"They are light viewers of television, so using the channel adds coverage of the population to their campaigns. Granada received pounds 18.8m and United News & Media pounds 15.2m.Because of Carlton Communications' acquisition of Westcountry, United's takeover of HTV and Granada's planned takeover of Yorkshire Tyne- Tees the big three owners of ITV stations are set to take even more this year.For more marginal companies such as GMTV the Channel 4 funds have in the past made the difference between being in profit rather than loss.The Secretary of State said that Channel 4 would now have to shoulder all the risk of the commercial television market, but advertising industry buyers foresaw no dangers for the broadcaster.Zenith Media, the country's largest buyer of television airtime, forecasts the channel will take pounds 516m or 19.2 per cent of commercial revenue in 1998 and pounds 542m (19.2) in 1999."The profile of Channel 4's audience is very attractive to advertisers," said Adam Smith, head of forecasting at Zenith. He also wants it to invest in the British film industry to an even greater extent than it does now.He registered concern that the channel had "lost a little bit of the cutting edge that it had at its outset in recent years," but said that the channel had already told him that it wanted to follow the same path as the changes to its licence under new chief executive, Michael Jackson.Last year, Carlton Communications received pounds 25.7m from Channel 4 through its London and Midlands franchise holders. It is expected to pay ITV around pounds 85m this year from total advertising revenue forecast to be around pounds 495m this year.Mr Smith said that he had not given Channel 4 an immediate end to the formula in order to soften the blow to ITV companies.The transitional year in 1998 was also included because ITV companies would renegotiate their licences with the Independent Television Commission in 1999 and should see the amount they pay to the treasury fall.Mr Smith has told the Independent Television Commission that he wants ITV to spend half of the money it receives from Channel 4 on its digital terrestrial television service.He also placed conditions on Channel 4, in return for having the funding formula removed, that should boost the UK's film and television production industry.He has instructed the Independent Television Commission to change the terms of the channel's licence obliging it to spend the extra pounds 100m it should receive in 1998 and 1999 on more UK and European-produced programmes, more programmes made outside of London and to show fewer repeats. Chris Smith, Secretary of State for Culture, Media and Sport, wrote to the Independent Television Commission (ITC) yesterday to outline how the funding formula would be wound down. In 1998 the ITV companies will receive a third, rather than a half, of all of Channel 4's advertising sales revenue that are over and above a benchmark of 14 per cent of the total television advertising cake. And in the following year the levy will be reduced to nil.City analysts had been expecting the ending of the formula and shares in the ITV companies held steady.

Indeed Carlton, which receives more from Channel 4 than any other broadcaster, saw its shares rise 4p to 481.5p.Since Channel 4 started selling its own airtime in 1993 it has had to give 50 per cent of all revenue above the 14 per cent limit to ITV and has already paid out pounds 257m. If that is so why persist with legislation which is at best irrelevant and at worst, may actually legitimise late payment?. The Government announced yesterday that the ITV companies were to lose around pounds 100m from the Channel 4 funding formula over the next two years before it was eventually phased out in 2000. Nor will the legislation prevent a customer and supplier agreeing terms that stretch payment well beyond the 30 days canvassed by the DTI.Those owed money will, of course, be able to pursue a course in law but if the unpaid debt is more than pounds 3,000 that means the time and expense of a county court and, it hardly needs pointing out, the end of any business relationship.Ah, says Mrs Roche, but yesterday's consultative document is really all about improving the payment culture through best practice. The upshot is yesterday's consultative document on the subject which smells of legislation for legislation's sake.Although all the surveys pinpoint late payment as one of the small businessman's greatest bugbears, the reality is that no-one, save for the Forum of Private Business, actually wanted a statutory right to interest when they were asked for their views.When he was still in government, Michael Heseltine let the cat out of the bag by confessing that the worst payers were small businesses themselves.Barbara Roche, the Small Firms Minister, has thought about this one and decided to protect them from themselves by giving small businesses four years' protection before the legislation applies universally.Even then, the new law threatens to be largely redundant Where lengthy payment terms are the norm they can remain. But these are dangers worth flagging up before we move sooner or later to the main course - which is to ask whether Mr Davies and the SIB aren't biting off more than they can chew.Late payment law will not help small firmsMargaret Beckett has succeeded in unhooking Labour from many of the poorly thought out policies it adopted in opposition - reversing the burden of proof in hostile takeovers and sliding scale regulation for the privatised utilities to mention just two.But the one it remains impaled on is the commitment Tony Blair gave to small firms that they would have a statutory right to receive interest on unpaid debts. Buoyant markets, high volatility, the star culture inside most investment banks and the absence of any traders who remember the last real bear market all point to a souffle waiting to collapse.The SFA is probably guilty of over-egging the pudding out of self-interest.

