BBC BLOGS - Peston's Picks
« Previous | Main | Next »

ITV: Change of cast

Robert Peston | 09:30 UK time, Thursday, 23 April 2009

Michael Grade is stepping down as executive chairman of ITV about a year earlier than planned, but will remain as non-executive chairman.

The reason is that the commercial broadcaster faces three significant strategic decisions - and ITV's board sensibly concluded that it would be inappropriate for those decisions to be taken by Grade more-or-less alone and then bequeathed to a new chief executive.

Better to appoint a successor, before the end of this year, to set the direction of the business which he or she would then have to travel.

Michael Grade

The big decisions that loom, as result of regulatory reviews, are whether to remain a public-service broadcaster after 2012 - when all British TV goes 100% digital - and how to charge for advertising, as and when the existing contractual arrangements with advertisers are replaced.

Oh, and then there are one or two financial pressures, such as how to refinance £350m of debt due for repayment in 2011.

This morning, ITV said it "has no current plans for a rights issue", no immediate intention to tap shareholders for new equity finance.

Although advertising revenues are falling at an alarming rate - they're 20% down on the flagship channel - ITV feels it has enough cash and borrowing facilities to weather the recession. It is raising a further £58m of "covenant free" financing (or money without strings attached).

That said, ITV has discussed with leading investors the possibility of selling them new shares and may well have to raise new equity at some point.

When I spoke to Grade this morning, he said that market conditions were tougher than they've ever been since ITV was founded more than 50 years ago. Which is particularly galling for him, in view of progress in improving programmes, reaching more viewers and in removing shackles imposed by regulators.

So what is the future of one of the most distinguished brands in the history of British media?

A tantalising question is whether in the inferno of an advertising meltdown, the government and competition authorities would abandon their opposition to the creation of a super-broadcaster formed by the merger of ITV with channels Five and 4.

That would have seemed absurd a couple of years back. But right now, an ad on ITV 1 is cheaper per individual reached than an ad in a national newspaper.

Those are not the economics that can support the quality of programmes viewers expect from ITV over the long term.


Page 1 of 2

  • Comment number 1.

    "When I spoke to Grade this morning, he said that market conditions were tougher than they've ever been since ITV was founded more than 50 years ago. Which is particularly galling for him, in view of progress in improving programmes, reaching more viewers and in removing shackles imposed by regulators."

    Then again, removing the shackles imposed by regulators allows greater competition, which leads to tougher market conditions when compared to the age when ITV was founded over 50 years ago....

  • Comment number 2.

    the quality of itv over the past five or so years has dropped to comic levels and its regional broadcasting has become one of their biggest jokes.
    i have transfered to sky becouse of the ammount of choice.
    gone are the days of itv having quality programmes that competed with the bbc but both are guilty of poor programme choices and lack of interesting viewing.
    it seems that money talks when it comes to terestrial tv and viewers have no option but to accept what people like mr grade wants us to watch.
    its time he stood down in reality but can itv survive his not being incharge, i am unsure but does it matter whilst there is a choice.

  • Comment number 3.

    Robert-your silence on yesterday's budget is deafening.

  • Comment number 4.

    ITV need to up their game! I reckon if they focused on more 'original' original programming, along the lines of the BBC and Channel 4, instead of churning out the gazillionth Britain's Got Talent or X-Factor, their advertising might be worth more. It doesn't take losing the concept of shows like the above, but rather adding more material. How about an X-Factor for actors, or a Britain's Got Talent focusing on real, useable talents? Just a thought.

  • Comment number 5.

    Surely it is time to look at the way the BBC is funded? How can it justifiably have a guaranteed source of income through the licence fee when other broadcasters are struggling? If any other business had such an unfair advantage over its competitors the regulators would have forced it to be broken up in the spirit of competition years ago

  • Comment number 6.

    A BBC takeover in order to monopolise the propaganda bias. Just you see.

  • Comment number 7.

    The real problem for commercial television regarding the advertising issue, is that marketing consultants in analysing customers shopping habits have consistently shown that targetted advertising reaps greater dividends than across the board advertising. One of the few exceptions occurs with sports programmes such as European Champions League football with a preponderance of beer products as an example - most pubs on a Wednesday evening will show the matches on satellite channels. This is reinforced by the fierce bidding wars when the broadcasting rights for football come up for grabs.

    Analogue TV has no way of identifying who watches what. The BARB weekly audience survey aims for a cross-section of the population to derive estimated viewing figures, but it does not tell potential advertisers much about what products to advertise during which programs. Supermarket Loyalty cards analysis permits a greater insight into the customers shopping habits, and voucher placement is targetted individually to that household's shopping.

    So coupled with a recession, commercial TV will struggle to sell advertising and crucially make a profit. Digital TV could potentially be a solution, but I doubt that the digital TV providers have put any thought into this. The emphasis is on viewer's choice to view, but if it harnessed viewer feedback on say an advert shown that might encourage more advertising through a more sophisticated form of product placement. Manufacturers of goods and services usually have a good idea of what their customer profile is, and digital TV providers could potentially match that profile to selected adverts. Otherwise commercial TV will have to depend on pay per view to survive.

  • Comment number 8.

    yeah, What about the Budget Robert?

  • Comment number 9.

    Nothing to say about the markets benign reaction to the budget?
    It would be interesting to see the UK budget deficit and overall national debt in context with the other major economies. It may look shocking that the UK could end up in the red to the tune of 79% of GDP, but where will the other economies end up? Japan is already 170%, Germany and France 65%, Italy 105%. Germany predicted to see 10% unemployment and a contraction of 6% in GDP this year who is more likely to go to the IMF first?? And when the IMF run out of money, the only solution, the monetisation of government debt across all leading economies.

    Could you please write an objective piece on the stste of the UK economy and fiscal position in relation to the rest of the world.

  • Comment number 10.

    "A tantalising question is whether in the inferno of an advertising meltdown, the government and competition authorities would abandon their opposition to the creation of a super-broadcaster formed by the merger of ITV with channels Five and 4."

    I'm alarmed at how readily competition rules are thrown away when financial problems persist (just look at the HBOS/Lloyds TSB merger if you want to see how badly wrong this can go). Yes, ITV is having problems but (apart from the BBC) who isn't? The one thing I can virtually guarantee is that, if ITV, Five and 4 were to merge, the result wouldn't be a "super" broadcaster. Standards across these channels (and most others) are already woefully low. What sort of programming could we expect? MORE talent shows? MORE home make-over shows? MORE Nazi sharks? Some grotesque combination of the three? Ooh, I can't wait...

