Academic Publishing, Bookselling, Digital Publishing, VAT

Don’t Tax Reading: the case against VAT on knowledge

The removal of VAT from electronic publications earlier this year was the triumphant culmination of a vigorous campaign that had been led by publishers, booksellers, writers, librarians, teachers and readers over many decades to protest against taxation on knowledge. Originally it was started to save print books from tax: after VAT was introduced to the UK in 1973, successive governments had cast envious eyes on the thriving book and newspaper industries and debated whether to slap this surcharge  on their products, perhaps at a lower rate than for other consumer goods, as other European countries had already done.  Protests began immediately; there were crises as the threat reappeared periodically, which the campaigners always won – VAT has never been imposed on printed publications in the UK – but sometimes the victory was a close-run thing.

To a significant extent, the advent of e-books hobbled the power of those watchful that the government of the day might target print books again. VAT was imposed on e-books immediately they became commercially available, because it was argued that they should be treated in the same way as the products of the music industry – records, cassettes and CDs. Publishers, especially, were worried that if they protested too loudly the government might retaliate by imposing VAT on print publications rather than removing it from electronic ones.

When Annika wrote about the freeing of electronic publications from VAT a few weeks ago, I remembered a book had been published detailing the early struggles.  I have a copy and had hoped to quote from it.  Unfortunately, I couldn’t find it then, but yesterday was finally reunited with it. Published in 1985, it’s even more venerable than I thought.  It was designed to be submitted to the Treasury when Margaret Thatcher was Prime Minister and Nigel Lawson the Chancellor of the Exchequer, and commissioned by an organisation called the National Book Committee.  (I’ve looked this up: it no longer exists, but in the foreword, contributed by its “Chairman” [sic], Baroness David, she explains that it represented “all the major organisations concerned with the production and reading of books”.) It was written by Marita Evans of W H Smith and Brenda White of CPI Associates (a research organisation similar to Gold Leaf), supported by several prominent academics, including Dr Frank Fishwick, of the University of Cranfield (with whom Gold Leaf subsequently worked on a JISC report on e-books).

Don’t Tax Reading: the case against VAT on knowledge is a fascinating compendium of history, economic argument, statements from prominent authors and accounts of the legal and political debates on the dissemination of knowledge that have taken place since the middle of the nineteenth century. Below are some selected quotations that seem particularly relevant.

“In 1941, in the darkest days of the Second World War, when the Government needed every penny it could get, the idea of a tax on books, on knowledge, was rejected.”

“Any attempt to separate out books of ‘non-educational value’ for taxation would lead to absurd judgements having to be made.  Fiction and poetry, for example, classical or popular, are just as important to understanding, literacy, and to our culture as serious works for formal education.”

“It seems that each generation has had to fight for the independence of the written word .. if this generation is to win its round, we must use words and tactics that are relevant today.  The arguments of the eighties.”

“The Government record for skimping on school books is abysmal: where among every twenty young adults leaving school – not even a classroom-full – there is at least one who is effectively illiterate; where a Government that is introducing huge training programmes to make sure that school-leavers are employable in our fast-thinking, fast-technology society, is now proposing to tax the basis by which those children’s minds are trained – the written word.”

“The National Association of Teachers in Further and Higher Education stated the following: ‘At a time when the Government is crying out for a better-educated work force, imposing a tax on books is not only illogical, it is stark-raving mad. Further and higher education students would need an extra £1.5 million in grants to enable them to buy their books if VAT is imposed. Will the Government provide this? We think not. Students will be penalised and their access to books reduced. And those students already least able to afford books will be the hardest hit.’”

Some of these statements seem quaint to us now. Grants? Today’s students should be so lucky! And  in 1985 students paid no tuition fees. The £1.5 million figure given as a proportion of overall student spend on books is illuminating: in 1985 the proportion of school leavers entering Higher Education was still only approximately 15%. Most were spending – and expected to spend – more in actual amounts – i.e., not adjusted for inflation – than students expect to spend today. The concept of the UK aspiring to a “fast-thinking, fast-technology society” in 1985 may seem risible to us; but no doubt future generations will be having a similar laugh at our expense in 2055.

