Talkin’ about my generation 1: Accounting and pirate radio

Frances Miley (School of Business) University of New South Wales Canberra, Australia

Andrew Read1 (Faculty of Business, Government & Law,) University of Canberra, Australia Journal or Conference:

Accounting History

Word Count:

9341 words

lanned Completion Date:

30 September 2014

Corresponding author: Andrew Read, Faculty of Business, Government & Law, University of Canberra, University of Canberra ACT 2601, Australia Email: [email protected]

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Abstract In the 1960s, the British Broadcasting Corporation had a monopoly on radio broadcasting in Britain, controlling what was broadcast. This monopoly was maintained through an alliance among the government, the BBC and the Musician’s Union. This monopoly was challenged by pirate radio stations operating outside British territorial limits. This research examines the use of financial controls by the British Government to suppress the largest pirate radio station, Radio Caroline. Radio Caroline subverted the BBC monopoly through playing rock music and making money through advertising. The government implemented financial control mechanisms that ensured Radio Caroline could not operate profitably. While these controls led to the demise of Radio Caroline, they failed to suppress rock music or the youth culture it represented. Examining the role of accounting and financial control in the suppression of Radio Caroline illustrates how private sector accounting can provide a mechanism for government blame avoidance.

Keywords Accounting history, blaming avoidance, government, pirate radio, public sector, Radio Caroline.

Introduction The golden rule in the Caroline handbook: whenever forced of (sic) the air, she will always return at whatever cost! (2002).

Extant literature has recognised a negativity bias in the public sector (Boyne et al., 2009; Gelders et al., 2008) whereby negative information has more influence on decision-making and assessment than equally strong positive information (Hood, 2007). This is thought to explain a predilection for blame avoidance in the public sector (Cialdini et al., 2006) so strong that it has been described as a feature that distinguishes the public sector from the private sectors reflective of a difference in attitudes to the risk of error between these sectors (Savoie, 1999). Adoption by public-office-holders of strategies that seek to deflect or reduce blame connected with unpopular or adverse government decisions is a recurring theme of extant literature (Hood et al., 2001; Hood et al., 2009; Hood, 2010). Blame-avoidance has been linked to minimisation of financial risks (Black, 2006), maximising the likelihood of political survival (McGraw, 1990) and lessening public resistance to unpopular government policies and programs (Hood et al., 2001). The main blame-avoiding strategies of public-office-holders have been categorised into three groups. First, presentational strategies involve the use of argument, spin or stage management by seek to shape public impression (Hood, 2007). Second, agency strategies are adopted whereby the complexity of government agency relationships and agency structures are used to ensure complex lines of responsibility and rotating staff make it unclear who is responsible for a government decision (Hood et al., 2009). Third, policy strategies concern the use of routines and processes that minimise individual or institutional liability (Weaver, 1986). The three categories are

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not necessarily discrete as public-office-holders may adopt strategies from more than one category or hybrid strategies that cross categories (Hood, 2010). Extant literature has recognised tension between public sector objectives of accounting transparency and the use of blame-avoiding strategies, suggesting that concerns with blame avoidance can outweigh concerns for transparent accounting so that there may be reverse effects, side effects of nil effects that hinder or prevent attempts at transparency (Hood, 2007). It has been suggested that governments directly involved in accounting standard setting processes might use blame-avoiding strategies when seeking to avoid international intervention in their management or to avoid blame at times of corporate failure (Ball et al., 2003) but supporting empirical evidence is weak, which may reflect a lack of understanding of the role of accounting in government blameavoidance strategies. To provide a preliminary foray into this area, we consider the role of accounting in the blame avoidance strategies used by the British Government in its suppression of Radio Caroline, a radio station broadcasting recorded rock music into Britain during the 1960s from ships anchored outside British territorial limits and therefore beyond the legislative purvey of Britain’s broadcasting laws. During the 1960s, the British Broadcasting Corporation (“BBC”) had the monopoly of British radio broadcasting. This had been given by Royal Charter and included sole responsibility for determining the radio content including the type of music played. The BBC did not have sole responsibility for the format of that music: the amount of recorded music played by the BBC per week was limited by the Needletime Agreement which was a contractual agreement with the Musicians’ Union to ensure the BBC played primarily live music, ensuring employment for musicians. The Needletime Agreement limited the amount of recorded music played by the BBC to 28 hours per week per radio station with a maximum of five hours per day, later decreasing to 20 hours per week (Parker, 2004). By conducting business offshore, radio stations such as Radio Caroline circumvented the BBC’s monopoly of British radio airwaves. By playing recorded music, Radio Caroline circumvented the strictures of the Needletime Agreement. By playing rock music, Radio Caroline challenged the BBC’s programming choices: at the time, the BBC did not play any rock music even though the live and recorded music of groups such as The Beatles, The Rolling Stones, Eric Burden and the Animals, and The Yardbirds was popular in Britain and this period has been described as the zenith of British rock music (Chapman, 1992; Lodge, 2010). Radio Caroline and similar stations which sought to circumvent the BBC’s monopoly over British radio broadcasting were termed “pirate stations” by the British Media and the ships used by these stations were termed “pirate ships”. The term “pirate” refers to the perceived theft of state-run airwaves by unlicensed broadcasters and the risk-taking nature of offshore radio stations operated on ships or marine platforms. This research excludes stations based in Continental Europe whose target listening audience was in Continental Europe, even though some of these broadcasts could be received in parts of Britain. Examples of these stations are Radio Luxembourg and Radio Normandie. These

