Channel 4

Matt Hancock Excerpts

Tuesday 19th July 2016 Westminster Hall

[The Minister for Digital Policy (Matt Hancock)]

It is a great pleasure to serve under your chairmanship, Mr Stringer. I am very grateful to the hon. Member for Hyndburn (Graham Jones) for his contribution and for bringing me to Westminster Hall on day two of my new job. As he mentioned, I have had discussions about this issue with the previous Secretary of State for Culture, Media and Sport, and we decided as a Government to ensure that we would look at all options on the following bases.

Like the hon. Gentleman, I cherish Channel 4. It was introduced by a Conservative Government and we are proud of what it has achieved over the past 34 years. I want to see Channel 4 continue to thrive and have a sustainable future. The question is, how do we best do that? I am focused on the challenge of ensuring that the public service broadcasting system, with Channel 4 at its heart, can continue to play a leading role in the UK’s cultural life for many years to come.

We are committed to public service broadcasting in the UK, which is a key driver of one of the most successful TV markets in the world. Ofcom reviews consistently show that public service broadcasting is valued by the public. Its 2016 review, which was published only last week—I am sure the hon. Gentleman has seen it—found that last year, 84% of the TV population aged over 4 watched some of the main five PSB channels in a typical week; 86% of viewers believed PSB news programmes were trustworthy; and 83% of viewers felt PSB channels helped them to understand the world.

Channel 4 is a fundamental part of the PSB system because of the range of programmes it broadcasts, its reflection of the UK’s cultural identity and its distinct and different offering. As the hon. Gentleman said, it performs a role in challenging the establishment. That is something I have had direct experience of, and I have always enjoyed the rigours of the challenge that Channel 4 provides. It stands up to authority through, for instance, “Dispatches”. I also endorse the comments of my hon. Friend the Member for North Swindon (Justin Tomlinson) on the coverage of the Paralympics in 2012, which was outstanding.

Channel 4’s commitment to diversity in all its forms—in terms of not only gender or ethnic background but also, for example, LGBT diversity—is a valuable and important part of its remit. Channel 4 has developed a unique character since it was established under the then Conservative Government 34 years ago. From “Countdown” to “Gogglebox”, “Father Ted” and “Unreported World”, Channel 4 is known for its innovation, originality and outspoken nature. It has also played a key role in the development of the independent production sector, which is now a huge sector that exports around the world and is worth more than £3 billion to the UK economy.

We need to think about this more broadly than just the channel. Through Film4, the Channel Four Television Corporation has played a role in some of the British film industry’s biggest successes—“Slumdog Millionaire”, “Four Lions” and “12 Years a Slave” come to mind, but there are many others. The importance of Channel 4 is recognised across the industry and across the House.

[Tim Loughton]

I congratulate the Minister on his new appointment. In his first week in the job, may I suggest that this is an opportunity to preserve the innovative legacy of Mrs Thatcher when she created Channel 4 in the 1980s, and to make a name for himself by creating certainty for what is, as he and other hon. Members have commended it for, the most successful, diverse, creative, youth-engaged and innovative British-backed broadcaster, by saying once and for all that Channel 4’s future in its current form is safe in his hands?

[Matt Hancock]

My hon. Friend tempts me, but the broadcasting market is changing rapidly. That is why the previous Secretary of State decided to look at all the options. It would be a bit previous of me, on day two in my job, not to consider where that work has reached in our goal of a sustainable future for Channel 4.

[Graham Jones]

I accept and respect that this is day two of the Minister’s current job, but he had previous conversations about Channel 4 with the former Culture Secretary in his previous ministerial post, so it is not necessarily day two. Is he ruling out or ruling in privatisation and a sell-off?

[Matt Hancock]

It is also day two for my Secretary of State. The issue needs to be considered realistically in the face of the facts. Channel 4 acknowledged the risks facing its business model in its 2015 submission to Ofcom’s PSB review when it said:

“Channel 4 believes the potential downside risks associated with…factors, such as a faster shift to on-demand viewing, the emergence of new disruptive entrants, faster fragmentation of audiences, production cost inflation outpacing funding, and structural changes to the licence fee of TV, outweigh the potential opportunities. Moreover, Channel 4 is arguably the PSB most likely to face the future first, given its focus on risk-taking and trying new things, and also its targeting of young audiences, who are the most avid users of new technologies and platforms.”

