At any other time, what happened to the BBC last week would be a sensational story. As it is, it has been largely ignored because of even more spectacular cutbacks. But we should be in no doubt as to the magnitude of what happened. The licence fee has been frozen for six years, and the corporation is having to take on extra burdens, most notably the BBC World Service, hitherto funded by the Foreign Office. According to George Osborne, this amounts to a 16 per cent cut by 2015. It could be more because we don't know what the increase in the licence fee would have been. After a decade of unprecedented expansion, the BBC is being forced to reconfigure itself as a much reduced organisation.
In some respects, this is a good thing. I have often inveighed against the inflated salaries of BBC stars, presenters and executives. In the good years, the corporation behaved as though it were part of the private sector and its director-general, Mark Thompson, was shamefully slow in adapting the organisation to changed circumstances once the recession began. Because the party continued until recently, the BBC attracted so much criticism that it was short of friends when the Coalition reached for the axe.
A cut of this size is nonetheless draconian. It should tell Mr Thompson and other BBC executives something of which they were apparently unaware – that, so far as the Coalition is concerned, the BBC is just another department of government spending. Licence-payers might, if given the choice, be prepared to bear small increases in the fee, but they have not been given it. Independence from government, which the BBC imagined it partly enjoyed, turns out not to exist.
Look, for example, at the BBC World Service, which receives £272m a year from the Foreign Office but will now be funded by the BBC. This is unfair to licence-payers who receive little, if any, benefit from the World Service, excellent though it is. It would make much more sense to transfer the costs of the World Service to the international development budget, which is soaring by 37 per cent to £9.4bn in 2015. But the Coalition thinks it can foist whatever costs it wants on the BBC.
The licence fee does not represent a dependable source of income if it can be arbitrarily slashed by government with no reference to what the corporation's customers want. By 2015, the income of BSkyB could be twice that of the BBC. Rupert Murdoch can charge his subscribers what they are prepared to pay, whereas the BBC can charge its customers only what the Government says it can. It is a hopelessly unequal fight. The lesson of last week is that the BBC will survive and thrive only if it has a direct relationship with its customers. It should supply a variety of services, and they should pay for what they want.
An ingenious idea from The Independent's new owners
When Alexander Lebedev bought the loss-making Independent in March, it was clear that things could not go on as they were. There was much speculation that he would make the paper free, as he had done with his previous acquisition, the London Evening Standard. In the event, the solution has been even more radical. Tomorrow sees the launch of a new daily title called i, priced at 20p, which will be a boiled-down version of The Independent aimed particularly at younger and "time poor" readers. This is a pretty big deal. Because the new paper will draw on the same editorial resources as The Independent, it will probably be able to "wash its face" at a daily circulation of 200,000 even with a cover price as low as 20p. The hope is that i will expand the market by attracting lapsed readers of quality newspapers and those who do not read them. If it achieves significant sales, it may skim off existing readers from other titles including The Independent.
Some people have suggested that if i is a runway success it could supplant The Independent. But to do that it would have to take on its parent's cost base, though that could be scaled down. As things stand, the new title can be seen as a rather ingenious attempt to extract more value out of The Independent, and thus reduce its losses. It will only work, though, if enough non-readers and lapsed ones have the time and inclination to go into a newsagent and shell out 20p. Do these people want the right newspaper at the right price?
A politician who fell at the first journalistic hurdle
There are some political commentators who are politicians manqué. They really would like to be in the Cabinet but the cards have not fallen that way. My old friend Peter Jenkins, The Independent's distinguished first political commentator, was perhaps a case in point. Then there are journalists who use newspapers as a stepping stone to political power. Sometimes the journalistic experience is fleeting as with Yvette Cooper (ex-Independent) and her husband Ed Balls (ex-Financial Times). Or it can be more drawn out, as with the rather older Energy Secretary, Chris Huhne, who worked for The Economist, Guardian, Independent On Sunday and Independent.
It is unusual, though, for a leading politician to have fallen at the first journalistic fence. George Osborne failed to secure a place on The Times's trainee course in the early 1990s. If he had been accepted, would he have used journalism as a means to a political end, or might he now be writing columns about a slashing Tory Chancellor?