    It would be like slow cousins marrying: never ever a good thing for the longevity of the species!

  • Comment number 11.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 12.

    "MORE talent shows? MORE home make-over shows? MORE Nazi sharks? Some grotesque combination of the three? Ooh, I can't wait..."

    Isnt that called the One Show?

    Seriously I have to say the enforced payment of the licence fee must end soon. How can you for example allow the regulators to insist BAA be broken up (The right decision by the way) but let the BBC get away with a near total monopoly. I dont have to use BAA airports but i also dont expect to have to pay them a yearly fee in case i do.

  • Comment number 13.

    ITV's business model is broken. Adverts can be skipped over if you are happy to see the programming delayed. For Satellite they are hanging on to regional adverts at the expense of picture and sound quality. They do not seem to understand the value of High Definition pictures and 5.1 sound. Not sure what the answer is! My ITV viewing is now very limited with most adverts skipped over.

  • Comment number 14.

    It is obvious ITV have major problems as does every other TV company, problems caused by trying to service far to many channels, they all made promises that content would not depreciate if allowed to operate everywhere.
    Now the truth apparent is for all to see, services degraded to pathetic levels.... still, gets folk out more, pulling up weeds is more entertaining than some of the rubbish.

  • Comment number 15.

    hi Robert,

    when we asked you for a blog on something other than the banking mess, we didn't actually mean it!

    let's get back to Black Magic ... you know, Goldman Sacks and the contents of their Box of Tricks

  • Comment number 16.

    I had to laugh at Grade's claim that he was leaving his successor a 'revitalised ITV'. Does he ever watch the output of his stations?

    ITV regional programming has all but vanished, Simon Cowell seems to have carte-blanche over prime-time family entertainment and there's soap operas galore. Thanks very much, Michael.

    As for advertising, in these days of Sky+ and other recorders does anyone actually watch the commercial channels live? I tend to record the programmes in order to skip the adverts later.

  • Comment number 17.

    ITV need to push for changes to the rules on product placement.

    I don't watch adverts any more - with a PVR we just hit the fast forward until the show starts again.

    WRT comments above on targetting adverts - even I can tell that advertising Stair Lifts during Buffy the Vampire Slayer wasn't the best idea.

    Channel 4 have a better grip on programme sponsorship, changing their sponsorship of "Friends" from soft drinks to wine to bath products as the audience demographic gets older.

  • Comment number 18.

    This takes precedence over the farce of yesterday's budget including the highest borrowing announced for the last 300 years?
    Very on message Mr. Peston.

  • Comment number 19.

    BTW, this blog another diversion? all the budget fallout and we are now discussing poor tv quality, nice one, bet AD is very happy.

  • Comment number 20.

    #5 Horned_Devil "If any other business had such an unfair advantage over its competitors ....."

    I respectfully disagree: the BBC isn't a business; it's a public service, and it was there first. I believe that we should have the right to have public services whose existence takes priority over someone else's business opportunity. The health service is another example.

    Also, I do not wish international media magnates, be the the odious Rupert, or Mr Lebedev, to have a monopoly of our media.

  • Comment number 21.

    Blimey, Robert, having read this report anyone would have thought there was a Budget yesterday!

    If you had done some proper research, perhaps you would have found out that the real reason for Michael Grade's departure was more to do with the 50% tax hike that he will have to start paying next year.

    God help us if we are witnessing the end of the independent channels because the end result will be that we are left with the Big Brother Channel which is no more than a New Labour mouth piece.

  • Comment number 22.


    I dont mind a refreshing change from your job as chief public perception manipulator to the treasury but if you are going to take a leap into the irrelevent talk about the governments growth forecasts or something.

    #20 sasha

    My reference to Margharitas yesterday was supposed to be a reference to your book recommendation to me on PM blog... i think you may have missed that intent by me!

    Anyway, red wine works also.


  • Comment number 23.

    The basic problem is TV has been superceded by the internet/computing. There are still the uneducated out there who will pay a lot of money for TV eqpt but with a £20 card in your computer you can record 2 channels of freeview to watch when you want skipping all the adverts. In this busy day and age we havent time for adverts.
    Oh and most computer monitors offer much better quality than even the best 'HD' tv's.
    Skys model of 'mine all mine' may work for some but by no means all and the internet will make it redundant in the medium term.

  • Comment number 24.

    "...Which is particularly galling for him, in view of progress… in removing shackles imposed by regulators" - "shackles imposed by regulators" so you mean porn, more porn and earlier in the evening porn.
    Once again this shows the total silliness of the financial system that counts both money and real stuff on the same side of the equation and calls both of them wealth - Wealth is real stuff and money is a claim on that wealth. The World is a richer place if my kids play out in the street at night, it is a less wealthy place if they watch pleasant, informative, entertaining programmes on the TV, it is less wealthy if they watch hypno-TV - Hypno-TV is where the camera changes after less than 3 seconds - you get it on MTV and Eastenders an the like - this tricks the brain of weak minded people, with its constant flickering, to keep watching. It is less wealthy again if they watch a pile of porn. Because the financial system we use is so stupid, as the real wealth decreases, the financial wealth increases - how much money could ITV make if all its regulatory shackles were removed ? - and how much poorer would our country then be in real terms ? There is a better way to run the National Accounts – its called NEFS Net Export Financial Simulation see [Unsuitable/Broken URL removed by Moderator]

  • Comment number 25.

    television watching is changing and the broadcasters had better find a new business model before they end up like the music industry...with television on demand apart from news channels i rarely watch any programme at the time it is broadcast, so tv advertising just skipped the never ending attempt to increase audience the only route is to dumb down to the lowest common denominator. and on the subject of television, the BBC claims to be "the finest broadcaster in the world" so they should put their money were their mouth is and become a subscription channel, and i bet they would struggle against SKY...why should the taxpayer finance the broadcasting wing of the government....?

  • Comment number 26.


    That's what everyone seems to be doing post-budget, including Mr Peston today; don't look over into the other lanes of the motorway where a terrible multi-car crash has taken place (more scrappage opportunities there......)

