Channel 4 Privatisation

Lucy Powell Excerpts

Tuesday 14th June 2022 Commons Chamber

[Lucy Powell (Manchester Central) (Lab/Co-op)]

I beg to move,

That this House supports the UK’s much loved cultural institutions, which are celebrated around the world while creating jobs and growth across the country; in the Jubilee year supports world-renowned British broadcasting which brings the country together in celebration; believes that the Government should reverse its decision to sell Channel 4 as it will undermine the UK’s world leading creative industries and the delicate ecosystem of companies that support them; and calls on the Government to ensure that, if the sale does go ahead, Channel 4’s headquarters continue to be based in Leeds and its remit ensures that it continues as a public service publisher-broadcaster, commissions over 50 per cent of its content outside London, continues its significant investment in new independent British films and funds quality news content which is aired at prime time.

I refer Members to my entry in the Register of Members’ Financial Interests, as I was a guest of Channel 4 at the recent BAFTA awards and at a recent rugby league match, where I also met the Secretary of State for Digital, Culture, Media and Sport.

We wanted to have this debate today because, despite the Government publishing a White Paper and declaring their intention to sell off Channel 4, there has been little parliamentary scrutiny, and what there has been has exposed quite widespread opposition. Being the generous person that I am, I thought I would give the Secretary of State the chance to lay out her compelling arguments and win over the House today. Perhaps things might go a little worse than that, but we will see.

In all seriousness, the arguments to sell off Channel 4 to what will likely be a large US media company are at best thin, while the case for nurturing and retaining all that is great about this unique British broadcaster is very strong. First, it is ironic that the self-declared party of Brexit is now uprooting, undermining and selling off great British institutions and assets at fast pace. Is that what putting British interests first is all about? Channel 4 is just one of many; the BBC and others will follow.

As the nation came together last week to celebrate the jubilee, we were again reminded of the important role our national broadcasters play in bringing the country together and projecting ourselves around the world. Making great TV and film is one of the things Britain is seen as a world leader in, one of our greatest exports and a reason why English continues to be a world language. From “East Is East” to “Everybody’s Talking about Jamie” to “Trainspotting”, British film is known and loved around the world. Selling off one of our broadcasting jewels in the crown in a jubilee year is not just the wrong thing to do as a patriot or for nostalgic reasons; it is also really bad for our world-renowned creative economy.

The foundations on which our global success is built come from our unique public and private, small and large landscape, which puts Britain at the top of the tree when it comes to TV and film.

[Sir John Hayes (South Holland and The Deepings) (Con)]

I agree with the hon. Lady about Channel 4 and its role in film in particular, but surely she will acknowledge that we need a plural system, and that private investment and engagement is critical to that plurality. Furthermore, will she confirm that, should Channel 4 be sold off, she would renationalise it? Is that Labour’s policy?

[Lucy Powell]

We have a very plural system. The argument that I am making is that private and public play different roles in that important ecosystem, but I hope that the House will today agree with my motion to stop the sell-off; I am sure it will.

Channel 4, like the BBC, is fundamental to the foundations of our global success in TV and film. We flog it off at our peril. Its broadcaster-publisher model has given rise to many of our most successful production companies. That was Margaret Thatcher’s original idea. It was a good one—and I do not say that very often. Without its ability to take risks, attract different audiences, and invest in programmes and films that can seem like loss leaders, our creative economy would be all the more bland and mainstream.

[Marsha De Cordova (Battersea) (Lab)]

My hon. Friend is making an excellent speech. Does she agree that Channel 4 reaches audiences that other outlets struggle to reach, and produces content that attracts a diverse audience, including the takeover day commemorating the anniversary of the killing of George Floyd and the excellent coverage of the Paralympics? Does she worry, as I do, that selling off Channel 4 would hinder that kind of programming?

[Lucy Powell]

I could not agree more. My hon. Friend makes some excellent points, some of which I will turn to later in my speech.

[John Redwood (Wokingham) (Con)]

Does not the hon. Lady see the opportunity that could be provided by a new private owner or owners, who could contribute a lot of new ideas, innovation and extra money to transform the channel for the better? Why is she always so pessimistic about any new idea?

