The ongoing fun at TalkTV’s expense has pushed Guido to reflect at length on something that he has thought for a while. There’s too much broadcast political content chasing too small an audience and it will end in tears – for shareholders.
Guido had his second watch of Piers Morgan’s show last night, and by the standards of most current affairs shows, it is better-than-average infotainment. He’s doing issues in an accessible way, a bit more tabloid than say Peston, with much more show business than Marr used to put on his Sunday morning show. Will it work in the sense of making a profit? That remains to be seen. The economics of television favour mass market products; politics-focused television products lose money because politics is, in general, a minority interest and there are just not enough people in the UK to make that minority pay. ITV has always regarded politics as a loss leader, so TalkTV and GB News are attempting to do what no British commercial broadcaster has ever done. They are trying to do politics for profit.
The British television audience is one fifth the size of the US television audience, which is why Fox News, MSNBC and CNN can make money. Although CNN+, the channel’s new streaming venture, failed and shut down after just one month. In the UK magazines, think tanks and online political enterprises have all launched video shows and podcasts of varying quality to service political geeks. Content that mostly preaches to the choir, be it their readers or the ideologically allied. These are niche ventures that build brand loyalty and increase subscriptions and donations. The Spectator’s family of podcasts drive magazine subscriptions, and are financed by sponsors wanting to be associated with the glossy magazine and reach their affluent readers. On the left, Novara’s professional high production values and left-wing critiques give comrades Sarkar and Bastani a measurably bigger reach than TalkTV, funded largely by the donations of their left-wing fans. One think-tank boss told Guido that if their policy wonk focused videos reach just 500 people, that is ten times as many as would ever turn up to a policy seminar – if one donor likes what they see and makes a £50,000 donation, that pays for a lot of cheaply produced online videos spreading their message. The financial logic of these ventures is that they spread the brand message and are self-funding.
These online-only narrowcasters don’t pay presenters millions and don’t have the infrastructure of legacy broadcasters, with purpose built studios, satellite fees, network fees and big production staff head-counts. Yes, the production values are lower, yet viewers don’t seem to mind and they have surprisingly big audiences. They will continue to thrive.
The new channels – GB News and TalkTV – have gone for the infrastructure of legacy broadcasters, in the full knowledge that Sky News loses £20 million-a-year and that the BBC News Channel has a tiny audience by BBC standards. Whilst GB News is doing things on a tighter budget, break-even is still some way away. What takes these channels into profitability will be multiplying their audiences ten times. Good luck with that…
Mumsnet, the motherhood focused website which has been going for 20 years, has long been caricatured as a coven of Waitrose-wine-glugging, liberal, Guardian reading, middle class mums. There is some truth in it; they have championed right-on campaigns on #MeToo, desexualising girls clothes, against gender stereotyping clothes and toys – though Guido notes with regret, somehow never championing toy guns for girls. The founder of Mumsnet, Justine Roberts, told the Guardian she was most
proud that Mumsnet seems to have given mothers a platform to express themselves in all their magnificent variety, and I’m pleased that so many users (58%) say Mumsnet has made them more likely to consider issues from a feminist perspective.
Safe to say, it has not been the place to find feminist Tory voters. Until this Wednesday.
Following on from Keir Starmer saying “trans women are women”, Boris was asked at PMQs by Angel Richardson about the issue of “gender distress”. Boris said in his response, “when it comes to distinguishing between a man and a woman, the basic facts of biology remain overwhelmingly important.” This might seem like basic common sense, however biological facts are no longer accepted by much of the Labour Party…
Mumsnet’s readers reacted with an ecstatic chat thread, “Boris Johnson Just Stated that Biology Dictates What is a Man / Woman“ with over a hundred comments of which 99% were positive for Boris. Here they are to show just how radicalising an issue Labour’s toxic woke policies are:
This week Tony Blair warned the Labour Party in the New Statesman that wokeness will cost them working class votes:
If you look at the culture wars, identity politics, it’s exactly the same as the 1980s. If Labour gets in the wrong place on these things, it’ll alienate part of the working-class vote, a part of which is small-c conservative. If you look as if, on identity politics or culture, you are far away from those people, you’ll frighten them: they won’t vote for you.