    I'm not very interested in British telly, especially ITV, and get all my video from THE PIRATE BAY, but I suppose it's a SCOOP of sorts; RP got through the switchboard or past Mr Grade's PA and managed to speak to the GREAT MAN, so he needs to tell somebody that he's still relevant

    And as he alluded to himself, Stephanie has been given the big budget stories; she even knows how to use statistics and graphs, linked to IMF reports, which gives her the edge; Yikes Peston looks mullered

    Anyway Sasha and other regular bloggers, I've been indisposed due to a short period of incarceration in the US of A, which interrupted my piratical work, but since they've stopped the torture lite, it was quite pleasant. I couldn't have asked for a nicer cellmate, a Mr C Black, though thre was a Mr B Madoff next door who seemed terribly negative about things and there was constant construction work; I understand from the guards that it is being called the WALL STREET WING and has to be ready for 100 new high-achieving inmates by the autumn

    For everyone perplexed at how Alistair Darling can believe that the UK could grow by 3.5% in 2011, all I can say is - think inflation!

  • Comment number 27.

    The problem with ITV is the plethora of uninteresting, non-cerebral programmes aimed at the lowest common denominator. There isn't much worth watching on ITV. A better quality of programmes are needed to compete.

  • Comment number 28.

    a few years ago I would be happy to sit through the adverts during ITV programming, or film. Today, however, restrictions on their frequency and duration are more relaxed, making a 1hr45m film run for in excess of 3hrs. Even longer if it straddles the news. No wonder viewers now record and fast forward straight through the adverts.

  • Comment number 29. were my told us how it explained the whole financial and banking implosion so well that I could talk with authority..where did you go?...and who has got to you?...the day after one of the most controversial budgets in modern times and we talk about GRADE and ITV?

    You will never admit this to us but you MUST have been told to cool it from an already injected PC Beeb Beaurocrat.

    The day after yesterday the pre nobbled Robert would have come out with incisive facts that made many of the pronouncements of yesterday look shaky or superficial.

    Is there anything we can do? there a PC antidote...or are you off to Build a Better Britain with the rest of the believers?

    Bob the blogger has departed...long live Bob the Builder...

    PS the artful trio of Stephanie, Nick and Robert were so pallied and weak on incisive reporting on last night's BBC news. Nick had the PC injection shortly after beginning 1st class travelling with the PM, Stephanie is a shadow of her Newsnight days, and now.....Pesters...all too much.

    Off to start a car scrapping consultancy

  • Comment number 30.

    Now THAT is the 'green shoots of recovery' - Robert Peston writing about something other than the credit crunch and its effects on our economy - realising that he'll have to earn his bread and butter with a new story

  • Comment number 31.

    #22 Jericoa: Ooops - sorry I was slow :-)

    #26 Pirate: Glad to see you back unscathed - did you hear of any plans for extraditions to the "Wall St Wing"? I don't think we'll be having a "Lombard St wing" in Wormwood Scrubs somehow.

    ITV will stay afloat no doubt, minus the "public service" as part of a "Bread and Circuses" programme to keep our minds off the realities.

  • Comment number 32.

    For Helenhey (#3).

    "Robert-your silence on yesterday's budget is deafening."

    He's still brooding around the rise in tax for people who earn over £150,000 a year.

  • Comment number 33.

    Thought it was Budget day yesterday?

  • Comment number 34.

    Robert, mate, what about the budget?

  • Comment number 35.

    It seems that many of the digital devices we use are a huge step backwards. Digital TV is typical. When you lose a bit of signal the box goes haywire, won't switch off and won't respond to the control. You have to unplug it. Or the pictures freeze or stop. With analogue TV, the picture just went a bit fuzzy. HDTV - what on Earth is the point of that? Is Corrie suddenly miles better because you can see it super-sharp? Unless you're trying to read pages of data or words, there is zero point in spending thousands on a HDTV set. It's just pointless technology. LCD / plasma? It's nice TVs are a bit flatter, but who really needs a 50" screen to watch EastEnders? Who needs a super quadrophonic TV surround sound really? Nobody, except some techno-geeks who can impress their sad friends. And don't get me started on DVDs. You can't pause them, take them out and play them where you left off, they jump, hang - video tape did none of these things. How is digital an improvement? Sharper picture quality maybe, but again how much does that increase your enjoyment?

    I resent being forced down the digital route when I am being sold inferior goods and getting an inferior service.

  • Comment number 36.

    I am so disappointed not to read/hear Robert Pestons comments on the budget. Have I missed something or is he being prevented from commenting?
    It s a gret loss and WHy?

  • Comment number 37.

    I'm baffled.

    The basic budget story is the Government is to borrow 175bn and spend it. I am bracing myself for the effects of this fine-tuned fiscal policy but know I can depend upon the skilled team at number 10 to spend wisely! (Track record.)

    It would not matter to me if ITV stopped broadcasting tomorrow as a subject area it is of no consequence in the face of the real news and events. Maybe ITV should report some of this stuff?

    The shop is particularly dead today (Real effect of all this.) and I have been searching for meaningfull discussion in the media on the subject of the 2009 budget. I have come to the conclusion that it did not happen as no-one is taking a blin D Notice of it.

    I would like to see the 2009 /2010 projected income and expenditure account for UK plc shown in simplistic terms to allow us to grasp what's coming from where and going to whom.

    I looked at some of the regional unemployment figures too this week. Very large conurbations with approaching 10% of the working population unemployed. This is a potential public order nightmare and nothing like a spending cut earning opportunity.

    I am unclear how yesterday's budget reflects in substantial terms the welfare and prudent stewardship of the UK economy that is currently required.

    It is merely the residual fall-out from saving the economy from the collapse of the banking system, is accepted, and has stunned us all into silence.

    All sizzle. No steak!

  • Comment number 38.

    Surely they'll be able to use yesterday's budget to claim back vast amounts of tax for their last three years of losses?

    That would be a practical example of the budget

    The fact that you don't mention it probably says much more

  • Comment number 39.


    Do what we're paying you to do and report on the economy please! It was budget day yesterday didn't the BBC tell you? Michael Grade leaving ITV is not top news. Dont tell me the BBC has giving you a gagging order or threaten to ship you of to China again, just so you dont report on the budget....

    Yeah I know just my imagination running wild...

  • Comment number 40.

    Yesterday's Budget demonstrated the best Exit/Dump policy ever shown to the British people - a bankrupt Government leaving a now-bankrupt country.

    Be gone and let's have done with you.

  • Comment number 41.

    I doubt financial pressures won't be just an ITV problem, but one that will effect other commercial broadcaster's like Channel 4 and 5, who are now living with the proliferation of TV channels, decreasing advertising revenue and a decreasing ability to bring it's content to the attention of the majority of the viewing audience. Traditionally this wasn't a problem as there were 5 or under Terrestrial channels capturing the majority of the TV audience, but as the 'choice' increases and so to does the method of delivery of these new channels and so does audience spread across them.

