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Mr Deputy Speaker (Mr Nigel Evans)
Members will be aware that social distancing is no longer in operation. I remind Members that Mr Speaker has encouraged us to wear masks where at all possible. We now go to Dame Angela Eagle who will move the motion.
Dame Angela Eagle (Wallasey) (Lab)
I beg to move,
That this House has considered privatisation of Channel 4.
I am very relieved to serve under your chairmanship, Mr Deputy Speaker, and thankful to have secured this timely debate on the future of Channel 4.
Ministers have made it clear, for the sixth time, that they want to privatise Channel 4. They have issued what they ludicrously describe as a consultation document, in which they reveal that their preference is wholesale, 100% privatisation of Channel 4. They have also decreed that the exercise will close on 14 September, which leaves little parliamentary time to resist this act of wanton cultural vandalism and leaves the public only the summer holiday period in which to notice the existential threat that the Government’s actions pose to one of the most successful experiments in UK broadcasting history.
Channel 4 was established in 1982 with an unusual structure and remit. It is Government owned but wholly commercially funded, which means that it costs the taxpayer nothing. More important, Channel 4 has no shareholders and is free to reinvest all the surplus it can generate back into content production. That enables it to develop adventurous and experimental programming that would never find more conventional commercial backing and would therefore never see the light of day if Channel 4 did not exist in its current form.
Over the years, Channel 4 has developed such programming with some panache, and as a consequence the UK has a thriving cultural pool of TV and film production talent and punches well above its weight in the soft-power stakes of cultural influence on the global stage. Channel 4 has also nurtured a younger audience, which makes it especially attractive to advertisers and to those who wish to sponsor content.
Channel 4’s public service broadcasting remit obliges it, among other things, to be innovative, inspire change, nurture talent and offer a platform for alternative, culturally diverse voices. In the 39 years since its creation, Channel 4 has fulfilled its remit—and more. It has become a pint-sized film powerhouse with 37 Oscars and 84 BAFTAs. Film4, its production arm, has co-financed successes such as “The Favourite”, “Slumdog Millionaire” and “12 Years a Slave”, to name but a few. Its successful TV output this year alone includes the AIDS drama “It’s a Sin”; a comedy about a female Muslim punk band, “We Are Lady Parts”; and the magnificent “Grayson’s Art Club”, which got many of us through the lockdown in better shape than we would have been in without it.
The support the channel has given to the Paralympics has been inspirational and genuinely groundbreaking. Its news output, although controversial with Conservative MPs, includes “Unreported World”, the Heineken of news because it reaches the parts that others simply do not go to.
Since Channel 4 is prevented from undertaking any in-house production, it has played a leading role in growing the UK’s world-leading independent TV production sector. It works with more than 300 production companies a year, and has been responsible for directly investing £12 billion in the independent production sector since being established in 1982. That supports 10,000 jobs in the supply chain, a third of which are in the nations and regions of the UK. It also means that Channel 4 effectively acts as a kind of early-stage venture capital fund that takes risks and is able to finance innovation.
It is absolutely clear that the channel’s more risky and experimental programming would never see the light of day if it had to search for commercial backing. If it were not for Channel 4, many exciting and successful careers for writers, directors and performers might simply never have happened. Crucially, the country would have been much poorer in cultural terms if such unusual, diverse voices and talents had remained undiscovered and unfulfilled, their voices and viewpoints stifled and unheard. That model has proved to be robust and resilient, and it has come through the pandemic in good shape, so why on earth are the Government seemingly hellbent on destroying such a successful and innovative system?
Only five years ago, after an 18-month review, the then Culture Secretary, the right hon. Member for Staffordshire Moorlands (Karen Bradley), described Channel 4 as a “precious public asset” and declined to privatise it. She did, however, require it to establish hubs in the regions, which it is doing in Glasgow, Bristol and Manchester, alongside a new national headquarters in Leeds. Any sale is likely to reverse that decentralisation to the regions and would destroy the hubs before they had had a chance to establish themselves. That is a peculiar manifestation of the Government’s self-proclaimed mission to level up, whatever we think that oft-used slogan actually means. Why destroy a unique institution that more than pulls its weight in the national interest?
Ministers have been desperate to find arguments to revive the privatisation threat for a sixth time, and appear obsessed with completing this irreversible destruction despite the fact that there is no merit whatever in the proposal. The Minister for Media and Data, whose response to the debate I eagerly await, has had it in for the channel for decades. Last year, he told an audience at the Tory party conference that the channel was struggling financially, but it is not. It has just returned its highest ever pre-tax surplus of £74 million, despite the disruption caused by the pandemic.
Ministers and some Tory MPs have also attempted to justify their obsession with an irreversible privatisation by claiming that UK media players need scale to compete with the Americans, but not all of them do. Moreover, Channel 4 is competing superbly well with the Americans in their own backyard, as its haul of Oscars shows. It is not trying to be a huge, mega-global media player. That was never its purpose. It occupies an incredibly valuable niche of distinctively British programming with a distinctive voice of its own. All 4, Channel 4’s advertising-funded video-on-demand service, has just posted results that demonstrate a 25% increase in views of its streaming services. Channel 4’s social platforms have had 4.2 billion content views. That once more demonstrates that Channel 4 is evolving to compete in the rapidly changing media environment of on-demand without changing its structure or ownership. Ministers have claimed that Channel 4 needs access to capital to compete, but its executives have denied that that is the case, and its record of producing innovative programming in a unique way bears them out.
Privatisation is often justified as a money-raising effort, but as Channel 4 does not produce content in-house, it has no lucrative back catalogue, and its value has been estimated at between £1 billion and £2 billion. That will make scarcely a dent against the £400 billion that the Government have borrowed and splashed around with such abandon during the pandemic, so money raising cannot be a reason behind the Government’s intention either. What on earth is going on? Why are Ministers hellbent on this destructive act?
When we look at the flimsy arguments that Ministers have used to justify this cultural vandalism, it is hard not to draw the more obvious political conclusion that the Government wish to destroy Channel 4 because they do not like the fact that it caters for diverse audiences and different viewpoints—that they are pursuing a hegemonic media project to control public discourse and they do not like dissenting voices.
There are some hints around. The output of Channel 4 has been described by one Tory MP as woke rubbish. The clue is in the dripping contempt for anything different. Anything that does not share the current Tory world view is beyond the pale and ripe for destruction.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
I understand what the hon. Lady is saying, but she must also, I think, reflect the fact that these are Government proposals. Many of us in the Conservative party are questioning them in the same way that she is and will be very interested in what the Minister has to say in winding-up the debate. She must not characterise this as a “Tories versus Channel 4” debate.
Dame Angela Eagle
I look forward to the right hon. Gentleman being one of, I hope, more than 40 Conservative MPs who appear in the Lobby to vote against any such privatisation proposals. If he can raise that number, I hope to be in the Lobby with him.
It is certainly the case, though, that “Channel 4 News” has refused to be cowed by the Government’s none-too-subtle attempts to intimidate it. Those manifested themselves most notoriously during the 2019 general election when—this may be the real reason that we are seeing what we are—the Prime Minister was replaced by a melting ice sculpture in the Channel 4 leaders’ debate on climate change, which he had characteristically shirked. Following that incident, an unnamed Tory source briefed that Channel 4 would be privatised as punishment for lampooning the prime ministerial no-show. A complaint was made to Ofcom, but it was subsequently thrown out.
To silence such dissent in the future, the Government have decided that Channel 4 will be privatised, and Ofcom taken over by new, hard-line appointees. The BBC has already been cowed. Our national discourse is being drained of different voices as a deliberate act of political ideology. That reminds me more of the authoritarian events going on in Hungary than of something I ever expected to witness in the UK.
