Since 2015, the Welsh Government has interpreted a European Commission state aid regulation as applying to English-language magazines like Planet, even though we are a magazine of cultural value and our focus is on Wales, and so couldn’t compete in the global media marketplace. This is also despite the fact that the EU is legally bound to promote cultural diversity, having signed the 2005 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions, and has upheld a principle of ‘cultural exception’ to protect state support of culture since 1993.
This decision has contributed to a 29% cut to our Welsh Books Council grant. Following the result of the EU referendum our situation remains the same, at least until the UK leaves the EU. In the lead-up to Brexit we will be campaigning to ensure that a principle of ‘cultural exception’ is upheld in UK competition law to protect public provision of Welsh culture across the board. For more information about the state aid regulation, and how you can campaign for the state aid decision on cultural magazines to be overturned see below.
Planet has been severely affected by a new European Commission regulation on state aid from April 2015 onwards. Why is this the case and what can you or your organisation do to help the magazine continue to thrive?
Under European Union rules, some state aid is illegal because it is seen to ‘distort competition in a way that is harmful to citizens and companies in the EU.’
For more information see www.gov.uk/state-aid.
Some exemptions to this rule are granted under the General Block Exemption regulation (GBER).
For example, the regulation ‘authorises aid in favour of SMEs, research, innovation, regional development, training, employment of disabled and disadvantaged workers, risk capital and environmental protection’.
Books and Welsh-language magazines are exempt from the ruling.
De minimis aid is used to describe small amounts of state aid that do not require European Commission approval.
The European Commission considers that public funding which complies with the de minimis regulation has a negligible impact on trade and competition, and does not require notification and approval. The total de minimis aid which can be given to a single recipient is €200,000 over a 3-year fiscal period. This can be given for most purposes, including operating aid, and is not project-related.
Planet, Planet, as an English-language Welsh magazine funded by a grant from the Welsh Books Council (WBC), has been interpreted by the Welsh Government as not being exempt from the state aid ruling, and its funding has been severely limited by the de minimus regulation from April 2015 onwards, resulting in a 29% cut to our grant (Thankfully, books and Welsh-language magazines are not affected by the ruling.)
Following a review into the funding of English-language magazines, the WBC decided in 2013 that from April 2015 onwards cultural magazines which win the new grant franchise would have their funding capped at a lower amount, a sum which will be granted in full if the magazine is able to raise sufficient extra income and/or contributions in kind. However, the EC state aid ruling means that the maximum WBC grant available to magazines like Planet has been reduced even further.
Magazines about Wales cannot compete in an English-language media marketplace. Magazines which cater to the cultural needs of a small, economically weak stateless nation will never be commercially competitive with English-language magazines produced in England or the USA. Welsh English-language magazines like Planet are in danger of disappearing in the name of ‘fair competition’.
The recent ‘Review of English-Language Magazines in Wales’ commissioned by the WBC stated that:
Magazines in Canada, Australia, Scotland, Ireland, Northern Ireland and Wales are all funded in order to maintain a diversity of voices and opinion in the context of the media dominance of England and the USA. In Canada, as many as 115 arts and literature periodicals are supported. In addition, hundreds of other titles (leisure, sport, fashion, etc) receive public subsidy in order to sustain a healthy native publishing industry in the face of competition from the USA. In some respects … Wales is amongst the least advantaged of these countries in terms of its ability to compete with the commercial mainstream.
Magazines which feature content of lasting cultural and intellectual value, rather than gossip, lifestyle features, infomercials, etc. will be especially vulnerable to the ruling.
Commercial life in Wales is particularly beholden to England, for example through bookshop and newsagent chains. Support for the Welsh media is surely vital for redressing structural inequality in a post-devolution era.
Wales is a bi-lingual country with a distinctive culture
Much of Wales’s cultural, political and artistic activity takes place in the English language, and yet much of that activity is culturally, politically and artistically ‘Welsh’ rather than English or American.
One of Planet’s founding principles is to support the Welsh language, and we would like to see the strengthening of state support for Welsh-language media. Planet is also one of the few outlets for Welsh culture in English to flourish.
English-language magazines in Wales provide a platform for Welsh writers who would otherwise struggle to be heard. Siôn Tomos Owen, the winner of the Young Writers’ prize in Planet’s 2014 essay competition, has pointed out that English English-language magazines are less likely to publish pieces with Welsh content than are Welsh magazines:
Planet was the only magazine with a competition encouraging this type of writing – what I thought to be a niche or too localised Welsh subject matter hardly written about or read in recent times. That essay got me noticed for something I had never thought would be a publishable piece and I have now been offered a publishing deal on the back of Planet's award, for which I will always be grateful. It is a stalwart, important and relevant publication that Wales needs and it should be used as a template to encourage more to read and to emulate.
