Ofcom should stop persecuting BSkyB
REWARDS for failure, we all agree, need to be eradicated. Everybody has had their fill of those – in the City, in government and elsewhere – who have pocketed a fortune while failing to deliver or even destroying institutions. But successful, entrepreneurial firms that have risked their owners’ capital, taken huge gambles and delivered vastly better services for their customers, creating thousands of jobs in the process, should be rewarded.
So it beggars belief that Ofcom, the telecoms and media regulator, has just launched a massive attack on BSkyB, one of Britain’s most successful companies and a firm which ticks all of the above boxes. In what appears to be an astonishing attempt at punishing success, Ofcom wants Sky to share sport and movie content with its rivals, at regulated prices. There will be a consultation period; but all sorts of meddling could be on the cards.
BSkyB should be left alone. It is not its fault that Setanta proved useless. BSkyB will fight any decision in every court in the land; for the sake of fairness, we must hope its CEO Jeremy Darroch sees off the assault. BT and Virgin Media should be forced to compete freely with Sky without being handed favours from the regulators.
If Ofcom really wants to fight monopolistic behemoths, it should turn its attention to the real elephant in the room: the state-financed BBC, which is crippling the rest of the media with its massive, unfair dumping of TV and web content. Now that would be a target worth pursuing.
BROWN’S BRITAIN
Today’s figures from the Centre for Economics and Business Research showing that government spending will reach 50 per cent of GDP by 2010-11 suggest Britain is no longer a real capitalist nation. If London and the South East of England were stripped out, the rest of the UK would be largely dependent on state spending; some parts of the country are now more socialised than Cuba.
As if this were not depressing enough, a recent pamphlet from the Centre for Policy Studies highlights two other important pieces of research. The first is an analysis from Saffery Champness, the accountancy firm. It shows that Gordon Brown’s new top tax rate and reduction in the pension credit could mean a marginal tax rate as high as 138 per cent for some earners who choose to place most of their income into a pension. Its scenario is little more than a theoretical curiosity but it highlights the absurdities of the new system. Take an individual earning £169,000, who pays £131,600 of this income into a pension. He will receive £26,320 from the government as tax relief. If this person is then handed a £32,000 annual bonus, not only would he lose the £26,320 tax relief but he would also face a further £17,900 of income tax.
The second comes from the Office for National Statistics’ latest survey of personal incomes. This shows that that the top 1 per cent of earners paid 23.9 per cent of total income tax receipts in 2008-09, up from 21.3 per cent in 1999-00. The top 5 per cent paid 43 per cent, up from 39.6 per cent; and the top 10 per cent paid 53.6 per cent, up from 50.3 per cent. We already operate a highly redistributionist tax system; it would be nice if our politicians actually looked at the facts before fuelling class war and envy to pay for their ever-tightening grip on the UK economy.
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