I hope the Government will step back from the brink that they have moved towards. For Channel 4, privatisation will be irreversible—an act of vandalism that does irreparable damage to a model that has worked well and provided a unique source of innovation and support, nurturing a vibrant independent production industry that should be the pride of our country. Already, the big beasts—Disney, Netflix, Discovery, Google and Amazon—are beginning to circle, and the Minister for Media and Data is spending his time facilitating the interests of those corporate big beasts by hinting that in-house production will be allowed following privatisation and that Channel 4’s “edgy” remit will be changed.
So there we have it: a sale that threatens to destroy in one fell swoop the independent production industry that Channel 4’s remit and inability to produce in-house have fostered in the UK for the past 40 years. That is deliberate vandalism of all that is unique and successful about Channel 4. If privatisation happens, the bland dullness of US corporate regurgitation may well await us all.
That may serve the immediate interests of what some in the Conservative party believe, but it does not serve the interests of the country. How does the Minister think that it is in the country’s cultural interests to destroy Channel 4? Will his Department prepare and publish an impact assessment of its privatisation plans? How do the Government intend to change the remit of Channel 4 to facilitate a sale? How will privatisation protect innovative and experimental programming that comes from diverse and often unheard voices?
Ministers have also announced that the current ban on in-house production could end with privatisation. That would put the UK’s thriving independent production sector and the 10,000 jobs that it supports directly at risk. How will the Government protect the sector? Finally, how will flogging off Channel 4, possibly to one of the corporate digital giants, preserve the UK’s unique voice in the age of bland corporate entertainment?
I look forward to hearing the Minister’s detailed answers.
Mr Deputy Speaker (Mr Nigel Evans)
The winding-up speeches will begin at 10.28 am. Therefore, given the number of Members who have indicated on the call list that they wish to speak, I will introduce a four-minute limit for speeches. For those who have not already done so, please feel free to remove your jackets, as it is unseasonably warm, yet summer.
Sir Peter Bottomley (Worthing West) (Con)
I endorse much of what the hon. Member for Wallasey (Dame Angela Eagle) has said.
Nearly 20 years before I was elected to this House, when I was aged 12, I put stamps on envelopes to help to save the Third Programme, which then became Radio 3. The Minister may point out that when Channel 4 started broadcasting, I had been in the House for—I think—seven years.
There have been a number of considerations of privatising Channel 4, under Margaret Thatcher’s Government, John Major’s Government and Tony Blair’s Government. I think that the public records, now that they are open, will show that in 1996, when my wife was the Heritage Secretary, most of the Cabinet Sub-Committee agreed to privatise Channel 4 for about £1 billion. She and the Chancellor had a discussion, and more and more money was offered in exchange for other cultural projects. She had to explain that privatising Channel 4 was not a question of money; it was a question of right or wrong.
The only thing that will not happen if and—I hope—when Channel 4 is not privatised is that the Americans will not take it over. I was influenced in my youth by a man called Graham Spry, the legendary father of Canadian national broadcasting. When the network of local radio stations in Canada was put together, he said, “The choice is between the state and the United States”.
I have heard no argument from the Minister or from anybody else that allowing Channel 4 to be taken over by a US mega-conglomerate of broadcasting or entertainment would be in this country’s national interest, in the interests of those who produce programmes for Channel 4 or in the interests of those who watch it. We are not just talking about the existing audience for Channel 4, and its many programmes and many ways of putting those programmes out; we are talking about future viewers and listeners.
I will not go through the programmes that Channel 4 has made that are of value; I will not even go through the things it has done that have annoyed me. But the fact that an MP could be annoyed by what they see in an entertainment programme or a news programme is just par for the course. Those programmes are not there to make us happy the whole time; they are there to alert others to what is going on and to make others think, and hopefully to make us think as well.
If one goes through the history of some of the stories that “Channel 4 News” has broken in its individual way, one can see that it has had a good impact. If what it is doing is wrong, it is exposed and its makers will either feel ashamed or apologise, and there is always Ofcom to regulate it. However, if we count up the number of times when its distinctive approach has been of value to the country—I would argue to the Government as well, but that is less important; it is its value to the country that matters—we see that the model chosen for Channel 4 counts.
As the Minister may remind us—and, by the way, the Wikipedia article on Channel 4 needs significant updating—we were expecting a second commercial channel for 10, 15 or 20 years before it came; the button for it was there on the television sets. The way Channel 4 has managed to adapt and evolve has been important, and I pay tribute to those who have led that, to the different chairs and chief executives of Channel 4. On balance, it has clearly been a successful method of allowing for flexibility that is distinctive from the normal commercial channels in this country, and from the BBC.
The Minister needs to explain how privatisation will lead to more content investment and more jobs if the independent producers say that they feel threatened, how content investment will come, and why the Government are planning to change some of the restrictions on Channel 4 so that it could, in the short term, apparently have greater income, which may give a better multiple to the price that might be obtained if it were to be floated off on the market.
Alison Thewliss (Glasgow Central) (SNP)
I would like to pick up where the hon. Member for Worthing West (Sir Peter Bottomley) left off, because I was two months old when Channel 4 began broadcasting. I have grown up with it, and I think it is a fantastic channel. I am incredibly proud that Channel 4 has its creative hub in my constituency, so I stand to support its work, the £200 million that it has spent on Scottish productions since 2007, its commitment to increase spend in Scotland, and its bringing on of young talent, which is incredibly important to the industry.
I was really impressed when I went to visit one of the initiatives that Channel 4 ran to bring talent stream into TV, where it is still a challenge to work with under-represented groups. It is working very hard to bring folk into the industry. As well as being based in Glasgow Central, Channel 4 is important for independent production companies in my constituency because it has invested in indies through the alpha fund, the emerging indie fund and the indie growth fund. Those indies take risks and do different types of broadcasting, but it is the public service broadcasting model that underpins all that work.
Last year, Channel 4 worked with 161 production companies up and down the country and in their communities. Although people might see the front door of Channel 4, they do not always see the front door of the production companies that employ so many more people in skilled jobs. Blazing Griffin is one such company based in my constituency. It is a medium-sized production company that specialises in post-production and video games, and it has 60 full-time employees in Glasgow. When I spoke to people there yesterday, they highlighted the importance of the regulated environment in which Channel 4 exists and made specific reference to the terms of trade, which mean that Channel 4 does not own its copyright. That gives production companies a huge advantage, because they can own their intellectual property and sell it domestically and internationally. That contributes to international trade for this country, which I think the Government have completely forgotten about. As hon. Members have pointed out, privatisation may mean that that unique selling point will vanish overnight and destroy, at a stroke, a hugely successful industry.
[Yvonne Fovargue in the Chair]
Independent production companies have gone from making a contribution of £600 million in 2001 to £3 billion in 2019, and the UK punches well above its weight in that contribution. Naysun Alae-Carew of Blazing Griffin pointed out to me that the story of Channel 4 is not yet complete. The early fruits of its investment in the nations and regions and in young talent have not yet been completed, and it would be premature of the Government to try to flog off the channel and pull the plug at this stage because there is a lot more to do in order to bring new voices to television, to bring in the nations and regions, and to bring black, Asian and minority-ethnic talent and working-class talent into TV. Channel 4, almost uniquely, is absolutely committed to doing that.
Blazing Griffin is working in a long-term, full-time and high-quality area in post-production jobs, and it points out that we need to look beyond the crew and location work that we often see at the front of TV, and to increase the spread of highly skilled, very stable and very lucrative jobs in areas such as post-production. As Blazing Griffin has pointed out, the Channel 4 model is absolutely crucial to that.
