Telegraph Media Group Ltd: Acquisition

Kevin Brennan Excerpts

Tuesday 30th April 2024 Commons Chamber

[Lucy Frazer]

I understand my right hon. Friend’s points. When we bring forward legislation, it is important that it does not have loopholes. As a Department, we thought very carefully about how we can protect against that. When the Bill comes back to this House this afternoon, he will see that we have defined foreign state ownership very broadly. We have extended the definition to include not only ownership but control and influence.

[Kevin Brennan (Cardiff West) (Lab)]

Further to the excellent point made by my hon. Friend the Member for Luton North (Sarah Owen), may I press the Secretary of State? In her statement, she said that the order prohibits parties from making significant organisational and staff changes without her consent, and that the restrictions remain in place. Will she agree not to consent to any deal that involves significant job losses?

[Lucy Frazer]

Obviously, it would be entirely inappropriate to say what decision I might take when exercising a quasi-judicial function without looking at the evidence, which is exactly what I would do.

Football Governance Bill

Kevin Brennan Excerpts

2nd reading
Tuesday 23rd April 2024 Commons Chamber

[Lucy Frazer]

The regulator will have strong powers to look at owners and directors tests, and at financial plans. They will have powers that are designed to ensure the financial sustainability of football. The question that would arise, I suspect, in the right hon. Member’s case is whether that issue was interfering with a particular football club.

[Kevin Brennan (Cardiff West) (Lab)]

The Secretary of State is being very generous with her time. I thank her for mentioning Cardiff City. I hope to catch Madam Deputy Speaker’s eye later and talk some more about them.

One reason why the Government regulate in the commercial space and in business is to promote competition. In the White Paper, the Government said that the scale of parachute payments can distort competition in the championship and encourage greater financial risk-taking by clubs not in receipt of them. If the regulator has no power in this sphere, how will we ensure that the pyramid is a reality, rather than it becoming ever more difficult to climb?

[Lucy Frazer]

I recognise the concerns raised about parachute payments and the distortion of competition. On the backstop powers, parachute payments have been included because of the way that the backstop mechanism works; two offers are made by the Premier League or by the English Football League. However, that is not to say that parachute payments are completely ignored. The regulator will look at the state of the game in a holistic way. Also, it is not to say that if the parachute payments affect the running and finances of a club, the regulator has no ability to look at those payments.

--- Later in debate ---

[Kevin Brennan (Cardiff West) (Lab)]

Thank you, Madam Deputy Speaker. I also broadly welcome the Bill. May I add the members of the Culture, Media and Sport Committee to the list of people whom the Secretary of State praised? I was a member of that Committee until the end of last year, and I am glad to see several of its members in the Chamber for Second Reading.

It is a pleasure to speak directly after my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch)—I think I can call her a friend after all these years. I commend her for her work in this area and the terrific speech that she has just delivered. I found myself agreeing with pretty much everything that she said. I know that we are in favour of replays, but it would perhaps be wise of me not to repeat everything she said, so I will try not to, although I commend her for what she had to say.

There are still some who question whether Parliament should be regulating in this area at all. Why should we legislate to regulate football? After all, we do not do that in every sport—although, as the hon. Member for Worcester (Mr Walker) pointed out, there is perhaps a strong case for doing so in rugby union after what happened to his local club and other English premiership rugby clubs. However, in reality, Parliament has a long record of legislating specifically in lots of different areas of football. In fact, my private Member’s Bill—the Unauthorised Entry to Football Matches Bill—will have its Committee stage on 8 May, and will, I hope, given its widespread support, make its way into law if we have time before a general election is called. There is a long record of football-specific legislation, so this is not that unusual. Football plays such a huge part in our culture.

Let me say, as the Member of Parliament representing Cardiff West, that although we talk about the English football pyramid, it includes Welsh clubs of course, and has done for well over a century. Football is a huge part of our culture in Wales. In fact, a lot of hon. Members will not know that it is the most popular sport in Wales—more popular even that rugby—helped greatly by the success of our Welsh men’s national football team in recent years, including their reaching the semi-final of the Euros.

Of course, as hon. Members have pointed out, we would not be legislating if football had demonstrated the ability to regulate itself, which many of us—including the late Alan Keen, whom I am glad got a mention in the speech of the hon. Member for Chatham and Aylesford—have called on it to do for many, many years. It is telling that the Bill is now widely welcomed in almost all tiers of football except, as has been mentioned, the Vanarama national league and the higher echelons of the premier league. I completely acknowledge not only that the premier league is the world’s most successful club competition, but that its existence has brought benefit down the football pyramid.