However, much of the information captured in these extracts raises serious questions about how much progress we’ve made in the intervening 35 years. The Literacy Trust says that 1 in 7 adults in the UK today has the reading age of a child of nine or lower. There is still under-investment in our schools. In 2015, Iain Duncan Smith, the then Work and Pensions Secretary and prominent member of the Cameron administration, congratulated the government because the number of children living in poverty had “dropped to 2.3 million” – “the lowest since the mid-1980s”.  That figure was shocking; and even more shocking was that the government thought achieving the child poverty level of thirty years before was a cause for celebration. There has been further deterioration since: the Children’s Society estimates that four million children are living in poverty in 2020.

Social imbalance and educational under-achievement are of course the result of a complex mixture of factors; they can’t be attributed to a single cause. Neither can a “silver bullet” be conjured to remedy them. However, enabling affordable access to knowledge in all its formats has to be the greatest single action a government can take to alleviate these ills. Let us hope that the removal of VAT from every kind of publication is permanent; but if its shadow looms again, key stakeholders must surely unite again to protect knowledge.

[Written by Linda Bennett, Gold Leaf]

Bookselling, Deutsch, Services

“Buy local” during Covid-19 – How German booksellers encourage local shopping online; and what is happening in the UK

Since the 18th of March 2020, all non-essential shops in Germany have been closed owing to the current Covid-19 crisis. Like everywhere else in the world, this affects small shops in particular and even though many offer click & collect or delivery services for their products, the danger of the vast majority of customers simply buying from one of the online giants is incredibly high. Small shops (with less than 800 m3 of shop floor) and all bookshops are now due to reopen from today, but they will have to operate under strict hygiene rules and the expected footfall will remain low.

To inform the consumers about their options and ways to support local shops, the German bookshop chains Thalia Mayersche and Osiander teamed up and started the initiative www.shopdaheim.de (which translates into “shop at home”) about 10 days after the closures. Initially, it was a database of about 1,000 bookshops – you are able to search by postcode or place name and see all the local shops that offer some kind of delivery or collection service locally. Within 2 weeks, nearly all of the 3,000 bookshops in the country joined and now – after 4 weeks – 10,000 shops in 41 industries are listed. The site experiences more than 100,000 views a day (at peak times up to half a million) and has become such a success that recently the Austrian equivalent www.shopdaheim.at was launched.

The site still has its main focus on bookshops, but includes shops that sell confectionary, cosmetics, baby products, flowers, perfumes, fashion, sports and more. Several chains (Intersport, DHL, Douglas perfumes, the drug store chain DM and Blume2000, a flower shop chain) are contributing to the marketing and PR of the site whilst the original founders have invested a 6-digit Euro sum into the site. Currently, the listing of a shop is free of charge, but it might be possible that the display of a shop logo or inclusion into marketing campaigns will become chargeable in future – the owners are planning to keep the platform running; after all, local shops having a shared platform to encourage consumers to shop locally is a good idea at the best of times.

shopdaheim Logo

The UK is less fortunate than Germany. Not only are all the bookshops closed, but some of the distributors have closed down their operations and furloughed their staff.  Gardners, one of the UK’s leading book wholesalers and distributors, closed before the end of March and Amazon is no longer stocking new titles, as it says it must focus on storing and distributing more essential products. It’s still possible to buy some print titles direct from online booksellers such as Waterstones and some publishers are also selling print direct – Bloomsbury, for example, has a well-established online ordering service for both print and electronic books which so far it has continued to maintain.  Many online sellers are also making extra promotional efforts to sell e-books; it will be interesting to see if this results in another spike in e-book purchase, which has long plateaued at around 10% of all sales in the trade sector. 

Libraries are also closed but also promoting their digital services. The British Library has contacted all its members to explain how to access its huge resource of online collections. Some public libraries are still making their online collections available, but others have closed down their services altogether. 

Academic libraries in the UK are also all closed, but their staff are still working from home and making Herculean efforts to provide as extensive a service as possible to all their patrons – students, lecturers and researchers.  Most have built up extensive online collections over the past twenty years which have now become an even more valuable resource than they were prior to the lockdown, but users still need support when accessing these and help in finding exactly the materials they want. 