A lot has been said about Netflix, but Netflix also does post-production in the UK, and can do so only because of the Channel 4 ecosystem. Naysun Alae-Carew pointed out to me yesterday that when US states with incentives or short-term measures cut their investment—New Mexico was given as an example—the production companies and big corporates just move on to the next state. It would be incredible if the UK Government decided to pull the plug and allow a highly successful, talented and skilled industry in this country to fold for short-term gain. It would devastate the industry here, so I urge the Minister to consider the full ecosystem that exists because of the unique position that Channel 4 is in.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
I draw the House’s attention to my interests as set out in the register. I approach this debate in a slightly less certain and more inquiring way than the very eloquent mover of the motion, the hon. Member for Wallasey (Dame Angela Eagle). I ask myself, what sort of media do we want to serve our constituents? My own experiences of the media are quite well balanced— I have suffered but I have also benefited enormously from the media.
All around the world, the lesson is that the strongest, safest societies have independent, raucous, cynical, largely unfettered and disrespectful media. That is what keeps us safe as citizens and defends our human rights and civil liberties. The question is, where does Channel 4 fit into that? It caters for minority tastes and diversity in modern Britain. It aids inclusivity. Its news quality is outstanding. In independent surveys it is the most trusted outlet; look at the experience of people like Cathy Newman, Jon Snow, Gary Gibbon and Matt Frei. I draw hon. Members’ attention to the coverage of Syria, and the depth and the decent length of interviews on what is the greatest humanitarian catastrophe that the world has faced in the last two decades—the numbers on the move into Europe are absolutely staggering.
I draw hon. Members’ attention to “For Sama”, a film made by Channel 4 that would not have been made by other outlets. It is brilliant, moving and was shown in Parliament. We have seen what Channel 4 has done for Paralympic sports and on the Sri Lankan atrocities. As recently as last night, it was praised by John Kerry for the Exxon revelations.
Channel 4 is different from the BBC. It is true that all around the world the BBC is venerated—look at the work of the BBC World Service. When I had responsibility for these matters, I increased its funding ninefold because it is so important. The hugely elevated level of international coverage under James Landale is known to us all but, unlike Channel 4, the BBC is extremely establishment. It is often criticised by colleagues, particularly colleagues in Government, for being biased. But the BBC tries to hold the Government to account, and I would argue that in some ways it is too close to the Government—it may pull its punches because it is worried about the funding model or, indeed the charter. Channel 4 occupies a unique position in our national media.
I come to my questions for the Minister, who is extremely experienced in this area, and I hope that he will answer them. First, will he ensure that there is an impact assessment before rather than after the decision is made? Secondly, what evidence does he have that privatisation will encourage more content investment and more jobs? All previous reports, as the hon. Lady said, including the Government’s own from 2017, concluded that Channel 4’s remit is better served in public ownership.
Fourthly, have the Government addressed the genuine dilemma—I speak here as a strong supporter of capitalism—of whether there could be a conflict of interest in pursuing public policy objectives where the pursuit of profit is the underlying model? Channel 4 does not take money from the taxpayer; it is publicly owned but commercially funded and 100% of its revenue is reinvested in the organisation. It has a new headquarters, not in Birmingham, I regret, but in Leeds, which is out of London—that is very important. It is a huge boost to the British film industry through Film4 and it commissions rather than produces its own programmes, which hugely stimulates and expands the private sector. Those are important matters and I hope very much that in making this case, the Minister will address them.
Mick Whitley (Birkenhead) (Lab) [V]
It is a pleasure to serve with you in the Chair, Ms Fovargue. I thank my hon. Friend the Member for Wallasey (Dame Angela Eagle) for securing this important debate. As broadcasters including Sir David Attenborough have warned, the privatisation of Channel 4 would have disastrous and far-reaching consequences for the film and television sector. The UK’s creative industries are one of the fastest growing sectors of the economy, widely admired across the world. Channel 4 sits at the heart, with its distinct remit to reinvest profits into commissioning. All that would be jeopardised by privatisation.
The claim that the consultation now under way is a response to a changing broadcasting landscape is not believable. The Minister first advocated privatisation all the way back in 1996. His attempts to push through privatisation when he was Culture Secretary were frustrated only because David Cameron, the Prime Minister who sold off Royal Mail for a pittance, recognised the irreparable harm that would do to the wider cultural sector.
In fact, despite all the challenges posed by the rise of the streaming giants, Channel 4 continues to thrive, both critically and commercially. Last year, the channel recorded a record £74 million pre-tax surplus, while also bagging a prime-time Emmy for its coverage of the deteriorating situation in Hong Kong. Viewing figures for the terrestrial channels and All 4 continue to rise. The Minister is confecting a crisis where none is, in order to provide a flimsy pretext for privatisation.
The Minister should come clean about the Government’s motivations. This is not about money; it is about ideology. He wants Channel 4 to be consigned to the dustbin of history because it is simply too good at doing what it is supposed to do. For four decades it has been a leading provider of innovative content that resonates, not just with communities across Britain but across the globe. It is a showcase of what is possible when things are run in the interests of the public good and not for private profit. Since its inception, “Channel 4 News” has spoken truth to power and exposed injustices and corruption at home and abroad. That is something that this Government and this Prime Minister simply cannot stand.
Andy Carter (Warrington South) (Con) [V]
It is a pleasure to speak in this debate and I thank the hon. Member for Wallasey (Dame Angela Eagle) for securing it. I am pleased to appear via a TV screen for a debate about TV.
One thing I learned early in my career running a media business is the value of taking risks, the need for platform commissioners to try different, find new talent and be experimental with subject matter. That is what gives creative businesses their edge. It is imperative that we regularly review the broadcasting landscape; technology is changing at great pace. It is also important to recognise that no business can exist in aspic. To suggest that nothing should ever change at Channel 4 would frankly be ridiculous, particularly given the significant shifts that we have seen on a global basis, the rise of platforms and the arrival of media organisations, such as Amazon and Netflix, in the past decade.
However, it is easy to overlook the unique nature of Channel 4, which has massive benefits to UK plc. I want to stress that my comments are not particularly related to the popular programmes seen on Channel 4, such as “Gogglebox” or “The Great British Bake Off”, which I am sure would find a place on any mainstream broadcast channel. We are fortunate in the UK to have a public service broadcasting ethos that runs through the core of our broadcasting networks. I strongly support Channel 4’s continued work in that area, even when sometimes I do not agree with the tone or the approach the channel takes. It is important that we have plurality of voices and ideas. The space and time Channel 4 gives to new, different and sometimes challenging content, from emerging producers across the UK, is what makes Channel 4 particularly valuable among the wide range of publishers that are available today.
Channel 4’s unique design in the 1980s, under a Conservative Government, has turned Channel 4 into one of the most creative platforms on the planet. That has immense benefit to GB plc, and to thousands of small businesses in constituencies such as mine, up and down the country. Channel 4’s model as a content commissioner from external production companies means it does not make any of its own programmes and it therefore allows independent producers to retain intellectual property rights. It is IP that has real value. Channel 4 provides that seed funding for production companies, funnelling money generated from advertising directly into the creative sector. That publisher-broadcaster model is unique among public service broadcasters. Having run a media business, I struggle to see how the idea of not owning IP would be compatible with a model that prioritised profit.
The Government consultation asked for views on removing the publisher-broadcaster element of Channel 4’s model. I worry that making that change will damage the super-creativity of the sector, forcing out new, untested content producers who, without the opportunity to produce something for Channel 4 to be broadcast—perhaps off-peak in the early hours of Sunday morning—would not get the break that would lead them to produce bigger and better content that might become a global hit, produced here in the UK.