In the first 25 years of the premier league’s existence, its revenues grew thirtyfold while revenues in the second, third and fourth tiers grew more than tenfold. That is the nub of the issue: if we go on as we are without effective redistributive methods, the inevitable consequence is that that the gap between the top and lower tiers would gradually make the pyramid untenable and unworkable. Without a long-term viable pyramid, football at the top will become even more of a cartel than it currently is.

The Premier League’s chief executive told the Culture, Media and Sport Committee earlier this year, that he was

“totally accepting of the Bill and the regulator coming in after that Bill.”

As the Bill progresses we should bear that comment in mind, which he said on the record to the Select Committee. We should hold the Premier League to that.

As we have heard during the debate, football should be about competition. Business should be about competition, and regulation is about helping to promote fair competition. That is the role of Parliament, Government and the state in this sphere. In the absence of an agreement between the Premier League and the English Football League, the backstop power of the regulator is an essential tool to ensure fair competition, and so that smaller businesses are not ultimately wiped out by the gradual concentration of resources at the top of the game and the impossibility of making progress in the game without taking the sorts of risks that undermine local clubs, and ultimately led to a number of situations that we have heard about. I do not see how Ministers will be able to convince right hon. and hon. Members that that is possible without the regulator having any powers to deal with pyramid payments. As we have heard, the Government’s own White Paper acknowledged the distorting impact that they have on competition. If the Bill is about fair competition, that has to be dealt with.

I want to mention my own club Cardiff City—hon. Members would not expect anyone not to mention their own club. Its stadium is located in my constituency and its recent history has contributed to some of the clauses in the Bill, particularly around fans’ rights. Cardiff City has been very successful during my 23 years in Parliament. It has been in the premier league twice, reached the FA cup final, and lost to Liverpool on penalties in the league cup final, but as is well known, some years ago a new owner, Vincent Tan, decided to change the club’s colours from the traditional blue to red, believing it to be a colour that brought good fortune. If hon. Members can imagine, for a football club universally known as the Bluebirds, the switch to red was somewhat problematic for the fans.

I welcome the fact that the owner changed his mind, and that the Bill would not allow that sort of thing to happen without the involvement of the fans. I can confirm that Cardiff City football club welcomes the Bill. I thank the club’s director Steve Borley, who wrote to me about the Bill. He said that

“the game’s fractured governance model and the inequitable distribution of finances”

is increasingly putting the game at risk. That is why the Bill is so important.

The Bill does not make any reference to the players. That is a missing part. The players’ union, the Professional Footballers’ Association, wrote to hon. Members about that, to say:

“As drafted, there is currently no reference to players within the Bill. We think this is a significant omission”.

I would like to hear from the Minister why that is the case, whether the Government would consider the representations from the players’ union to ensure appropriate references to them in the Bill, and reassurances about some of the existing structures that protect the rights of players, which the union is concerned about.

No one here wants to damage the premier league. I simply want my club, Cardiff City, to have a fair chance of playing in the premier league again. I hope that the Bill will go some way—hopefully improved, strengthened and amended—to ensure a healthier future for football.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Culture, Media and Sport Committee.

Oral Answers to Questions

Kevin Brennan Excerpts

Thursday 18th April 2024 Commons Chamber

[Kevin Brennan (Cardiff West) (Lab)]

Would Ministers be equally keen to prevent organisations, such as political parties, using images of His Majesty the King in their propaganda?

[Stuart Andrew]

I do not know how to answer that question, if I am honest! [Laughter.] Our party has always been proud to use the Union Jack, because we are a proud Unionist party, and we will always be proud to support the royal family.

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[Julia Lopez]

It sounds like a superb party and I shall certainly send the invitation to Lord Parkinson, who is the ministerial lead on these issues.

[Kevin Brennan (Cardiff West) (Lab)]

At the most recent British-Irish Parliamentary Assembly, I asked the Irish Tourism Minister about their ticketing policy and its success, and they said it was very much a success. So may I suggest that rather than dismiss Labour’s proposals, the Government should look at the evidence from the Irish Government, rather than listening to outlaw companies such as Viagogo?

[Julia Lopez]

I spoke to officials this week about the Irish example and they were concerned that it had led to an increase in fraudulent activity. However, we will obviously keep this under review.

Oral Answers to Questions

Kevin Brennan Excerpts

Thursday 22nd February 2024 Commons Chamber

[Lucy Frazer]

My hon. Friend is absolutely right. The public rightly expect the BBC to be an exemplar of impartiality. Our review highlighted issues in relation to both impartiality and complaints. As a result, the BBC will undertake significant reforms on both impartiality and complaints. At the charter review, as I have already said, we will examine whether the BBC first process remains the right complaints model.

[Kevin Brennan (Cardiff West) (Lab)]

My innate lack of deference has probably not got me far in this place over the past 22 years, but it is good to see you in your rightful place this morning, Mr Speaker.

The BBC is a great British institution, as the Secretary of State says. In considering the mid-term review, will she reflect on the importance, in this era of fake news, biased comment and social media, of having a space in which information and news are presented impartially and in accordance with editorial guidelines? The BBC is criticised from the left and the right, which probably reflects the fact that it generally gets things right.

[Lucy Frazer]

The hon. Gentleman is absolutely right that the BBC plays a critical role. It is extremely trusted not only here but across the world. The BBC is an important institution, which is why it is so important that it remains impartial. I know that the director-general agrees and, like me, thinks there is more to do. That is why, in the mid-term review, we set out things that the BBC continues to need to look at. The BBC agrees with our mid-term review and has accepted all our recommendations.

Gambling Act Review White Paper

Kevin Brennan Excerpts

Thursday 27th April 2023 Commons Chamber

[Lucy Frazer]

I commend my right hon. Friend for all the work that he and others have done in this area. It is because of their tireless campaigning, along with that of people and families who have suffered harm, that I am standing here today to introduce this White Paper.

My right hon. Friend mentions young people, and I share his concern. We must do more, which is why we are taking steps to make gambling illegal, in many forms, for under-18s. I welcome the Premier League’s announcement on banning gambling advertising from the front of shirts. Footballers are role models for our children, and we do not want young people to advertise gambling on the front of their shirts. They like to wear football shirts, so I welcome the Premier League’s voluntary move, which my predecessors and I encouraged.

Of course, we will look carefully at the evidence on the funding from the statutory levy, and we will keep all these matters under review.

[Kevin Brennan (Cardiff West) (Lab)]

I thank the Secretary of State for her statement. I have just managed to get a copy of the White Paper. It was widely reported that it might introduce restrictions on over-18s, but it appears to be more of a commitment to consult on asking gambling companies to think 25, rather than think 21, when verifying people’s age. Given that we are trying to address the real issue of gambling by children, can she explain the thinking behind that provision?

[Lucy Frazer]

The hon. Gentleman is right to say that it is appropriate to protect people who are aged between 18 and 25. When he reads the whole White Paper, he will see that it proposes a consultation on reducing the amount of money that young adults, aged between 18 and 25, can bet on online slots.

Channel 4

Kevin Brennan Excerpts

Monday 9th January 2023 Commons Chamber

[Michelle Donelan]

I can absolutely guarantee my right hon. Friend that it will be. We will be working extremely closely with the independent sector throughout this period and consulting it to make sure we get this right, not just for Channel 4, but for our thriving independent sector.

[Kevin Brennan (Cardiff West) (Lab)]

The problem with TV repeats is that we all know what the ending is going to be in advance, and we have seen this movie before. However, I am interested in what the Secretary of State has to say about the media Bill. She said she had an announcement to make today, but she did not make a statement to the House. When are we going to see that Bill? When are we going to see the measures that are vital to the future of our public service broadcasters in this digital age and that will ensure their sustainability and prominence?

[Michelle Donelan]

I share the hon. Gentleman’s commitment to the media Bill, and we will be bringing it forward shortly. I cannot stipulate the exact timeframe here today, but I can reassure the House that this Government are absolutely committed to that Bill and to its important aspects, including prominence, for not just Channel 4, but all our public sector broadcasters.

Oral Answers to Questions

Kevin Brennan Excerpts

Thursday 1st December 2022 Commons Chamber

[Mr Speaker]

Never say never.

[Kevin Brennan (Cardiff West) (Lab)]

Of course, a very important part of our film and television industry is the music that goes with it and the composers who provide that music. At this juncture, it would be wrong of me to not recognise and send sympathy to the family of Christine McVie, one of Britain’s greatest ever songwriters, who sadly passed away yesterday. [Hon. Members: “Hear, hear.”]

I was glad to hear what the Minister of State aid about AI earlier, because that will affect film and TV composers, as well as other people within the industry. Will she ensure that in undertaking the AI review, the Government listen very carefully to the views of songwriters and composers who work in the film and television industry during their consultation?

[Michelle Donelan]

I echo the hon. Member’s sympathies. Of course, we will listen to all relevant voices, and I am happy for the hon. Member to meet with either myself or the Minister of State, who is responsible for this.

Online Safety Bill

Kevin Brennan Excerpts

Report stage
Tuesday 12th July 2022 Commons Chamber

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Further to that point of order, Mr Deputy Speaker. How can the Conservative party have no confidence in and write letters about the Prime Minister one week yet refuse to come to Parliament the following week to declare that in front of the public?

[Kevin Brennan (Cardiff West) (Lab)]

Further to that point of order, Mr Deputy Speaker. Can you inform the House of whether Mr Speaker has received any explanation from the Government for this craven and egregious breach of parliamentary convention? If someone were to table a motion under Standing Order No. 24 for tomorrow, has he given any indication of what his attitude would be towards such a motion?

[Mr Deputy Speaker]

I will answer the question about Standing Order No. 24 first, because I can deal with it immediately: clearly, if an application is made, Mr Speaker will determine it himself.

The principles concerning motions of no confidence are set out at paragraph 18.44 of “Erskine May”, which also gives examples of motions that have been debated and those that have not. “May” says:

“By established convention, the Government always accedes to the demand from the Leader of the Opposition to allot a day for the discussion of a motion tabled by the official Opposition which, in the Government’s view, would have the effect of testing the confidence of the House.”

I can only conclude, therefore, that the Government have concluded that the motion, as tabled by the official Opposition, does not have that effect. That is a matter for the Government, though, rather than for the Chair.

May I say that there are seven more sitting days before recess? As Deputy Speaker, I would anticipate that there will be further discussions.

We now have to move on with the continuation of business on the Bill.

New Clause 7

Duties regarding user-generated pornographic content: regulated services

“(1) This section sets out the duties which apply to regulated services in relation to user-generated pornographic content.

(2) A duty to verify that each individual featuring in the pornographic content has given their permission for the content in which they feature to be published or made available by the service.

(3) A duty to remove pornographic content featuring a particular individual if that individual withdraws their consent, at any time, to the pornographic content in which they feature remaining on the service.

(4) For the meaning of ‘pornographic content’, see section 66(2).

(5) In this section, ‘user-generated pornographic content’ means any content falling within the meaning given by subsection (4) and which is also generated directly on the service by a user of the service, or uploaded to or shared on the service by a user of the service, may be encountered by another user, or other users, of the service.

(6) For the meaning of ‘regulated service’, see section 2(4).”—(Dame Diana Johnson.)

Brought up, and read the First time.

Oral Answers to Questions

Kevin Brennan Excerpts

Thursday 7th July 2022 Commons Chamber

[Nigel Huddleston]

My hon. Friend is making an important point, and that is why this is a call for evidence. It is about information; we have not come to conclusions or, indeed, decisions about potential legislation. There is a balance to be had here. Many people rent out a spare room, and in particular in these straitened times, it is very important that they can get additional revenue where they can.

[Kevin Brennan (Cardiff West) (Lab)]

With the announcement, just now, that the Prime Minister has resigned as the leader of the Conservative party, will his temporary occupation of No. 10 Downing Street over the summer qualify as a short-term holiday let?

[Nigel Huddleston]

I am sure the hon. Gentleman is enjoying himself, but that is nonsense. I think the important thing to make very clear, as people can see today, is that government continues.

Channel 4 Privatisation

Kevin Brennan Excerpts

Tuesday 14th June 2022 Commons Chamber

[Kevin Brennan (Cardiff West) (Lab)]

I endorse what the Father of the House just said. That is not to say that I do not have sympathy with Ministers. I was a Minister in the last Labour Government and I understand that Ministers face very difficult decisions. It is not always a decision between simply what is right and what is wrong. Sometimes, it is not a decision between good and evil. Sometimes, it is a decision between the unacceptable and the unpalatable. So I have sympathy with Ministers when they are considering policy.

However, I have been trying to imagine the meeting that the Secretary of State and her Ministers must have had to discuss this topic. Presumably, the permanent secretary came along and said, “Secretary of State, I’m afraid that I’ve got some bad news for you: we haven’t got a problem.” The Secretary of State said, “Really? That’s worrying. What haven’t we got a problem with?” The permanent secretary said, “I’m afraid we haven’t got a problem with Channel 4.” The Secretary of State said, “Why? What has it been doing?” The permanent secretary said, “I’m afraid to tell you that it hasn’t been costing the taxpayer a penny while it has been operating as a public service broadcaster. It gets worse. Last year, it brought in £1.2 billion in revenue and a record financial surplus of £100 million. If that is not enough, it does not even need to borrow any money to finance its operations. I’m afraid to tell you, Secretary of State, that there is much more of this. It has also been rapidly growing its digital advertising revenue, moving into the advertising market that is the future in a way that is far outstripping all of its commercial competitors. Worse still, its digital strategy is way ahead of all its commercial competitors. It has been, annoyingly, fulfilling its remit to appeal to young people. It is the most successful broadcaster of any commercial broadcaster in reaching 16 to 34-year-olds and hugely diverse audiences.

