Media 86: The BBC’s enemies strike

As history proves, rows between the Government and the Corporation are nothing new, writes Torin Douglas

‘Where were you 30 years ago?’ asks FIFA, as it marks the anniversary of the 1986 World Cup. Regular readers of this column will need no reminding about life in 1986. Suffice it to say that the World Cup Final (in which Argentina beat Germany 3-2, after England were beaten by Maradona’s ‘hand of God’) was watched by 11.75m viewers on BBC1 and 10.75m on ITV.

But in June 1986, media minds were focussed on other matters – as the Government prepared to publish the Peacock Report on one of broadcasting’s hottest and longest-running debates: should the BBC carry advertising?

As discussions continue on how the BBC is to be regulated from 2017, it’s good to remind ourselves that rows between the Government and the Corporation are nothing new. The future of the licence fee has been hotly debated for well over thirty years, usually against a background of Government unhappiness with BBC reporting, hostile newspaper coverage and own-goals by the BBC’s management.

Never a friend to the Corporation, Margaret Thatcher had set up the Committee on Financing the BBC with the specific aim of getting ads onto the BBC – or at least that was the widespread perception. It was chaired by a free-market economist, Sir Alan Peacock, and one of its best-known members was another free-marketeer – Sam Brittan, the distinguished economics writer for the Financial Times and brother of Leon Brittan, the Home Secretary, then in charge of broadcasting policy.

The committee’s terms of reference were a bit of a clue:

1) To assess the effects of the introduction of advertising or sponsorship on the BBC’s Home Service, either as an alternative or supplement to the income received through the licence fee…

As Alasdair Milne, the then director-general of the BBC, put it in The Memoirs of a British Broadcaster, “there were many claiming that Peacock had simply been set up to do a hatchet job on the BBC.”
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But how had the idea of advertising on the BBC got the ear of government? For that, I and my former colleagues at Marketing Week must take some responsibility, as Michael Leapman recounted in his book, The Last Days of the Beeb.

Leapman pointed out that the debate over advertising and the BBC was not new. In 1965, Labour’s Tony Benn, as Postmaster-General the minister responsible for broadcasting, had proposed that the BBC should take advertising on the Light Programme (later to become Radios 1 and 2) and perhaps on television too.

In 1977, the Annan Report on the Future of Broadcasting had considered advertising and “provided the standard intellectual case against it for many years: it is that if two rival television companies compete for the same source of revenue, the inevitable result is a decline in programme standards and the virtual elimination of serious demanding fare at peak hours.”

In May 1984, Douglas Hurd, the junior Home Office minister, indicated that the government was no longer ruling out advertising as a future means of funding the BBC. He told the Sunday Times: “The more variety of broadcasting there is, such as cable and satellite, the more tatty the present licence system looks.”

Other papers followed up the story. “TV licence to be axed?” ran the Sunday Mirror headline while the Sunday People declared: “Tories to sell off Beeb”. Two days later the Guardian wrote: “Ministers aim for radio ads on BBC”, saying ministers were “privately advocating” advertising on Radios 1 and 2 but that TV ads would be politically unacceptable.

And this is where we journalists came in, as Leapman explained: “The issue lay dormant over the summer but was brought back to life by a September article in the trade journal Marketing Week. The magazine had asked the advertising agency D’Arcy MacManus Masius to devise a workable plan for advertising on the BBC. The article was written by the agency’s media director, Rodney Harris, a quiet-spoken, rumpled and slightly donnish man who belies the suave go-getting image of his trade.

“He started the article by pointing out that if the corporation began taking ads overnight, and sold airtime on the same scale as its commercial rivals, the ITV companies would all go bankrupt. He therefore proposed a scheme for holding the licence fee at £46 and paying for increased BBC costs by a limited amount of advertising on television, beginning at an insignificant level but increasing as costs rose and inflation reduced the value of the fee.”

Leapman observed: “It was a clever piece of special pleading, enlivened by a few merry swipes at the Beeb: ‘It is part of that British Establishment that looks down on tradesmen, salesmen, commerce in general and advertising in particular.’ And Harris made no secret of his principal motive, to end the ITV monopoly on television advertising and, through competition, bring down the cost.”

Following the Masius report, Saatchi & Saatchi carried out a similar exercise. The agency argued that programme standards need not fall, pointing to the high standard of some ITV programmes as proof that commercialism does not rule out quality. And Leapman observed: “Since Saatchi’s are the advertising agents for the Conservative Party, there was an assumption that this in some way reflected the Government’s thinking, or at least the prime minister’s.”

In 1985, the Peacock Committee began taking evidence, and other advertisers and agencies piled in, with submissions from the Incorporated Society of British Advertisers and the Institute of Practitioners in Advertising.

ISBA said it believed that advertising on the BBC would bring benefit to viewers, broadcasters and to industry. The BBC submitted reams of evidence to the contrary, including reports from the London Business School and others.

The Peacock Report was published by the Government on Thursday July 3rd 1986, a few days after the World Cup Final, but by then newspaper leaks had revealed the main finding. Despite Mrs Thatcher’s hopes, Professor Peacock and his committee had rejected the idea of advertising on BBC television, though five members recommended funding Radios 1 and 2 through advertisements, and privatising them to boot.

An academic analysis at the time concluded: “The Peacock Report threw Tory television policy into disarray. A committee appointed by the government had devastatingly rejected the Prime Minister’s favoured policy of putting advertising on BBC television.”

But if the BBC thought it had got off lightly, events were about to prove otherwise.

Next month: The Peacock Report gives a shock to ITV, and the start of a long hot summer for the BBC.