    Furthermore those of us out there, with PVRs like Skys and Freeview+ we simply fast forward the adverts. I know I do. And I do it 100% of the time.

    I simply detest adverts, to the extent that I never watching a Film because of the interruption or corruption to them, that Terrestrial viewing brings with it. DVD's and Box Office on Sky are my order of the day for me.

    Unfortunately the aforementioned channels have added to their own downfall, adding to proliferation by allowing the 'pimping' of old material to all and sundry and continual repeating of old show's on their own digital channels as well.

    America is now the shining light of quality TV (how I've never wanted to say that), but we need to look to them for inspiration. HBO like the BBC has no adverts, but unlike the BBC it is subscription based and generates huge revenues to invest in first class shows. Anyone heard of the Sopranos, Six Feet Under, The Wire ? All HBO. ITV meanwhile cancells Wire in the Blood as it's too expensive?

    I'm not saying this model is the way forward, but one which is would have been could have been Kangaroo (see the link please).

    It could have provided the British public access to a huge amount of content at a drop of a hat. And you know what I wouldn't have minded sitting through a advert or too to Watch an episode or a series.

  • Comment number 42.

    Well put somali_pirate , nothing more scary then the graveyard at night , unless in the arms of your Darling! maybe?

  • Comment number 43.

    Quite frankly my dear I don't give a dam about ITV

    What about the 200bn deficit

  • Comment number 44.

    Interesting points made by Excellentcatblogger...

    However, it is a very one sided arguement that has failed really to address the real issues surrounding commercial TV and specifically ITV within the UK.

    Commercial TV can deliver huge coverage levels (people actually seeing an advert or communication) in a very quick period of time. Not that long ago a 30 second spot in Coronation Street, could reach 15 million people in an instant, an England World Cup game can be seen by half the population, that means your message been seen by 30 million people in the space of a 30 second advert. This has always been TV's strength and is why advertisers pay big premiums to use it.

    However, the advent of MCH and it's continual fragmentation of the UK broadcast landscape has hindered the large terrestrial channels from delivering what was traditionally their core USP. If you add to this the very unique way TV is traded in the UK (Impact tolerated trading system optimised across various different social demographs, such as ABC1 Adults or 16-34 Adults), the growth of Digital Media and CRR (Contracts Rights Renewal, which is the regualtors shackles that Peston has mentioned) then commercial TV, and especially ITV (CRR) is in a quandry.

    The costs of TV airtime are directly related to how much supply and demand is in the market at any given time (year-on-year). The problem commercial broadcasters face is that they created a trading system that benefitted them many years ago, however, it is now working against them, becuase all it has done is cheapen their product massively. It is now more expensive to advertise in the Sunday Times on an ABC1 Ads cost per thousand basis than it is to advertise at ITV's Station Average Price (Ratecard) across it's full network price.

    CRR was created to prevent ITV from abusing it's position when the the two former ITV saleshouses of Carlton & Granada merged back in the early 2000's. ITV at the time did not forsee their Share of Commercial Impacts (SOCI) or 'supply' falling off so dramatically, and essentially they mis-judged this, due (and it has to be said) to a certain amount of mis-placed arrogance. This has resulted in advertisers and Media Agencies removing large amounts of reveune share from ITV and sticking it into other braodcasters (namely Channel 4 & Sky), but more worryingly re-investing it into Digital and other medias, detracting from commercial TV altogether. Most Media Agencies and advertisers are happy with CRR and quite rightly so.

    For ITV to improve its position it has to do one of several things:

    1) Remove CRR, but there will be much opposition from advertisers and agencies alike, as well as potentially the OFT. Realistically, this couldn't even be implemented before 2011, even if there was enough support for it.
    2) Come up with a brand new Trading mechanism, that prevents further cheapening of their product.
    3) Improve its share of commercial impacts, specifically against the more desirable audiences that advertisers wasnt, namely up-market and younger audiences, that have disposable incomes. To do this they need to improve quality programming. But how can they afford this?

    Good luck to Michael Grade's successor, as they are going to need it...

  • Comment number 45.

    Bob if your not going to talk about the budget - far more important than whether itv carry on or not - can you just let sasha and jericoa carry on with there wine talk as its far more interesting! lol

  • Comment number 46.

    Grade has shown at least some understanding that ITV has a future as a major broadcaster only by investing in quality programming aimed at selected aspirational audiences. Unfortunately ITV now shows signs of its traditional knee-jerk reaction to advertising downturns, which is to retreat back to lowest-common-denominator TV, seemingly blind to the fact that this drives away the affluent and aspirational consumers most advertisers are targeting - and so depresses its advertising income further. ITV's core problem seems to be a lack of intelligence and talent amongst its senior and middle management.

    On a separate note Robert, can you clear up why a BBC Online story today tells us that Lloyds banking Group is "43% taxpayer-owned", when we're continually told it's majority owned by the taxpayer?

  • Comment number 47.

    As you all seem to be bored today; here is a topic worthy of discussion. I've nicked it off the bottom of Damian Reece's column in the Telegraph today.

    "Not surprisingly the gilt market took fright, giving an immediate vote of no confidence in Darling's plans. The yield on 10-year gilts jumped 12 basis points to 3.45pc as the price of gilts tumbled. The currency markets reacted in the same way, the pound falling, while the cost of insuring UK government debt against default rose.

    This is a Budget that won't stimulate the economy but weaken it. His borrowing plans will burden us with one of the world's worst deficits for years to come and his tax plans will punish hard work and penalise aspiration. The UK has suddenly become a much worse place from which to do business which can only damage our prospects. Our long-term interests are being eroded by short-term political games. Old Labour is back but this time it's back for revenge"

    This is a real worry.

  • Comment number 48.

    Bloggers:Please don't encourage Robert by talking about the state of (ITV !!??).Everyone is here for the same reason so just ignore him and please keep posting on the topic we're all hungry for.

  • Comment number 49.

    The problem for ITV is that it's business model hasn't worked for some time and, in a multichannel and internet-ed up universe, is probably never going to work again.

    Commercial shows, the ones that get high ratings - like so called 'shiny floor' entertainment (X Factor, Talent, I'm a Celeb etc) and dramas with high profile casts (eg Martin CDlunes, Julie Walters etc) - now cost so much to make that ITV have not turned a profit on them for years.