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stations were not considered pirate stations as their intention was not to broadcast into Britain. The pirate stations were set up specifically to broadcast into Britain while remaining outside British legal jurisdiction. Pirate stations represented a spirit of post-war entrepreneurial capitalism that made a mockery of the power of the British government to grant the BBC a monopoly over radio broadcasting and radio programming, of the British Government’s support of the Musicians’ Union and the control over the employment of musicians secured by the Musicians’ Union under the Needletime Agreement. In playing rock music, Radio Caroline represented a re-defined post-war youth culture that challenged Britain’s dominant construction of youth and societal norms (Hall and Jefferson, 1993). Contemporary acceptance of 1960s rock music may make it difficult to appreciate the magnitude of the perceived threat posed to the British Government’s power of Radio Caroline’s programming choices as a manifestation of youth culture. Rock music represented the undesirable side of youth culture and youth culture introduced the undesirable side of music through its devotion to rock music genres (Hatch and Millward, 1987) which the British Government sought to suppress (Hall and Jefferson, 1993). Rock music is essentially a response to the subjugation of youth (Bennett, 1999). The Who’s iconic anthem, My Generation, described how their generation was “put down” (Townshend, 1965). This intergenerational division, labeled the “generation gap” (Mead, 1972), was not unique to Britain; Bob Dylan sang of it in The times they are a-changin’ (Dylan, 1964). Descriptions of youth subjugation were not restricted to fringe elements. The Beatles sang of the need to overthrow hegemony in Revolution 1 (Lennon and McCartney, 1968). Even The Monkees, the epitome of commercialized and corporatized pop music, sang of it in their theme song (Boyce and Hart, 1966). The British Government imposed financial control mechanisms to suppress that struggle, which lead to the financial failure and demise of Radio Caroline. There is considerable research on the use of accounting as a mechanism of control (Alawattage and Wickramasinghe, 2008; Walker, 2008; Walker and Carnegie, 2007). We move to the road less travelled by considering accounting as a mechanism of blame avoidance by government. However, it was not the accounting of the British Government but that of Radio Caroline, the British Government’s target, which provided protection from blame for the British Government. In the next section we provide background to pirate radio in 1960s Britain and the circumstances that led the British Government to suppress Radio Caroline before outlining the financial control mechanisms the British Government used to suppress Radio Caroline. This is followed by discussion of accounting as a mechanism of blame avoidance for government and how the example of Radio Caroline illustrates how private sector financial accounting disclosures provide a measure of protection from blame for governments whose decisions have had a deleterious impact on those organisations.

