Government's media policy remains boxed in


There is a refreshing reliance on the marketplace in the Government's digital TV proposals. Most media and other companies will be free to bid for capacity on the digital network, and take their chances that the viewing public will tune in. Coming after the Government's botched attempt to reform the rules on cross-media ownership, ministers seem finally to be finding the right approach in their media policy.

The only limits will be wholly appropriate ones: a maximum of 15 per cent of the total television audience (the BBC, as a public broadcaster, remains exempt); a maximum of perhaps 25 per cent of total digital capacity in the hands of any one player; a broadcasting licence from the Independent Television Commission; and assurances that companies bidding for "multiplexes", the clusters of at least three TV channels carried on a single digital frequency, meet all conditions relating to service and quality.

In addition, it is probably right that the traditional broadcasters, BBC1, BBC2, the ITV companies and Channel 4 should receive an automatic allocation. If the hope is to engineer the transition from analogue to digital generally, then viewers must be sure they receive the channels they have come to know (and perhaps love) as well as all the better reception, better sound, and new content promised by the digital revolution. Though there may be a free-for-all as alliances form and fall apart, that may be no bad thing; only the viewer can win in the fight for the best programming, partners and services. There is perhaps only one black cloud on the horizon and, as so often when it comes to the media, it involves Rupert Murdoch.

It is Mr Murdoch who controls the only existing encryption technology in Britain, and so far the only viable subscription and billing service, both developed for his satellite service. Digital will not work without this technology, or a similar one, to unscramble the signal. That is a powerful potential monopoly for Mr Murdoch which any amount of regulation and Government control could only partially harness.

The obvious solution has been known for some years. The only way to have a viable alternative to Mr Murdoch's technology is to build ones own. The ITV companies, perhaps in league with cable companies, ought to do so, and make it the new standard, despite its heavy cost estimated to run to several hundred millions of pounds. A single set-top box, capable of receiving all the programming and services on offer, is clearly the best way forward. The only question is will it be Mr Murdoch's or someone else's?

A remarkable restoration of fortune

Looking at the robust set of interim profits delivered yesterday by Royal Insurance, it is hard to remember this is the same company that just three years ago was flat on its back. It would be churlish not to give Richard Gamble, Royal's chief executive, at least some of the credit for this remarkable restoration of fortune to what was an atrociously managed company. Sterling has come to his aid, of course. Had the pound not been expelled from the ERM in September 1992, when Royal was at its nadir, the company may well have not made it into the intensive care unit.

The business, cracking under the problems of the past which continued to punish it with the usual lag of the insurance sector, was within a few months of a rescue rights issue or having its licence pulled, so low had its solvency margin sunk. The soaring stock market following the ERM debacle put unexpected life back into Royal's bombed-out balance sheet.

But everyone needs a bit of luck, and Richard Gamble appears to have built on his judiciously. He came to the Royal in 1989 as finance director from British Airways, unencumbered by the ivory tower blinkers worn by so many of the insurance old school.

Much of what he did, after becoming chief executive in 1991, looks pretty much like common sense, but for Royal at the time it was revolutionary - installing proper checks and controls, and getting management to talk to one another.

There have been some brave decisions. Royal strengthened its US loss reserves well before most of its competitors, and at a time when it hurt to do it. In particular, Mr Gamble has chosen the people round him wisely. The latest choice of Bob Mendelsohn to head Royal's US operations appears to have finally put the business back on the map in the US. The once critical patient now looks among the better prepared for the tougher times looming for UK insurers.

Fat cats controversy is still with us

If you thought that the fat cat issue had gone away, you need to look no further than pension costs for the next brouhaha. As early as next year we could be seeing a series of multi-million pound pension benefits disclosed in annual reports, to embarrassment all round in industry and the City and another chorus of complaints from the Labour Party.

Most companies wildly under-report the cost of their directors' pensions, according to a survey from the actuaries Lane Clark & Peacock. Very few disclose realistic amounts and when they do they are staggering.

British Gas said earlier this year that the additional cost in pension terms of the 75 per cent increase in the salary of Cedric Brown, the chief executive, was pounds 550,000. Soon the rest of industry is likely to be forced into the open if the new pension disclosure proposals made by the Greenbury Committee are enforced. The survey found that 17 of the FT-SE 100 companies made negligible or no disclosure of directors' pension costs.

The other 83 annual reports showed pension costs averaging 11 per cent of remuneration, which the actuaries say falls "far short of the cost of providing even current service benefits, let alone the extra past service costs arising from large salary increases". The reality is that pension costs each year are likely to be over a third of the disclosed remuneration.

The discrepancy arises because most companies state just the contributions actually paid, and these can vary a lot, depending on the precise circumstances of the fund and the company. The true picture emerges from an examination of the pension entitlements earned during the year, which is what the Greenbury Committee wishes to see disclosed.

For a pounds 300,000-a-year executive director of an FT-SE company who has been promised a pension of two-thirds final salary on retirement at 60, the capital cost of providing the pounds 200,000 pension is around pounds 3.5m. For a director aged 40 on appointment, the annual cost of building up that pension is about 35 per cent of salary, says Lane Clark & Peacock. These are heady figures, which once subjected to public scrutiny, can only intensify public outrage over executive pay and perks.

Start your day with The Independent, sign up for daily news emails
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Scunthorpe goalkeeper Sam Slocombe (left) is congratulated by winning penalty taker Miguel Llera (right)
Arts and Entertainment
The Apprentice candidates Roisin Hogan, Solomon Akhtar, Mark Wright, Bianca Miller, Daniel Lassman
tvReview: But which contestants got the boot?
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
Tourists bask in the sun beneath the skyscrapers of Dubai
travelBritish embassy uses social media campaign to issue travel advice for festive holiday-makers in UAE
ebooksNow available in paperback
Arts and Entertainment
Jennifer Saunders stars as Miss Windsor, Dennis's hysterical French teacher
filmJennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress
Life and Style
Nabil Bentaleb (centre) celebrates putting Tottenham ahead
footballTottenham 4 Newcastle 0: Spurs fans dreaming of Wembley final after dominant win
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Carlton Senior Appointments: Sr Wealth Manager - San Francisco - Inv AdvisoryFirm

$125 - $175 per annum: Carlton Senior Appointments: Senior Wealth Manager – In...

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum