The BBC Vs. The Market

‘Addled thinking about the BBC’s status seems to be characteristic of leafy-suburb leftism’

Tim Congdon

A society can be designed in which “competitive advertising” is abolished and only “informative advertising” is allowed. For the purpose of preparing and disseminating informative advertising “a department of propaganda”, financed from taxation, “would be sufficient”. Civil servants can decide which products and services deserve promotion and which do not, and they can allocate the state advertising budget to different media outlets according to impartial criteria specified in legislation.

I hope you have just blinked. Dear reader, these are not my beliefs. But I want you to be aware that they were once held by a key opinion-former in British society. They were expressed in a 1937 book, The Economic System in a Socialist State, by Robert Lowe Hall, then an economics lecturer at Oxford. Hall was not a maverick. On the contrary, he was appointed chief economic adviser to the British government in 1947 and stayed in that post until 1961, later becoming Baron Roberthall KCMG, CB. 

Hall was involved in discussions in the mid-1940s about how best to finance television from the British Broadcasting Corporation. Perhaps his thinking on these matters evolved over the years. Nevertheless, he approved of the BBC licence fee, introduced in 1946. As with other socialists close to the Attlee government, he was against too much consumerism. In his view, Britain must not go down the same route as the USA, where the ideology of the free market determined that advertising jingles pay for the making and distribution of TV programmes, and generate profits for media businesses.

Britain and America have continued to have different regulatory frameworks for broadcasting and media. Britain still has the BBC, financed mostly by licence fee revenue, whereas in the USA market forces have long prevailed. The BBC’s heyday was in the late 1940s and early 1950s. It not only had a monopoly in a nation that accounted for over 6 per cent of world output, but basked under a halo because of Britain’s role in the Second World War. It regarded itself, with good reason, as the most important and influential broadcasting organisation in the world.

That is no longer true. Indeed, relative to greedy profit-motivated American rivals, the BBC is a midget. In 2016 Google’s revenues in an average month, $7.5 billion ( about £6 billion), exceeded the BBC’s licence fee receipts (under £4 billion) in a year. All the same, the BBC cannot forget its past, and its top executives puff and swagger as if their institution remained an indispensable national champion. In 2013 the current director-general, also a Lord Hall (no relation), said that the BBC’s iPlayer would be “reinvented” so that it would be “the best in the world”.

If something is the best in the world, it ought not to depend on government subsidy or favourable regulation or legislation that discriminates against competitors. It ought to be able to stand on its own two feet, as Google has had to do since it was a start-up in September 1998 and as all surviving US media businesses have over the decades. But in the 21st century, just as in the mid-20th, the BBC seems not to understand the meaning of market forces. James Purnell, the BBC’s director of radio and education, complained recently in the Daily Telegraph, “Spending on British television programmes has fallen. The biggest media companies are American. Netflix and Amazon Video are focused on global content and have so far only made a handful of programmes that reflect British society.”

So what should be done? Purnell’s answer is that Parliament — in line with an (astonishing) precedent set 14 years ago — should pass new legislation to protect the BBC’s position. This legislation should ensure that, in programme listings of any kind, the BBC’s output should come first or be at the top. Guaranteeing “prominence” for BBC content “on all major TV platforms” is needed “to preserve something very special” in British culture. Advertising should be slanted in (what the BBC deems to be) the national interest.

The chutzpah is almost comic. Although the BBC’s programmes are already subsidised relative to the competition by a special tax, they are to be further advantaged by state intervention in the way that other broadcasters — yes, other broadcasters — publicise their wares. But we must remember how the BBC began and its extraordinary ability to privilege itself in UK political debate. Addled thinking about its status seems to be characteristic of leafy-suburb leftism. To recall the views in 1937 of an Oxford don later much honoured by the British establishment, competitive advertising is always wicked and should be banned, but informative advertising is good and sensible. Informative advertising is, of course, particularly good and sensible if it promotes national culture and the state-owned broadcaster. Indeed, it is sometimes so desirable that the government should create a department of propaganda, employing thousands of bureaucrats to tell  us which TV programmes to watch.

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