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Background In this section we provide relevant background to pirate radio in 1960s Britain, discuss why pirate radio was a threat to the British Government, why Radio Caroline proved particularly problematic for the British Government and the circumstances that led the British Government to suppress Radio Caroline. The BBC was funded from licence fees paid under the Wireless Telegraphy Act (UK) 1904 whenever a household purchased a radio receiver (White, 2003; BBC Press Office, 2011). In the 1930s the British Government had considered an advertising-based funding model for the BBC but rejected it following the successful lobbying of Sir Charles Higham, ironically the first advertising mogul knighted or elected to the British Parliament. He argued that licence-based funding ensured the British public was entertained when listening to radio whereas advertisement-based funding would only tell people what to buy (Higham, 1933). This view was upheld by a Royal Commission in the 1940s (Beveridge, 1951) and continued to be strongly supported by the BBC and British Government in the early 1960s (Barnard, 2002). A 1960 Royal Commission into television and radio broadcasting in Britain paternalistically stated giving the British listening public the radio programming it wanted was not in the public’s best interest and it was “patronizing and arrogant” to assume listeners knew what was in their best interest (Pilkington, 1962, paragraph 48). It recommended unfettered BBC control of programming content contending only the BBC had the expertise to determine what was in the best interests of the listening public (Allen and Hill, 2003). In 1960, the British Government saw the BBC as the front-line in controlling “excessive triviality” in radio broadcasting, a term it did not define (Her Majesty's Postmaster General, 1962: , para. 34). Since the BBC excluded all rock music from its programs, rock music was apparently excessively trivial. Hence, pirate radio stations filled a gap in BBC programming by playing rock music. When pirate stations commenced, they adopted a different funding model from the BBC. They were funded by commercial advertising. This was not a new funding model for radio: many stations in the United States and some in Continental Europe were funded this way. Radio Luxembourg and Radio Normandie, privately owned commercial stations located in Continental Europe which could be heard in parts of England, received revenue primarily from advertising (Craig, 1990). Before Radio Caroline, Radio Luxembourg was the main European source of music specifically aimed at a youth market and was often the first time British youth heard commercial radio. In addition to receiving advertising revenue, Radio Luxembourg operated a system whereby artists paid for airplay of their recordings so unlike Radio Caroline, Radio Luxembourg’s playlist was limited to established artists who could afford to pay for air time (Nichols, 1983) Listeners could tune their receivers to pirate radio station frequencies or the BBC. All frequencies were published in the print media. Since all radios required a licence, the BBC’s revenue stream did not suffer if listeners switched allegiance to pirate stations so they posed no financial threat to the BBC.

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In 1964 rock band manager Ronan O’Rahilly was unable to obtain either BBC or Radio Luxembourg airplay for the bands he managed. The bands did not play music acceptable to BBC programmers and airplay time was unavailable on Radio Luxembourg for new artists or those who could not pay for record air-play time (Leslie Perrin Associates Ltd, 1964). O’Rahilly decided the solution was to start his own radio station (Lodge, 2010). This station, Radio Caroline, played nonstop rock music, generally playing a current single followed by an album track. Its target market was British youth but it became immediately popular with the broader British listening public (Jenkins, 1964). Within months of going to air, Radio Caroline had a larger listening audience than BBC radio (Humphries, 2003) even though under the Wireless Telegraphy Act (UK) 1949, everyone who listened to a pirate broadcast was breaking the law. Legally, the BBC retained the broadcasting monopoly but in fact, Radio Caroline broke the BBC’s monopoly of Britain’s radio airwaves. The history of Radio Caroline is well-documented (Lodge, 2010; Lodge, 2002; Conway, 2009; France Radio Club, 2010; Humphries, 2003; Johns, 2010; Noakes, 1984; Radio Caroline, 2011; Venmore-Rowland, 1967) but these histories concentrate on events aboard the pirate ship station rather than the financial control of Radio Caroline covered in our research. The term “pirate radio” was reinforced in the imagination of the British public by media reports of wild parties aboard Radio Caroline, Radio Caroline’s reported disregard for British broadcasting controls and certain actions by its staff. The most infamous action involved Radio Caroline staff seizing a rival station. Radio City, broadcast from a disused fort built during the Second World War sixty-eight nautical miles off the coast of Kent. Allegedly, Radio Caroline planned a friendly takeover of Radio City and provided it with new transmission equipment that reached a larger geographic audience. Radio City reneged when new British legislation made Radio City’s main operations illegal (Edwards, 1966) Shareholders decided to liquidate Radio City to avoid prosecution but a dispute arose over ownership of its transmission equipment. Radio Caroline claimed the equipment was given on condition the takeover occurred but Radio City claimed the equipment was given unconditionally. The dispute was essentially financial: the equipment was a valuable asset which would give Radio City shareholders a return on liquidation. In a bizarre incident, Major Oliver Smedley of Radio Caroline led a boarding party that entered Radio City’s sea-fort and took the crystal from the transmitter, making it unusable. He left some members of his boarding party at the fort to prevent Radio City staff access. In response, Reg Calvert of Radio City threatened to use nerve gas to remove the remaining boarding party. The following day, Calvert visited Smedley at his home. An altercation ensued in which Smedley fatally shot Calvert. Smedley, arguing self-defence, was acquitted of murder and manslaughter and was awarded 250 guineas towards his legal costs (Johns, 2011). This incident reinforced British media portrayals of Radio Caroline as subversive (Donnelly, 2005) and prompted the British Government to renew legislative measures to suppress all pirate radio stations (Johns, 2010). Radio announcer on pirate station Radio London, David Cash, would later say that the British government “needed something heavy like drugs or murder (to legislate against pirate radio) …(W)e gave them murder” (France Radio Club, 2010).

