Culture secretary Michelle Donelan has recommended that the planned Channel 4 privatisation does not go ahead, a leaked letter has revealed.
Writing to Rishi Sunak, the cabinet minister said there are “better ways to ensure C4’s sustainability” than selling off the publicly-owned broadcaster.
The apparent U-turn follows plans announced by Boris Johnson’s government last year to privatise the channel, sparking outrage from opposition parties, Tory MPs and top media figures.
In a letter leaked to the News Agents podcast, Ms Donelan wrote: “After reviewing the business case, I have concluded that pursing a sale at this point is not the right decision.”
The culture secretary also told Mr Sunak that the TV sector “would be very disrupted by a sale at a time when growth and economic stability are our priortities”.
She said a U-turn on the sale plan “is likely to be popular with parliamentarians, particularly those who raised concerns about the effect a sale of C4C may have on the UK’s system of public service broadcasting”.
Ms Donelan told the PM that the government should use legislation to scrap rules which prevent C4 from producing content for its own main channel, saying it was time to give the broadcaster “more commercial flexibility”.
The minister said she wanted to bring in a new statutory duty on the C4 board to focus on long-term sustainability, but said wanted to see the government give C4 “more tools” to help maximise “the growth they provide to the creative sector and the regions”.
Former Tory culture secretary Nadine Dorries launched a bitter attack on Mr Sunak and his government over the apparent U-turn – saying it would be “almost impossible to face the electorate” at the next general election.
Ms Dorries – who led the push privatise C4 in the hope of raising £2bn – tweeted: “Three years of a progressive Tory government being washed down the drain.”
She added: “Levelling up, dumped. Social care reform, dumped. Keeping young and vulnerable people safe online, watered down. A bonfire of EU leg, not happening. Sale of C4 giving back £2bn reversed. Replaced with what?”
Labour, strongly opposed to the sell-off, said the decision announced by Ms Dorries in April 2022, had been “a complete waste of everyone’s time”.
Lucy Powell MP, Labour’s shadow culture secretary, said: “The Conservatives’ vendetta against Channel 4 was always wrong for Britain, growth in our creative economy, and a complete waste of everyone’s time.”
She added: “Our broadcasting and creative industries lead the world, yet this Government has hamstrung them for the last year with the total distraction of Channel 4 privatisation.”
Jamie Stone, the Liberal Democrats’ culture spokesperson, said the government should now “come clean on exactly how much taxpayers’ money was wasted on these pointless and divisive plans”.
Media industry figures welcomed the apparent U-turn. Phil Smith, director general of Incorporated Society of British Advertisers (IBSA), said: “If confirmed, advertisers will be delighted by the government’s decision not to dispose of Channel 4.”
John McVay, chief executive of Pact, representing independent production companies, said it was “the right decision to hit the stop button on Channel 4 privatisation” – adding that the broadcaster’s commissioning model supported thousands of jobs.
Ms Dorries, having announced the move as part of the government’s Media Bill, had argued that state ownership was “holding Channel 4 back from competing against streaming giants like Netflix and Amazon”.
But Jeremy Hunt and Tom Tugendhat, now in government, were among the senior Tories who opposed the planned sale, warning it would cost the TV sector jobs in the north of England due to the loss of regional programming.
Labour described the plan as “cultural vandalism” and Channel 4’s former head of news Dorothy Byrne had said the move was designed to “throw a bit of red meat to Tory supporters of a very right-wing nature”.
Ms Donelan, who was appointed by Liz Truss and remained in the role after Mr Sunak took at No 10, had previously cast doubt on plans to privatise the broadcaster.
Responding to the leaked letter, a spokesman for the Department of Digital, Culture, Media and Sport (DCMS) said: “We do not comment on speculation. The DCMS Secretary of State has been clear that we are looking again at the business case for the sale of Channel 4. We will announce more on our plans in due course.”