Looks like it will cost Starmer middle class women’s votes too…
This was an astounding budget. Rishi Sunak is the first Chancellor to raise corporation taxes since Dennis Healey in 1974. He has established a National Investment Bank, fulfilling John McDonnell’s Labour manifesto promise of 2019. During the time he spoke gilt yields rose over a third of one percent, adding some £7 billion to the nominal annual re-financing cost of the national debt in a little over an hour. Rishi audaciously boasted that after 10 years of prudent Conservative Party fiscal stewardship he was able to undertake a massive spending programme, the like of which we have not seen since the post-war era.
That is just not true, in the decade before the pandemic the Tories failed to close the deficit, doubled the national debt and increased the debt to GDP ratio beyond a level which they said would make Britain bankrupt under Labour. The tax burden is now at a level not seen since Roy Jenkins was chancellor.
The last ten years have seen the Bank of England’s quantitative easing allow Tory Chancellors to avoid the imperative of balancing the books. That trick may not work for much longer. Inflation looms and the bond market vigilantes are awakening from their QE induced anaesthesia. This government has convinced itself that what it wants to do, it has to do, which is spend borrowed money.
In 2017 the Tories, including Rishi himself, were proclaiming that it was a fact that higher corporation taxes will reduce the tax take. So why in 2021 is Rishi scheduling the first corporation tax rise in 47 years?
In the year since he became Chancellor, Rishi has failed to meet every fiscal objective and mandate the government set itself. He now intends to oversee a tax and spending regime last seen in the sixties. Tory spinners are briefing this is setting the ground for an electoral strategy; the levelling up agenda, active government intervention in the economy, monumental infrastructure programmes. Perhaps. It is an electoral strategy that owes more to Peronism than Thatcherism…
Germany’s Chancellor Merkel is right to call Big Tech’s banning of Trump “problematic”, though Guido is not sure that it can be described accurately as a breach of the “fundamental right to free speech”. The Big Tech platforms are just withdrawing their services, which may seem like an academic distinction in terms of the outcome, it is however important to distinguish between a state enforcing a ban in law and a private enterprise choosing to not provide a service. Germany has strict laws which regulate free speech in ways that we don’t want to import.
Facebook and Twitter saw their share prices fall yesterday as investors worried that regulations were going to hit the firms in the wake of politicians around the globe realising that if it could happen to Trump, it could happen to them. France’s finance minister Bruno Le Maire said yesterday that “Digital regulation should not be done by the digital oligarchy itself . . . Regulation of the digital arena is a matter for the sovereign people, governments and the judiciary.” By which he really means politicians like him.
The de-platforming of Trump and the alternative Parler social network, after Amazon pulled the plug on it, reveals where real power lies. The solution is a return to the first principles of the internet. Resilience is surrendered by relying on the main social networks, which are advertiser funded and reliant on giving brands a safe space. Fortunately the architecture of the internet was designed to allow information to flow even if the network was damaged. New social networks that are self-hosted, distributed and decentralised will be developed, they exist already and could soon gain critical mass. Many have just experienced a surge in new users after the Trump ban.
Some of the decentralised services have millions of members, Mastadon‘s codebase allows you to build your own Twitter-like social network, you can either keep it private or open it out to the wider world. We will inevitably now see decentralised and politically polarised networks develop, possibly in the shadows, unregulated. Information wants to be free and the internet enables it. The Big Tech platforms have probably made the big mistake that Mark Zuckerberg has been determined to avoid from the beginning, it could see them go the way of AOL…
The Centre for Policy Studies has a paper out arguing for low deposit, fixed-rate, long-term mortgages. The “no deposit” aspect of the headline reports triggered a bit of concern among those of us old enough to remember that the 2008 global financial crisis was triggered by defaulting sub-prime mortgages in the US housing market. Prima facie it sounded insane to go down this path…
The CPS’s chief wonk, Robert Colvile, has put out a lengthy rebuttal this morning which he summarises as
“This policy is designed to make mortgages accessible to those who can afford mortgages but not deposits – or at least not the current sky-high deposits.”