I am keen to highlight the investment in British film. Channel 4 spends more on UK film than any other broadcaster based in this country. It is rather good at it too. Film4 has collectively won 37 academy awards and 84 BAFTAs. In 2021, “The Father” won best actor and screenplay at the Oscars.
I conclude by asking the Minster a couple of questions. How does he envisage the remit of Channel 4 changing were it to be privatised? I am experienced enough to know that many owners buy a media product and then their first port of call is Ofcom to ask for a licence change. How will the Minister ensure that that does not happen? What impact does he envisage on smaller independent production companies, were Channel 4 to be privatised, and how might he mitigate those changes?
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
It is a pleasure to serve under your chairmanship, Ms Fovargue.
I am a child of the ’50s and ’60s. If we cast our minds back, there was a great deal of American stuff on our television—“The Lucy Show”, “Batman”, Dick Van Dyke, and on and on it went. Just before the pandemic, I and others from this place had occasion to visit NASA in Florida. After the day was done, we had dinner with the astronauts, all the NASA officials and their wives. Over pudding, the wives talked about the shows they really liked. They said that we had some “swell stuff” coming across the Atlantic.
While we have name-checked some of the great shows that Channel 4 has produced, I will add two more films: “The Madness of King George” and “Four Weddings and a Funeral”. One of the American wives looked at me and said, “You know, you just remind me of one of the characters in that ‘Four Weddings and a Funeral’.” I thought she meant Hugh Grant, but she said, “No, the goofy preacher guy.” This is soft power, which has already been alluded to. It is a real change from what went before when we had so much American telly on British telly. We know just how important that is to this country.
That was about looking outward. Looking inward, Members have mentioned what is achieved through delivering public service content that speaks to the nation. “Gogglebox” has been mentioned, as have “Channel 4 News” and “The Great British Bake Off”. Think what an impact it has had on people’s lives. The Paralympics have changed our attitudes towards disability. It is arguable that “It’s a Sin” has led to a rise in HIV testing. It has been good for the nation.
All the other points have been touched on. It is private money in a public enterprise, and all that money is reinvested. That is incredibly important. Look how well Channel 4 did during the pandemic. It passed through with flying colours and has repaid all the furlough money, which is really something.
I conclude with one of my favourite quotes, which is a message I send, with the greatest politeness, to the Minister. It is a conversation between Mr Charles James Fox, the erstwhile leader of my party in the 18th and early 19th centuries, and Mr William Pitt the Younger, arguably one of the greatest Prime Ministers that the country has ever seen and a Conservative, from “The Madness of King George”:
“FOX: Do you enjoy all this flummery, Mr Pitt?
PITT: No, Mr Fox.
FOX: Do you enjoy anything, Mr Pitt?
PITT: A balance sheet, Mr Fox. I enjoy a good balance sheet.”
Channel 4 pays its way and reinvests its money, and that strikes me as something that is unusual and very good for this country. We chuck Channel 4 under a bus at our greatest peril.
Alex Sobel (Leeds North West) (Lab/Co-op)
The 31 October 2018 was a day of profound joy in Yorkshire. It was the day when Channel 4 announced that Leeds would be its new home. It is not often that we celebrate something started by Maggie Thatcher in Leeds. Just three years later, we hear that Channel 4 may be privatised, with little realistic prospect that some global media company will want to headquarter its new UK asset, with the largest free streaming service in the UK, in Yorkshire. In a small space of time, all the work done and investment decisions made, which are benefiting some of the most left-behind communities in the country, will be undone so the Government can tick some culture war box that says everything has to be run by space cowboy billionaires or sovereign wealth funds who do not care about our sovereignty.
Channel 4’s publicly owned but entirely commercially funded model means it can operate in a way that no other British broadcaster can: it puts public service before profit at zero cost to the taxpayer. It is for and owned by the people. This distinctive model generates economic, cultural and social impact in Yorkshire and across the UK. Channel 4, as it stands, will not put a billionaire into space, but it will give thousands of jobs to Yorkshire folk.
What has Channel 4 achieved through its unique commercial funding model for Yorkshire and other centres outside London? Some £843 million has been invested in production in the north of England since 2009. Channel 4 will have around 400 roles based outside London by the end of this year. The new national headquarters has already been the catalyst for a clustering of TV, film and creative organisations in our region. It includes a number of independent production companies, the new UKTV Leeds hub, the trade association PACT—the Producers Alliance for Cinema and Television—opening a new office and the country’s first Centre of Screen Excellence.
Channel 4’s new emerging indie fund is designed to help indies outside London to break through key stages of growth. The emerging indie fund replaced the alpha fund, which invested in many production companies in the north of England over the years, supporting early development and growth. The indie accelerator provides development funding and bespoke support for 10 indies with black, Asian and minority ethnic leadership, including ClockWork in Leeds. The indie growth fund supports the UK’s independent creative sector by investing in UK-based small and medium-sized enterprises, taking minority stakes to help them grow their businesses to the next stage. Growth fund investments include Yorkshire-based companies Candour, Duck Soup and True North.
What has that meant for public sector broadcasting during covid? Leeds-based Candour Productions produced “The Truth About Long Covid”, which was filmed entirely in Bradford, and Leeds start-up ClockWork Films produced “Ramadan in Lockdown”. Channel 4 only commissions content from external production companies and therefore allows independent producers to retain the IP. Channel 4 funnels the money generated from advertising directly into the creative sector. This publisher-broadcaster model is unique among public service broadcasters but would not be compatible with a model that prioritises profit.
Channel 4’s model is robust and highly resilient. It has been tested by the pandemic and a sharp decline in advertising spend, alongside the rest of sector, but Channel 4 ended 2020 with a significant financial surplus. The corporation was able to repay its furlough payments and avoid the drastic measures taken by other media organisations, such as mass lay-offs or pay cuts for junior staff. In a privatised future, the victims would be British staff at the expense of foreign billionaires. Its model allows Channel 4 to put public service at the core of everything it does.
Thus far, the Minister has not produced an economic impact assessment for privatisation, nor a plan for one prior to making the decision. Perhaps today will be the day. We all suspect that there will not be one, as it would show that, rather than levelling up Yorkshire, privatisation will significantly level it down, with a dismantling of our independent production sector replaced by foreign imports and the old boys of Soho making our programmes once more. That is why I am working with Tracy Brabin and our metro Mayors across the north, as well as the Co-op party, to look at mutualisation, not only to keep Channel 4 in Yorkshire but to keep it in public hands. That is the only way to guarantee its unique offer into the future. If this privatisation goes ahead, it will be the tombstone of this Government’s cultural policy.
Brendan O'Hara (Argyll and Bute) (SNP)
I thank the hon. Member for Wallasey (Dame Angela Eagle) for securing this debate on what she described as the wanton cultural vandalism that the UK Government are planning. The UK Government’s plan to privatise Channel 4 is completely unjustified. It is politically motivated and totally vindictive. When viewed in the wider context of other legislation going through Parliament on voter suppression, the right to peaceful protest and undermining the Electoral Commission, it is deeply worrying for our democracy.
Not only is this further evidence of a Government allergic to criticism and terrified of independent scrutiny; they are also ideologically driven to undermine anything that proves that public service can be delivered by a publicly owned organisation. By any measure, Channel 4 is and has been a success. It has more than met the remit it was given. As we have heard, it has been responsible for some of the greatest creative and commercial successes in UK television and film in the past 40 years. It has given creative opportunities to people who otherwise would never have had their voice or ideas heard, and it has taken a London-centric industry and reminded it that there is life on these islands beyond London. In short, Channel 4 has achieved what it was asked to do, and viewers like what it does.
