PUBLIC SERVICE BALONEY
The media:
Paul Johnson exposes the
licence fee fallacy
THE survey of Britain's economic per- formance published by the National Eco- nomic Development Office on Monday shows that it has improved marginally over the last ten years but that all our main competitors (France, West Germany, Japan and the US) have done very much better. One reason for our relative decline is the extraordinary hostility towards com- merce in any form bred by our cultural climate. Here is a small example. George Gilder is one of the world's most original writers on business and has been particu- larly successful in penetrating the secrecy with which the Japanese cloak their methods. He probably knows more about the semi-conductor industry, for instance, than any other author. His book Wealth and Poverty has had immense sales and influence in countries with high-growth economies, where they take this kind of writing seriously. Last week the Times Literary Supplement decided to review another of Gilder's books. As it was called The Spirit of Enterprise, the TLS people felt a short bit of knocking-copy was in order. So they sent it to Roy Hattersley, a professional socialist politician, whose knowledge of, or interest in, the process whereby wealth is created is minimal. He duly provided a few sneering, contemp- tuous paragraphs.
Now for a bigger example. The scorn for `trade', reminiscent of a Jane Austen heroine, is particularly marked in the concept of 'public service broadcasting'. The theory runs that a television network financed by compulsory licence fees serves the interests of the public, whereas one financed by advertising and provided free serves the interests only of its shareholders and the advertisers. Once you examine this absurd notion it is seen to be not only illogical but directly contradicted by com- mon experience. Nationalised bodies tend to be run in the interests of their em- ployees, or rather of the unions which claim to represent them; serving the public comes very far down their scale of priori- ties. Most of them, indeed, use their monopoly power and statutory privileges to hold the public to ransom. The truth is, any organisation which gives the public something it wants is providing a public service and what matters is not the precise way in which it is paid for but its quality. All our post-war experience suggests that commercial rather than nationalised bodies are more likely to satisfy public needs. Since British Telecom was privatised, it's much easier to get your phone repaired. There has been a steady and cumulatively striking improvement in British Airways since it began to ready itself for private ownership. Whoever thinks of bedraggled old lags like British Rail, which charges the highest rail-fares in Europe, or the NCB, which sells the highest-cost coal, as serving the public? Most people think of them as ancient crosses we poor British have to bear, like the weather or Sunday closing or pub hours.
The theory, as applied to broadcasting, argues that the BBC serves the public better just because it does not earn its living by selling air-time. That entitles the BBC, and the BBC alone, to call itself a public service broadcasting system. But again the argument is contradicted by common experience. In terms of program- mes there is very little difference between those provided by the BBC and ITV. The only marked superiority is of ITN over BBC television news, and that runs directly against the PSB case. In general, however, BBC 1 and ITV 1 are virtually interchange- able; there is little to choose between BBC 2 and Channel 4 either. In fact all four channels are increasingly similar — the same uneasy mixture of quality and rub- bish — and audience research shows that viewers pick and choose between them without any consciousness of crossing cultural barriers. Nor is this surprising. The people who hold the key positions in the BBC and ITV are all interchangeable too. If, say, Sir Denis Forman of Granada and Jeremy Isaacs of Channel 4 and Alasdair Milne of the BBC all swapped jobs, no viewer would notice the slightest differ- ence. All three — and there are countless others holding top posts in the duopoly share the same cultural assumptions.
The truth is, the conventional PSB argu- ment ought to be reversed: the BBC provides an inadequate public service pre- cisely because it refuses to sell air-time. Advertising is a public service too, and an extremely valuable one. I won't rehearse the arguments that advertising, far from increasing the price of goods, actually reduces unit costs, because no serious economist would dispute it. So the indirect public benefits of advertising, especially on television, are marked. Displaying ads is a public service of the most direct and ubiquitous kind, whether it is provided by the local newsagent or village post-office putting cards in its window or through Saatchi & Saatchi. Where would we be if the local newspaper would not permit us to buy or sell our houses and cars through its columns, or use them to announce births, marriages or deaths? There can be very few people who have never inserted a personal ad, or scanned the jobs vacant sections in a newspaper. This kind of public service is already being provided by local television stations to some extent, and will spread rapidly as cable television develops. By refusing to carry advertise- ments, the BBC, far from upholding, is abdicating its public service role. And it is doing so for the most reprehensible reasons: snobbery, cultural arrogance, lazi- ness and sheer, unthinking conservatism.
The BBC's refusal works against the public interest in another way which is not widely understood. Reading reports of the evidence submitted to the Peacock Com- mittee, people say: 'Why look — even the ITV companies are against the BBC taking advertisements.' The term should not be `even' but 'of course'. The ITV companies are, if anything, more terrified of change than the BBC, because the absolute monopoly of television advertising they have enjoyed for 30 years is the .essential basis of their licence to print money. Like every other monopoly, it has bred waste, inefficiency, idleness and contempt for the public.
The benefits in lower costs to the public which television advertising ought to pro- vide have been reduced by the grotesquely high costs of air-time in Britain, the fruits of the racket being shared out between the monopoly ITV company shareholders and the monopoly ITV labour unions. Once the BBC begins to take ads the monopoly will be broken, the cost of air-time will fall, the television advertising market will ex- pand in consequence, and total broadcast- ing revenues will progressively increase. In this sense the public will get a much better service. In terms of programmes, it will be much the same because the Denises and the Jeremies and the Alasdairs will still (I fear) be in charge. So much for Public Service Broadcasting — it is all Public Service Baloney.
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