Tory government does something right! Channel 4 privatisation is called off

Michelle Donelan: she’s made the right choice.

Conservative Culture Secretary Michelle Donelan has confirmed that the government will not go ahead with a controversial plan to privatise Channel 4.

And quite right too!

Former Culture Secretary Nadine Dorries had been determined to sell off the company in order to make a fast buck for Boris Johnson’s spendthrift government, last year.

She ignored a  public consultation that resulted in 24/25 of respondents saying privatisation should not happen, claiming that Channel 4’s current ownership model, as a publicly-owned, advertising-funded broadcaster, is too restrictive. That model was, of course, dictated by the government.

Giving evidence to the Commons Culture Committee last May, she said Channel 4 is dependent on just one stream of revenue – advertising – but income is falling as advertisers have more choice. She claimed Netflix would be a better option.

And the government could not allow Channel 4 to borrow to invest, because the taxpayer would be liable for those debts, she said. This actually did make sense of one of the restrictions on the channel’s funding.

But later in the session, the SNP’s John Nicolson pointed out that Channel 4 is currently making record profits – belying what Dorries has been saying about advertising revenue.

Her response?

“That means it would be a good time to sell.”

Dorries said after the channel was privatised it would be better-able to make its own programmes, because the government would then lift restrictions on borrowing money or raising private sector capital by issuing shares.

But while remaining in public ownership would preclude the issuing of shares, it would be perfectly possible for the government to vary Channel 4’s current ownership model to provide it with other forms of revenue generation in order to make, and then sell, programmes.

And now that is what the government seems keen to do.

According to the BBC,

Michelle Donelan has now said the broadcaster “should not be sold”, instead proposing other reforms because “change is necessary”.

Her alternative reforms include allowing the broadcaster to make and own the rights to some of its own programmes – many of which are currently made by independent production companies – and moving more jobs outside London.

“This announcement will bring huge opportunities across the UK with Channel 4’s commitment to double their skills investment to £10m and double the number of jobs outside of London,” Ms Donelan said.

“The package will also safeguard the future of our world leading independent production sector. We will work closely with them to add new protections such as increasing the amount of content C4C [Channel 4 Corporation] must commission from independent producers.”

Channel 4 welcomed the news, saying the decision “allows us to be even more of a power in the digital world”.

The announcement came a day after a letter, in which Donelan recommended the move to the prime minister, was leaked – sparking an angry response from Dorries, who said the privatisation was one of a number of “progressive” policies that were being “washed down the drain”.

Here’s a video clip responding to that:

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