The interpretation of the state aid ruling as affecting cultural magazines like Planet contravenes European Union principles with regard to culture
The EU has upheld a principle of ‘cultural exception’ to protect state support of culture since France introduced it during the General Agreement on Tariffs and Trade negotiations in 1993. Furthermore, the EU is legally bound to promote cultural diversity, having signed the 2005 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions. For more information about debates around how the EU approaches cultural provision see this link to a presentation by Planet’s editor at a fringe meeting at the 2015 Plaid Cymru Annual Conference
Other areas of cultural activity have won exemptions on the grounds of supporting cultural diversity within the European Union
UK Video-Game producers have been exempt from a ban on tax relief under the state aid ruling because they meet certain cultural criteria. In 2013, the European Commission opened an in-depth investigation into the tax relief offered to UK video game producers. This was because they saw ‘no obvious market failure in this dynamic and growing sector and games were being produced even without state aid.’ However, the investigation concluded that the tax relief measure provides incentives to developers to produce games meeting certain cultural criteria, in line with EU objectives. Commission Vice President in charge of competition policy Joaquín Almunia concluded: ‘Our initial doubts have been dispelled. The proposed aid for video games is indeed focusing on a small number of distinctive, culturally British games which have increasing difficulties to find private financing.’
The Commission therefore concluded that the tax relief measure promotes culture without unduly distorting competition in the Single Market. It is therefore in line with Article 107(3)(d) of the Treaty on the functioning of the European Union (TFEU).
Other countries are challenging the ruling
According to a report in the Telegraph, the French state gives nearly three quarters of a billion euros in subsidies to the written press, including magazines. Several million of that subsidises the costs of posting copies to readers, according to figures for 2012 from the ministry of culture and communication. French Industry Minister Arnaud Montebourg in 2014 defended the subsidies, saying that the French press was going through an ‘industrial crash’ that he compared to the collapse of the steel industry in the 1980s.
‘If we stopped the subsidies… while the press is in difficulty, that would pose a real democratic problem,’ he said.
The ruling will have a detrimental effect on Welsh publishing, culture and arts, and will exacerbate the ‘democratic deficit’ within Welsh politics.
Through their review pages, magazines like Planet and New Welsh Review and Poetry Wales serve an essential function in the wider field of Welsh publishing by making interested readers aware of new titles. Planet’s reviews of music releases, performance and visual arts events are invaluable for the health of the cultural sector in Wales. Planet also plays an important role in fostering political debate. Our renewed political focus addresses recent concerns by Assembly Members about the ‘democratic deficit’ caused by a lack of engagement between the National Assembly and citizens, debating topics of contemporary political urgency from Assembly policy proposals to myriad forms of Welsh internationalism. Furthermore, the English-language Welsh magazines play a major role in bridging English- and Welsh-language Welsh culture, with their coverage of Welsh-language culture of significant benefit to Welsh learners and non-Welsh speakers in particular.
How you or your organisation can help support Planet financially or in kind, call us on 01970 611255
What you can do if you think this ruling is unfair:
Ken Skates AM – Minister for Culture and Sport
Contact Ken Skates by email email@example.com
Post: Minister for Culture and Sport, Welsh Government, 5th Floor, Tŷ Hywel, Cardiff Bay, CF99 1NA
Carwyn Jones, First Minister
post: Carwyn Jones, First Minister, Welsh Government, 5th Floor, Tŷ Hywel, Cardiff Bay, CF99 1NA
Plaid Cymru Shadow Spokesperson on Shadow Business, Innovation and Skills; Culture, Media and Sport; Wales.
House of Commons, London, SW1A 0AA
Tel: 020 7219 3000
70 High Street, Bangor, LL57 1NR
Tel: 01248 372948
Derek Vaughan (MEP - Labour)
Labour European Office
1 Cathedral Road
Cardiff CF11 9SD
39 Rhosddu Road
Tel: (01978) 350052
Cardiff Office: 029 2022 7660
Fax:029 2022 4725
EU Office:+32 22 845 419
Jill Evans (MEP – Plaid Cymru)
45 Gelligaled Road
Telephone: 01443 441395
Fax: 01443 440999
EU Office: +32 22 845 103