Meanwhile the SROs have the awkward task of keeping their eye on the regulatory ball while simultaneously appearing not to be lame duck administrators.And there is plenty to keep an eye on, according to the SFA. The SFA, for one, reckons it has a lot to bring to the party - individual registration, risk assessment-based supervision, and the division between regulation of wholesale and retail markets for a start.One of the problems, however, is that Mr Davies' cake does not come out of the oven until 1999. One upon a time there was room at the trough for everyone - Imro, Lautro, Fimbra, PIA, SFA, SIB. But then a new government arrived and asked the obvious question: why have such a complicated and duplicative structure when banking, insurance and securities firms are fast becoming indistinguishable from one another?Answer came there none, which left the SROs needing to justify their relevance for the day when they are all rolled into a single regulator.

Morgan Grenfell Asset Management, Sumitomo, Fidelity Brokerage Services, Barings - it's just amazing how easily the recipe can go wrong when nobody is keeping a proper check on the ingredients.The cake that Mr Durlacher and the SFA are more interested in, of course, is a grander confection altogether - the new super-SIB that Howard Davies, currently (currantly?) deputy Governor of the Bank of England, goes off to bake at the end of this week.Will the SFA be the icing on the top, the jam in the middle or just part of the flour and water? It is, of course, a question that lots of self- regulatory organisations are starting to ask. Last year, according to the SFA's annual report, there were lots of currants masquerading as raisins and even the odd sultana. But this time it is too late, and Mr Brown, like the rest of us, will have to live with his predecessor's mistakes.Too many cooks in the regulatory kitchenAt the regulators' tea party you can spot Nicholas Durlacher, chairman of the Securities and Futures Authority, a mile off. He is the one in the stripey apron picking "rogue currants" out of the cake mix and putting them back in the box marked "not fit and proper". We only need remember Black Wednesday to see the futility of intervention against the weight of the market.The best thing both the Chancellor and the Bank can do to keep sterling at a sustainable and competitive level is to run policies that avoid boom and bust in future. Intervention can turn exchange rates around, but generally only when they are ready to be turned but need the initial encouragement.

UK interest rates are likely to rise, German rates far less likely to do so despite the Bundesbank's hints.Even if the central banks jointly decided to intervene by selling their sterling reserves and buying marks in a joint operation, it would represent the triumph of hope over experience. It is an inescapable fact that the British economy is at a much more advanced stage of its business cycle than the ailing German economy. An exchange rate links two currencies and reflects the position of two economies. Clearly, the business community still has to grasp that Mr Brown really meant it when he said he was giving the Bank the independence to set interest rates.Secondly, there is not much the Bank can do about the level of sterling either. First of all there is the fact that business keeps urging the Chancellor to do something. He had his turn with the Budget, which raised taxes and cut spending, and now it is up to the Bank of England. It was enough to send a few banks seeking Deutschemark cover just in case, which was enough for some other investors to take a bit of profit on the pound. The gap between the instant interpretation and the reality illustrates the utterly facile level of much of the debate about sterling's current strength.