Chris Palmer: Nationalise the BBC

Chris Palmer is a Conservative political blogger who regularly contributes to ConservativeHome. He is also co-founder of the Reinstate Roger Helmer Campaign and an active member of the Conservative party in Somerset.

> Policy summary

To nationalise the BBC (British Broadcasting Corporation.)

> Policy explanation 

This policy would entail a Conservative Government giving direct ownership of the BBC to the people of this country. The BBC would be established as a Public Limited Company in a similar manner to the privatisation of British Steel, Gas and Telecom during the nineteen eighties. However, unlike privatisation, the next Government and Treasury would not benefit with an immediate financial cash injection from this nationalisation of the corporation since the shares in the BBC plc would not be sold on the market.

Every eligible member of the electorate (ie. all those on the electoral register) would be given a certain number of shares in the BBC. The number of shares per member of the electorate could be distributed as proportionate to the number of years that person has been a taxpayer/on the electoral role, or simply indiscriminate of electoral age and tax contribution with every person being able to own the same number of shares (for example, one share per person.) Either way, only members of the electorate would be initially eligible to own shares – no companies or organisations or the Government would be able to own or buy shares in the BBC.

The people of Britain would therefore be free to do what they wish with these new BBC shares. They could chose to keep them, which would provide certain ownership benefits such as a say on important BBC decisions, a vote on the election of BBC board members, the receiving of dividends, along with any other normal shareholding privileges. Alternatively owners might wish to sell those shares on the open market. The decision is entirely theirs. Further, potentially the initial (first) sale and profit gained from the selling of BBC shares may be tax exempt. (This factor may be open to some negotiation closer to the time.)

At the same time, the license fee would be abolished along with the tearing up of the BBC’s Royal Charter. British television consumers would no longer be forced to pay a broadcasting tax if they did not wish to watch BBC channels.

> Political risks and opportunities

At the beginning of the 21^st century, in a changing world where we now have access to 24/7 multi-channelled television and radio, should Government still own and to an extent control a corporation which was created and ran at a time when there was only one or a few television stations and it served political purpose to control the content of that media?

There are numerous and far reaching political consequences and opportunities that would arise from such a policy being enacted.

The nationalisation of the BBC would, for many people be the first time they have owned shares in a company. This first taste of ownership may perhaps encourage more people to take an interest in shares, prices and how the market works while at the same time giving shareholders a sense of control over the previously unaccountable BBC. It would be their BBC.

The BBC on television, radio and on the internet would be opened up to much needed competition which would increase standards across the broadcasting and online markets due to the BBC license fee funding monopoly being annulled. Currently, the BBC dominates online news in Britain, stifling alternative attempts to enter the market. Forcing the BBC to compete on even terms with other private companies would benefit the consumer and the market as a whole.

The electorate would be empowered by being given the freedom of choice to do as they see fit with their property. Power and decision making over a previously independent government organisation would be opened up to higher and more rigorous levels of scrutiny.

Within the broadcast news sector the BBC is no longer impartial – despite desperate and angry bleating from a small few to the contrary. Once nationalised this would probably end once and for all the dominant liberal left bias and control that has held sway over the corporation for many years – and even if it remained, then that would be largely acceptable since not every television viewer would be indiscriminately forced to pay a tax for the propaganda that they show. The decision about paying for the BBC would now be about personal choice, which is ultimately the fairest method.

However, the political risks of this policy are, in my opinion, also quite substantial.

The BBC is much loved by the left and liberal ends of the political spectrum. If people of such persuasion believed that their beloved corporation may be broken up or their political stranglehold and monopoly over influential broadcast news and internet published news was to be radically curbed, then they will be out in full force to prevent this occurrence. This policy and issue would be a battle and not a quiet one either. It would be very public for all to see and judge and therefore would have to be handled with the utmost care with all Conservatives engaged in the debate needing to be fully briefed and knowledgeable on the matter.

Further, I do not doubt that many politically and financially motivated employees of the BBC will be out to do their very best to prevent this policy coming to fruition; many of them will certainly have some sort of adverse reaction to the idea that their wages and productions may be opened up to real competition. Jonathan Ross on £8m a year for example may start to worry (and so he should.)

Some comments that may arise from such a policy:

“Privatisation by the back door”: This is not a policy of privatisation though it is comparable in certain respects. The Government will no longer own the BBC, but there will be an improvement over previous privatisation in that any funds raised will be the result of a personal direct decision by the electorate, and that the BBC will not be sold to “private” investors but instead given to the general public.

“Selling the crown jewels”: Though a Conservative Government would be creating a public limited company out of the BBC in a similar fashion to that of British Telecom and British Gas under the previous Conservative Government, no “selling” of shares would be taking place. The people of Britain would be empowered by being given the opportunity to do as they wish with their rightful slice of the BBC (since the BBC has always belonged to the people and has only been held in stewardship by the Government.) If shareholding members of the electorate wish to sell on their allocation of shares, then that is their choice – it’s called individual responsibility.

