Channel 4: Privatisation

Debate between Christian Matheson and Andrew Mitchell

Wednesday 21st July 2021 Westminster Hall

[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.