Why are this Government so determined to change something that has been a demonstrable success? It is not for the money: the way Channel 4 is structured means that it does not have shelves of tapes or mountains of intellectual property rights waiting to attract a potential buyer. Any money generated would likely be absolutely minimal.
It is beyond credible that the UK Government honestly believe that UK viewers would be better served by Channel 4 being subsumed by one of the huge international TV conglomerates. As it is currently constituted, Channel 4 can experiment with format and take risks with new writers, and it can occasionally bomb without having to explain why profits might be down this year to an angry accountant representing a consortium of international investors. Let us be honest: not one of those multinational TV giants will give two hoots for the hugely successful model of spending outside London and supporting independent film and television production in the nations and regions.
The Government also know that even though Ofcom found that the multi-award winning “Channel 4 News” has been one of the most trusted media sources of information during the pandemic, no giant profit-driven multinational TV conglomerate will invest the money to continue to support it. That is where this begins to make sense: in the absence of any commercial, creative or public interest reasons for privatising Channel 4, one can conclude only that the motivation is politically driven spite. Channel 4 is the one thing that the Government fear most: a public service broadcaster that delivers good, informed and wholly independent news, and that makes people think, question and challenge what is going on around them.
Unlike the BBC, Channel 4’s greatest strength is that it provides that public service without relying on the UK Government for its finance. Unfortunately, its greatest strength has become its greatest weakness. This Government are gerrymandering the electoral map, curtailing citizens’ right to protest, and removing the teeth of the country’s electoral watchdog, so the last the thing they want is an independent non-compliant media. That, more than anything else, explains why they are determined to privatise Channel 4. The Government know that if they do, it will not come back, but has that not been their intention from the very start?
John McDonnell (Hayes and Harlington) (Lab) [V]
I am secretary of the National Union of Journalists parliamentary group, so naturally, when this issue came up again, I sought a meeting with those at the NUJ and talked with them about their views, and they consulted their members. I think we are all in the same position: we just cannot believe that this matter has come around yet again—especially those of us who were involved in the 2016 discussions, when we thought that the future of Channel 4 had been sensibly resolved. The privatisation seems to be a particular obsession of the Minister—it is almost as though he needs some counselling. It has become an addictive obsession that he has been pursuing since the 1990s, as others have said, and it is completely irrational.
From the trade union point of view, we look at the security of jobs and the economics of the organisation that we are negotiating with. When looking at the economic performance of Channel 4, I cannot for the life of me understand what the problem is for the Government. The latest figures show a record £74 million pre-tax surplus. As other hon. Members have said, including my hon. Friend the Member for Leeds North West (Alex Sobel), Channel 4 is now opening up offices around the country—hubs in Leeds, Glasgow and Bristol—and is doing exactly what the Government want by investing in the regions as part of the levelling-up strategy. Channel 4 is economically sound and completely in line with the Government’s policy direction.
Channel 4 provided 10,600 jobs across the UK in 2019, of which 3,000 were jobs supported by Channel 4 in the nations and regions. As the hon. Member for Warrington South (Andy Carter) set out, it is working with private sector producers to bring forward talent on an eminent scale. It has done so successfully, and has been well rewarded by the various independent bodies that adjudicate on these matters.
It is very difficult to understand the rationale for the Government’s pursuit of this privatisation. Others have given their views about the range of attitudes. The Father of the House has demonstrated yet again his wide-ranging experience of what has been going on over decades. The right hon. Member for Sutton Coldfield (Mr Mitchell), in a very balanced way, indicated the concerns that he and many others in the Conservative party have. Paul Siegert, the NUJ’s national broadcasting organiser, gave a true reflection of its members’ views in saying:
“It’s hard to see any justification for privatising Channel Four other than ideology. Channel 4 has achieved what it was asked to do and has proved a hit with viewers.”
If it is not broken, why are the Government proposing the fix of privatisation? Four years ago—I remember this, because I was there—the Government said that Channel 4 would continue to be owned by the public. In our view, they should honour that promise. I hope they see sense. I have to say that the consultation that is going on, particularly over the summer period, flies against all the rules of consultations.
Let me ask one final question of the Minister. At the moment, the Government are being advised by a panel they set up on the future of public service broadcasting. The panel does not publish its minutes and is not meeting in public. Why is that happening? Why is it not more open and transparent? Why can the Minister not explain the role of the panel, and indeed its composition? That generates concerns that there is more to this than any rational thought about the future of broadcasting. It is more about ideology, and maybe an element of political spite.
Yvonne Fovargue (in the Chair)
I remind Members that I will be calling the SNP spokesperson at 10.28 am.
Jim Shannon (Strangford) (DUP)
I appreciate the opportunity to speak on this matter. I thank the hon. Member for Wallasey (Dame Angela Eagle) for leading this debate on the privatisation of Channel 4.
Channel 4 has been around for many years and has provided many years of entertainment to the British public. It was introduced in 1982 under Thatcher’s Government, and was set to lead as the second largest commercial broadcaster in the UK. It followed ITV, after its birth in ’54.
Television and visual entertainment have proven incredibly necessary throughout the covid-19 pandemic. They have become a much-valued tool for many people, and we were most definitely thankful for them during lockdown.
Recent statistics show that 16% to 17% of Channel 4 viewers are aged 16 to 34, showing that there is a keen interest in Channel 4 shows, particularly among the younger generation. Interestingly, recent figures show that the quarterly reach of Channel 4 television in the United Kingdom is now some 51.1 million viewers, highlighting that there is still a call for the channel itself.
In recent years, large television broadcasters have proven dominant in the TV industry. Others have referred to Netflix, iPlayer, BritBox and so on. As a traditionalist, I usually watch the channels in front of me. I just about control the handset for switching channels. Fewer people are watching channels such as the BBC and Channel 4. I wonder why that is. We all watch television programmes that we are interested in. I have to admit that there are few programmes that I would be inclined to watch on Channel 4, and in all honesty there are certain things that I take exception to, but I do watch it for the films and the news, because they are both good. It provides an opportunity to follow those.
However, I would like to praise Channel 4 for the work it does with Stand Up to Cancer and charity TV programmes. There are many things that it should be commended for—not forgetting, of course, “The Great British Bake Off”, which is a household favourite, not because I can cook or bake but because I like to watch those who can.
I would not be against the privatisation of any channel if it meant that there were programmes available to cover interests for a range of people, regardless of age or political beliefs. Some of my constituents have been in touch with me ahead of this debate and have expressed the same concern: that there is simply not much that they would choose to watch. We have to have a channel that gives variety and opportunity, and that people are inclined to watch.
One brilliant factor is that Channel 4 runs solely on commercial, self-organised funds. An issue that has come to light, perhaps for older members of the public, is the payment to have no advertisements for Channel 4 on-demand. Many will inquire whether those fees would still be incurred after privatisation, so any change could well mean a change in the cost for those who view the programmes they wish to watch on Channel 4. On the other hand, many would argue that Channel 4 could become a for-profit company, with the programme quality drastically decreasing. That is a concern that I have and that others have also expressed. We also have to consider whether the producers of programmes would be comfortable airing their shows via private means.
I thank Channel 4 for all the entertainment that it has provided for us. It should be credited for offering a free channel that we in the UK are able to take advantage of to watch the programmes that we desire to watch. However, I also feel that, if a service is national and available to all, its content should also be suited to all. That is something that I would like to see. When it can be argued that some of the programmes are inaccessible for some sections of the community, a call for reform or change is required.
There is certainly scope for the channel to remain. The figures show that Channel 4’s share of viewing among black and minority ethnic audiences has grown by 3% over 2020, which is good news, and that its 16-34 linear viewing share in all time has grown by 9% on 2019—more than any other terrestrial channel. However, when this does not cover the national population, there are suggestions that privatisation could improve viewing demographics. I urge the Government to keep that in mind and put our constituents’ views at the forefront of decision making.