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Radio Caroline posed a threat to the British government by making its decision-making appear outmoded and irrelevant. Radio Caroline’s immediate financial success challenged the British Government’s financial competence since it had rejected advertising-funded radio as a model that would not be viable financially (Secretary of State for the Home Department, 1962) and made the British Government’s support of the BBC seem anachronistic in that the British Government was protecting an organization that no longer understood public musical taste. Although Radio Caroline was not a threat to the BBC’s revenue stream, it did make a mockery of the Needletime Agreement, which had been strongly supported by the British Government (Venmore-Rowland, 1967). Radio Caroline provided an alternative that appealed to a youth demographic the BBC either failed to acknowledge or specifically ignored. Clause 3(a) of the BBC’s Charter stated it was “to provide, as public services, sound … broadcasting services … and entertainment for general reception”. The BBC did not interpret this legislative requirement as a reason to include music appealing to teenage listeners (Lago et al., 2008). To the British media and public, the BBC was viewed as representing the establishment and akin to the British Government; they were not separated in the public eye despite the legal independence given the BBC by its founding charter (Childs, 2006; Briggs, 1985). The Beatles’ guitarist George Harrison summed up public feeling in the following words: I can't understand the government's attitude over the pirates. Why don't they make the BBC illegal as well - it doesn't give the public the service it wants, otherwise the pirates wouldn't be here to fill the gap. The government makes me sick. This is becoming a police state. They should leave the pirates alone. At least they've had a go, which is more than the BBC has done (Coleman, 1966).

The British Government versus Radio Caroline The British government wanted to suppress a subversive youth culture. The rise of a youth culture in 1960s Britain has been described as a cultural revolution evidenced most prominently through music and fashion; it was viewed by establishment Britain as a disturbing and threatening subversive counter-culture to be suppressed. Suppression of pirate radio represented control of youth culture (Donnelly, 2005; Marwick, 2000; Wakeman, 2003). By 1967, legislation had suppressed all pirate radio stations except Radio Caroline. Other stations owned disused sea forts or structures on islands in the River Thames estuary so it was simply a matter of the British government closing legislative loopholes to bring these locations intra vires. Radio Caroline stayed outside British territorial limits so was more problematic as its broadcasts into Britain were never illegal under British broadcasting law. To stop Radio Caroline’s broadcasts, the British government enacted the Marine & Broadcasting (Offences) Act (UK) 1967 (hereafter “the legislation”). The Marine & Broadcasting (Offences) Act (UK) 1967 was not promoted by the Postmaster General as a means of financial control yet contained draconian financial controls. The legislation caused a flood of public protest (Yates, 2003; O'Meara, 2006). Following the enactment of the legislation,