On top of that, I’m afraid to tell you, Secretary of State, it has been commissioning content from independent producers all over the country—”

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. The hon. Gentleman is doing it, too. You cannot say, “I want to tell you, Secretary of State.” You have to say, “Madam Deputy Speaker, I want to tell the Secretary of State.”

[Kevin Brennan]

I apologise, Madam Deputy Speaker, but I was quoting, in an imagined scenario, the permanent secretary. I was not referring to you, Madam Deputy Speaker. This is a creative debate about the creative industries. I was creating an imagined conversation, so I do apologise if—

[Madam Deputy Speaker]

Order. I apologise to the hon. Gentleman. I had not quite picked up on the context. He is probably allowed to make an imaginary quotation, saying, “You, Secretary of State.” Fine—proceed!

[Kevin Brennan]

I know that satire and irony does not translate very well into Hansard, Madam Deputy Speaker. Perhaps it could be put into italics, so that everybody can realise.

[Jesse Norman]

I just wondered, in the spirit of chivalry, whether I might be able to give the hon. Gentleman an extra minute by making an intervention.

[Kevin Brennan]

I have a feeling that that might not be in order, Madam Deputy Speaker.

[Madam Deputy Speaker]

Order. I would just point out to the right hon. Member for Hereford and South Herefordshire (Jesse Norman) that he might find he is disappointed at the end of the debate when he himself loses a minute.

[Kevin Brennan]

I am very grateful to the right hon. Gentleman for his motives. I hope he achieves his objective, but I am not sure whether I will get that extra minute.

In the imaginary conversation, the permanent secretary might have gone on to say, “On top of that, Channel 4 works with 300 production companies a year. It spends more on external production in the nations and regions than any other commercially funded broadcaster, dedicating over half its total content spend to content produced there. I’m afraid to tell you, Secretary of State, that, in addition, Channel 4 has created hundreds of high value jobs in the nations and regions, including by moving a large part of its operations out to Leeds”—I am afraid it was not Cardiff; I wish it had been Cardiff, but it has moved an important HQ out to Leeds—“and announcing plans to significantly increase its investment in skills.”

The permanent secretary might have continued, “On top of that, I am afraid it has been taking decisions with the public interest at heart. I’m afraid to report, Secretary of State, that it has been taking those sorts of decisions, including broadcasting the Paralympics, which otherwise would not have been exposed, and giving a whole hour every night in prime time to news. The news, which counters the misinformation that is such a blight of our age because of the internet, is subcontracted to a production company”—as ever, to ITN—“and subject to Ofcom’s rules of impartiality. And it has been absolutely integral to the success of our film industry.”

“In other words, Secretary of State,” the permanent secretary must have said, “it is a shameful litany of success from Channel 4, and we really ought to do something about it.” Presumably, the Secretary of State would have said in response, “Well, quite clearly, we cannot allow things to go on as they are, because we are going to risk the Government’s reputation for incompetence if this carries on. We have to protect it, and, after all, we were absolutely silent in our manifesto on the issue of privatising Channel 4. Therefore, it is absolutely imperative that we should definitely do it. We did not seek a mandate from the electorate to privatise this successful, publicly owned, public service broadcaster, so we absolutely ought to do it.”

I say to the Minister for Media, Data and Digital Infrastructure, the hon. Member for Hornchurch and Upminster (Julia Lopez)—a very thoughtful Minister, who I am sure will make the best fist of this whole thing both here and eventually in Committee, if this lamentable proposal ever gets that far—that that is where we are at the moment: caught up in an episode of “Parliamentary Pointless”, with a policy that nobody promised in search of a problem that nobody perceives.

Lord Parkinson, the Arts Minister, appeared before the Digital, Culture, Media and Sport Committee this morning, and told us he has six Bills coming down the track in the House of Lords. I would have thought he had enough on his plate, without a pointless proposal of this kind. If colleagues in this place do not prevent this daft proposal from going any further, and the idea ends up down in the House of Lords, I am telling you—you, Madam Deputy Speaker, and the House—that it has no chance of making swift progress in the House of Lords, because it was not in the manifesto. As a result, as Lord Parkinson accepted this morning, the Salisbury convention will apply, and their lordships will feel as free as ever to delay the proposal and if necessary, as they are constitutionally entitled to do, invoke the Parliament Act. The proposal is pointless and should be abandoned.

