just days before VAT on digital news sites was removed by the Government, also aiding its finances.
According to the messages – obtained by the Telegraph newspaper – Hancock told Osborne on 28 April 2020 that “I need to call in a favour tomorrow”.
He said there were 22,000 spare slots for COVID testing “hence I’ve extended eligibility” for who can get a test. While he pointed out that “demand just isn’t there” and how this was “good news” about the spread of the virus, Hancock also told Osborne it was “hard for my target”.
Under increasing pressure over his handling of the Coronavirus’ spread, Hancock had promised to deliver 100,000 tests a day by the end of April 2020.
“So I really could do with a testing splash,” he told the former Chancellor.
Osborne replied: “Yes, of course, all you need to do tomorrow is give some exclusive words to the Standard and I’ll tell the team to splash it… Send the words to me by 8am tomorrow.”
The request came in the same month a special subsidy had been arranged for the established press, which began in April 2020, called ‘All In, All Together’.
Days later, on 1 May 2020, the 20% VAT charge on digital news sites was removed “to help the news industry weather the impact of the COVID-19 crisis” according to the Financial Times.
Hundred of Millions in Subsidies and Tax Relief
The net benefit of removing VAT from digital news sites would amount to many millions of pounds. Statista estimates news brands receive more than £1 billion in advertising revenue alone and the value of digital subscriptions is an ever increasing part of newspaper profit margins.
According to the Telegraph – which used to pay Boris Johnson around £275,000 a year for a regular column – in the year after his Government lifted VAT payments, its digital subscriptions leapt by 40% to £44.1 million – giving it a net windfall of more than £4 million.
This year, the UK digital subscriptions market for newspapers and magazines is estimated to be worth more than £1.2 billion, meaning that on subscriptions alone the industry has been relieved of more than half a billion in tax in the past three years.
The amount in subsidies paid directly by the Johnson Government to the press has been more difficult to ascertain.
Budgeted at £35 million for the first three months, All In, All Together still appeared to be operating two years later – the Guardian published a story under its banner in March 2022 – but the Government and industry have repeatedly refused to answer Byline Times’ questions on how much has been spent in total.
Newspapers had been lobbying for zero VAT rating for their digital products for years, but All In, All Together was conceived after intense lobbying in the first weeks of the pandemic by newspapers in the News Media Association (NMA) – the members of which include the Evening Standard, Guardian, Mail, Murdoch, Telegraph and Mirror groups.
Though it was explicitly a subsidy – then Chancellor Rishi Sunak said the public money was being spent “in support of the print newspaper industry” – it was combined with an advertising campaign, with wrap-arounds about the Coronavirus, normal ads and paid-for editorial content labelled as ‘government-sponsored’ (though not always prominently).
The Cabinet Office’s monthly spending data showed the money was delivered to the newspapers through OmniGov, the branch of global media company Manning Gottlieb that manages Government advertising.
Although Byline Times first reported on the scheme on the same day as Hancock sent Osborne the WhatsApp messages, there was no wider interest in the story from the media – and no questions asked about the conflicts of interest created by government money going to newspapers tasked with holding it to account during a health emergency.
It was only a year later when Johnson’s former chief advisor Cummings lifted the lid on the deal in a Twitter exchange that it attracted attention.
Asked if he knew of any instance when lobbying had altered Government policy during the pandemic, he replied that “newspapers negotiated direct bungs to themselves with him [Boris Johnson]” and there were “no officials” on the calls.
Johnson “told officials to send the [money] dressed up as ‘COVID relief’”, Cummings claimed.
The Evening Standard is owned by Evgeny Lebedev and the Daily Mail and General Trust (DMGT). Boris Johnson faced considerable scrutiny of his decision to make Lebedev – a personal friend and the son of a former Russian KGB officer – a peer in December 2020.
He sits in the House of Lords as Baron Lebedev of Hampton in the London Borough of Richmond upon Thames and of Siberia in the Russian Federation.
Last March, the Government withheld security advice on the peerage on “national security” grounds, amid claims Britain’s security services had raised concerns about the appointment.