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the British Prime Minister received more letters per week supporting the pirate radio stations than his combined correspondence received on all other political issues (Edwards, 1966). Section 1(1) of the legislation made it an offence to broadcast into Britain from a ship in external waters. This section may have been ultra vires but was not tested in the courts. Radio Caroline’s response was to move operations to the Netherlands to be beyond British legal reach (Noakes, 1984). Despite its misleading title, the legislation introduced financial controls that ensured Radio Caroline was unable to continue operating by creating circumstances whereby Radio Caroline was unable to earn revenue. Extant literature on the use of accounting control mechanisms has focused primarily on cost control (Napier, 2006) or the imposition of capital hurdles (James et al., 2011); revenue control has either not been a popular strategy of control or instances of its use have not attracted the attention of accounting researchers. Within seven months of the legislation being promulgated, both Radio Caroline ships were towed away by a salvage company when Radio Caroline failed to pay a creditor £30,000 (Chapman, 1992). The stated purpose of the legislation was to suppress radio program broadcasts into Britain from ships to ensure maritime safety even though when the legislation was promulgated, Radio Caroline was the only broadcaster in this category. Section 1(1) of the legislation made it an offence to broadcast into Britain from a ship in external waters. This section may have been ultra vires but was not tested in the courts. Radio Caroline’s response was to move operations to the Netherlands to be beyond British legal reach (Noakes, 1984). Under the legislation, it became illegal for British subjects to work in any capacity on a ship on the high seas engaged in radio broadcasting. It became illegal to work for a ship that supplied a ship used for broadcasting, or to supply a ship if the supplier knew or had reason to believe that the ship had broadcasting transmission equipment or was engaged in broadcasting into Britain. Those supplying, maintaining or installing broadcasting equipment or supplying goods for the sustenance or comfort of those on ships engaged in broadcasting into Britain were liable to imprisonment and a fine. Radio Caroline circumvented these restrictions by using labour from and receiving supplies from Continental Europe. The legislation made it illegal for businesses to advertise via ship-based radio stations, for British media to promote ship-based radio advertising or for British merchants to sell items advertised in ship-based broadcasts. Radio Caroline advertisers included Pfizer Inc. (Listerine mouthwash), Phensic Ltd (headache powders), GlaxoSmithKline (Ribena blackcurrant fruit drink), Bulova Watch Company (luxury watches), Weetabix Ltd (breakfast cereal), Golden Wonder Ltd (peanuts) and Halex Ltd (toothbrushes) (2013) and provided its entire revenue stream (VenmoreRowland, 1967). While Radio Caroline might have employed staff and obtained provisions from Continental Europe to circumvent the legislation, the advertising prohibitions could not be circumvented. Radio Caroline relied on British advertisers for all its income. Without advertising, Radio Caroline was not economically viable. Despite the many measures introduced by the British Government to close

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pirate radio, only prohibitions that cut off its revenue-generating capacity were successful in closing Radio Caroline. Within seven months of the enactment of the legislation, Radio Caroline’s financial statements showed a loss and it was unable to offer a management solution that would give confidence to its creditors of future solvency (Chapman, 1992). Unable to demonstrate an ongoing potential to earn revenue and remain solvent, Radio Caroline lost the confidence of its creditors, was unable to secure ongoing finance for its ships and was unable to continue in business (Conway, 2009). The use of financial control mechanism by the British Government was intended to place Radio Caroline in financial distress (Venmore-Rowland, 1967). The British Government could not legislate to close Radio Caroline but it could legislate to create circumstances whereby financial failure and subsequent closure occurred in swift succession. The legislative mechanisms of the British Government shifted blame for Radio Caroline’s failure from the British Government’s legislative controls to Radio Caroline’s senior managers, who appeared financially incompetent to creditors since they were unable to develop management strategies for financially viable continuance. Thus, Radio Caroline ceased broadcasting when its financial statements showed it was insolvent (Edwards, 1966). In justifying its legislation, the British government openly acknowledged that it was targeting Radio Caroline. However it claimed this was necessary to ensure maritime safety, although there was no evidence that Radio Caroline’s operations had posed a threat to maritime safety. First, the British Government said pirate stations were illegal, which was untrue. At no time did Radio Caroline operate illegally. Second, the Government said Radio Caroline used frequencies allocated to radio stations in Continental Europe. This was also untrue. It used frequencies reserved for ships at sea. Third, the British Government said Radio Caroline’s broadcasts might interfere with reception of an emergency shipping message. This was also untrue as special frequencies are reserved for emergency shipping broadcasts to ensure they are always monitored (Edwards, 1966). When these reasons were challenged by the media, the British Government stated Radio Caroline’s closure would benefit the recording industry because, unlike the BBC, it was avoiding paying royalties for playing of recorded music (Wilson, 1971; Hickson and Seldon, 2004). This was also untrue. The BBC was legislatively exempt from paying royalties and although Radio Caroline was not legally required to pay royalties for playing recorded music because of its extra-territoriality, it voluntarily paid one per cent of its revenues as royalties in accordance with the Copyright Act (UK) 1911. In addition, Radio Caroline’s policy was to encourage record sales through on-air promotion of artists and it was established expressly to benefit the recording industry and artists unable to get airplay because of BBC policies and the Needletime Agreement. Hence, Radio Caroline helped the record industry grow whereas the BBC and Musicians’ Union, through the Needletime Agreement, were suppressing its growth. Listeners had to obtain an annual radio licence to listen to a radio receiving set, thus ensuring funding for the BBC irrespective of the station to which the receiver was tuned. Thus, Radio Caroline did not harm the BBC’s licence-based revenue steam. It may have increased BBC revenue: although this is a speculative comment, there may have been listeners who acquired a licence specifically to hear rock music and who would not have listened to