John Nicolson (Ochil and South Perthshire) (SNP) [V]
Here we go again. Only four years ago, in what turned out to be the Government and Channel 4’s phoney war, the privatising zealots were licking their lips at the thought of a corporate takeover at Channel 4, a much-loved public service broadcaster. After all, bus, water and rail privatisations under the Tories had been such resounding successes, so why not turn to yet another institution about which they knew absolutely nothing? In the end, the privatising zealots backed off. Why? The then Secretary of State told us at the time that Channel 4 works, that it delivers on its remit and that privatising it would involve too much grief for too little financial return.
In the intervening years, nothing has changed—well, apart from an 80-seat Tory majority and an enhanced desire to clip the wings of a pesky station with a news outlet that No. 10 fears for its independence and high journalistic standards. The thing is that Channel 4 does work. The Conservatives are fond of reminding us that they set it up. They did, and it delivers on the remit that it was given.
On diversity in programming and staffing, Channel 4 has been a trailblazer for women, black and minority ethnic people, and lesbian, gay, bisexual and transgender people, as well as people living with disabilities. According to Ofcom, Channel 4 employs a greater proportion of women than any other public service broadcaster. The same is true of staff with disabilities. In 2019, Channel 4 also committed to doubling its target for employing staff with disabilities from 6% to 12%. According to last year’s Ofcom report, more than 10% of staff at Channel 4 were living with disabilities. Channel 4 News has a higher proportion of black, Asian and minority ethnic viewers than any other public broadcaster in the UK.
Channel 4’s commitment to diversity stems from its statutory remit to appeal to culturally diverse groups, to offer alternative perspectives and to nurture new talent. That is underpinned by Channel 4’s unique not-for-profit model. It is lamentable, therefore, that only months after we discovered that the BBC has so far spent over £1 million in legal fees fighting equal pay cases, the UK Government are now seeking to put one of our best and most diverse public service broadcasters at risk through a threatened, albeit sleekitly planned, privatisation.
I came out as gay—the first BBC network TV presenter to do so—when I was presenting BBC Breakfast on BBC 1. My bosses were furious, and my BBC Breakfast presenting gig was soon over. By contrast, over at Channel 4, the company was blazing a different, more inclusive trail. In February 1999, the first episode of the award-winning series “Queer as Folk” aired. Written by Russell T. Davies, the series chronicles the lives of three gay characters living in Manchester, and it marked a significant watershed moment for LGBT programming across these islands. For the first time, young gay men had people like themselves portrayed proudly onscreen. Fast forward to 2021, and both Channel 4 and Russell T. were breaking new ground again with the incredible “It’s a Sin”, which powerfully depicted the human impact of the HIV/Aids epidemic. What is more, the show has been credited with an upsurge in HIV testing, taking the channel’s public service obligations to a whole new level.
In news and current affairs, Channel 4 has also been trailblazing, with outstanding, high-quality factual output, in particular “Channel 4 News” and “Unreported World”. In an age of festering misinformation and disinformation and plummeting trust in the media, impartial and accurate public service broadcasting has never been so important. Public service broadcasters such as Channel 4 have been lifelines during the pandemic, providing coverage of daily briefings from leaders in all our nations across the UK. Huge efforts have been made to ensure that expert voices are featured and truthful information provided, in accordance with the public service broadcasting ethos.
As the vaccine is rolled out, Channel 4 coverage could not be more appreciated. In a world where anyone can spread disinformation and misinformation about covid, it is vital that we bolster the presence of our public service broadcasters on TV and online as a means of combating it.
The privatisation of Channel 4 would almost inevitably mean cuts. No privatised company would fund “Unreported World” or the Channel 4 daily news programme at its current length. Of course, that is perhaps what the Government want. A privatised Channel 4 would bring more commercially lucrative entertainment output. It might mean editorial lines being subjected to the whims of advertising and profit. We cannot afford to lose a second of factual programming in the dangerous times in which we live.
The Government have presented no serious case for the privatisation of Channel 4. If they press ahead, privatisation would see profit put first. It would mean slashing the half a billion pounds which go annually to independent production companies. There would also be a centralisation of Channel 4’s headquarters—the very antithesis of levelling up. Perhaps most concerning of all, we would likely see cuts to Channel 4’s hard-hitting news and current affairs programming, which effectively hold this Government to account. I suspect that is why the UK Government are so passionate about the prospect of privatisation. With record profits recorded last year and not a single penny taken from the taxpayer, it is certainly not to satisfy any public demand to tinker with—or attack—this much-loved public institution.
We all know what this is about for the Government. It is revenge—payback time, as the hon. Member for Solihull (Julian Knight), the Conservative Chair of the DCMS Committee has suggested. Channel 4 is all the things it is meant to be: innovative, inclusive, and, above all else, independent. The Secretary of State wants it brought under control. It is time for us as MPs to defend independent programme-making and journalism.
Yvonne Fovargue (in the Chair)
I confirm that we can go on until 11 am if necessary for this debate.
Christian Matheson (City of Chester) (Lab)
It is a great pleasure to serve under your chairmanship, Mrs Fovargue. I congratulate my hon. Friend the Member for Wallasey (Dame Angela Eagle) on her outstanding introduction. I thank all hon. Members who have contributed today, particularly my hon. Friends the Members for Birkenhead (Mick Whitley) and for Leeds North West (Alex Sobel) and my right hon. Friend the Member for Hayes and Harlington (John McDonnell). I was expecting my good friend the hon. Member for Strangford (Jim Shannon) to mention “Derry Girls” in his speech, so passionate is he about Northern Ireland. I am sure at some point he will.
British television is renowned and envied around the world, and Channel 4 is no exception. For nearly four decades, Channel 4 has given us an endless list of brilliant, progressive and world-leading programmes. It is a British success story which gives small British independent companies with a drive of entrepreneurship and innovation an opportunity to take on the world.
Channel 4 was established to provide distinctive and challenging output to complement the then three main channels and to drive forward growth in the independent TV production sector. By any measure, and as hon. Members have suggested, it has far exceeded those goals. Channel 4’s remit remains clear and its output sharp, challenging, diverse and entertaining. It is there to appeal to a wider and younger audience and, according to Ofcom, it is doing very well to fulfil that purpose.
Like my hon. Friend the Member for Leeds North West, I do not often praise Margaret Thatcher, but I cannot deny that her changes to the broadcasting landscape gave us Channel 4. However, although the channel was launched under a Conservative Government, successive Conservative Governments have threatened to sell it off and privatise it; I believe that this is the sixth attempt to do so. “Yet again” was the phrase used by my right hon. Friend the Member for Hayes and Harlington. This time, the Government seem more determined than ever to succeed, despite completely—
Mr Mitchell
I hope the hon. Gentleman is not opposing this proposal on the grounds of privatisation per se, because it is for the Minister to tell us whether privatisation could add to the many points that have been raised in support of Channel 4. Will he make it clear that he would not oppose privatisation if he thought that it would benefit the objectives that we all want to see Channel 4 fulfil?
Christian Matheson
I am grateful to the right hon. Gentleman for that intervention. I have a presumption against privatising successful public assets, simply because among Conservatives there is an ideological presumption in favour of privatisation. However, if he will bear with me, he may well find that I address that point in my speech—at least, I hope I do.
It may well be right once in a while to review the make-up of Channel 4. However, it seems that the Government have simply presented a done-deal proposal rather than an inclusive and thought-out consultation. The decision to press ahead with the proposal to privatise Channel 4 has surprised many in the industry, as there does not seem to be any solid evidence behind the Government’s proposals. In fact, as we have heard, Channel 4 has just had one of its best financial years on record.
