Most idiotic story of the year so far

By Stephen Pollard
January 4, 2010

OK, it's only 4th January, so it's not much of an accolade, but this is clearly the most idiotic story of the year so far:

is to launch a fightback against its critics by claiming that, far from
being a drain on the licence feepayer and squandering millions on
on-screen stars and behind-scenes apparatchiks, it in fact generates
£7.6bn a year for the British economy.

Why so? Let Tim Worstall explain:

Now I’m perfectly happy to believe that an organisation as large as
the BBC has spin off benefits. Even that there’s a multiplier to their

I’m also absolutely certain that the report they commissioned from
Deloittes will be full of the most basic economic howlers. It will
entirely ignore opportunity costs for example. (What would be the
multiplier effect if those billions in licence fee stayed in the
pockets of the populace and fructified for example.)

But the bit that I’ve got an extremely hard time believing is this:

The Guardian understands it concludes the licence fee
generates £7.2bn for the UK economy by supporting the independent
production sector and other parts of the “creative economy” – more than
twice the value of the licence fee.

Why is the multiplier dependent upon how the BBC is financed? £3
billion cycled through a voluntary subscription scheme to be spent on
TV and radio would have the same effect, wouldn’t it? In fact, it
should have a greater effect for being voluntary there would be no
deadweight costs to it.
In short, “big organisation has an effect on the economy” seems fair. “Big corporation must be financed by taxation” doesn’t.



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