WHAT a mess. The BBC, Britain’s most powerful and influential media company, is in crisis; the resignation of its director general hasn’t been enough to halt the chaos. Radical changes are needed to reform, strengthen and preserve the BBC; if Lord Patten, the chairman of the BBC Trust, doesn’t want to introduce them then he too should go.
First of all, the licence fee needs to become voluntary. It is time for the BBC to become like other subscription channels: people should be able to choose to pay for it. Those who don’t would lose access to all BBC content, including iPlayer and the website. The vast majority of the public, including myself, would be happy to pay; but those who don’t should be allowed to own a TV and watch ITV, Sky and the rest without also being compulsory BBC customers, as they are today.
I’m not a fan of regulators supervising journalists: it is far better to trust consumer choice and competition, as well as a proper application of the criminal and civil law. But it makes no sense that only commercial TV is regulated by Ofcom. From now on, its remit must be extended to the BBC. The BBC Trust needs to be abolished and replaced by a proper board of directors. The unmanageable role of director general needs to be replaced by a CEO and an editor in chief. The CEO would run the business; the editor in chief would be responsible for supervising all content.
What of George Entwistle’s payout? Imagine that a business figure who had voluntarily resigned, as he did – not been given cash as part of a compromise argument – had been offered such a substantial pay-off. There would be an outcry, with the BBC slamming rewards for failure. Hypocrisy on this scale is always lethal. The BBC is a much-loved institution – but it must now undergo its very own cultural revolution.
CRISIS IN THE CITY
The City is also in deep trouble. Last week we revealed that the number of City-style jobs across London – investment banking, securities, corporate finance, trading, research, derivatives and forex, fund management (including hedge funds and private equity), insurance and professional services, including corporate law, accounting and related consulting – are down by a third from their 2007-high.
Today the Centre for Economics and Business Research calculates that there are already more City-type jobs in New York than in London, though many Wall Streeters service their domestic economy so London remains the top international centre. But by 2015, when London will have fallen to third place for the first time, New York will boast 249,746 City-style jobs; Hong Kong 247,912; London 237,134; and Singapore 182,266. No wonder so many talented people are leaving the UK and moving to Asia: that is where the jobs are, and the tax is much lower.
London’s bonus pool for 2013 is set to come in at £1.585bn, down from £4.402bn in 2012 and the £11.38bn peak in 2008 (from £33,000 a head to £6,400). Activity has slumped; higher capital requirements mean profits per employee have collapsed; and new rules mean banks have hiked base pay. Some of this makes sense: banks were too leveraged and the industry made unsustainably high revenues. But losing the flexibility of variable pay is stupid; and overall this is no mere post-bubble readjustment.
The backlash has gone too far; jobs are being exported to other centres, crippling Britain. The CEBR estimates tax revenues (across the board) from the City will hit £40bn in 2012-13, down from £70bn in 2007-08. It’s time to start panicking.
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