We need to think bolder if we are to rebalance the UK economy


Jack Hands

The recent report by the Centre for Cities was a startling yet perhaps unsurprising indictment of the UK economy in 2014. London dominates Britain more than at any other time in our history. Why, you may argue, is this even unhealthy; surely whilst London prospers the rest of the UK benefits too? Put simply, the rest of the UK does benefit but it also pays a price because as London has grown, it has become a black hole sucking in more and more talent from elsewhere to the detriment of local economies from Inverness to Plymouth.

All political parties have argued the need for a great rebalancing of the UK economy yet have offered little way in terms of substantial setups. The Government’s flagship regional Growth Fund is one such policy and has made a marked difference. In some regions such as the East Midlands, job creation is seeing a mini boom.  Relocation however is one aspect which sees far too little political air time.  The one move of real political courage was to relocate the BBC studios from London to Salford. It has been an overwhelming success which reaches far beyond the simple relocation of jobs from London to Manchester.

Of course, the focus on any regional growth programme should be first and foremost about sustainable, private sector growth. Public Sector institutions and private investment are however, at times inextricably linked. The BBC’s move has improved the image of Manchester, attracting young, creative talent and helping to expand the media industry in the region. These factors in turn have led to greater private sector investment and, in the long term, will make Manchester a place where businesses are more attracted to relocate.

Why then should we not look at further bold relocations to rebalance the UK? Perhaps the inconvenient truth is that this issue simply does not feature as prominently as perhaps it should do. Is moving Parliament to Birmingham such a nonsensical idea? Are moving our leading museums to Sheffield such a backwards step? If you believe in the need to transform our regions to help them attract more private sector investment and, put frankly, improve their image, then these are valid debates we should be having.

Bold moves such as this desperately need to be advocated by more politicians because the gap between London and the rest of the UK has grown so terrifyingly wide. Travelling from London to the rest of the UK often feels more alien than travelling to other major European cities. London’s identity is its own – its excellent success has allowed it to prosper in a way which means it is now unrecognisable from many parts of the UK. Long term, our national identity will be threatened because London has the potential to warp into its own state, distant and non-needing of any other UK city. 

When the UK economy was on its knees after the financial crisis in 2009, the Government stepped in to provide a stimulus effectively propping the UK economy up until it recovered. London is creating ten times as many private sector jobs than anywhere else in Britain. It is prospering. Why then should no one argue that some UK institutions currently based in London such as museums or Civil Service departments not be relocated to help cities outside of London prosper until they can create enough private investment to recover and prosper themselves.

4G spectrum failure hardly surprising, but what is Ofcom playing at?

Nik Darlington 9.58am

When George Osborne said the Treasury would raise several billion pounds from the upcoming 4G auction, I along with many others feared (or even expected) that wouldn’t be the case. Some technical and financial reasons for why, but largely an informed hunch.

So it has come to pass. ‘Only’ £2.34 billion has been raised by Ofcom, despite the OBR’s forecast of £3.5 billion.

A couple of observations about the reporting of all this: first, £2.34 billion is still a useful fillip not to be sniffed at; and second, this mini embarrassment has given journalists a perfect excuse to ignore the good employment figures also released today.

Yet a mini embarrassment it is. Perhaps Mr Osborne should not have brandished an outcome ahead of time, but auctioneers tend to set target prices with little impact on bidding behaviour other than to focus it around said target. It isn’t a patch on Gordon Brown selling our gold reserves having already announced to the world his intention to do so.

On the subject of auctioneers, however, something odd happened on BBC Breakfast earlier today. Ed Richards, Ofcom’s chief executive and unsuccessful candidate for BBC director-general (despite being the bookies’ favourite), was on talking about the auction. Mr Richards stated that Ofcom’s priority - as auctioneers - was straightforwardly to hold a fair and proper auction and “ensure that a valuable economic resource was brought into productive commercial use”. Ofcom’s priority - as auctioneers - was certainly not to maximise revenue.

Whether or not this was on instruction from the Government doesn’t matter. It is still odd. Tell auctioneers at Christie’s that the whole point is just to shift stuff and not to maximise revenues, you’ll be laughed out of the room. These are, as Mr Richards also said, “very different times” compared to the 3G spectrum auction, which raised £22 billion in 2000. But it doesn’t mean you shouldn’t at least have a go at it.

Follow Nik on Twitter @NikDarlington

Twitter is a wonderful thing, but it shouldn’t be journalists’ sole source of a news story

Nik Darlington 11.03am

Here on Egremont, we try to tackle profound issues in an unprofound fashion. But today I’d like to flag up something of relevance from Telegraph Blogs, whose author does the opposite: tackle an unprofound issue in a profound (and timely) fashion.