Mortgages are usually for terms of 25 years to pay off the borrowing over the borrower’s working life. A hangover from when working lives were only 25 years or so. 25 year fixed-rate mortgages in an era of ultra low rates sound like a great idea, giving certainty to borrowers over the lifetime of the mortgage. Guido and the CPS are at one on this, they could be welcome innovation in the mortgage market.
There are a few snags, a quick Google search has not turned up any 25 year fixed-rate mortgages being offered by mainstream high street lenders, yet. What will it take to encourage them? Well judging by the 15 year fixed-rate mortgage offered by Virgin – fat profits. With base rates at 0.1%, Virgin want 3.0% for their 15 year fixed-rate mortgage.* What does this cost borrowers?
Over the term of their loan, assuming not unreasonably that lenders like Virgin would look to maintain a 200 basis point spread on their financing costs, the borrower of £250,000 would risk having to repay £125,000 more than a floating rate borrower, if rates were to remain static for the term. There is no such thing as a free lunch, the fixed rate certainty generally comes at a higher cost to borrowers. If you can’t raise a deposit, the total cost of borrowing inevitably will be higher, a lot higher.
The fat interest rate margin Virgin are demanding might be driven down by more competition, though wholesale lenders might in turn be wary of backing loans to institutions lending on thin margins to consumers who can’t raise a deposit. A property downturn, say because rates rise precisely as feared, might see borrowers in negative equity sending their keys back to lenders. Paradoxically making fixed rate mortgages with little deposit cushion much more risky for lenders.
Rates could rise quite dramatically over the next 25 years, given that central bankers are thinking about inflation more kindly of late. That is why deposits give banks a margin of safety, given politicians will support banks with bailouts, those deposits also give wider society protection. Making mortgages deposit free for a few could be quite expensive for the rest of us in a housing downturn.
The irony of our situation is that quantitative easing and the ultra low interest rate policies that fixed the banking crisis caused by the housing loan crisis, have subsequently caused a housing price inflation crisis. The Bank of England now believes that the increase in house prices is now almost entirely due to low interest rates. Be careful of clever financial fixes…
The Government has been uncritically using the Chinese Communist Party’s coronavirus data in its presentations for days. The numbers, which come from a regime that has expelled and disappeared journalists who questioned them, appear to show a dramatic leveling off of Coronavirus cases. Information obtained by the CIA, first reported in the Mail on Sunday and now followed up in the New York Times, reveals that:
China has form on this – silencing the doctors who initially tried to raise the alarm about Coronavirus. Now the Chinese Communist Party (CCP) is seemingly using carrot and stick approaches encouraging no reporting of new cases. Not that the cases have actually gone away…
Downing Street is aware that the figures are suspect yet still includes them in the data presentation charts. This seems to only be muddying the international comparisons.
On the wider point of Chinese integration with the global economy, you don’t have to be a Trump supporter to think that relying on China for strategically important goods is no longer going to be considered a great idea. In recent years China has made great play of it being a force for good in international affairs. Pundits even started comparing it favourably to the Trump administration when it came to the global rules based order. No longer.
Since President Xi extended his term of office the signs are that China is reversing liberalisation and becoming more of a technology-enabled totalitarian state, with increasing repression of minorities and continuing suppression of human rights of dissidents. On the international front it is becoming increasingly belligerent in the region, not forgetting it is North Korea’s protector.
Hong Kong fears that it will end up as under the leash of Beijing as Tibet. The Chinese communists are waging a cold war on Taiwan, which has been cold shouldered by other nations under economic pressure from Beijing. After this crisis is over Western countries are going to re-evaluate relying on China for strategically important technology like 5G. It goes without saying that production of critical medical materials and technology will be repatriated. Predictions of globalisation being reversed are overblown, de-Sinofication of the global economy however is a given.