Many people do not realise that Channel 4 is publicly owned but funds itself almost entirely through advertising, and it reinvests any profits into new British programming. In other words, although it is publicly owned, it does not cost the taxpayer a single penny. When the advertising market dropped last year because of the coronavirus pandemic, the Government saw an opportunity to attack the broadcaster once again. However, despite the hit to advertising spend, Channel 4 has bounced back stronger than ever. It has reported a record £74 million pre-tax surplus and an increase in viewing figures across all its platforms, and it is on track to top £1 billion in revenues for the first time this year. Its streaming viewers are up by 30% on last year, the linear portfolio is up by 4% and there have been 4.2 billion content views on social platforms.
As hon. Members have alluded to, we are all aware that the Government have had a bumpy relationship with “Channel 4 News” and a number of close run-ins with it—indeed, that is true not just for the Government, but for MPs from across the political spectrum. However, the Government cannot simply run away from scrutiny and throw a tantrum every time they dislike something. The Conservatives—or, I say with respect to the right hon. Member for Sutton Coldfield, some Conservatives—complain about a cancel culture, but this is a perfect example of the sinister trend with this Government of closing down or selling off any mechanism that can scrutinise or oppose them. In view of the figures mentioned earlier and the information available, can the Minister assure us that any decisions on the future of Channel 4 are made on the basis of concrete evidence and not simply based on an ideological vendetta against the broadcaster?
Not only do the Government’s proposals make no sense, but they would be catastrophic for the creative sector, particularly independent British TV companies. Channel 4’s success has been instrumental in helping to grow the UK’s world-beating creative industry. The channel has invested £12 billion in the independent production sector, and each year it works with more than 300 production companies.
Channel 4 has also been investing in regional TV and production, and giving voice to communities right across the UK, long before “levelling up” became the latest empty Tory slogan; other hon. Members have already mentioned that today. The channel is crucial in both representing people and providing jobs for people right across the country.
As well as people directly employed by Channel 4, the channel supports over 10,000 jobs in the supply chain, 3,000 of which are in the UK’s nations and regions. As hon. Members have mentioned, Channel 4 is now a truly national organisation. As my hon. Friend the Member for Leeds North West has said, it has opened up its new headquarters in Leeds; he and Tracy Brabin, our former parliamentary colleague, are fighting hard to support that move. Channel 4 has set up creative hubs in Glasgow and Bristol, to make the channel more reflective of UK life. Nearly 400 Channel 4 roles will be located outside London by the end of 2021, and the channel is also committed to investing at least 50% of its spend outside London from 2023, bringing jobs and investment to all parts of the UK.
Changing the very DNA of Channel 4 will mean that indie TV production companies simply will not have the opportunities that they have now. They will be hit by a double whammy. Not only will they not be able to make programmes, but they will not even be able to own the IP, and they will essentially become service provider companies to potential buyers. The plan would suppress the brilliant entrepreneurship and innovation of the UK’s production industry. If the Government’s proposals go ahead, they will clip the wings of one of the most successful industries in Britain.
The creative industries are a key growth area and will be crucial to the UK’s economic recovery after the pandemic. Office for National Statistics data show that in summer 2019, 9% growth in the TV and film sector was key to the UK avoiding recession. The sector has been growing at five times the rate of the UK economy and contributes £111.7 billion to it. As my hon. Friend the Member for Leeds North West and the right hon. Member for Sutton Coldfield (Mr Mitchell) have asked, what assessment has the Department made of the impact of its proposal on the wider creative sector? Was an impact assessment made when drawing up the proposal?
The proposal would also impact on the UK on the global stage. Channel 4 is a national asset with a global reach. As an exporter of uniquely produced content, Channel 4 projects British talent, culture and soft power around the world, as was mentioned by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). It was created to reflect the cultural diversity of the UK through programming, boosting Britain’s reputation overseas and showcasing British values to the rest of the world.
Channel 4 has commissioned formats and shows that producers can then sell around the world, helping to launch hundreds of UK creative businesses on to the global stage and generating British IP. The UK independent sector is now worth £3 billion, and it exports soft power around the world through formats, talent and sales.
There is also success at the award ceremonies. Channel 4 spends more on British film than any other UK broadcaster does. Film4 films have collectively won 37 Academy awards and 84 BAFTAs. As the hon. Member for Warrington South (Andy Carter) mentioned, in 2021 “The Father” won best actor and best screenplay at the Oscars. From the outside it looks as though the Government are punishing success. In reality, they are passing on British success to their mates and big companies in America, once again showing where their true loyalties lie.
We all know that big foreign tech companies have only money on their minds, so I simply cannot see them showing any sympathy for Channel 4’s current remit and structure. That is bad news for the TV production industry and the unrepresented voices in the UK. We cannot lose Channel 4’s distinctive remit and let it simply become Channel 4.5—in other words, like Channel 5.
The Government may well argue that this change needs to be made for Channel 4 to be able to keep up and compete with giants such as Netflix, Amazon and Disney+, but they are simply missing the point. Channel 4 was created to be different, diverse and daring, and to champion the under-represented voices of this country. It does not need to splash millions of pounds to compete with Netflix. It simply needs to do what it does best—make fundamentally British content that speaks to and represents British audiences. As we heard, a prime example of this is the fantastic “It’s a Sin”, a masterpiece that broke down barriers and demonstrated the true brilliance and success of Channel 4 and the British TV production industry.
Our TV industry is a British success story. We cannot allow the Government to place a huge “For sale” sign on Channel 4 and lose it to the highest bidder. Great British TV belongs in the UK, and I would very much like it to stay that way.
The Minister for Media and Data (Mr John Whittingdale)
I thank you, Ms Fovargue, and Mr Deputy Speaker, for presiding over our debate. Neither of you expected to be in this position today, so we appreciate your giving up the time to join us. I also thank the hon. Member for Wallasey (Dame Angela Eagle) for securing this debate. As she says, it is a very important subject, so I am glad that the House has an opportunity to debate it.
However, I do not think a single speaker has talked about the revolution taking place in television at the moment. Every speech has been backward looking. Each one has been a list of admittedly terrific programming over the past 40 years, but there has been no looking forward and no reference to what is happening to television viewing and how the landscape is changing. Linear viewing is in rapid decline. Young people are no longer looking at scheduled programmes on the traditional broadcast channels. The competition for eyeballs, which comes from streaming services, a new one of which joins the market almost every few months, is completely changing. Therefore, what we intend and wish to do is look forward. Yes, Channel 4 has a terrific record and is doing well at the moment, but it is the Government’s job to ensure that Channel 4 has a viable future going forward—not this year or next, but in 10 years. That is the purpose of the consultation.
Sir Peter Bottomley
I think the Minister can be assured that each Member present has read the consultation document. We know that the Government say the structure of broadcasting has changed. We have seen that All 4 has 41%, which is only a little lower than Netflix. Channel 4 is doing all those things. At every paragraph, the Government say, “Change the ownership, and we’ll do xyz.” The only example given by the Government is Royal Mail, looking backwards to 2013. The Minister is right in thinking that we understand what he is going to say, because we have read his document. We are challenging the idea that a new owner is necessary.
Mr Whittingdale
I will come to that. I am sure my hon. Friend has read the consultation document, and it is extraordinary that the arguments, which I believe are strong, have not actually been addressed by any speaker so far.
Mr Mitchell
The point is that we are looking forward. Will the Minister address two arguments? First, I made the point about Syria—
Mr Mitchell
Only Channel 4 provided the seriousness that was needed on that subject. Secondly, the Minister will find that young people and people across society are accessing “Channel 4 News” in many modern and futuristic ways, so his point about Members being uninformed and looking backwards might require a little elucidation.