Mic Wright wrote yesterday about “lazy hacks” mistaking Twitter for news. It is worth quoting some of Mr Wright’s blog at length:

The growing reliance on social media, particularly Twitter, is damaging to journalism. While social networks can quickly flag up potential sources and highlight stories faster, they also have a tendency to get things wrong and obscure just who is behind a message…

People often play characters online and profess to hold more exaggerated view points than they might be comfortable acting upon in the physical world. It’s also arguable that answers from Twitter and Facebook users will be subject to social desirability bias, the tendency to answer questions in a way that will be viewed favourably by their friends and followers.

Twitter is an enjoyable communication channel and one whose value lies in its restrictions. But when journalism and academia turn to it for answers, they’re almost always asking the wrong questions. Consider it a source and a start by all means, but those social media refuseniks  have pretty valuable things to say if you make the effort to hear them.

Too often, supposedly serious newspapers and news broadcasters will scramble to fill column inches with ‘stories’ sourced, constructed and flimsily corroborated entirely via Twitter. A matter concerning the TRG’s Summer Party earlier this week, with which many of our readers, followers and supporters will now be familiar, was so highlighted by ‘no less’ than the Guardian, the Daily Mail, the Daily Telegraph, the Times (£), the International Business Times and the BBC. It even made the Daily Telegraph's front page.

All on the basis of a patchwork Twitter digest by a journalist of scant pedigree or repute.

The fact that news distributors have in recent times been emasculated from the inside out, to the point that their journalists are too busy and too few and far between to collect, check and double-check the news they distribute, should not go unacknowledged. The “lazy” accusation is too easy and too lazy in itself.

However, there’s an important clue in that last sentence as to the extent of the problem. Our ‘quality national dailies’, even our national broadcaster, have indeed become little more than news distributors, rather than primarily news collectors, sifters and interpreters. And as Mr Wright puts it quite eloquently, Twitter has become a part of that problem.

Irony acknowledged, do follow Nik on Twitter @NikDarlington

For everyone’s sake, we can’t allow the BBC’s media monopoly to persist

Craig Barrett 6.00am

A few weeks ago I was reading the newspapers in my local pub when I noticed on one of the blackboards the message “Sunday papers - no Murdoch”. On departing, I took great care to leave behind my Sunday Times, prominently displayed for anyone else who wished to read it.

This was in the midst of the phone hacking scandal and after the closure of the News of the World, but the pub’s targeting came as something of a surprise. I had believed that most people in the real world were not interested because they were fairly certain that such tactics had been employed all along. The whole thing seemed a ploy by the media’s Murdoch-loathing elements to send the might News International army well and truly off course, so preventing the total takeover of BSkyB. The BBC and the Guardian certainly gave the story much more prominence than the rest.

Something still jarred me. The BBC complained about a potential media monopoly, conveniently ignoring its own near total dominance of news in this country. The BBC has 70 per cent of news viewers (up from 60 per cent in 2002), as compared to 18 per cent for ITV, 6 per cent for Sky and 4 per cent for Channel 4 (encouragingly, Ofcom is launching an investigation into this).

For all its claims of independence, the BBC has long propounded a left-leaning agenda and is swift to criticise anything done by the Conservative party or to downplay bad behaviour from the Labour party. Too often this is dismissed as mere hysteria but a quick scan of Peter Sissons’ memoirs shows that what many of us have always suspected is, in fact, correct.

I can also cite another former BBC employee caused total astonishment amongst her colleagues when she announced in 2008 that she was voting for Boris Johnson rather than Ken Livingstone.

The BBC claims to be independent but it manifestly is not. It complains about monopolies because of a dislike of one man yet revels in its own domination. It likes to behave like a commerical organisation but rests easy on the comfort of licence fee income.

The best recent example of this is the schedulers’ decision to screen the final series of Spooks at 9.00pm on a Sunday. If I recall correctly, Spooks had always aired on Monday evenings. Why the change? It cannot be mere coincedence that ITV’s flagship show, Downton Abbey, this weekend returned to its regular 9.00pm Sunday evening slot.

When there were three channels, ITV’s position as the terrestrial broadcaster with adverts was secure. The ‘market’ was such that it didn’t matter if there was a ratings war - advertisers only had one place to go. Nowadays, satellite and digital broadacsting have forced ITV into an increasingly weakened position. Too many channels are chasing too few advertisers. At one stage, ITV was in such a bad state that it was ripe for takeover (by BSkyB). If we believe City rumours, ITV put in place funding arrangements with its syndicate of banks to borrow enough to give shareholders a dividend, thus bribing them to reject any bid.

