Channel 4 Privatisation

Debate between Colum Eastwood and Lucy Powell

Tuesday 14th June 2022 Commons Chamber

[Lucy Powell]

As I am going on to say, many of these things will disappear. Channel 4 occupies a very important part in the ecosystem, and all parts of the ecosystem feed one another. The reason that some foreign investors come here is that we have Channel 4 and the BBC producing the talent pipeline and the kind of risky, edgy content that they themselves would never produce.

Despite Channel 4’s crucial role in British film, which the White Paper recognises, the Government are making no commitment to ensure that a privatised Channel 4 would continue that investment, or even to the future of Film4 itself. The White Paper also says that Channel 4 is and will remain a public service broadcaster. However, that completely unravelled when the Secretary of State told the Select Committee recently that this would expire after only 10 years. To a big foreign media buyer, this 10-year pledge is fairly trivial and worth weathering in order to get beyond it, when it would be a case of anything goes. If the Secretary of State and her colleagues agree that at the very least all that makes Channel 4 great should be permanently enshrined in its new remit, they should support our motion.

As well the claim of pretending we can keep everything that is good about Channel 4, I want to address some of the other claims I have heard Ministers make. The Culture Secretary says she wants to set Channel 4 free so that it can raise investment, because it is not financially sustainable and is a burden to the taxpayer. However, Channel 4 does not cost the taxpayer a penny, yet retains the benefits of public ownership, such as British values, British jobs and British content for British audiences, especially young and diverse audiences. In fact, it is in rude health both creatively and financially, making a profit of £75 million last year, which has all been ploughed back into British content, skills and talent. Channel 4 does not need a taxpayer bail-out, it is not a broken financial model and it does not need privatising to continue to flourish.

Next, we hear that the sell-off of Channel 4 is necessary so that it can escape the straitjacket of being kept in public hands and can compete with Netflix. Channel 4 is free to make commercial and editorial decisions without Government or shareholder pressure. That means taking risks on shows such as “Gogglebox” and “It’s A Sin”, or initiatives that do not in themselves have a financial return, but have a significant public good, such as the Paralympics or Film4. Can the Secretary of State tell us what she wants to free Channel 4 from in order to be able to do what it cannot do already?

If the Secretary of State’s Netflix comparison is about competing for subscribers, then she is wrong on that too.

[Colum Eastwood (Foyle) (SDLP)]

Will the hon. Lady give way?

[Lucy Powell]

I will not give way; I am going to make some progress.

Unlike Netflix, which is seeing the number of its subscribers going down, All 4 is a highly successful free streaming service, generating 1.25 billion views in 2021, with eight out of 10 young people in the UK registered to it. Global streamers produce content to appeal to the widest possible global audience, but Channel 4 produces distinctive and diverse British content that reflects this country’s social and cultural landscape. The Secretary of State’s sell-off will mean less British-made content and representation. Finally, if she wants Channel 4 to be free to compete with the likes of Netflix, Amazon or Disney, why is she offering those companies a chance to buy it?

The Secretary of State also says that the age of linear television is dead and linear advertising is going down with it. However, advertisers are against her plans too, as they know it will mean less choice and less competition without the unique audience reach that Channel 4 currently offers. The big winners will yet again be the likes of YouTube that compete for young audiences and will gobble up the advertising opportunities that disappear from Channel 4.

There are basically two options for a buyer if the Government go ahead: either the channel will be bought by a UK broadcaster such as ITV—and the sale may well not be allowed to go through on competition grounds, as it would lead to over-dominance on advertising, driving up prices up and lowering choice—or, which is more likely, Channel 4 will be bought by one of the big US media giants. In that event, rather than investing in British programmes for British audiences, Channel 4 would become a shop window for the buyer’s existing content. This is a policy that sells off a great British asset to the benefit of the big US tech giants in more advertising revenue and to the big US media giants in economies of scale. That is a great policy, is it not? It is really patriotic; I am not sure why I didn’t think of it myself.

Finally, the Secretary of State says there is no alternative, but she and I both know there is. Channel 4 has set out a proposal that maintains public ownership while delivering even greater public benefit and putting Channel 4 in a stronger financial position. However, she has ignored it, because she is hellbent on selling off the channel because she thinks it is a bit left-wing.