PARLIAMENTARY DEBATE
Channel 4 - 9 January 2023 (Commons/Commons Chamber)
Debate Detail
Channel 4 is a great British success story. It was set up by Margaret Thatcher and it has done exactly what she wanted it to do: positively disrupting British broadcasting and driving an expansion in the UK’s independent production sector, which is now surging at £3 billion. However, in the last decade, the media landscape has been transformed by technology and the entry of new, rapidly growing streaming platforms. Channel 4, along with all public sector broadcasters, faces unprecedented competition for viewers in terms of both programming and talent.
Channel 4 is uniquely constrained in its ability to respond to those challenges. There are limits on the broadcaster’s ability to raise capital and make its own content. Under current legislation, Channel 4 operates as a publisher-broadcaster, meaning that all its shows are commissioned or acquired from third parties, such as independent producers or other broadcasters, who typically retain the rights relating to those programmes.
The challenges faced by Channel 4 are very real. That is why the previous Administration decided to proceed with the sale in order to free the broadcaster from the constraints that were holding it back under public ownership. Over the last few months, I have carried out my own examination of the business case for the sale of Channel 4. I have listened to stakeholders and taken a close look at the broadcaster’s long-term sustainability and the wider economic outlook, and I have decided that pursuing a sale is not the best option to ease the challenges facing Channel 4. However, doing nothing also carries a risk. Change is necessary if we want to ensure that the corporation can continue to grow, compete and keep supporting our thriving creative industries. Anyone who says otherwise is burying their head in the sand.
After discussions with Channel 4, I am therefore announcing an ambitious package of interventions to boost the broadcaster’s sustainability. Under this agreement, Channel 4 will continue to play its own part in supporting the UK’s creative economy, doubling both the number of jobs outside London and its annual investment in the 4Skills training programme for young people. Meanwhile, we will introduce a statutory duty on Channel 4 to consider its sustainability as part of its decision making. We are working with Channel 4 to agree updated governance structures to support that long-term sustainability.
We will provide Channel 4 with new commercial flexibilities, including by looking to relax the publisher-broadcaster restriction to enable it to make some of its own content. In doing so, we will work closely with the independent production sector to consider what steps are necessary to ensure that Channel 4 continues to drive investment in indies, particularly the newest, smallest and most innovative producers. That includes increasing the level of Channel 4’s independent production quota, which is currently set at 25% of programmes, and potentially introducing specific protections for smaller independent producers. Any changes will be introduced gradually and following consultation with the sector. Finally, we will make it easier and simpler for Channel 4 to draw down on its private £75 million credit facility.
Alongside the changes to Channel 4, the media Bill will introduce a wide range of measures to modernise decades-old broadcasting regulations, including prominence reforms. Further details will be announced in due course.
What a total waste of time and money this has been. At least £2 million has been spent, and there has been a huge opportunity cost not just for Channel 4, but across the creative industries, with the plans sucking the life out of all the important work that Ministers should have been getting on with. MPs on both sides of the House knew that the privatisation of Channel 4 was an act of cultural vandalism from a Government who simply did not like its news coverage. Can the Secretary of State give us her estimate of how much pursuing this flawed policy has cost the taxpayer, Channel 4 and our public sector broadcasters in lost opportunity?
This is the second time in six years that the Government have proposed this privatisation. What guarantees can the Secretary of State give that privatisation is off the agenda for good? How is she going to ensure future financial sustainability without damaging our vibrant independent sector? Prominence reform is key to that, so when will she bring forward the long overdue media Bill? Does she agree that these plans have been a massive distraction and have already led to British broadcasters losing out to the global streaming giants?
Finally, is it not the truth that after 13 years, this tired Government have run out of road and run out of ideas? They have no plan for growth to support our world-renowned creative economy; just infighting, time-wasting and petty vendettas.
In fact, as I have already stated, Channel 4 has now committed to doubling its investment in skills across the country to £10 million. This is a new package, and the money we have invested in considering Channel 4’s sustainability is very clear and on the public record. It is important that we now work together to secure the future of Channel 4 and of our independent sector. As I outlined in my opening remarks, we will particularly safeguard small, innovative independents.
The Secretary of State is right to examine the proposals put forward a year or so ago. I would not have frozen the BBC licence fee, I would not have proposed the privatisation of Channel 4 and I would not have put pressure on Arts Council England to strangle the English National Opera, but there is more to be done to put them on the right path.
Alex Mahon, the chief executive of Channel 4, spoke for me when she talked about Channel 4’s innovativeness in reaching audiences that others do not serve so well, and I think the publisher-producer split is worth preserving. I hope Channel 4 will not be forced to make too many programmes in-house, as it is vital that we keep the independent producers going. I hope we are back here in 10 years’ time with no more proposals to change the ownership of Channel 4, which is a good public broadcaster that successfully operates commercially.
I congratulate the Secretary of State, but I heard her refer to a previous Administration. There is no new Administration, just the same old Tory Administration. This is the second time I have sat on these Benches to listen to a Conservative Secretary of State reverse their predecessor’s damaging proposal to privatise Channel 4.
Channel 4 is a flourishing, much-loved public institution that is making record profits and offers fearless journalism. The Secretary of State says her decision is based on evidence, which is a good call, but evidence, rather than any personal agenda, should surely have been the guiding principle from the get-go. For those who are not aware, Channel 4 receives no public funds. Can I try again: how much public money went into this Government’s aborted attempt at privatisation?
I warmly welcome the Secretary of State’s words. The creative industries are simply our global superpower, and it is right that Channel 4 has the flexibility to be able to move with the times, respond to the changing media landscape and take advantage of commercial opportunities. Part of this is about nurturing the skilled workforce of the future so that they can respond to the needs of our creative industries. What kind of flexibility and focus will there be for Channel 4 to have the ability to do that?
I do not want to be mealy-mouthed about this, because I am delighted with the Government’s change of course, but is the Secretary of State aware of the favour that she has done us? The campaign to save Channel 4 has been amazing in bringing together all the people in the creative industries in Yorkshire and the north, giving them a sense of purpose that will not go away. We are a vital part of the creative economy, and we will go from strength to strength in the future.
Last year, evidence to an inquiry in the other place indicated that Channel 4 has commissioned about £84 million-worth of work in Wales over the last decade. What assurances can the Secretary of State give that DCMS will work with the Welsh Government to develop the relationship between Channel 4 and the Welsh independent production sector?
I welcome the decision by the Government not to privatise Channel 4, and I thank my right hon. Friend for her time to discuss the matter with me. I am very proud that Channel 4’s headquarters are in my constituency. Does she agree that what makes Channel 4 so special is that it is a levelling-up company that supports jobs and production companies across the four nations? It is so important that we continue to support Channel 4 and ensure that it can sustain its business model.
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