the media and entertainment union
a sector of Prospect

22 June 2009

A leading academic has today questionned the Government's motivation for not considering a levy system to help bridge the funding gap which public service broadcasters will face after digital switchover in 2012.

Speaking at a lunchtime debate at The School of Pharmacy organised by the Federation of Entertainment Unions, of which BECTU is part, Professor Patrick Barwise, Emeritus Professor of Management and Marketing at the London Business School, said: "Once you start looking at the numbers such a levy should be part of the answer."

Referring to the Government, the Conservative Party, Ofcom and other influential voices, Professor Barwise urged decision makers to "open their minds and listen to the facts."

Full text of Professor Barwise's presentation

One of the central facts which Professor Barwise underlined, is the disproportionate size of the consumer telecoms sectors when compared to the size of the broadcasting industry as a whole, let alone the size of the public service broadcasters within it.

"The most important of these facts is that the total revenue of the consumer telecoms and technology industries - including fixed and mobile telephony and broadband, internet advertising and hardware sales - is hugely bigger than the whole of broadcasting.

"If you take nothing else from this talk, I hope you’ll take this. It explains both the solution and, unfortunately, much of the problem," he continued.

The meeting heard that annual revenue from the consumer telecoms and pay TV sector is £50billions making a 1% levy equivalent to £500millions.

'Levy system not difficult or impractical'

The broadcasting industry was invited to today's debate to consider the case for the introduction of an industry levy following the April publication of a report commissioned by BECTU and the NUJ from independent think-tank, the Institute for Public Policy Research.

The unions believe that examination of the alternative solutions put forward in that report - Mind the Funding Gap: the potential of industry levies for continued funding of public service broadcasting -  is all the more critical after last week's publication of Lord Carter's Digital Britain recommendations which opened formal consultation on the top-slicing of the BBC licence fee.

The unions' IPPR report demonstrates that £70millions alone could be raised from a one per cent levy on the revenues of BSkyB and Virgin Media with a further £200millions possible if a levy were to be introduced on the revenues of the telecoms companies.

The unions insist that monies are available to sustain public service broadcasting for the longer term and that the identification of new alternative sources of funding would be acceptable to the public.

The unions also argue that such enquiry should be encouraged by politicians and regulators given the UK's worldwide reputation for excellence in this area.

This afternoon's discussion also exploded the myth that a levy system was somehow outmoded or unfashionable.

The IPPR report lists country after country in Europe, and further afield, which supports public service broadcasting with industry levies.

Commenting on the possibility, Professor Barwise said: "It is not difficult nor impractical to introduce a levy system". 

Quoting Steve Morrisson, chief executive of All3 Media,  Professor Barwise pointed out that only five out of 27 countries in the EU do not operative a levy on equipment sales to support domestic broadcasting. The UK is one of the five, along with Cyprus, Ireland, Luxemburg and Malta.

France and Germany are two of Europe's leading economies and both raise money via a levy system without any consequential negative impact on equipment sales.

The Government's and Ofcom's current reluctance to back a levy system to support public service broadcasting is inconsistent with the announcement last week of plans to introduce a universal 50p levy on telecoms customers to fund the expansion of broadband.

Observers of Government suggest that it is precisely the power and influence of media moguls such as Rupert Murdoch and the leaders of the telecoms companies, which makes the Government reluctant to act on the opportunities inherent in a more developed levy system.

FEU representatives including BECTU, the NUJ, Equity, the Musicians Union and the Writers Guild of Great Britain all reconfirmed today their opposition to top-slicing of the licence fee. The unions are also united in their resistance to  further moves which would threaten the pluralism of the current system, and specifically, put C4's future at risk.

Levy argument is critical

Luke Crawley, BECTU's assistant general secretary, insisted that it was critical for supporters of public service broadcasting to win the argument over levies. With the publication of Digital Britain, the BBC still faces the threat of top-slicing, he said, and C4 has yet to find a solution to address its projected shortfall of up to £150millions.

"I am fearful for the future of the BBC if the Government gets its way. The public understands the TV licence fee and there is little doubt that if you allow money to be taken away from the BBC to fund commercial broadcasting, the people will question this and support for the licence fee will be lost."

The FEU will continue the campaign for the adoption of a levy system to support UK public service broadcasting over the coming months.