[Lucy Powell]

I do not know why the right hon. Gentleman thinks that large American media companies are more innovative than small, British-made institutions such as Channel 4, which has been innovating for the 30 or 40 years since Margaret Thatcher invented it. He might want to rethink his point. We are not known for the blander, more mainstream content that would come from the sell-off. That is not how our success has been built. Creativity means actually being creative.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

My hon. Friend is making an excellent speech. I have many constituents in Leeds who work at Channel 4, but even more who work for independent production companies. Kay Mellor, the founder of Rollem Productions, recently passed away. Great creative talents such as Kay Mellor would not have been able to come forward without support such as the £221 million that Channel 4 invested in independent production in 2021. We need more Kay Mellors and more Rollems, not fewer as a result of US imports.

[Lucy Powell]

My hon. Friend makes a really good point. I will come on to some examples in my speech.

Secondly, Channel 4 unashamedly supports British jobs and the British economy. The UK’s creative industries are one of our biggest and fastest-growing sectors, contributing more to our GDP than aerospace, automotive, life sciences and energy put together. With the UK’s creative industries growing at four times the rate of our economy as a whole, most other countries are looking to create home-grown companies of the kind that our Government are actively undermining. In an era of stagnant growth, when Britain needs to win the global race for jobs of the future, why are we looking to sell off a critical part of our creative ecosystem?

Channel 4’s public service remit is integral to this success. It is a driver of levelling up in the creative industries, which have all too often been focused in London. With more than half its commissions outside London, and with headquarters in Leeds, Channel 4 supports thousands of jobs in Yorkshire and across the nations and regions. Film4 has built on Halifax’s success to make it a world-leading hub in film.

[Michael Fabricant (Lichfield) (Con)]

Does the hon. Lady not recall that Channel 4 was dragged kicking and screaming into moving its headquarters outside London? Has she not visited Leeds and has she visited London? Does she seriously think that Leeds can be called the headquarters of Channel 4 when most of the senior management are still firmly anchored in London?

[Lucy Powell]

So the hon. Gentleman now thinks that Channel 4 is not important to Leeds. Perhaps he might want to take up the issue with Leeds MPs and Leeds constituents, who take a very different view. They support what Channel 4 is doing in its levelling-up agenda, which is evident for all to see.

Channel 4 supports skills and widens access to the industry. At a time when employers are crying out for talent and people across the country are looking for jobs, Channel 4 is supporting thousands of young people and apprentices each year. The Secretary of State has said that her defining mission is

“ensuring that everybody from every background has access to the arts”,

so why is she undermining an important access driver in this way? Thanks to its unique publisher-broadcaster model, Channel 4 invests half a billion pounds a year on average in the independent production sector. That has helped to grow and start many of our most successful production houses.

[Alun Cairns (Vale of Glamorgan) (Con)]

The hon. Lady refers to spending on original content. In 2006, it was £516 million; by 2020, because of the fall in advertising income, it had fallen to £329 million. Does she accept that the current model of Channel 4 cannot survive and that it needs reform?

[Lucy Powell]

No, I do not. This year, it is the most profitable and successful that it has ever been, so I think the right hon. Gentleman’s figures are wrong.

[Hilary Benn (Leeds Central) (Lab)]

Not only do Labour Members oppose this proposal, but there is a great deal of concern about it among Conservative Members. It seems to have more to do with ideology than with practicality.

Leeds has been really proud to host Channel 4’s presence in our city. We worked very hard to win the competition and bring it to Leeds. If the proposal goes ahead, will there be any guarantee whatever that the new owners, whoever they are, will keep a significant Channel 4 presence in Leeds? I fear that they will shut it down and go somewhere else.

[Lucy Powell]

My right hon. Friend is absolutely right. There is no guarantee whatever.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

rose—

[Lucy Powell]

Cardiff is another hub for the media, so I give way to my hon. Friend.

[Stephen Doughty]

I totally agree with my hon. Friend’s points. She is right that Cardiff is a huge hub for the creative industries; Channel 4, alongside many other media companies, has invested in our industry locally.

Does my hon. Friend agree that through its public sector remit, Channel 4 has been very successful in telling stories from across the United Kingdom about subjects that others have not been willing to address? As a vice-chair of the all-party parliamentary group on HIV and AIDS, I particularly commend its work on “It’s a Sin”, which told the story of the HIV/AIDS epidemic from a British perspective. It tells stories from all parts of the UK and from communities that have been under-represented.

[Lucy Powell]

My hon. Friend makes an incredibly powerful point that I fully support.