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[Damian Collins (Folkestone and Hythe) (Con)]

Before I start, I would like to do as the shadow Secretary of State did and declare my entry in the Register of Members’ Financial Interests. I, too, was a guest of Channel 4 at the BAFTA ceremony. I would also declare, as other Members from across the House have done, that I am a fan of “Derry Girls”, as, I am sure, as part of his cross-community work, is the hon. Member for North Antrim (Ian Paisley). This is a channel that makes great programmes that are part of our national psyche and it is an important part of our broadcasting landscape.

However, I say to Opposition Members and some on our side that I have an honest disagreement with Channel 4 and with people who are opposing privatisation; the company, although well run, is running into such strong industry headwinds that this cannot be taken off the table and it has to considered seriously. As Channel 4 said in its own “The Next Episode” response to the Government’s White Paper, all options have to be considered. That has to include the option of privatisation.

The challenges to the sector are very real. A lot has been made of the fact that the last financial year was a successful one for Channel 4 and for the UK advertising industry. There was a major spike in advertising revenues. That is partly to do with a major surge in advertising spend coming out of the pandemic, which saw a big increase in revenues for all broadcasters. The pandemic also meant the delay to the European championships and the Olympics, and such major international tournaments traditionally have a considerable inflationary impact on the advertising market. So we have to look at this in a wider context: the increases in ad revenues seen in 2021 may not be repeated; and the diversion away from linear television advertising—traditional spot advertising—to digital media is a continuing trend. Channel 4 may be the leading UK broadcaster in that respect, but currently only 16% of its revenues come from digital advertising. Although it wants to move that target to 30% by 2025, that may still be a significant challenge.

If there is a major challenge to the TV industry, to the advertising industry, and if there were a recession—TV advertising is traditionally one of the earliest and worst-hit sectors—Channel 4 would be much more vulnerable to the economic shocks that would come, because it does not have other revenue sources. These trends may be familiar across PSBs, which have seen long-term declines in revenue if they are commercial, and in audience numbers, including at peak time. However, the BBC can make money from making programmes. ITV can make money from making programmes, for itself and for other people. Channel 4 does not have that option.

Let us look at the period before the pandemic. In trying to observe a trend, that is probably the fairest thing to do, because we do not yet quite know what impact the pandemic has had, in terms of lockdown in 2020 and recovery in 2021. What does the picture look like? I think everyone here would agree that when Channel 4 was set up its purpose was to invest its money in UK original productions made by independent production companies. It was set up at a time when the BBC and the ITV companies largely made most of their stuff in house, so it was a necessary vehicle to get financial investment into the independent production sector. This was a sector where Sky, Amazon and Netflix did not exist, and it was far more reliant on that funding.

If we look at what has happened to Channel 4, and this is true for other PSBs as well, we see that in 2006 it spent £516 million in first-run original content. In 2019, the year before the pandemic, the figure was £436 million, so we have seen a 15% decline. That declining revenue also bought a lot less as well, because inflation in the TV production market is making it more and more expensive to make programmes. So in 2006 Channel 4 broadcast 3,388 hours of first-run original content, whereas in 2019 it broadcast 2,473 hours, which represents a decline of 27%. This trend away from traditional broadcasters towards digital markets, with the pressure that has on their budgets and the declining amount of money they can afford to spend on new programming, has been a trend for a number of years now. The concern we must have is that if there was a shock in the digital ad market and if Channel 4 cannot hit its targets of allowing digital revenues to grow as broadcast revenues decline, it is much more vulnerable. It does not have the reserves and it does not have the ability to make money elsewhere. That is why even Channel 4 is proposing significant changes to its remit.

[Kevin Brennan]

The hon. Gentleman says that Channel 4 is proposing this, but that proposal was a direct response to a request from the Secretary of State to propose alternative sources of revenue. It was not initiated by Channel 4 because of its concerns about its finances.

[Damian Collins]

As I pointed out earlier in the debate, in that document Channel 4 itself says that it requires a radical reset of its role. If it is to take the opportunity of the changing digital landscape in the future, it needs to be in a position to invest more money. That extra investment will not come from advertising revenues. Channel 4 has been the most successful traditional UK broadcaster in switching to digital, but even there the best one can say about the last few years is that the increase in digital revenues has just about kept pace with the decline in broadcasting revenues. Digital is not raising more money incrementally for Channel 4 to invest in programming at a time when new entrants to the market are increasing their spend significantly—by hundreds of millions of pounds. The danger is that Channel 4, with its unique voice, will be less able to compete, less able to commission, and will run less new programming than it could in the past and that other broadcasters will do. That has to be addressed.