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the BBC. The British Government intended to use financial controls to suppress Radio Caroline2. Introducing the legislation into Parliament, Lord Denham (1967) stated: If there were not this demand (for rock music) the listeners would not listen, the advertisers would therefore not advertise, being a pirate would cease to be financially attractive, and there would be no need for this Bill. At the same time the British Government promulgated the legislation, the Postmaster-General announced the BBC would start an “official pop music” radio station (Lord Denham, 1967) called BBC Radio 1 and funded by commercial advertising, the business model previously rejected by the British Government for British radio. Pirate stations had shown by the size of their listening audience that there was sufficient demand for rock music on radio. BBC Radio1 provided a replacement radio broadcasting option for advertisers no longer able to advertise to Britain’s youth market via pirate radio. BBC Radio 1 commenced in 1967. BBC Radio 1 was promoted as a station appealing to the youth market but its playlist fell far short of the pirate stations’ offerings 3. It played a saccharine and “establishment” version of rock music. For example, Bernard Herman and his Orchestra played BBC Radio 1’s version of Hendrix’s Purple Haze (Davies, 2009). The enormous social change in 1960s Britain was precipitated in part by youth rebellion against the establishment (Marwick, 2000). This was not the only subversive element in British society in the sixties. It was a time of enormous social change occasioned in part by disillusionment with postwar social reforms and dissatisfaction with Britain’s shifting political and economic direction (Savage, 2010). Simultaneous with the rise of youth culture and rock music were other threats to the British establishment including the forces of anti-colonialism, disestablishmentarianism, and strong republican and home-rule movements. The home-rule threat would soon explode into the laconically-named “troubles” in Northern Ireland. Rebellion and the richness and diversity in British youth culture were reflected in British rock music of the 1960s but not in BBC Radio 1’s programming choices (Donnelly, 2005). The BBC headhunted Radio 1 presenters from pirate radio, requiring them to play a broader range of music interspersed with rock music deemed suitable for the public by BBC programmers (Davies, 1999). The majority of BBC Radio 1 programming was taken directly from its “easy listening” radio station, BBC’s Light Programme, including its religious and classical music offerings. Although BBC Radio 1 was promoted as the station representing youth culture, it only permitted aspects of youth culture it viewed as consistent with a carefully sanitised BBC-constructed version of British culture. The establishment of Radio 1 appeased another potential ally of Radio Caroline, the record industry. Radio Caroline had boosted sales of recorded popular music by exposing the music to its audience. Giving record companies a replacement promotional vehicle through Radio 1 diffused any criticism that they would lose revenue when pirate radio ceased.