That must be true. Some 94% of its total revenue comes from TV advertising, and with so much of its revenue coming from advertising, an open question remains about how Channel 4 is affected by shocks to the economy, such as Brexit. It is our duty to make Channel 4 sustainable.

[Kelvin Hopkins]

I congratulate the Minister on his new appointment. Will he, at the very least, take back to his colleague in the Government and to the Secretary of State the strength of feeling that has been conveyed from both sides of Westminster Hall this morning?

[Matt Hancock]

Of course. I think we are about to hear a bit more.

[Graham Jones]

I want to follow up on this interesting exchange. I recognise the passage that the Minister read from Channel 4, but it would be disingenuous to suggest that its position going forward is that it wants to change its model. Channel 4 executives are happy with the current ecology and want it to remain. They respect and see the challenges going forward, but at the moment their preferred option, by a considerable margin, is as we are, not for change.

[Matt Hancock]

As a Conservative, I understand the arguments against change. They exist in almost any circumstance, but that does not mean we should not look to the future and at the risks and opportunities it provides, and the way things are organised so that they make the most of the opportunities and mitigate the risks. That is what we are doing. I hope the hon. Gentleman has heard in the tone of my response that it is our approach to do that in a way that supports public service broadcasting and some of the unique attributes that Channel 4 brings to that broadcasting.

[Mims Davies (Eastleigh) (Con)]

I reiterate the point about the executives being happy both with being scrutinised and with wanting surety for the market. I agree with my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) that we would like to hear that Channel 4 is safe in our hands. Its achievements include issues such as transgender, and it is making its future safe with “Come Dine with Me”, which I think is funding most of the opportunities for diversity that the company is bringing forward. I absolutely applaud the Minister for continuing to look at all the options, but I hope he comes back to the option that we are already at.

[Matt Hancock]

It is important to get this right and to take the time to come to the right conclusion. After all, the main channel, Channel 4, where most public service broadcasting resides, has seen its audience fall from more than 10% to under 6% over the last decade. We must take such things into account.

There are some concerns about the remit. Key to driving the public service broadcasting aims of Channel 4 is the remit, which has evolved over time. There are concerns, for example, about Channel 4’s performance against the requirement to provide content for older children. Ofcom has repeatedly raised this concern and the Lords Select Committee on Communications recently concluded that Channel 4’s current programming in this area is unsatisfactory. We must go into the full details of how the remit is executed to make sure we have got that right.

Ofcom also found that spend on first-run UK-originated children’s programming has fallen by 45% since a decade ago. Older children’s programming is an important part of the remit as written.

[Graham Jones]

This is an interesting debate. On the Minister’s point about falling viewing figures in the last decade, there is now, of course, a plethora of choice and channels. It is natural that, for example, if in his West Suffolk constituency there are 10 candidates on the ballot paper, everyone receives fewer votes, but if there are two candidates, everyone gets more. It is a bit like television channels.

The Minister says that viewing figures have fallen, but that is because of the plethora of offers available. The key point is that Channel 4 is not making a loss. It is still breaking even on its viewing figures. That is a key issue that we need to and should remember. It is not losing viewing figures and money; it is losing viewing figures because of diversity across the platforms, but it is not losing money. It is still providing wonderful content, which is probably better than 10 years ago.

[Matt Hancock]

The viewing figures I set out were a proportion of the market. The hon. Gentleman is right about Channel 4’s current financial status, but it acknowledges the risks because such a high proportion of revenue comes from advertising, which is, as everyone knows, a highly cyclical part of business and there may be shocks to the economy, not least the impact of Brexit, which is as yet impossible fully to ascertain. I take his point, but the matter must be looked at in the round.

I hope I have demonstrated the Government’s commitment to Channel 4 following its rich and proud history, our acknowledgment of and support for its work in promoting a plural and diverse element of our national life, its holding authority to account with rigour and innovation, and my personal commitment to Channel 4 and seeing it thrive sustainably. We will certainly take on board the points that have been raised from both sides of the Chamber. We will consider them over the summer with a mind to ensuring that Channel 4 has a strong and sustainable future. I have no doubt we will have the opportunity to discuss these matters again.

I have been remiss in waiting until the last minute of this debate to welcome to the Front Bench the hon. Member for Luton North (Kelvin Hopkins), who has a long history of involvement in these issues. We will make sure all views are considered and that, as we consider how the remit should be set going forward and how to ensure that Channel 4 is strong and sustainable in future, all voices in the debate are heard.

Question put and agreed to.