Channel 4 has said that its role needs to be radically reset. It is calling for its digital streaming service, All 4, to be global—to reach a global audience—to increase ad revenues. That is a sensible idea, but the independent production companies that make programmes for Channel 4 would have to give their consent to being unable to sell their programming internationally on their own, as they would in other territories. It calls for the creation of a joint venture in which Channel 4 holds a minority stake that would raise £1 billion to invest in new programming over the next five years. That would be a sensible measure to bring in a significant extra boost in revenue, although it would only bring Channel 4 back to where it was in 2006. As part of that joint venture, Channel 4 would have the intellectual property rights for programming and make money from selling those programmes. Channel 4 believes that may be within its current remit, although it would significantly change the spirit of the remit. The independent production companies might have concerns about that extension, but it is probably necessary.

The idea that the status quo can continue is wrong. It would be wrong of us to assume that it can continue and to say that we will deal with this problem, if it comes, in the future, and in the meantime see Channel 4 gradually wither on the vine, with declining revenues, declining investment in programming, unable to compete, until the point where it cannot go on and requires a bail-out from the Government or the other PSBs. That is the risk we are taking.

The Government’s “Up Next” White Paper is not an ideological tract; it is a sensible and serious at look at real issues in the TV sector. We may have different views on what the right format would be; Channel 4 has put forward its ideas and other bidders will do the same. I think the bidders will be more than the traditional players; others will bid as well and we should look at those options, but they will all be options for change, suggesting a way that Channel 4 can raise more money to invest in what we want it to do—making great programmes.

--- Later in debate ---

[Jesse Norman (Hereford and South Herefordshire) (Con)]

It has been a good debate, but I must say that I am not persuaded by many of the arguments that have been put forward, even by my distinguished colleagues, the former Chairs of the Digital, Culture, Media and Sport Committee, my right hon. Friend the Member for Maldon (Mr Whittingdale) and my hon. Friend the Member for Folkestone and Hythe (Damian Collins). It is a pity that the consultation was carried out in the way that it was. For a subject as vexed and contentious as this, it would have been more appropriate for at least the individual and organisational contributions to have been if not published, then at least digested in more detail and reflected.

If the Government are committed to exploring all the options, as has been recognised by many hon. Members on both sides of the House and as I think it is fair to say the Government have said, it is important that there should be an options paper to show which options have been considered. I was sad to see that the option of mutualisation has not been considered, because it has been effective in other areas. Welsh Water, which is in many ways the best of the water companies, is a mutual company limited by guarantee. I still hope that mutualisation will be considered.

The truth is that, notwithstanding some of the concerns that have been raised, Channel 4 is not a problem, and this measure comes at a time of severe and rising concern among people of this country about the cost of living, inflation and slow growth, and, in policy circles, about the loss of productivity. It is not just that Channel 4 is in rude health—although, as has been pointed out, revenues can go up and down over time—and has been sustained by its huge growth in digital advertising and its remarkable ability to reach interesting younger audiences; it is also that it is a highly dynamic organisation and a highly managerially innovative organisation. Therefore, for the Government to start to panic now about what its future advertising revenues may be is to rule out the possibility that diverse, interesting, engaging and innovative responses may be undertaken by this innovative team.

It is also strange for a Conservative Government to wish to sell off a business in the face of competition, rather than embracing and welcoming that competition and expecting the business to fight its corner. Let me remind the House that the intellectual property does not go anywhere. The fact that it is not trapped in Channel 4 does not mean that it does not reside within independent production companies, and that creates the dynamic tension and energy that has always sustained the sector.

I am afraid that I regard this as an unnecessary attempt to address a non-problem at a time of much wider concern. I refer hon. Members and the Government to the ancient Conservative principle: “If it ain’t broke, don’t fix it.”

[Kevin Brennan]

On the point about intellectual property, is it not interesting that the people behind some of the most successful productions in recent years, such as Michaela Coel, have refused to go to streamers such as Netflix because they insist on keeping the intellectual property, rather than letting it reside with the British small production companies, writers and creators who are responsible for it?

[Jesse Norman]

The hon. Member makes an interesting and fair point. Of course, if advertising revenue were so unattractive, the rest of the market would not be piling into it. At the same time, no matter who the owner of the enterprise will be, they will not be immune from wider inflation in programming costs. That is the nature of the business, and the question is what innovative and constructive responses will be undertaken by the management team to address that.

The plan is also bad economics from a public standpoint. The House will know that I spent a couple of years as a Treasury Minister, including during the period the Secretary of State talked about when all the support was given to the cultural sector, and I think it is bad economics. Even if the constraints were relaxed in the way that has been described, the revenue to be derived would be only, on a net basis, in the order of £500 million to £1 billion. My successor, the present Chair of the Digital, Culture, Media and Sport Committee, my hon. Friend the Member for Solihull (Julian Knight), has pointed out that that is a drop in the ocean compared with the wider problem. At a 4% interest rate, £500 million amounts to £20 million a year. Are we really going to give up all the control, energy, drive and impetus that exists in Channel 4 now, and the £200 million of directed programming from independent production companies that comes from that, in return for the equivalent of a £20 million annuity? I do not think that makes any economic sense at all.

