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HUNT JEREMY NW Jeremy Hunt MP is Shadow Secretary of State for Culture, Media and Sport.  He blogs here.

Today the government is going to make its long-awaited statement on Digital Britain. For those of us that think that competitiveness in new economy businesses is vital to Britain's future, this is a very important moment.

Sadly judging from one particular announcement that has been trailed, the government looks like it is more interested in propping up old business models than encouraging the rapid adoption of new models upon which our prosperity will depend. It is rumoured that regional news will be supported from now on by diverting around £100m of licence fee money to commercial broadcasters. Here are three reasons why this is wrong:

1. If there is spare money at the BBC (and many of us suspect that proper National Audit Office scrutiny of BBC expenditure would reveal a lot of waste) should we not at least consider giving it back to licence fee payers before doing anything else? The BBC has just pushed through an inflationary licence fee rise (even though there is no inflation, which is why we opposed it). This rise would be more than cancelled out if this "surplus" cash was used to reduce the licence fee from its current £142.50.

2. What people want is not regional news but local news. Regional news is an outdated model based on the old ITV transmitter regions. The East Midlands region covers Nottingham, Leicester and Derby for example. But people in Nottingham do not have the slightest interest in what is happening in Leicester or Derby – they want to know what is happening in their city. It is a disgrace that Birmingham Alabama has eight local TV stations and Birmingham in the UK – four times the size – has none. Rather than propping up an old business model the government should be working out ways to usher in a new generation of super-local TV stations – surely of vital importance to support our campaign for more locally-elected Mayors.

3. Getting on for 100 local newspapers have gone bust because of both the internet and the recession. Instead of trying to solve problems like regional TV with yet more state support, why do we not get rid of the outdated regulations that prevent newspaper groups expanding into local television, as happens in the States? That would give them a new revenue stream, allow them to cut costs by spreading the costs of journalism over multiple platforms, and bring new entrepreneurialism to our local media sector that is starting to die on its feet.

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Added by Tim Montgomerie: I hope Jeremy won't mind me adding a PS to his article but the chart below is interesting.  Commissioned by OfCom it shows what the public would like done with excess licence fee payers' money.  Click on the image to enlarge.

Picture 1 Asked to rank options on a 1 to 10 scale the red bar represents those who rated an option highly and so on.  It shows that the option most favoured by licence fee payers is a simple refund.  The least popular option is the one being pursued by Labour; a subsidy for public service broadcasting on ITV.

36 comments for: Jeremy Hunt MP: If the BBC has surplus cash it should be returned to licence fee payers or used for a local TV revolution

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