Culture Secretary Nadine Dorries has frozen the BBC's licence fee for two years and says it should be scrapped completely. Getty
Culture Secretary Nadine Dorries has frozen the BBC's licence fee for two years and says it should be scrapped completely. Getty
Culture Secretary Nadine Dorries has frozen the BBC's licence fee for two years and says it should be scrapped completely. Getty
Culture Secretary Nadine Dorries has frozen the BBC's licence fee for two years and says it should be scrapped completely. Getty


The future of the BBC and its funding


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May 04, 2022

The government of British Prime Minister Boris Johnson often under-performs but never under-sells. Mr Johnson frequently describes his achievements as “world leading,” although the facts frequently say otherwise. And so when the British Culture Secretary Nadine Dorries promises a “golden age” of British broadcasting to compete with streaming services such as Netflix and Amazon, there is considerable scepticism, especially since the BBC remains the world’s most famous, and by staff numbers, the world’s largest broadcaster. It has 22,000 employees including 2,000 journalists. It is unclear what Ms Dorries’ new “golden age” will look like, but some detect a vendetta against existing broadcasters, including the BBC and the independent TV Channel 4.

The BBC began exactly a century ago. Since 1922 there has often been a love-hate relationship between British governments and the broadcaster, which is funded by the licence fee, a tax on all those who watch television. The amount is set by the government. That means the BBC is editorially independent yet financially often a political football. Ms Dorries is kicking the football now. Originally called the British Broadcasting Company, the BBC was first funded by big business, the high-tech media barons of the 1920s, the makers of "the wireless," that new-fangled invention we now call radio.

The funders lost money, so the British government stepped in, renamed it the British Broadcasting Corporation and most recently set the licence fee at £159 a year. That’s just 43p a day. It allows British people access to numerous national and local TV and radio channels, programmes, podcasts, films, dramas, international news and catch-up services. Buying just one quality British newspaper, The Times or The Guardian, costs more than £2 a day. But now the licence fee, and therefore the BBC itself, is under threat.

A general view of the BBC office in London. Getty
A general view of the BBC office in London. Getty

Ms Dorries has already frozen the licence fee for two years and says it should be scrapped completely. She is unclear how the BBC will subsequently be funded. Ms Dorries is a colourful character. She is the author of some novels, but has endured mixed reviews both for her fiction and her politics. Her 2014 novel The Four Streets was described as “the worst novel I have read in 10 years,” by The Daily Telegraph. The New Statesman offered the worst criticism possible of fiction, writing that “Dorries is just not very good at making things up”.

Every significant British prime minister in living memory, whether on the political left or right, has had rows with the BBC

As Culture Secretary she has repeatedly been accused of being clueless about the job, suggesting, for example, that the independent Channel 4 TV costs the British taxpayer money. It does not. One critic sarcastically suggested Ms Dorries has “written more books than she has read”. Then, in a bizarre interview, she explained that her job included ensuring access to “tennis pitches” instead of tennis courts, that viewers could “downstream” TV programmes (perhaps she meant downloading streaming services?), and that the internet in Britain would be made the safest in the world. The meaning again was unclear.

Ms Dorries responds that she mixes up words because she has dyslexia, but her critics worry that she is pursuing her political vendetta to neutralise the BBC, Channel 4 and other critics because she – and her Conservative colleagues – view journalists as left wing or liberal or biased against her party.

In this Ms Dorries is at least treading in the footsteps of giants. Every significant British prime minister in living memory, whether on the political left or right, has had rows with the BBC. Many tried to clip its wings. The BBC coverage of the 1956 Suez crisis was disliked by those in power. In the 1980s Margaret Thatcher tried to silence – literally – BBC coverage of Republican paramilitary groups during the Troubles in Northern Ireland. Mrs Thatcher also wanted to scrap the BBC licence fee and force it to take advertising. Labour prime minister Tony Blair demanded an inquiry into critical BBC coverage of the Iraq war of 2003. That led to the resignation of the BBC’s chairman and director general.

In the past century the BBC has also had countless inquiries into its editorial standards, its future, its impartiality (or lack of) and its funding. Left wing commentators, such as Owen Jones, claim the BBC is a nest of right wing establishment characters. Perhaps the decades of criticism simply signpost the BBC’s importance in British public life and culture. But Ms Dorries may change that. The funding row, and uncertainty about the future, risks destroying one of the greatest British institutions and among the most trusted news sources in the world.

I am biased, because I worked for the BBC for years. I therefore politely suggest that someone in Ms Dorries’ Culture department should dig out the 1980s Peacock inquiry, which was a review into the BBC's financing, ordered by Margaret Thatcher. Professor Peacock – to Mrs Thatcher’s surprise – concluded that rather than advertising or subscription, the BBC licence fee was the “least worst option” for ensuring the continuation of a national treasure. Sadly, even if Ms Dorries is eventually persuaded, it is a mistake to undermine the one British institution which for a century has truly been “world leading,” the uncertainty she has created means some of the damage already done will be difficult to repair.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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The queen bee eats only royal jelly, an extraordinary food created by worker bees so she lives much longer

The life cycle of a worker bee is from 40-60 days

A queen bee lives for 3-5 years

This allows her to lay millions of eggs and allows the continuity of the bee colony

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Updated: May 04, 2022, 9:00 AM