Mr Whittingdale
If my right hon. Friend will forgive me, I am going to come to those points. Given the limitations of time, I am anxious to do so.
I do not dispute the list of programmes, many of which are great, made by Channel 4 over the past 40 years. There are some real jewels among a lot of other programming. It was once said that Channel 4 is a public service tail wagged by a very large commercial dog, and that is the consequence of the model under which it operates. I have enjoyed things such as “It’s a Sin” and “Gogglebox”, and I want to talk specifically about “Channel 4 News”.
Occasionally, I have been cross with “Channel 4 News”. I have been just as cross with Sky News and BBC News. Channel 4 is an essential contributor to plurality. It is worth bearing in mind—again, this has not been recognised in the debate—that “Channel 4 News” is not actually produced by Channel 4. It is an ITN production, and ITN has done a terrific job in providing news programming that is different from the other broadcast news services. It has also been extremely successful internationally, as it has an Oscar-nominated newsroom and has won five Emmy awards.
Mr Whittingdale
If the hon. Gentleman will forgive me, I am not going to have time to give way.
I absolutely pay tribute to ITN for the work it has done for Channel 4, and it is certainly our intention that, whatever happens to Channel 4, news should remain a major part of its schedule. However, there have been huge changes. When Channel 4 was created, there was a choice between the BBC and ITV. Channel 4 was founded by a Conservative Government in 1982 to provide alternative viewpoints, and it has been very successful in doing that. Since that time, we have seen the advent of satellite television and the coming of digital terrestrial television. Now we have the streaming services, so there has been a huge explosion in choice. Some of that content, which was originally not available and which Channel 4 was set up to provide, is now available in a large number of different places, so Channel 4 needs to adapt to that.
The latest Ofcom report on the future of public service broadcasting states:
“Rapid change in the industry—driven by global commercial trends and a transformation in viewing habits—is making it harder for public service broadcasters to compete for audiences and maintain their current offer… Change needs to happen—and fast.”
That is why we have set up the review of public service broadcasting, and why it is right to consider whether Channel 4 is best placed to continue to thrive under the current ownership model, because there are some worrying signs.
Channel 4 is entirely dependent on advertising, unlike other broadcasters such as ITV, which has successfully diversified into production, or the BBC, which can rely on the licence fee. Channel 4 relies on advertising. More than 90% of its revenue comes from linear TV advertising, and advertising is under pressure. It is likely to come under greater pressure, in part due to the actions that Parliament is going to take in restricting advertising spending on, for instance, foods that are high in fat, salt and sugar, and possibly such spending with respect to gambling, which we are considering at the moment. Therefore, that model is already coming under pressure.
Competition from the streaming services is almost inevitably going to lead to a decline in audience share over time as more and more content is provided by such services, which can outspend Channel 4 by a factor of 10 with respect to how much they can invest in high-quality content.
Reference was made to Channel 4’s performance. Yes, it did well to record a profit this year, but it is worth bearing in mind how it did so. It is not difficult to continue to make a profit if spending on content is cut by £138 million. That is what happened. Channel 4 slashed the budget on content. It did not, incidentally, slash the budget on employment expenditure, which actually went up—all the money came out of content spend. It is difficult to see how that it is going to be able to return to a position of spending the amount that it was previously. Yes, Channel 4 has been supporting independent producers, although the figure that was quoted of support for more than 300 independent producers is not actually correct. The annual report shows that 161 production companies have been supported that actually meet the definition of indies.
Yes, Channel 4 has moved its headquarters to Leeds—against great resistance—and the hon. Member for Leeds North West (Alex Sobel) is right to celebrate the fact that he has a new building there, but it is worth bearing in mind that Channel 4 still has a very large and expensive building about 100 yards from where we are today. Therefore, if it is properly committed in that regard, there is a case for it to move more employees and to do more outside London.
There is a question whether private ownership might result in greater investment. I was surprised to hear from my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) that he questions whether it is possible to fulfil public policy purposes and to satisfy shareholders. He will know that any number of utility companies are doing exactly that. I point to examples such as the telecommunications companies, the electricity companies and the gas companies.
Mr Whittingdale
I do not think I am going to have time.
I also point to Channel 5. Its spend on content was very small while it was under UK ownership, but when it was bought by Viacom, it became channel of the year and there has been a massive investment.
The one thing I make categorically clear is the reason the Government are looking at the future ownership of Channel 4, which is that we wish to sustain Channel 4. We are concerned that, in the longer term, the model is going to come under ever-increasing pressure and will be unable to deliver the content that we all want to see.
Mr Whittingdale
I am afraid I do not have time.
I want to make it absolutely clear that there is no political agenda attached to this. I am completely committed to an independent Channel 4, and I welcome the fact that it has a questioning news programme. This is not motivated in any way by a political agenda or ideology. It is about sustaining Channel 4 and making sure that it has a viable future. That is why we are having a consultation. It is a consultation.
I want to answer the point about remit. We are asking a question about whether the remit might or might not be amended to take account of changes. It is not a question of removing the remit. In some areas, there may well be a case for strengthening the remit, and there is absolutely no intention to strip the remit away. The remit will be there. Whether it is tweaked in some way, perhaps to increase the requirements for production outside London, is something that we are asking questions about.
I also want to answer the question about the impact assessment. The impact assessment will be determined by the answers to those questions. An impact assessment cannot be carried out before those things have been decided—for instance, what the remit should be, as that will have a huge effect on the impact. All those matters are subject to an open consultation, with no decision taken.
The hon. Member for Wallasey referred to lack of parliamentary time. I can promise her that, if it is decided to change the model, that will require primary legislation. There will be no lack of opportunity for Parliament to debate any changes that we decide to make. There will be an impact assessment at that time. No decision has been taken. It is the job of Government to look forward and to ask how we can best ensure that Channel 4 has a viable future. That is what we are doing.
Dame Angela Eagle
It is a great pleasure to serve under your chairmanship, Ms Fovargue. That is two Chairs in one debate. I am disappointed that the Minister declined to allow me to question him, since this is my debate. I do not think our arguments have been backward looking, and many of us have made the point that Channel 4 is already evolving.
This is the question I would have put to the Minister, had he allowed me to do so: why have the Government made it clear that their preference is for 100% privatisation of Channel 4? If the consultation is open-minded, they would not have been so firm in their view. It appears to me, from reading the documents, that the Government have already decided that they are going to flog off the entirety of Channel 4. They have made that clear in the way the consultation is worded.
Dame Angela Eagle
Very briefly, because I have only two minutes to respond.
Sir Peter Bottomley
The missing word is “Treasury”, which wants the income. The other missing things are the executives of Channel 4 saying that they want to change the ownership, and the independent producers saying that would benefit them. Neither have.
Dame Angela Eagle
I agree with the last two points the hon. Gentleman has made, although I am not sure I agree with the point about the Treasury, as selling off Channel 4 would not raise much money. That makes the threat to the model and to the remit all the more problematic, especially, as many hon. Members have pointed out, with respect to the ongoing health of our independent sector, its ownership of IP and the trade benefits that that gives us.
I hope the Minister will in future demonstrate, more than he has today, an open mind on what is happening with Channel 4, and will be more forthcoming, more quickly, on how he thinks the remit will change and whether the in-house production ban will remain. We need to know how Channel 4—which offers unique things to our country, many of which we have heard about today—can be facilitated, not changed out of all recognition, and that it can look forward to a future in a changing media environment that preserves all that we value it for.
Question put and agreed to.
Resolved,
That this House has considered privatisation of Channel 4.