When the lockdown is relaxed, it is difficult to predict which businesses will become casualties. In recent years, the UK has enjoyed a resurgence of both small independent bookshops and independent literary publishers.  Many of these businesses are run on a shoestring, propelled by enthusiasm and love for books rather than any more concrete financial backing. Our culture would be the poorer if we were to lose them, so it will be worth making an extra effort to support them when they are able to trade again. In the meantime, we could do worse than set up our own version of “Shopdaheim” in the UK.

[Written by Annika Bennett and Linda Bennett, Gold Leaf]

Academic Publishing, Bookselling

Vale atque Ave, Tim!

(written by Linda Bennett of Gold Leaf)

People who are old enough to remember President Kennedy’s assassination in November 1963 nearly always say they can remember where they were when they heard the news; similarly, members of a different generation remember precisely what they were doing on the day in August 1997 when Princess Diana’s death was announced. 

For those of us working in the publishing and bookselling industries (and, again, of a certain age!), a similar indelible moment occurred when the demise of the Net Book Agreement [NBA] was first made public in 1996.  At the time, I was attending the Scottish Library Association’s Conference in Glasgow – so the delegates there were among the first to hear.  It was on the second day of the conference that the axe fell.  A speaker at the conference who had passionately defended the NBA on the previous day – I won’t name him, but he was the very prominent MD of one of the UK’s largest publishing houses – was one of the chief architects – or assassins, depending on your point of view – of its departure.  “The Net Book Agreement”, he had proclaimed earnestly the day before, “is safe.  It will be abandoned over my dead body.”  This was well before the era of fake news; but suffice it to say that the gentleman concerned managed to survive – and I believe is with us still.

For those too young to know what it was all about, the NBA was the legally enshrined practice of  price-setting their own publications by publishers. Booksellers and others selling these publications were not allowed to undercut the publisher’s chosen price, except in very particular circumstances: 10% discount could be offered to libraries and schools, and, with the publisher’s permission, old stock could be ‘remaindered’.  New stock had to be sold at the correct price. At the time of its demise, the NBA had been in force for the best part of a century.  It was designed to prevent booksellers from discounting each other out of existence – or other retailers from discounting booksellers out of existence.  Technically it was a restrictive practice, and in 1996, when a Tory government had been in power for well over a decade, ‘restrictive’ and ‘practice’, when seen adjacent to each other, were two very dirty words.

Everyone in the two industries knew the NBA was controversial, of course: it had endured a few nasty moments down the years and, to be fair, it didn’t enjoy unanimous support.  Everyone also knew, and hugely respected, the man who had been championing it, thus saving many booksellers from insolvency: Mr Tim Godfray, the already veteran CEO of the UK Booksellers Association.  Tim was and is a tireless supporter of all above-board initiatives to support proper bookselling; I still have in my possession two of his iconic and well-reasoned pamphlets on maintaining the NBA (Books Are Different) and not introducing VAT to print (Say No to VAT on Books).  He has prevailed on the latter issue, having campaigned against VAT on recurring occasions: VAT is still not applied to print books.

Why am I bringing all this up now?  Because today, after 47 years at the Booksellers Association, most of them in the top job of CEO, Tim is retiring.  Yesterday evening a farewell reception was held for him at the atmospheric, also iconic, London Library.  The event was attended by 250 guests of Tim’s own choosing, from across both industries.  Remarkably, he presented each with a handwritten letter telling him or her why they were special to him.

Tim has campaigned on many other issues to make life happier and more prosperous for booksellers and publishers.  Latterly and most extensively, and in league with his counterparts across Europe, he has lobbied the EU and individual European governments to close the loophole that allows large online retailers to escape or greatly reduce payment of corporation tax.  More joyfully, in 2013 he spearheaded the enduring and highly successful Books Are My Bag initiative, which is now in its seventh year.  Academic Book Week eventually became one of the offshoots of this campaign.

In many ways, Tim will be irreplaceable: he has combined tireless hard work with a fine brain, ready wit, genuine sympathy and unfailing patience when listening to others.  For those of us who have known him a long time, it has been a comfort just to know he is there.  He will leave a large hole in the fabric of our universe.  Yesterday evening, however, he hinted that he may come back – at least in a part-time capacity – in another guise.  I’m sure we all hope so.  Vale atque Ave, Tim!