The speech made by Jesse Norman, the Conservative MP for Hereford and South Herefordshire, in the House of Commons on 14 June 2022.
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.”
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?
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.
Will my right hon. Friend give way?
I cannot, as I do not have much time, but I may take my hon. Friend’s intervention later.
It is not a Conservative proposal to sell Channel 4, and even if it was sold now does anyone really think the value generated would not itself be a reflection of the proposed doom scenario in advertising revenues because of the way in which future cash flow works? The key issue here is that we should support an enterprise that itself supports independent production companies, many of them in our nations and regions, that proactively supports disabled people, that supports the Union, and that supports levelling up. That is what Channel 4 does.
I have no doubt that Channel 4 can be further improved and enhanced, and I see its next episode as a down payment on the next generation of its own thinking about how its module could be further leveraged and enhanced, but at the moment it is doing a superb job. We should not sell it; we should proceed and support it in any way we can in the future.