Film4 is also a global success story that costs the taxpayer nothing. It invests £25 million each year in British independent film. That is around one third of the total UK investment. By intervening particularly in the development stage, Channel 4 supports bold, risky films, and losing Film4 would be devastating for our leading edge in British film.

Perhaps this is why the industry and the public are so opposed to Channel 4’s privatisation. According to the Government’s own consultation, 96% of people are opposed to it. Even when the 38 Degrees responses are taken out, it is still only 5% of people who are in favour. Throughout all the stakeholder engagement I have done since starting this job, I have found exactly what the Government consultation has found, which is that not a single person across the sector thinks this is a good idea. I am sure we will hear from the Government today that all these good things can continue and that they are actually doing Channel 4 a favour by freeing it up, but I think the Government have made promises they cannot keep, whether on funding British-made content, investing in the regions and nations or continuing high-quality news and current affairs.

Whenever Ministers are challenged on how the benefits of Channel 4 will continue, all we hear is, “Don’t worry, we’ll put it in the remit.” What we know from the White Paper so far, however, suggests that the Government will remove the publisher-broadcaster model and instead require Channel 4 simply to meet a 25% quota, which would be significantly lower than the 100% it does today. On levelling up, the Government are promising only 35% of production outside London and 9% outside England. This is a dramatic cut to the current levelling up budget. As my right hon. Friend the Member for Leeds Central (Hilary Benn) has just said, the new remit will not include any commitment to keep the headquarters in Leeds or any obligations to training and skills.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Can I make a point from a West Yorkshire point of view? Is my hon. Friend aware that we in the north are proud that over in Manchester and Salford we have the BBC hub, and that over in Leeds we have Channel 4? They are the anchors and foundations of the creative sector, creative skills and a real culture that will be destroyed if a flagship organisation such as Channel 4 is lost.

[Lucy Powell]

Absolutely, because it’s great up north, isn’t it? It is not godforsaken. I think that was the word somebody else used.

[Ben Bradley (Mansfield) (Con)]

Will the hon. Lady give way?

[Lucy Powell]

I am not going to give way any more. I think the hon. Gentleman is down to speak later anyway.

The Government seem to think that the year-on-year investment Channel 4 makes across the country can be replaced with one-off grants raised from the sale. It is surely the opposite of conservative ideology—whatever that means these days—to replace business investment with Government handouts. I just do not get it.

[Ben Bradley]

Will the hon. Lady give way?

[Lucy Powell]

Okay, if the hon. Gentleman wants to come in on that point. This is my final giving way.

[Ben Bradley]

The hon. Lady is very generous. I do not understand the pessimism. She and other Opposition Members have talked about all of this disappearing, but nobody has suggested it will disappear. She said herself that the sector is growing four times faster than the UK economy, but Channel 4 is not. The part of the sector that is growing is the privately owned part of the sector, where the investment is coming in. What evidence does she have that any of this would disappear?

[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.

[Robin Millar (Aberconwy) (Con)]

It’s a lot!

[Lucy Powell]

Yes, well, it may be, but I do not think it is. [Interruption.] No, I think the hon. Gentleman has let the mask slip on his own side, because Conservative Members do think Channel 4 is a bit left-wing, which is why they are selling it off.

The truth is that the Secretary of State has misunderstood where Channel 4’s true value comes from and the important distinctive role it plays in the wider economy. That is why Margaret Thatcher invented it, and that is why many Conservative MPs and peers oppose this. The Culture Secretary might not want to hear it, but this is what some Conservatives have to say about her proposal: the “opposite of levelling up,” “very unconservative” and

“an unnecessary and provocative attempt to address a political non-issue during a time of crisis, at significant cost to the independent UK film and TV industry.”

I would say they are as brassed off as the rest of us. [Interruption.] Some Members got that cultural reference.

We know the Culture Secretary does not like Channel 4, and she has said that it does not do itself any favours. Her sell-off has no support in the country, no support in the creative industries, no support from other broadcasters, no support from advertisers and very little support in Parliament. The big winners from her policy will be the big US tech and media companies; the losers will be British creative jobs outside London, British independent film, British independent production companies and Britain’s creative economy.

This cultural vandalism does not get modern Britain and does not understand how best to grow the British economy. That is why I urge the House to support our motion today.

