Channel 4 Privatisation

Ben Lake Excerpts

Tuesday 14th June 2022 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to follow the right hon. Member for Maldon (Mr Whittingdale), and I agree with much of what was said by the Father of the House and the hon. Member for Cardiff West (Kevin Brennan). I do not feel that the case for privatisation has been made.

As the hon. Member for Cardiff West so eloquently conveyed in his imagined conversation between the Secretary of State and the permanent secretary, Channel 4 is in rude financial health and there is a danger that many of its commercial competitors look on with envy at its digital innovation, so I do not think the case has been made for privatisation in the interest of preserving the future of Channel 4.

I have previously raised concerns that privatisation would jeopardise Channel 4’s valuable investment and contribution in communities across the UK as part of its public service remit, and particularly its contribution to production companies and content producers in the nations and regions of the UK thanks to the quotas set by the Government as part of its remit and the voluntary quotas it has decided to exceed.

When I asked the Secretary of State and the Department how the Government would ensure that such a valuable contribution continues following privatisation, I was told to wait for the White Paper for further details. I have waited, but I am afraid the White Paper offers little by way of reassurance.

The Government made a commitment in the White Paper to maintaining Channel 4’s mandatory obligations on regional production and commissioning outside England, which at first glance is very welcome but is by no means an improvement on the status quo. In fact, it risks falling below the current level because Channel 4, as I mentioned, exceeds its mandatory requirements.

Channel 4’s mandatory quota for content produced outside London is currently 35%. That is much lower than its voluntary quota, which exceeds 50%. If a private owner aligned spending in the nations and regions with the mandatory quota alone, Channel 4’s contribution to gross value added through its supply chains in the nations and regions would reduce by some 43%, or £1.2 billion, over 10 years.

The independent report by Ernst and Young suggests that the creative industries in Wales will be disproportionately hit, noting that a private owner would likely choose to shift commissioning spend to London’s more concentrated production market. Perhaps in response to the inflationary pressures in the sector, a private owner might want to consolidate and concentrate its operations to save on costs, which would have a very serious impact on jobs in Wales and in the other nations and regions of the UK.

The jobs supported by Channel 4 in the nations and regions each year, both directly and through its supply chain, would reduce by some 60%. Channel 4’s investment in Wales has amounted to more than £77 million in the past 10 years, supporting more than 200 jobs in 2019 alone. The White Paper, I am afraid to say, fails to offer the reassurance I was hoping for that such a contribution would continue under privatisation, let alone explain how it might increase due to the supposed benefits of privatisation.

In evidence to the House of Lords Communications and Digital Committee, Teledwyr Annibynnol Cymru, the Welsh independent producers group, said it

“cannot see any benefits of privatising Channel 4.”

Indeed, TAC expressed a fear that privatisation will have a negative impact on the Welsh production sector, and it detailed concerns about the future of Channel 4’s training programmes, including its flagship production training scheme, which is completely focused on the nations and regions and has already placed trainees with Welsh companies such as Bad Wolf, Yeti and Chwarel, and with the Welsh factual fast-track scheme that addresses skills gaps in developing executive producers in the factual sector.

Reduced spending on such schemes will not only affect current jobs but undermine the long-term development of the creative producers and journalists of the future. It is patently obvious that the Government’s proposals to remove Channel 4’s publisher-broadcaster model, which ensures that the vast majority of its content spend goes on original UK programming, will only damage the sector in Wales. Rather than delivering a public service remit, Channel 4 would instead have to act solely with a direct profit motive. That would mean that future investment will be ever more driven by market forces. Let us consider for a moment that the Netflix production hub is in Surrey’s Shepperton studios and that Disney has a long-term lease for Pinewood studios. If the Government wish Channel 4 to follow in the footsteps of those companies, we will almost certainly see production concentrate and consolidate in the south-east of England, contrary to the Government’s levelling-up agenda. The White Paper and the proposals for Channel 4 have failed to reassure me that the privatisation will deliver any other outcome. They are then failing not only the future of the cultural sector in Wales and other parts of the UK, but the Government’s own levelling-up objectives.