Government plans to privatise Channel 4 are wide open to being challenged in court because they would undermine Boris Johnson’s commitment to “leveling up” the country, the head of the Northern Powerhouse Partnership has said.
Henri Murison, director of the NPP, whose chair is former Tory chancellor George Osborne, said on Saturday two bills to be announced for the next session of parliament in this week’s Queen’s speech – one on the privatization proposals, and another requiring that all government policies contribute to “leveling up” – were completely at loggerheads and “utterly incoherent”.
Ministers face a mounting Tory rebellion in parliament over the plans, which were not in the 2019 manifesto, from peers and dozens of MPs who think the government is wasting time on a policy that they believe will do more harm than good.
Channel 4 was set up during Margaret Thatcher’s time as PM to encourage the growth of small production companies outside London and the south-east. It is committed not to produce its own programs, but instead commission them from more than 300 independent production companies across the UK, many of them in the north of England.
Last year Channel 4 opened a new HQ for about 200 staff in Leeds and now aims to increase the proportion of its spending on commissions to companies in the UK’s nations and regions to at least 50% by next year.
Murison said culture secretary Nadine Dorries’s plan would fall foul of a new bill drawn up by Michael Gove that will require all policies to pass a leveling-up test to ensure they contribute positively to equalizing economic opportunity across the country.
“Based on what was in the leveling up white paper, our judgment is that the decision to privatise Channel 4 would not pass that test, and it does not reflect well on officials at the Department for Digital, Culture, Media and Sport that in advising the secretary of state on her policy they did not think to check that they would be consistent with the other laws they are planning to pass, ”he said.
There is now an expectation that if ministers press ahead, companies that could lose out from the sell-off could take the government to a judicial review to force a rethink. A consultation on the plans found 96% of respondents were opposed.
Murison added: “If you were designing a policy to support the independent television sector in areas like the north of England, if Channel 4 did not already exist, you would create it. When government ministers make decisions based on bad advice they shouldn’t be surprised when they are legally challenged. I think it is likely that other interested parties who are going to be disadvantaged will have a strong reason to consider taking legal action.
“On the tests of whether it is good or bad for closing the north-south divide, the privatization of Channel 4 is going to undermine leveling up. It is completely incoherent of government to propose two pieces of legislation that completely contradict each other. “
Dorries says Channel 4 needs to be sold off if it is to survive and thrive “in the face of a rapidly changing media landscape”. She recently tweeted that she wanted the broadcaster to retain a “cherished place in British life” but said she felt that UK government ownership was “holding Channel 4 back from competing against streaming giants like Netflix and Amazon”.
She added: “I will seek to reinvest the proceeds of the sale into leveling up the creative sector, putting money into independent production and creative skills in priority parts of the country – delivering a creative dividend for all.”
Shadow culture secretary Lucy Powell said: “Channel 4 is a leveling-up broadcaster, commissioning half its programming from creative companies outside the capital, securing a pipeline of creative talent and jobs in the regions and nations. Everyone knows that in selling it off, these commitments would be watered down, and any new owner would need to meet commercial demands, leading to less investment in British jobs and programs.
“That’s why these plans are going to face a rough ride in parliament and could be subject to legal and competition barriers along the way.”
Since its launch, Channel 4 has directly invested £ 12bn in the independent production sector, creating almost £ 1bn of value for the UK economy in 2019 and supporting more than 10,000 jobs.