--- Later in debate ---

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. The shadow Secretary of State must stop shouting at the Secretary of State from a sedentary position. If she wants to make a point, she should get up and intervene. I cannot hear what the point is. I can hear the Secretary of State’s answer, because presumably she can hear the hon. Lady, but nobody else can. That is why we debate properly in here by standing up and making a point, not shouting like football supporters—[Interruption.] I withdraw that. I am not criticising any group in society; I am just saying that it is unacceptable.

[Lucy Powell]

Perhaps the Secretary of State will give way on that point, then, Madam Deputy Speaker.

[Ms Dorries]

The question of Channel 4’s long-term sustainability is hardly a new challenge. I am not the first Secretary of State to seriously consider whether private ownership is ultimately the best way to protect one of our best-loved broadcasters, but I am the only one who is prepared and willing to act and do what is right, not just for Channel 4 but for British broadcasting and ultimately the British taxpayer.

--- Later in debate ---

[Ben Bradley (Mansfield) (Con)]

It is a pleasure to take part in this debate on a topic I have not shied away from in the public discourse. In fact I found myself, not for the first time, in the middle of the usual Twitter storm when I tried to cut across the predictable hysteria about the announcement of this privatisation. There were accusations from the Opposition Benches that this decision was fascism in action, a ridiculous statement and nonsense—because, of course, the first thing every fascist dictator does is relinquish state control of the media. Once again the Twitter commentariat, wound up by certain Members on the Opposition Benches, proved that they are incapable of seeing any debate in sensible or nuanced terms and instead go for the clickbait headline. That is incredibly frustrating, so I am pleased to be able to debate this today.

I agree with my hon. Friend the Member for Solihull (Julian Knight) that we should do more privatisation. There would perhaps be less ability to create such hysteria if there were a steady drumbeat of measures from the Government on privatisation, driving the private sector and innovation.

Opposition Members have said that this is ideological. We have heard from Ministers and others on the Conservative Benches all the practical reasons why privatisation makes sense in many cases. I do not speak for the Government, but for me part of it is indeed ideological, however; I fundamentally believe the Government should not be involved in stuff they do not need to be involved in, and if the private sector can drive this kind of innovation, then it should. If the Government want to bring forward more measures to remove their hands from things they do not need to be involved in, I will welcome that. That is a challenge for the Minister, and perhaps she will take me up on it.

Before I take a more critical viewpoint it is important to say that Channel 4 will continue to play an important role in British life, because it makes some cracking content. I am not as old as my hon. Friend the Member for Milton Keynes North (Ben Everitt), but I go back a bit as well, and I like Channel 4. I remember the time in the ’90s when “The Simpsons” was on at 6 o’clock on a Friday night; I used to sit down after my tea, and then there was “Malcolm in the Middle” and I would be allowed to stay up late until “Friends” had finished. That was my bedtime viewing on a Friday night. Those are all American programmes, actually, so they are probably not the best example. [Interruption.]

[Lucy Powell]

What about “The Word”?

[Ben Bradley]

Before my time, I’m afraid.

Channel 4 has also recently won the rights to a number of England games, and it is only positive to have more football on free-to-air television. All that should be celebrated, but the decision to privatise Channel 4 comes with mutual benefits. I strongly believe there is more potential for Channel 4 to compete and to make tremendous progress in the private sector. State ownership is impractical in the long run. If the channel is to find investors to find the cash to grow and expand and do more, it needs private enterprise. We have heard from Conservative Members why it is struggling to do that, which I will come on to again shortly.

Why do we continue to limit the growth and ability of a much-loved TV channel when we can easily sort it out? Questions need to be asked about why running media companies needs to be a role of Government. Government ownership has implications. Through being funded by advertising alone Channel 4 has a valuation of about 1% of that of Netflix, for example. Channel 4 clearly needs more funding if it is to compete in an ever-changing and growing market and if it is to expand. Where is that meant to come from? Its advertising funding is already falling, it cannot sell its content as other companies can, and its spending is declining. It is limited by Government ownership.

Members have pointed to good things Channel 4 does, and Opposition Members have jumped to the worst possible conclusions about the risks to all those things, but there is no reason why those good things cannot continue. Words such as “abolish” have been used, but Channel 4 is not going anywhere. I do not believe that those terms reflect what is happening.

To return to the money, if Channel 4 is to grow at scale and take full advantage of market growth and compete effectively, its only current option is to borrow, with that risk underwritten by the Government, and I do no not think that that is an option; nor should the taxpayer be asked to do that. That takes me back to my earlier point: do the Government need to do this, or could someone else do it? The answer is firmly that somebody else could.