Overall, this is not a Conservative proposal. What matters in this case is the quality of the ownership. Channel 4 has an independent ownership structure; it happens to be owned by the state, but its ownership structure has made it resilient to political pressure and able to commission highly innovative, risky and interesting forms of programming, for which we celebrate it.

--- Later in debate ---

[The Minister for Media, Data and Digital Infrastructure (Julia Lopez)]

I welcome the chance to close this debate on the importance of our much-loved cultural institutions, the future of UK broadcasting and the plan to sell Channel 4. I thank hon. Members for their contributions and thoughts.

The motion rightly recognises the role that our broadcasters play in bringing our nation together. There is no better example than the absolutely extraordinary coverage of Her Majesty’s platinum jubilee celebrations. I echo the Secretary of State’s tribute not only to our fantastic DCMS officials, the royal household and our broadcasters for the jubilee coverage, but to every person who participated in the exceptional showcase of British talent, from the glorious eccentricity of the pageant and the precision of the military parades to the musical power of Saturday’s concert and its innovative production, which included breathtaking light displays around Buckingham Palace, complete with drone corgi. It was a magical, delightful, magnificent kaboom of creativity.

I confess that I read the motion with a wry smile, because the hon. Member for Manchester Central (Lucy Powell) has been teasing and tantalising us with Labour’s patriotic pitch in the media for a couple of weeks now. Today, we saw it on the Floor of the House. During the glorious jubilee, the penny finally dropped for the Opposition that British people actually feel rather proud of our country. The hon. Lady has flogged to her leader the idea that the privatisation of Channel 4 is just the wedge issue that Labour needs to convince voters, after five years of campaigning for Comrade Corbyn to be Prime Minister, that it is the party of our most cherished institutions. “We are the patriots!”, she cheers from the Front Bench.

The trouble is that our plan for Channel 4 is not some ideologically driven attempt to dismantle all that is great about British broadcasting, no matter how hard the hon. Lady has tried to mischaracterise it today. It is part of an ambitious and considered strategy to ensure that British public service broadcasters not only survive in a very rapidly changing market, but grow and continue to be relevant to British and global audiences for many years to come, producing the kind of content that delights and informs viewers, underpins our cultural and democratic life and, critically, generates economic growth across our country. The structure of Channel 4, the sustainability of the licence fee and the diminishing value of linear prominence are all issues that have been knocking around for many years, but, as has been discussed at length today, market changes have injected real urgency into this debate, and we will not allow the can to be kicked down the road any further when the future of our public service broadcasters is at stake.

[Kevin Brennan]

I agree with the Minister on prominence, and in fact the Government should have acted sooner, as I called for them to do several years ago. She talks about kicking the can down the road, but what will happen after 10 years under her plans? Is she not kicking the can down the road for the future of this public service broadcaster by saying that in 10 years’ time anything can happen?

[Julia Lopez]

I can account for what the Secretary of State and I have done within our roles, and I think we have pushed forward an extremely ambitious set of reforms in the short time we have been in DCMS. This is an exciting time to be in public service broadcasting. I always thank the hon. Gentleman for his contributions because I know he has expertise in this field.

It is this Government and this Secretary of State who have decided to act, bringing forward a comprehensive package of reforms to support our PSBs through the first broadcasting White Paper in 20 years. It is the next step in a long history of support for our creative industries. It was a Conservative Government—under Margaret Thatcher, no less—that established Channel 4 in the 1980s to stimulate independent production and distinctive content. It has worked, and then some. It was a Conservative Government that encouraged Channel 4’s move to Leeds to spread the benefits of the creative sector beyond London. It worked. And it is a Conservative Government that are tackling the limitations of Channel 4’s ownership structure in this new broadcasting landscape, redirecting sale proceeds into a creative dividend to address the skills challenges of now.

Let me just touch on those limitations, because it is important to remind the House of them. Channel 4 is a fantastic broadcaster that has great management, innovative programming, high quality journalism and a diverse audience, but it is uniquely challenged in two ways. First, the publisher-broadcaster restriction means that it cannot own its intellectual property, so it finds itself reliant for 74% of its income on linear TV advertising revenues. Such revenues have fallen 31% sector-wide between 2015 and 2020, and that trend is set to accelerate as audiences move online and change their viewing habits.