“Advertising on the BBC”: Would the BBC turn down the path of so-called “dreaded” advertising if it no longer had the license fee to fund it? Potentially, yes, the BBC may have to start using advertising to pay for some of its costs. Without the license fee, for example, it would be extremely difficult to charge people for listening to BBC radio stations. However, on the other hand, with television the BBC could implement a subscription system similar to that of Sky Movies or Sky Sports. Those that wished to watch BBC channels and BBC programmes advert free could pay directly to do so [maybe with some sort of discount if they remained a shareholder] instead of under the previously grossly unfair system where you paid the BBC an expensive broadcasting tax even if you didn’t want to watch any of their productions.

> Questions for ConservativeHome readers

• What about those people who have not paid the license fee and/or do not own a television? Do they deserve to have a share in the BBC?
• Is this policy issue too controversial to be initiated during a Parliament where the Conservative Government only has a small majority?
• Would this policy ultimately prove popular with the British public?
• Is “Nationalise” the correct term to describe such a policy, or should “Privatise” or perhaps another analogy be used?
• Should the BBC be broken up in the process of nationalising? For example into three different outfits; television, radio and online?
• Can you think of any other opportunities or risks that I have missed?
  

> Costs 

The costs of such an undertaking are of course variable depending on the circumstances at the time of nationalisation, though I think they could probably be predicted to some extent.

Let us assume for the moment, that the electorate stays roughly the same as it was at the 2005 General Election. That would mean that an estimated 44.2 million voters are eligible to receive shares. Also, assuming a minimum of one share per voter, that would suggest that 44.2 million shares need to be issued. Along with other necessary administrative costs of such a venture, the expenditure on this policy project would therefore appear at face value to be relatively high.

As for the transformation of the corporation, a closer look at the costs of privatising BT and other previously state owned organisation in the 1980s would give a clearer idea of the costs of turning the BBC into a public limited company and the problems that would entail.

Time. How long would the procedure of this policy take? Could the next Conservative Government spend parliamentary time on another “needier” cause? Again, a look at previous privatisation attempts would provide a clue.

   

Comments

[ToMTom]

Somewhat half-baked and modelled exactly on the Yeltsin privatisations that made certain oligarchs like Berezovsky so incredibly rich.

The public OWNS the BBC at present under Royal Charter. The BBC was a private company in the beginning until the Govt took it under public corpration control in 1926.

Now 80 years later when have someone proposing to do it all over again !

History is a wonderful education for budding politicos - they really should learn some.

The BBC should be stripped of its Archives (to go to the British Museum) and then regionalised as with ARD/ZDF in Germany. BBC-North should be a separate entity and the London Empire reduced to a small holding company.

Noone needs to have the BBC reporting on IAS and meeting Sarbanes-Oxley or paying Corporation Tax or spending millions on servicing small shareholders with Annual Reports and the whole Plc reporting crap.

It is a TV station - it is out of control. It needs to be regionally accountable so regional economies are represented not just London ad nauseam

[ToMTom]

(to go to the British Museum)

British Library now it's separate

[TaxCutter]

WTF? Privatise it by the front door and abolish the compulsory licence fee.

[Matthew Sinclair]

I'm a little confused about some aspects of this plan.

"Either way, only members of the electorate would be initially eligible to own shares – no companies or organisations or the Government would be able to own or buy shares in the BBC."

For how long? Does this mean that only other, acquisitive, members of the public can buy the shares for a certain number of years, or forever?

If that is the case then they can hardly be sold on the open market, can they? The BBCs value would be massively depressed and management entrenched by making a takeover impossible.

Why are you tax exempting an initial sale of the shares?

This certainly isn't nationalisation; it's a privatisation.

TomTom, I don't think there is actually much similarity between this and the Yeltsin privatisations. Yeltsin never gave shares to individual people; the transaction costs would have been too high. Besides, Yeltsin's privatisations get more flak than they deserve.

[Adam]

double-plus-ungood

[Chris Palmer]

"For how long? Does this mean that only other, acquisitive, members of the public can buy the shares for a certain number of years, or forever?" - Matthew Sinclair

I was guessing that individual voters would be given say one share each, and then after that they could sell that share to whomever they wanted, be it another company or individual. It was just that when the shares were originally given out, it was to only voters.

"Why are you tax exempting an initial sale of the shares?" - Matthew Sinclair

I did say this would be negotiable nearer the time. However, I was thinking that it would be unfair to tax people immediately for something you have just given them. It is like saying, here's £10 but once I have given you that £10 I want £4 back.

[Phil Taylor]

Sorry Chris but this is really silly. What you propose would be a very expensive overhead and would simply fill the world up with paperwork without achieving anything sensible.

The BBC is too big. It has undue influence. There is probably a justified public service role in three areas:

• public service TV that does things that no commercial bradcaster does
• public service national radio that does things that no commercial radio station does
• public service local radio.

Everything else should be sold off.

[Chris Palmer]

I was trying to go for something different Phil, but your points are taken.

[John Coles]

Pathetic twaddle. The BBC has no place in today's marketplace. Stop the Licence Fee and let all the luvvies fend for themselves.

Nice sunglasses.