    In addition, their own production arm doesn't actually make most of their peak time successes. Indies do. And those independent companies enjoy a fabulous deal whereby the whole cost of their shows is covered in exchange for just a licence for two UK transmissions. So unlike the BBC, ITV don't even own most of the top shows they broadcast. So they can't make up the deficit via overseas sales.

    Management has tried putting pressure on commissioning editors to commission more shows from ITV Productions, but the Comm Edds know they will be measured in ratings and critical success, and fear that the in house producers won't deliver to the same standards the outsiders do. So they just ignore the pressure.

    So basically ITV are left with only one real way to make money - from UK advertising. Which leaves them in a vicious circle. If they spend the money they need to get ratings, they fail to earn it back. But if they cut their budgets and make cheaper shows, they risk losing even more viewers and driving the advertisers away.

    All this they have made worse by systematically getting rid of most of the people who actually understood popular television, starting with the old drama department, to most recfently the Head of ITV Productions.

    Now, with the size of their borrowing against a tiny shrunken capital base, they are technically BUST.

    My own best guess is that, once takeovers become commercially and politically possible again, some foreign interest (possibly with some UK front of house names) will hoover up the shares, will ditch the public service committments, merge the channel probably with Five, retrench to a diet of soaps and reality shows and the ITV we all grew up with will be no more.

  • Comment number 50.

    Considering the garbage that is now laughingly called programming by ITV, Grade should have been pushed before he got the chance to run. Mind you the BBC has reached almost the same level of mediocraty , so a few heads could do to roll there too. Enough about poor entertainment however, why no comment on the comment from Brown which suggests Labour is alive and well and caring for people. The man is still in denial, in fact I think he's a candidate for " care in the community " though due to his incompetence that doesn't work either. The expression on the faces of the Milliband bros. and cronies during the budget said it all, they saw the gravy train disappearing and would like to give Brown the push, but unfortunately this might precipitate an election and the gravy train would definitely vanish.

  • Comment number 51.

    #25 Jolo13
    "the BBC claims to be "the finest broadcaster in the world" so they should put their money were their mouth is and become a subscription channel"

    Hear, hear!

    Can anyone suggest why if we have to pay the "Television Licence" fee even if we don't watch BBC on television, there isn't an "Internet Licence" fee for anyone using the internet in the UK? Also what is the position of people watching just on i-Player rather than on real-time television? Such people actually get more flexibility and benefit from the BBC than those who use television receiving apparatus - why do they not have to pay a licence fee?!

    I wonder how many people would pay a voluntary licence fee. Not me.

  • Comment number 52.

    Today's blog is relevant because it is part of the real economy that Robert's correspondents have been asking him to do! I'm not an apologist for Robert either!

    The challenges facing ITV are relevant because lots of industries are going to face their own equivalent problems soon - if they are not doing so already.

    As for the budget, it would be good to have an analysis in plain English - not the are you the puerile are you a winner or loser analysis that we have traditionally been given - that shows just how far Britain is down the tubes, or not, when compared with the rest of the world. What would be equally useful is for the politicians to stop posturing and pointing fingers at each other about who is really to blame and actually agree how we might get out of this mess.

    As they used to say in 'Boys from the Blackstuff', "Gi'us a job, I can do that!"

  • Comment number 53.

    I think we are simply witnessing the (not so) slow decline of some of the old methods of media outlet and business models. The advent of things like youtube, on-demand TV and the need to instantly access information and entertainment all the time (iphone) has and will continue to kill the old business models.

    The growth and cheapening of digital tv production will simply spawn numerous low cost, home grown channels - think youtube but with people uploading directly to tv rather than the website. Already there is a proliferation of TV channels which don't require TV advertising but consist of attracting an audience of 100 or so people who interact with it to generate their revenue (think the girls on sofa or pay to enter quiz TV programmes). I think run of the mill TV which tries to be all things to all people will soon be a thing of the past.

  • Comment number 54.

    #51. ILOVEMYDENHAM wrote:

    "I wonder how many people would pay a voluntary licence fee. Not me."

    And yet you're happy to use the BBC website to air your opinions. Who do you think pays for it?


  • Comment number 55.

    C'mon Robert how about something on the budget? What about the Crosby report bit concerning 20 billion of taxpayer backed mortgages to reinflate the housing market? No-one else has reported on that, why don't you?

  • Comment number 56.

    We have just had the worst peace time budget in a century & you believe we expect a report from you on Showbiz? Please have a look at in the light that this is the BBC public service website.

    Or are you subtely hinting that the same is happening to you as Mr Grade?

  • Comment number 57.

    just discovered oz style arobics on sky sports xtra lol - now thats really worth a fee!

  • Comment number 58.

    LippyLippo said: "It seems that many of the digital devices we use are a huge step backwards. Digital TV is typical. When you lose a bit of signal the box goes haywire, won't switch off and won't respond to the control. You have to unplug it. Or the pictures freeze or stop. With analogue TV, the picture just went a bit fuzzy. HDTV - what on Earth is the point of that? Is Corrie suddenly miles better because you can see it super-sharp? Unless you're trying to read pages of data or words, there is zero point in spending thousands on a HDTV set. It's just pointless technology. LCD / plasma? It's nice TVs are a bit flatter, but who really needs a 50" screen to watch EastEnders? Who needs a super quadrophonic TV surround sound really? Nobody, except some techno-geeks who can impress their sad friends. And don't get me started on DVDs. You can't pause them, take them out and play them where you left off, they jump, hang - video tape did none of these things. How is digital an improvement? Sharper picture quality maybe, but again how much does that increase your enjoyment?"

    Ho Ho, funny Luddite stuff. Did your analogue TV never go wrong? HDTV is a step forward in quality. You've either never really seen it or can't afford it, one of the two. By the way neither Eastenders nor Corrie is bradcast in HD. Watching a concert on SKY HD with 5.1 surround sound is simply marvellous. Period. It's just silly to say otherwise. Regarding DVDs, you need to read your instruction manual. Just take a note of the time remaining and skip to this point when your put the dic back in. Sure beats having piles of scrunched up oxide tape jammed in the old VCR. Lastly, basically you're saying how can a marvellous picture with great sound and beautiful colour increase one's enjoyment. Huh? Trying to dress up this digital improvment as the Emperor's New Clothes is just daft. Go on, let yourself enjoy it...............

  • Comment number 59.

    #49 wharfgirl

    You're probably correct.

    And how long before, perhaps, the BBC becomes the Belgian-owned Broadcasting Corporation?

    Hell, it's pretty much what has happened in other sectors and let's just face it, mainline T.V. really is rapidly becoming yesteryear's advertising medium.

