Channel 4: Consultation

Lord Parkinson of Whitley Bay Excerpts

Tuesday 16th November 2021 Lords Chamber

[Lord McNally (LD)]

My Lords, in the absence of my noble friend Lady Bonham-Carter, and at her request, I beg to move the Question standing in her name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, the consultation on the potential change in ownership of Channel 4 received around 60,000 responses. We are grateful for the public’s engagement on this matter and, indeed, for the response from the noble Baroness, Lady Bonham-Carter, and her Liberal Democrat colleagues. We are now working hard to analyse every response and to ensure that all evidence feeds into any final decision.

[Lord McNally (LD)]

My Lords, is there not a lot of evidence that the overwhelming response, particularly from those with individual or organisational experience of the collective creative industries, was to warn against the privatisation of Channel 4? Will the Minister publish the advice that the department has received and, once he has analysed and considered it, would it not be a good idea to drop this piece of ideological vandalism?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord is rather getting ahead of the process. No decision has been taken yet and we are carefully processing all the responses received. The consultation ran from 6 July to 14 September; as I said, it received around 60,000 responses, including more than 100 from the industry, all of which will be carefully analysed before any decisions are made.

[Lord Bassam of Brighton (Lab)]

My Lords, independent analysis from Ernst & Young, which explored potential business models and remits for a privatised Channel 4, suggested that any change could significantly reduce the organisation’s economic contribution in the supply chain, with the effects felt disproportionately north of the M25. The Government claim they want to level up, but time and again their action has knocked down the UK’s nations and regions, rather than giving them a boost. Can the Minister tell us what in-house analysis the Government are undertaking, and whether the Government’s findings are consistent with Ernst & Young’s? Will they publish their analysis along with the results of the consultation?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord mentions the work done by Ernst & Young. Our analysts, UKGI, and our corporate finance advisers, JP Morgan, take a different view and that is why we are taking a range of views on the suggestions. On the work that Channel 4 does across the United Kingdom, I say simply that Channel 4’s strengths in this regard are to be celebrated and maintained, and that is not at odds with private investment; in fact, Channel 4’s access to networks outside London and its ability to speak to such a diverse range of audiences are likely to be attractive assets to nurture and develop for any potential buyer, if that is the route we go down.

[Lord Birt (CB)]

My Lords, there is a meme of the moment that Channel 4 and, indeed, the BBC are being marginalised by the awesome economic power of Netflix. Does the Minister accept that Netflix’s programme proposition, though wholly admirable, bears no relationship whatever to the breadth of the public service propositions offered by both Channel 4 and the BBC? Moreover, will the Minister remind his department that in terms of hours of consumption per adult per week, far from being marginalised, the BBC enjoys six times the consumption of Netflix, and that Channel 4 is level-pegging?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord speaks with great experience of the sector. I am about the same age as Channel 4; the environment in which it was launched in 1982 was very different from the environment now. The Government should never stand still when it comes to ensuring the success of our public service broadcasters and the growth of competitors such as Netflix, as the noble Lord mentioned. That is why it is appropriate to reflect on Channel 4’s future and consider whether the current model gives it the best chance to succeed in the new environment as we seek to ensure that it is set up for success for decades to come.

[Baroness Fraser of Craigmaddie (Con)]

I declare an interest as a board member of Creative Scotland. For producers in Scotland, Channel 4 is a key buyer. Regional independent production companies have said very clearly that they believe that the privatisation of Channel 4 will cause great harm to their businesses. What evidence does the Minister have that they are wrong and what reassurances can he give them for their future?

[Lord Parkinson of Whitley Bay (Con)]

Channel 4’s access to networks outside London and its work with independent producers right across the UK are likely to be attractive assets that any potential buyer would nurture and develop. Whatever decision we take, however, will not compromise the Government’s commitment to the independent production industry. That is why we have consulted on these issues and are working through the responses to inform our decision-making.

[Lord Fowler (CB)]

I am grateful to the noble Lord, Lord McNally, and indeed to everyone else who has spoken so far. I gently point out that privatisation has often been to the benefit of the public and the organisations being privatised. In the first privatisations of the Thatcher years, in which I was involved, we achieved the first employee buyout of a major company and the ability of British companies, who were starved of cash, to get the resources necessary to expand. Surely the important challenge for the Government is for them to give an assurance that their priority is to develop Channel 4 rather than simply to raise money.

[Lord Parkinson of Whitley Bay (Con)]

I thank the noble Lord for that important point. Channel 4 is uniquely constrained in its ability to meet the challenges facing the media landscape today; in comparison with other public service broadcasters, its access to capital is highly constrained. That is why we are looking at reform to protect Channel 4’s long-term future, so that it can continue to be a valued public service broadcaster, serving audiences with great public service content for years to come.

[Lord Inglewood (Non-Afl)]

Does the Minister agree that Channel 4 is not just any old media company but rather a sui generis British institution established by Act of Parliament—a hub at the centre of networks reaching out deep into broadcasting and the digital world, the creative industries, skills, minorities, the regions, entrepreneurialism and culture?

[Lord Parkinson of Whitley Bay (Con)]

Yes, and Channel 4’s inherent characteristics are also its strengths: its ability to make distinctive content, its work with independent producers and, in turn, its ability to attract diverse audiences. However, those strengths are not at odds with private ownership. They are things that we think would be attractive to potential buyers, things that they would seek to nurture and strengthen. We do not think that there is a false choice between public service remit and privatisation. As the noble Lord, Lord Fowler, pointed out, it is possible to have both.

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords, Channel 4 is not everybody’s cup of tea, including, I suspect, many in the Conservative Party. Some also say that there is an overabundance of reality TV programmes. There were major faults with the subtitles, which are essential to certain viewers. However, does the Minister agree that the flagship Channel 4 news output, which goes out at 7 pm and is repeated at 8 pm, headed up by the veteran anchorman Jon Snow, the inimitable Matt Frei, the incomparable Krishnan Guru-Murthy and the professional Cathy Newman, is essential viewing for those who do not get home in time for the 6 o’clock news? Can the Minister use his undoubted influence to ensure that this essential contribution to cutting-edge journalism continues?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the Government want Channel 4 to succeed as a public service broadcaster, and all PSBs are required to broadcast news. They are regulated under Ofcom’s Broadcasting Code, which ensures that all the news is reported with due impartiality and accuracy. That would not change under private ownership. Our consultation document sets out our current view that Channel 4’s existing obligations relating to news and current affairs provision should be broadly retained in any potential reform.

[Lord Londesborough (CB)]

My Lords, for the sake of perhaps as little as £500 million, after you have netted off adviser and transaction fees, does the Minister feel that the risk/reward equation stacks up for privatising when we take into account the potential disruption to thousands of jobs, not just within Channel 4 but across hundreds of small independent producers spread across the country? I repeat the question: levelling up or levelling down?

[Lord Parkinson of Whitley Bay (Con)]

Again, the noble Lord slightly pre-empts our response to the consultation. A range of views have been made in it and that is why we held it. As I said previously, whatever decision we take will not compromise the Government’s commitment to the independent production sector and to the wider creative economy. I am glad to say that the independent production sector is now flourishing and increasingly less reliant on income from UK public service broadcasters, but these are the very issues that we are taking into account as we look at the consultation and the responses that we received.