The BBC is immune to all these trials and tribulations because of its guaranteed income from licence fee payers and taxpayers. As Jeremy Paxman said in 2007:

"The idea of a tax on the ownership of a televsion belongs in the 1950s. Why not tax people for owning a washing machine to fund the manufacture of Persil?"

Last year, licence fee revenue comprised £3.513 billion out of the BBC’s total income of £4.993 billion, generating a surplus (what in the real world we call profit) of £483 million. ITV’s turnover was £2.064 billion, generating a pre-tax profit of £286 million. ITV has net debts of £188 million and its bonds are rated as sub-investment grade, which affects its ability to attract funding.

Needless to say, with billions of pounds of public money at its disposal the BBC has no such difficulties. Even the BBC’s “other income” is three-quarters of ITV’s total.

The BBC is happy to sell programmes abroad for hard cash. It is happy to have adverts on some of its channels (Dave, GOLD, Yesterday etc, which are all part-owned by the BBC). It is happy to make commerical sales and acquisitions (e.g. Radio Times and Lonely Planet). Yet the BBC insists on maintaining an antediluvian public service persona.

The BBC cannot have things both ways. Either it accepts that it is a commercial organisation and we remove the licence fee subsidy; or it accepts the fact that its special status skews and damages the competitive marketplace.

It does not have to screen its best programmes in the middle of the night but the BBC should avoid making calculated decisions to harm its less fortunate rivals. Every time the BBC sparks a ratings war, rivals are forced to work that bit harder to make up the ground. Each ratings fall makes it more difficult to attract advertising and funding for new content - all problems that the BBC doesn’t face.

If the BBC is permitted to abuse its position in this way, the result will be the crowding out of competition. Conservatives should be ensuring that the market is allowed to operate efficiently.

Sunday night’s ratings do suggest it was Spooks that lost out to Downton Abbey. Good news for ITV, but a rare battle won.

In a marketplace perverted by a publicly subsidised broadcaster, the longer war is one that commerical TV cannot win.

Follow Craig on Twitter @MrSteedUK

BREAKING NEWS: Tory peer Lord Patten to become next BBC chairman

Nik Darlington 6.05pm

The Daily Telegraph is reporting that Chris Patten, the Rt Hon Lord Patten of Barnes, has been chosen by the Prime Minister, David Cameron, as the man to replace Sir Michael Lyons as chairman of the BBC Trust.

Having interviewed the candidates for the post, which also included outgoing CBI chairman Sir Richard Lambert and BBC trustee Dame Patricia Hodgson, the Culture Secretary Jeremy Hunt referred the decision to Downing Street for final approval.

It is the latest high profile position for a man whose career has included Cabinet posts under Margaret Thatcher and John Major, the chairmanship of the Conservative party, the final Governor of Hong Kong, a European Commissioner, and Chancellor of two universities, Newcastle and his alma mater Oxford.

It comes at a crucial time for the BBC, which is under increasing scrutiny from the Government. The licence fee has been frozen and significant cuts imposed on the corporation’s budget. Strong criticisms have been levelled at its management - structure and personnel. Lord Patten’s in-tray on assuming the job is not pretty.

The Government will be pleased to have a Conservative in the role after a run of chairmen with alleged Labour sympathies. However, it should not be expected that a man of Lord Patten’s integrity and intelligence will be anything but independent.

This is what concerns large sections of Conservative MPs. In much the same way that the knives have been out for Ken Clarke of late, Lord Patten attracts a mixture of mumbling disapproval and outright opprobrium from eurosceptics, who have been briefing and lobbying strongly against him.

Those known to be opposed include John Redwood, who seemingly still feels the need to frame the party in terms of ‘wets’ and ‘dries’, and more importantly John Wittingdale, chairman of the Culture, Media & Sport Select Committee, to which Lord Patten will undoubtedly have to answer regularly in his new role.

Some have even described this as another ‘Bercow moment’ for Tory MPs, a comparison with John Bercow, nominally at least a Conservative, being appointed Speaker of the House of Commons on the back of support from Labour MPs.

This is both a shame and wrong. Whilst undoubtedly Labour and Liberal Democrat MPs will see Lord Patten as the sort of Tory ‘they could do business with’, he becomes BBC Trust chairman with the approval of the Conservative Prime Minister and the Conservative Culture Secretary. He is, as Jeremy Hunt said, “head and shoulders” above the other candidates.

Egremont wishes Lord Patten all the best in his new role.

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