British government expected to shelve plans to privatise Channel 4

UK prime minister Rishi Sunak is expected to shelve the proposed privatisation of Channel 4 as he reassesses policy pledges by his predecessors to streamline a packed legislative programme.

The decision to drop the sale of Channel 4 from the media bill has been signalled by Downing Street to industry and Whitehall. It would be welcomed by the publicly owned broadcaster, which has faced half a dozen privatisation proposals since it was launched in 1982.

Mr Sunak had privately been sceptical of the case for prioritising the Channel 4 privatisation while he was chancellor, but threw his support behind the plan during his unsuccessful bid to become Conservative party leader over the summer. His view at the time was that although he believed Channel 4 was a crucial part of British broadcasting, it needed private funding to compete with well-resourced streaming services such as Netflix and Amazon.

Just over a week after replacing Liz Truss as prime minister, however, Downing Street signalled that some of the commitments Mr Sunak made over the summer would need to be reassessed in light of the changing economic situation. “We are looking at all the campaign pledges and we are looking at whether it is the right time to take them forward,” the prime minister’s press secretary said on Wednesday.

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The proposed Channel 4 sale was already in doubt following Boris Johnson’s departure as prime minister as it faced a groundswell of opposition within industry and parts of the Conservative party.

Industry executives and some MPs expect the privatisation will be among the many low-priority policies that will be scrapped by Sunak, as he focuses on stabilising the economy and unifying his own party. The proposal was not part of the 2019 Conservative manifesto.

“It’s likely that the government will want to quietly drop privatisation,” one senior Tory said. “It’s unpopular with some parts of the party, has a huge impact on our creative sector and the media bill can be pushed through without including it.”

Culture secretary Michelle Donelan, who was appointed under former prime minister Liz Truss, said in September she was “re-examining” the business case for selling the broadcaster, with a final decision on the matter expected in the coming weeks.

The broadcaster, which launched during Margaret Thatcher’s premiership in 1982, is advertising funded but publicly owned. The sale of Channel 4 is the most contentious part of a broader media bill aiming to bring Britain’s broadcasting regime into the digital age, including proposals to guarantee the prominence of public broadcasters on smart TVs.

Ms Donelan remains supportive of pressing ahead with other parts of the bill, privately telling industry she was hoping to publish a draft “as soon as possible”. Her department has a series of legislative proposals to see through to completion in areas such as gambling and sport. The culture secretary is said to be particularly keen to progress the online safety bill, which aims to introduce guidelines on tech groups such as Facebook and Twitter to protect children online.

The sale of Channel 4 has faced fierce opposition from some in the parliamentary Tory party and Sunak’s cabinet. Speaking earlier this year before becoming chancellor, Jeremy Hunt said it would be a “shame” to lose the competition between Channel 4 and the BBC in public service broadcasting. Andrew Mitchell, a minister in the Foreign Office, said this month that he was “very much against” the sale.

The government said Ms Donelan had “been clear that we [were] looking again at the business case for the sale of Channel 4. We will announce more on our plans in due course.” Channel 4 declined to comment.

Meanwhile, the government confirmed that it was axing a rail project proposed earlier in the autumn by Ms Truss, as it reviews all capital spending commitments in the light of Britain’s fiscal black hole.

Ms Truss had hoped to expand the Northern Powerhouse Rail scheme to include a new high-speed link passing through Bradford in northern England. But the government will now revert to a less expensive version of the project proposed by her predecessor, Mr Johnson.

“We are reviewing every major project,” a government official said in advance of the autumn statement on November 17th.

The review of capital spending extends to all state-backed infrastructure schemes including the Sizewell C nuclear plant in Suffolk, which is due to start construction under the government’s long-delayed nuclear programme.

However, the government said it wanted to approve “at least one large-scale nuclear project in the next few years” – a reference to Sizewell – while speeding up the delivery of about 100 major infrastructure projects.

Negotiations on raising funds for the Suffolk plant are continuing with French generator EDF, which would lead the project. – Copyright The Financial Times Limited 2022