    As for subscription channels, well that's fine if you can afford it. Though having said that, from an advertising perspective, would you want to advertise to people who probably can't afford your product anyhow? So perhaps there could be a future for subscription channels subsidised by targetted advertising. Perhaps even this could be only at the beginning / end of programmes, rather than having commercial breaks inside the programmes.

    I mean TV is becoming increasingly "branded" and we increasingly associate certain brands, products and adverts with our own favourite programmes nowadays. (I know I certainlly do).

  • Comment number 60.

    #56 Has got a good point. Can we get Martin Wolf or someone like that to run this blog. I disagree with Wolf on his comment that the Credit Crunch was un-expected (see Elliot Spitzer, Governor of New York, explain how he and all 50 states tried to stop the credit crunch years ago but were stopped deliberately by DC - Spitzer wrote this article a little before he was brought down in a prostitution expose) but at least the topic is the proper one - Darlings 'last one out switch the light off' budget. A blog about ITV is fiddling while Rome burns. Peston might better be suited doing a light entertainment blog.

  • Comment number 61.

    The day after the budget reveals we as a country are on the brink of financial meltdown and Peston gives us this??????????????

    Pretty shabby

  • Comment number 62.

    Why are so many people complaining about the business editor writing about business and leaving the budget analysis to the economics editor, whose job is to report on the general economy?

  • Comment number 63.

    Can all the multitudes slating Mr Peston for not covering the budget today please note that Stephanie Flanders is the economics editor, and a very good one at that.

    "But right now, an ad on ITV 1 is cheaper per individual reached than an ad in a national newspaper.

    Those are not the economics that can support the quality of programmes viewers expect from ITV over the long term."

    One suspects that neither are these the economics that can support the quality of articles newspaper readers expect either - which may be of rather more consequence for 'speaking truth to power' in the long run.

  • Comment number 64.

    Peston seems to pick and choose his areas of comment, business, banks, economics......

    For instance he had plenty to say about Osbourne and yachtgate

    And to try and get us to believe that this ITV non story is a more important 'business' story than that nightmare budget, well...

    Pull the other one lads

  • Comment number 65.

    The lowest quality Peston posting ever!
    Failed TV executive fails again and finally walks.
    BIG story - I don't think.
    Grade has had his snout in the media trough for years and consistently failed to achieve anything of note.
    Haven't watched a single ITV programme in years.

  • Comment number 66.

    If I may veer off topic for a moment, people watching the ITN 6 O'Clock Evening News this evening were treated to the sight of Daisy McAndrew, their Economics Editor, talking about the IFS's gloomy assessment of the British economy.
    I myself found it difficult to concentrate on what she had to say because she appeared to have a silver port decanter label hanging on a chain round her neck.
    I think it had `DRINK ME' beautifully printed on it in large letters.

  • Comment number 67.


    Green ink? Autistic? Hints of Hitler?

    You are seriously insulting.


  • Comment number 68.

    #67. alexandercurzon wrote:


    Not so. It has been shown that the human mind reads and understands text far more easily when it is written in normal ("sentence") case. It's because the mind recognises shapes rather than individual letters, and that long strings of unbroken upper-case letters lack the ascenders and descenders that give a word its distinctive shape and allow us to recognise it quickly.

    If you're truly concerned with making your posts easy to read then you should imediately switch to normal sentence case. If you do not, then it is clear that you wish only to draw attention to yourself.

  • Comment number 69.

    Robert, Robert, Robert!
    The pathetic political 50% tax on high earners was introduced to give the headline writers an easy story away from the real event, borrowing, we all know that is why they did it.
    You have now fallen into the same, low intellect no story headline writers camp with this waste of time. Who cares what Grade is doing?
    Why are you being sidelined from what matters?

  • Comment number 70.

    #58 Lakepipe. I don´t know about technology, but I do know your final paragraph complete with typo is one of the funniest things I have read in a while.

  • Comment number 71.

    We are being placed into unsustainable DEBT by unaccountable people who only care for themselves.

    The British People are scared half to death and very very angry.

    Who is going to have the "balls" to tap into this energy and motivate the Nation? Just the interest payments as inflation comes back is unsustainable if growth does not return, meaning we all have to cut our cloth accordingly.

    What about 10% off all Public Servant salaries for those over £35,000? What about a full stop on all the Town Hall index linked pensions and a freeze on thier recruitment? What about cutting Parliament down to 300 people who will be willing to work for us at £60,000 a year with nowt else?

    No more gravy trains, cancel Trident, cancel IT cards, bring back our troops, cancel aircraft Carriers and give some taxes back to the lower paid and incentives to small businesses. Finally cut the BBC licence fee by 25%

  • Comment number 72.

    #68 rbs_temp

    I think you are quite correct, in a technical sense, but you are overlooking the fact that AC rarely has more than two or thee words per sentence.

    I don't have too much trouble absorbing his

    GO GORDY, GO NOW type postings, despite the capitals.
    Have a nice evening.

  • Comment number 73.

    #71. JohnnyZero66 wrote:

    "No more gravy trains, cancel Trident, cancel IT cards, bring back our troops, cancel aircraft Carriers and give some taxes back to the lower paid and incentives to small businesses. Finally cut the BBC licence fee by 25%"

    I'd agree with most of that, but what good would it do to cut the licence fee by 25%? That would not reduce the public debt, and would reurn approximately 40p per week to each person in the country while depriving many millions of people, including the elderly and unemployed, of a major source of information, entertainment and news.

  • Comment number 74.

    So ITV can't raise enough funds from marketing. Good! I got so tired of those marketing people doing everything they can to sell flu cures I barely watch it - just as fake as a talented banker in the city!

    Nice to see Robert has his eyes on industries other than banking for a change.

  • Comment number 75.

    Going back on topic. The local news networks seem to be under threat anyway. But if ITV ditches its public service commitment, what will happen to ITN?

    For all its faults, I am, on principle, a great supporter of the BBC*. However, I would hate to see a news duopoly of the Beeb and Sky, especially in the light of having seen Fox in the US. The Beeb would be forced into the arms of the government of the day in order to ensure its own survival, and Murdoch would reign supreme.

    What we seem to have now is too many channels with Llareggub on. (with apologies to Dylan Thomas).

    *(However, as a public service, it should be subject to a salary cap.)

    So far as the other controversies are concerned:

    Be yourselves, but


    I have learned lots from people who have disagreed with me, but courtesy is the lubricant of civilisation.