[sjm]

Can't really see the point of the BBC at all nowadays, get my TV fine arts and history programmes from C5, BBC1 makes ITV look hi-falutin, and I spend most of such little time listening to R4 as I can swallow by shouting at it.

Abolish the BBC.

[Les]

Another of these complex 'political' solutions to a simple problem--selling shares to those who actually want them seems far more sensible than setting-up complicated systems of allocation to those who don't care one way or the other.

It seems to me that the perception of being 'fair' often gets in the way of practical reality.

Personally, I don't really care who runs the BBC but I resent being forced to pay for it with no choice in the matter.

That issue could be resolved directly by scrapping the licence fee and adopting alternative methods of funding.

As to ownership, I would add the BBC to a long list of Governnment responsibilities which should be relinquished.

[Thomas Wales]

Surely the action that would benefit the British population as a whole would not be 'nationalising' the BBC but removing copyrights on all programs produced by the national broadcaster?

If we had free access to all of the output the beeb has ever produced the license fee would actually be worth the cost.

[aristeides]

This is quite a bureaucratic and needlessly expensive way of not solving a variety of problems.

As far as broadcasting goes, why not privatise Channel 4 first? See how that goes, and then move onto the BBC.

[Mark Wadsworth]

NOPE, TaxCutter's policy is infinitely preferable. In my world, simple is good. Can we have that as tomorrow's 100 Policy perhaps?

No doubt the BBC can run parallel advertising-free channels on Sky or something for people who feel themselves above that sort of thing. It will be interesting to see what £/s/d premium the BBC get for the advert-free channels compared to the free ones over your aerial.

[Angelo Basu]

Isn't the BBC already nationalised? Perhaps there is an argument for privatisation, and if so, lets do it properly. The BBC is a very valuable company with a very strong brand (I'm fairly sure that the BBC website is the most used web portal in the UK). There may be merit in the government retaining a golden share or putting some ownership restrictions on the company so as to prevent it being acquired by Al Jazeera.

On privatisation there would be some merit in giving a discount to those who have TV licences.

How about a flotation of the NHS while we're at it?

[Chris Palmer]

It would seem that the majority agree the BBC license fee needs to be scrapped - but not many can seemingly agree on what is to be done with the corporation.

[Denis Cooper]

There are problems with the BBC, notably its failure to adhere to the terms of its Charter regarding balance and impartiality, but allowing some media mogul to add it to his empire is not the solution. That would of course be the eventual outcome of setting up an open market in its shares, even though there'd have to be special arrangements for people to sell on their free shares cheaply in the first place.

[Denis Cooper]

I wouldn't mind paying the licence fee, if the BBC kept its side of the deal.

[Yet Another Anon]

Why not simply merge BBC and Channel 4, sell off some bits such as Radio 1 and Radio 6, Local Radio and maybe scale back the number of TV stations, phase out the licence fee and allow more commercial means for it to raise money and transfer the assets to a private charity limited by guarantee - as such no one would own it, the structure could reflect the General Public and it would then be owned effectively by the Public.

[Ken Adams]

If the Conservatives ever again win the keys to number ten it will be in the face of all the best efforts of the BBC. The liberal left wing organisation is filled with those who have a proven track record of opposing and ridiculing conservative views.

I really could not care less what happens to it as it does not speak for me or any other conservative, but promotes soft liberal left wing partisan attitudes as the only possibly approach. I do not see why as it does not speak for us we should be forced to pay for it.

If the BBC wishes to retain its present stance it should be deprived of its position as the national broadcaster. The question that needs to be addressed by conservatives is why they would wish to retain such a strongly partisan media organisation which is continually working against them and setting the adgenda for other media organisations follow.

[Edward Heckels]

Rather than a privatisation structure I would suggest a trade sale. A comprehensive valuation of the BBC’s operations and programme library would be a straightforward exercise for an experienced financial analyst. A back of the envelope valuation can be derived by comparison with ITV. In 2005, ITV’s revenue was £2.2 billion. The BBC’s revenue was £3.8 billion. The BBC has a stronger brand name and market position and a unique international network. The recent takeover activity valued ITV at £5.25 billion, so I should think a conservative valuation for the BBC could be £10 billion.

[Justin Hinchcliffe]

And Chris Palmer thinks *I'm* left-wing...

Fully privatise the bloody thing!

[Chris Palmer]

"And Chris Palmer thinks *I'm* left-wing..." - Justin Hinchcliffe

You are!!

[Matt Davis]

I agree with Edward Heckles on this one. Sorry Chris but whilst the disgraceful bias and behaviour of the BBC must be addressed the way forward is a simple trade sale to move it into the real world with every other broadcaster followed by the immediate abolition of the iniquitous licence fee. We don't need clever new plans to deal with the BBC, just the guts to take on the vocal liberal media minority instead of pandering to their prejudices.

[Matt Davis]

I agree with Edward Heckles on this one. Sorry Chris but whilst the disgraceful bias and behaviour of the BBC must be addressed the way forward is a simple trade sale to move it into the real world with every other broadcaster followed by the immediate abolition of the iniquitous licence fee. We don't need clever new plans to deal with the BBC, just the guts to take on the vocal liberal media minority instead of pandering to their prejudices.