Channel 4

Thursday 10th December 2015 Lords Chamber

Question

11:27

Asked by

[Baroness Grender]

To ask Her Majesty’s Government, further to the remarks made by the Prime Minister on 4 November (HC Deb, col 965), what information they are using to estimate the financial gains from privatising Channel 4.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, the Prime Minister has said that he wants Channel 4 to have a strong and secure future. No decisions have been made about the channel’s prospects. The Government are looking at a range of information to assess a broad spread of options including those proposed by Channel 4’s own leadership.

[Baroness Grender (LD)]

Is the Minister aware that while the Prime Minister says that private investment will safeguard Channel 4, leaders in the advertising industry and Campaign magazine say the exact opposite? How is it possible that a great Thatcherite success that supports more than 350 independent production companies annually is now under threat of what looks like the equivalent of a one-off car-boot sale?

[Baroness Neville-Rolfe]

Channel 4 is not under threat. It has an important remit. It must deliver innovative, experimental and distinctive content that appeals to a diverse society. Looking at all the options we shall obviously have full regard to that remit and indeed to the creative industries that depend on it.

[Lord Stevenson of Balmacara (Lab)]

Channel 4 was established by Act of Parliament by a Conservative Government. Does the Minister agree that it is highly unlikely that any commercial purchaser could be found for Channel 4 unless the Government change its remit which at present ensures that all profits are reinvested in programmes? Will she confirm that it would require primary legislation to amend the current remit?

[Baroness Neville-Rolfe]

My Lords, we are still at a fairly early stage of the process on Channel 4. The issue of whether legislation would be required for any change that we decide to make will certainly be one of the considerations.

[Lord Holmes of Richmond (Con)]

My Lords, does my noble friend agree that Channel 4’s coverage of the 2012 Paralympic Games clearly demonstrated the benefit of its public service remit and non-profit ownership model and the old adage,

“if it ain’t broke, don’t fix it”?

[Baroness Neville-Rolfe]

I share the view of my noble friend about the excellence of Channel 4’s coverage of the Paralympics. Indeed, I am a big fan of “Channel 4 Racing”.

[Noble Lords]

Hear, hear.

[Baroness Neville-Rolfe]

What we are doing is looking at the options in an objective way, engaging with Channel 4, and in the fullness of time—in due course, as they say—we will reach conclusions.

[Lord Gordon of Strathblane (Lab)]

Even if one takes the Minister’s reply at face value and is reassured by it, she surely must recognise that if Channel 4 were to be privatised, that capital would have to be serviced, either by dividends paid to investors or interest paid to those who provided loans. That would represent money that would otherwise have gone to creative programming—surely an undesirable outcome.

[Baroness Neville-Rolfe]

I can understand the noble Lord’s comments but we have to look objectively at all the options in the light of the changing media market and the needs of Channel 4 and its viewers.

[Lord Best (CB)]

My Lords, I declare an interest as chair of your Lordships’ Select Committee on Communications. The committee has heard from Channel 4 about its highly acclaimed news coverage. Bearing in mind that news programmes are not profitable because their production costs are relatively high and you cannot export or resell them, does the Minister not agree that the privatisation of Channel 4 would mean a major reduction in this distinctive and impressive news service?

[Baroness Neville-Rolfe]

I repeat the point that we are looking at options. I agree that “Channel 4 News” and news provision are an important part of decisions on public sector broadcasting. I think in Parliament we feel that even more strongly than elsewhere in the country.

[Lord Wigley (PC)]

My Lords, with regard to the fourth channel in Wales, S4C, can the Minister give an assurance that whatever consideration the Government are giving to the future of Channel 4 in England, there is no danger to the independence of S4C in Wales, and that it will be given adequate finance to ensure that it is not subject to death by a thousand cuts?

[Baroness Neville-Rolfe]

We have made clear our commitment to funding in Wales. S4C continues to have, as I think the noble Lord will be pleased to hear, a dual funding model and currently receives around £75 million a year from the licence fee.

[Baroness Bonham-Carter of Yarnbury (LD)]

My Lords—

[Lord Hamilton of Epsom (Con)]

My Lords—

[The Lord Privy Seal (Baroness Stowell of Beeston) (Con)]

My Lords, on this occasion I think the House would like to hear from the noble Baroness, Lady Bonham-Carter.

[Baroness Bonham-Carter of Yarnbury]

My Lords, the Prime Minister has made it clear that privatisation is under consideration. Will the Minister share with the Chamber what part of this great British and, can I say, Conservative success—an essential part of our creative industries, as the Minister mentioned, and the fastest-growing sector of our economy—is not working?

[Baroness Neville-Rolfe]

My Lords, we are looking at Channel 4 objectively to see whether it is meeting its remit properly and whether there are changes that need to be made to the remit or its distribution. Of course, as the Prime Minister said, we need to ensure that the great channel goes on being great for many years to come. It is perfectly okay to review things.

[Lord Hamilton of Epsom]

My Lords, is it not possible that if Channel 4 was privatised, it might be run more efficiently and have even more money to spend on quality programmes?

[Baroness Neville-Rolfe]

My noble friend is entirely right that looking at how things can be run efficiently—taking advantage of technological advances, for example—is a key point in the kinds of reviews that we do in the media sector.