    I'm having an early night 'cos I'm off t't metrollops for the weekend. Have a good one everyone.

  • Comment number 76.

    Crash Gordon has just declared CLASS WAR.

    And what does Apologist Peston have to say...

    ... nothing. A diversion.
    Just like Fred the Shred diversion. A political move to take the focus off the destruction of the economy by Labour.
    58 weeks to go....

  • Comment number 77.

    re #63 Stephanie Flanders - does she have her own blog ? - Newsnight has one. Maybe Peston is an un-sung hero - his blog was so bad, so out of place that maybe he was saying I've been D-Noticed and this is all they allow me to write ? - a Mr Blobby Story - Robert, next time you get D-Noticed, friends of mine are always getting D-Noticed at the FT, and you write a Titanic deck-chair shuffling post as a result, begin your post with the letter D to let us know.

  • Comment number 78.

    For Sashaclarkson # 75

    "I'm having an early night 'cos I'm off t't metrollops for the weekend."

    Nothing too rowdy, I hope, Chuck.
    London rozzers don't like rowdy people.

  • Comment number 79.

    #76. New_Hero wrote:

    "Crash Gordon has just declared CLASS WAR."

    Don't be so dramatic. Asking the wealthy to pay a little more of their income in taxation (and it is only a little more) at a time of national need is hardly class war. Sixty percent of the country agrees with the policy - and I agree with it too, even though I stand to lose a (small) amount as a result.

  • Comment number 80.

    ONly you could disagree with ac over his use of capitals. ANd how. IS this important? Tut tut.

  • Comment number 81.

    #79 rbs_temp I guess it depends on how you look at things.

    As far as I can see the main idea is to embark on a near GBP trillion borrowing binge. Who gets to meet the costs, why none other than the average guy in the street. What about the rich? Well they will be OK, no great change to non dom rules. A few people who earn over GBP150k will pay a bit more tax - but they will be mostly somehow tied to the public sector, or have maybe a couple of years of earnings just over the threshold. All the rest will rush of to their nearest tax advisor and find some new scheme to mean they are excluded.

    Looks a lot like class war to me.

  • Comment number 82.

    If, as has been said a number of times today, only 1% will be affected by the 50% tax rate on eanings over 150k GBP, I'm glad I'm in the 99% camp when the war comes.
    I think we might have a good chance of victory.
    Back to listening to Grimethorpe Colliery Band - superb recording I found yesterday at the local market, for pennies.
    "Cost of everything, value of nothing"???

  • Comment number 83.

    Just a point to cheer everyone up before I go to bed.

    With a rise in income tax to 50% from next year if happened to be a newly retired (early) banker living in Edingurgh struggling to survive on a measly works pension of GBP 705,000 then in the tax year 2010 to 2011 you will be paying an extra GBP 1,067 a week in income tax.

  • Comment number 84.


    longer ones, however, would be a serious misjudgement ... but the Alexander Curzon blogger person doesn't do long ones so all is well with the world

    as regards ITV I'm quite happy with Steve Ryder fronting their sports coverage - I prefer his brand of low key professionalism to those presenters who feel they have to inject a large slice of their "personality" ... you know the ones I mean

  • Comment number 85.

    at least,unlike the beeb and certain scots man that "run"the country and who will remain nameless, itv doesnt tax me. brownwatch 402 days

  • Comment number 86.

    #72 ebagum have a nice evening!!! at 8 54pm its almost over!!!esp if you have to get up early and earn a crust, so we can all pull together and fight hard and to battle bravely ,to get our wonderful government back on track.

  • Comment number 87.

    "3. At 10:05am on 23 Apr 2009, helenhey wrote:
    Robert-your silence on yesterday's budget is deafening."

    RP on a MI5 gagging order courtesy of our Jackie?

    Thanks BBC (Organ of the State)

  • Comment number 88.

    Nothing too rowdy, I hope, Chuck.
    London rozzers don't like rowdy people.

    We're singing with the 1000 male voices in the Albert Hall tomorrow. (Sold Out, so it isn't a plug). It's the wives and daughters who are the rowdy ones - but the police have more sense than to tangle with them I think. :-)

    Ah well, the coach is coming...

  • Comment number 89.

    As someone who took the money and jumped, while there was still a good redundancy deal to be had, I have to say I dont see much of a future for ITV and in a digital world have to ask why that matters anyway?

    Throughout talks we had with Ofcom last year arguing for them to oppose Grade's plans to merge our regional news, the response we got back all the time was that if they didnt support the plan ITV might walk away from the license.

    Ofcom, as such, was not so much a regulator as it was somone in a poker game unwilling to call the others bluff.

    I would argue that if ITV feels it can survive as a totally independant commercial company then it should walk away and do just that, as its current supposed commitment to PSB is nothing more than lip service.

    Obviously in that situation there is no reason why it should still automatically be our third channel, and that position should be taken instead by newly formed public service broadcasting channels.

    In that situation if ITV survives good luck to it, if it fails then to the viewer is it really a loss?

    I'm sure someone would be happy to buy the rights to make Coronation street and Emmerdale, as well as the Celebrity driven talent/reality shows they have that work, (or at the very least fill the gap in the market with something almost identical), and once you've done that what else really does ITV have that would make the viewer miss it?

    The old model that now doesnt work was based on the principle of the terrestrial channels. The assumption would seem to be that in a multi channel digital environment there is still some merit in preserving those channels.

    What for?


    Let ITV sink or swim free of obligation in a commercial multi digital world, lets see the Government provide legislation for a new system of public service channels devoted to regional news and programming that is totally divorced from any kind of ITV linkage.

    And lets start seeing our licence fee used by the BBC to make less Eastenders and talent shows in favour of those drama's, documentaries and factual programmes that commercial broadcasters cant afford.

  • Comment number 90.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 91.

    70. At 7:54pm on 23 Apr 2009, armagediontimes wrote:
    #58 Lakepipe. I dont know about technology, but I do know your final paragraph complete with typo is one of the funniest things I have read in a while.

    Seconded. Humour in the right place is a bonus, as they say in my office. But IMHO humour in the wrong place is even funnier. Helps pass the time while you are battening down the hatches and sharpening the billhooks for the forthcoming struggle.

  • Comment number 92.

    ITV missed the bus long ago when multi-channel satellite TV arrived. It never saw the real commercial world until far too late. It lacked the hard business money driven push of its competitor at Sky. ITV still struggles with the modern world. Live Sports programmes cannot be allowed to overrun into some other sacred slot. The Champions League league has to fight for its slot with Coronation Street on ITV1. What is multi-channel for?

