BBC Tax (the TV Licence) Beyond Basic Commonsense

The latest discourse on making the aged pay for TV Licences raises the question of why any of us are paying a TAX for a broadcaster.

BBC – Beyond Basic Commonsense

Over the decades, the BBC has grown, and now has 6 national TV channels, many local TV centres, 8 UK-wide radio stations and numerous local radio providers in places as small as Stoke-on-Trent and Northampton. Oh, and plus the World-service and a huge web-presence.

Why?

Throughout it’s life, the BBC has been determinedly “establishment”. But it is caught in a dilemma. On one hand, it tends to be staffed by arts graduates who cannot help themselves but produce programmes aimed at other arts graduates. However, aware of the danger of losing too much market share – and the danger of its validity being questioned – it gets drawn into more low-brow schedule fillers such as Eastenders or Homes Under the Hammer.

What is the BBC for? Is it to provide specialist high-brow content not provided by other stations, or mass-entertainment in direct competition with the commercial sector?

Either answer raises questions about justification.  Why should the general public pay tax for high-brow shows they don’t want to watch?  But if the BBC is going for a mass audience, why is it tax-funded when other operations do a great job without any subsidy?

Don’t get me wrong, I love their news output, especially the Radio 4 shows. But other television funding models are available. ITV does well with advertisement  funding, as does Government-owned Channel 4. Meanwhile, subscription based models such as Sky, Netflix, Amazon and even BT are growing their market. Nowadays, there is Youtube and many other internet content providers. Why are we taxed to provide such specialist content as Radio 3? There can be no actual justification for mass-taxation to fund such narrow-interest entertainment. It is like suggesting that the Government should fund, say, national ferret-racing – except the audience for ferret-racing is probably less well-connected to lobby for their interests to be subsidised by everyone else.

And the greatest worry for the BBC – their viewer demographic is aging fast. Young people are watching less TV, and especially less terrestrial TV. Families just do not gather together around the black and white TV furniture any more.

The TV Licence is just a tax, purely to fund a Government owned broadcaster that has grown and grown over the years. It will never have enough (unearned) income for its ambition. Like most centrally funded organisations, it can always think of good reasons why it needs more money. As a flat tax, levied on every household in the country, the TV Licence is extremely regressive. An unemployed single person in a grotty studio (haha, a flat, not a sophisticated and expensive broadcasting centre) pays the same amount of TV Licence Tax as a huge family living in a stately home.

The BBC also distorts the market for local newspapers, local radio and national television. Every organisation trying to operate in these markets has to compete against a well-funded operator who can give away their content for free. What is the largest obstacle to our press businesses moving to charge for their quality and costly journalism online? The FREE BBC news website! Our democracy is founded on a free-press. And yet such businesses are undermined by a competitor which has no commercial pressures. No doubt the BBC would turn it’s nose up at grubby actions to earn income as beneath them. It has all the outdated class-based opinions where it considers “trade” businesses are inferior to them.

The BBC is a national treasure, but the funding regime is completely untenable. No politician would propose the creation of a government owned broadcaster to be paid for by what is effectively a poll tax, so why do we put up with one now?

We support the organisers of the Abolish TV Licences petition. Time for the BBC to be funded by subscription and/or advertising. The current approach is undemocratic, unfair, regressive, and stinks of elite-ism.

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Jeremy Hunt Rides Forth. Which Is Where He Will Finish.

Hunt for fourth

Oh dear for Mr Hunt. His leadership campaign seems to have fallen already. We instinctively like a politician with a business background – especially a successful business background. And yet he has slipped – no, jumped – into the “Continuity May” trap.  This title is so poisonous!  Not only does it reference Mrs May, but the IRA too!

Jeremy Jeremy Jeremy. Your approach didn’t work for Theresa, and it won’t work for you.

His article in the Daily Telegraph, and an interview on the Today Programme this morning, were pushing the scare tactic of saying that expressing belief in No-deal will lead to a vote of No Confidence in Parliament, followed swiftly by an election and Mr Corbyn in No 10 by Christmas.

Such scaremongering didn’t convince the general public, and surely he is not suggesting that Tory MP’s are more gullible than the average voter. Okay, fair point! But even so, it is hard to believe Tory MP’s will vote for losing their jobs this summer any more than they did in the spring. The European Elections cannot have convinced them of the sagacity of returning to the voters any time soon. Taking No-deal off the table at this stage is to tell the EU directly that he will accept whatever terms they choose to impose. And then he will surely fail to get them through – again.

So we see the talented Mr Hunt being relegated to 4th place in the list.

Dominic Raaaab – the politicians’ Tory hopeful

And the top three are likely to be Boris, Dominic Raab and Michael Gove. Boris is a proven election winner but his other policies remain vague. The danger is if he opens his mouth, he will lose support with every word.

Govey is an intelligent man and made artful changes in his briefs so far.  However, the backstabber reputation remains.  Meanwhile,  Dominic Raab seems to have the best Conservative credentials and policies. Not only does the next Tory leader have to deliver Brexit, they have to make a success of it too.  Those cuts to income tax and corporation tax will appeal to his colleagues and supporters. If the rest of his package equally inspires Blue voters and activists, he will be hard to stop, and might just drag enough MPs with him to deliver any Brexit outcome.

Boris – the public’s darling

Meanwhile, the exciting point in this race will be to see if the MP’s dare keep Boris off the final 2 person ticket. We think they won’t. Then he wins. Cripes!

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FTSE100 Still Going Higher Despite Brexit Chaos

It is time for another 6 month forecast for FTSE100. We continue to see a much stronger stock market in London.

In January, when shares were at 6855, we stuck our necks out (a very long way given present uncertainty) and forecast FTSE at 8050 by 15 July.

See http://londonmarketcomment.co.uk/uk-equities/uk-equities-ftse100-up-to-8050-in-6-months/

As of last night, the index was at 7129. So I guess that is so far so good – though it is way too soon to start crowing about our success. Who do you think I am, Donald J Trump? He rather unwisely took the credit last spring when the Dow was flying. He’s been untypically silent on the subject since it retraced!

Over the month since our last forecast, well pretty much nothing has changed. Brexit is still the same. Unsurprisingly, UK growth was slightly softer in December. The US economy had good employment numbers, the EU economy was totally flat, who knows about China? Inflation was falling in general.

So we still see small upticks as Brexit nears the Fig-Leaf-Deal that we continue to expect. It was pleasing that Andrea Leadsom on Radio 4 described such an outcome today – though she didn’t give it our slightly derogative name.

Once the Brexit risk is settled, we see a relief rally in the late spring – and then sideways over the summer. Thus our forecast for August is the same as we called for on 15 July.

We see FTSE on 15 August at 8050.

It’s not very headline-worthy saying that we think the same as we did last month is it? Oh well, if you want excitement, I suggest that instead of market-watching, you take up kite-surfing instead.

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