    The Darwinian model of evolution is just as valid on TV as with the High Street shops.
    A lot of us bye supermarket own brand products - much of ITV's traditional advertising was competing brands of Coffee or Soap Powder etc. Does ITV's fund raising model have a future? Maybe only either subscription TV or compulsory tax TV are the only viable models at present.

  • Comment number 93.

    Mr Peston

    A blog about ITV the day after the budget - for goodness sake - did you think they were a bank??

    Car production down 50% - what's going to happen if this continues for another 6 months?

    Retail sales up about 1% - but what about the detail behind this surprising rise? Includes food where inflation is high so we are buying less stuff but how about some reporting of the split of the drops and a comparison with inflation in each sector to get some sort of volume drop as opposed to value? Too hard work perhaps?

    GDP down 1.9% against predicted 1.5% - what does this mean for AD prediction for year?

    Pound v Dollar - speaking to Americans they feel their economy is in a much worse state than ours; I tell them their size will protect them whereas we are too small and in big trouble. Who is right - will pound rise or fall against dollar in next twelve months - discuss.

    Just some possible topics for future blogs.

    I suppose if we are all on the dole whether ITV is on the telly to watch may be important from that point of view - are TV licences subsidised when you are unemployed?

  • Comment number 94.

    Is there scope for Gordon B to pull a rabbit out of the hat in 12 months pre-election, and sell off the govt shares in the banks(which has seen their share prices increase recently), and pay off the govt debt?

  • Comment number 95.

    #92 uk_abz_scot

    "Maybe only either subscription TV or compulsory tax TV are the only viable models at present."

    Possibly. I think in future we will be using Broadband to view on demand, pay to view, from "Media" suppliers which may not be TV companies at all.

    Where will the advertisers go? People would not want ads in anything they paid for directly.

  • Comment number 96.

    The BBC should be put on the same funding basis as other channels.

    It has long been infected by the Islington "Right on" set and their arrogance is breathtaking.

    At the weekend, at some obscure time in the morning, there is a succession of Islington set producers paraded before us to explain why all the viewer's complaints they are responding to are so dumb. I try to avoid it now as it's so infuriating.

  • Comment number 97.

    "... whether to remain a public-service broadcaster after 2012"? When was this horrible channel ever a public-service broadcaster? ITV's long been pointless, merely fuelling a race to the botton which has sadly dragged down Channel 4 and much of the BBC. And now it finds itself outdone in that race by the likes of Murdoch, just as the broadened participation of the internet threatens to make TV entirely redundant. Good riddance to it: ITV was never worth saving and even C4's no longer worth the effort of pressing a button on the remote. The only future for terrestrial TV is publicly-supported quality programnming that its competitors can't or won't deliver, and as ever more of us dump our TV's that support will eventually have to to come from general taxation rather than an increasingly prohibitive license fee.

  • Comment number 98.


    What's all the fuss over the 50% rate?

    Most of those paying it are well equipped with accountancy tax avoidance/evasion advice as a taxable deduction and will have no qualms about either joining Fred Goodwin in hiding, non-dom it or simply join the 'black economy' and take bungs and favours like sleaze museum MP's.

    The 'black economy' is never bust - ask friends and associates of most MP's - the black economy is doing well - I'm sure A. Darling did not ignore it in his budget - he knows the critical but suitably defined small role it plays in his GDP estimates - as most people do not know how big it is or how it operates at a macro-economic level and all political parties shy away from defining it in case their skeletons start rattling in the cupboards - that's definitely one for discusssion about Swiss and Monaco bank accounts on an oligarch's yatch!

    That's the one the politicians, economists and media reporters stay clear of! But I think that it needs stirring - if anyone has a mind to take it on? I wonder what figures were put on the 'black economy' and related tax dodge services in this week's budget?

    The 'black economy' is probably the UK's main economic growth area and is never bust! Perhaps that is what Goondog Trillionaire Brown meant when he said an end to 'boom and bust'?

  • Comment number 99.

    How convient for the hard core capitalists. As the super "successful" fail we have to cover all their short term decisions for maximum return. Now that they have successfully transfered their bad decisions to the governments of the world we are bankrupt and are forced to make hard decisions.

    Do you think a hard core capitalist wouldn't love to destroy everything they can about government? This looks like a huge win win for the plutocracy of the world that hides behind faceless corporations. In order to sweeting it a bit they also added a fee to tax the highest "earners" and thus keep any honest working competition in check.

    The entire system is rotten. We never have decent choices and are always put into a position of choosing from evils. And even worse I don't believe a word any corporate or government leadership speak. There is one thing I know beyond a doubt is that leadership all over the world is incapable of speaking truth.

    My guess is all that will happen is massive priviatization of everything as the government has to cut expenses. The "taxes" on the rich will simpy be there to keep honest capital from being able to do anything of value. And all the while average citizens are constantly told to retrain for jobs that don't exist or will be globalized shortly.

    Our society is garbage. It is obvious that this entire generation is being sacrificed for globalization agendas and to maintain the plutocracy.

  • Comment number 100.

    I dont mind admitting that I work for a large US investment bank and will be hit badly by this tax grab on my earnings and my pension (and I am very very angry at this wholly political move).

    However, what most of the correspondents on this blog fail to realise is the massive damage this has done to the City. That is a VERY bad thing as the City is a massive exporter of invisble trade and generates a huge of income tax for the country as a whole. The damage being done now will last for gernerations.

    I can asure you that a lot of talented people and firms will leave for Geneva, Zurich, Paris (less tax in Paris!!!) etc because of this. While I am angry i have children at school. A lot of my high earning colleagues will simply relocate - just like that.

    Net result:
    1) we structurally weaken one of the few industries we are still competitve in. (A Mars bar for anyone who can tell me what else we ARE good at??)
    2) UK earns LESS tax than before both in the short term and the long term.

    This whole assault on banking has been orchestrated by Mandelson as a headline grabber to divert attention to the Governments failing. Yes the banks created a cheap SUPPLY of credit (doh! thats what they are meant to do). The Government allowed a massive DEMAND for credit.

    1) Politicians are on an electoral cycle - they have always let booms run as its unpopular to take away the booze as the party's in full swing.
    2) Brown set up the regulatory structure and allowed the DEMAND to rise exponentially
    3) The governement has totally failed to save anything while the boom ran. Why... well have a closer look at this shopping list of waste...


Page 1 of 2

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.