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Discussion This section discusses how the British Government attempted to avoid blame associated with the adverse impact of its legislation on Radio Caroline. It also discusses how Radio Caroline’s financial accounting contributed to insulating the British Government from blame for the demise of Radio Caroline. While there is no evidence that the British Government managed the demise of Radio Caroline to take advantage of the protection from blame afforded by Radio Caroline’s accounting disclosures, we believe that there is value in making it visible to more fully understand the potential of accounting and that blame-avoidance by government can be a complex phenomenon to which accounting can contribute in indirect and unintended but nonetheless compelling ways. The Marine & Broadcasting (Offences) Act (UK) 1967 was predicated on a rhetoric of paternalism that constructed Radio Caroline as irresponsible and hence unconcerned with maritime safety. Radio Caroline contributed to this image by broadcasting details of ship-board antics more commonly associated with pre-pubescent school-boys. The excesses of life on Radio Caroline’s ships have been well-documented elsewhere (Humphries, 2003; Lodge, 2002; Radio Caroline, 2011). Unwittingly, the media contributed to the selective discourse presented to the public. By reporting the more colourful behaviour of life aboard MV Caroline, it portrayed the radio station as full of irresponsible youth. Radio Caroline itself contributed to this perception. When wellpublicised visits to the ships by fans to view and participate in the excesses of life on board ship were reported, they were used by the establishment as evidence of subversive and abandoned lifestyle that was part and parcel of rock music and the decadence it represented (Johns, 2011). The limited and ambiguous picture entering public discourse divided public opinion, laying the groundwork for suppression of pirate radio by the government. When the British Government announced pirate radio stations might block radio frequencies used by ships in distress, it cast pirate ships as irresponsible children and became the chastising parent disciplining a naughty child. The sub-text was that irresponsible youth do not consider the potential danger of their actions so government was stepping in to prevent Radio Caroline’s youthful but thoughtless exuberance. However, the popularity of Radio Caroline meant maritime safety might be insufficient to justify measures that would lead to the demise of Britain’s most popular radio station. Hence, the British Government needed to ensure it circumvented blame for Radio Caroline’s downfall. The Marine & Broadcasting (Offences) Act (UK) 1967 offered a presentational strategy of blame avoidance for the British Government because, although targeted at Radio Caroline, it seemed to be about maritime safety. Maritime safety provided a motherhood statement against which it was difficult to argue. Changing the debate from pirate radio to maritime safety allowed the British Government to claim the legislation met a broader national concern despite lack of evidence that maritime safety had neither been recognised as an issue prior to promulgation of the legislation nor was there evidence that Radio Caroline’s broadcasts threatened maritime safety. The British

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Government incorporated other strategies of blame avoidance into the legislation. Blurring liens of responsibility and accountability is an agency strategy that can diffuse blame for public decisionmaking (Hood, 2010). The legislation did not specify lines of responsibility so accountabilities for decision-making and actions taken in accordance with the legislation were unclear. The Postmaster-General had ministerial responsibility for all British legislation pertaining to broadcasting, the Minister of Transport was responsible for all matters of transportation including maritime transportation and the Ministry of Defence was responsible for breaches of maritime law that required intervention at sea it was unclear who had ultimate carriage of decisions under the legislation. Due to Radio Caroline’s public popularity, the most effective way for the British government to avoid blame was if it did not directly appear to attack Radio Caroline while securing the station’s demise. The British Government retained ultimate power to use The Royal Navy against Radio Caroline but this type of direct attack would not have been politically expedient in view of Radio Caroline’s popularity. Creating a legislative environment in which Radio Caroline became unable to earn revenue used financial control mechanisms to cause Radio Caroline’s demise while insulating the British Government from blame. Extant research on the limitations of accounting has focused on the nexus between calculative ability and financial responsibility (Bay, 2011), disclosure issues (Benston et al., 2006), alternative accounting systems and measures (Berger et al., 1991) and the mystique surrounding accounting information (Hines, 1991). A more fundamental limitation of financial accounting information is that when a company fails following a loss, blame for failure is likely to be attributed to the management or, post-Enron, the accounting profession (Coleman et al., 2004; Wiesenfeld et al., 2008; Gibson and Schroeder, 2003) and factors internal to a firm will be investigated on the assumption that managers were unable to adapt, manage or control their internal and external environment leading to a firm’s demise (Chaganti et al., 1985; Wiesenfeld et al., 2008). Thus, to look at Radio Caroline when it posted a loss following the revenue strictures of the Marine & Broadcasting (Offences) Act (UK) 1967 is to see a company unable to pay its bills; it looked like another short-lived company unable to balance its revenue and expenses and ensure ongoing cash flows to meet debt obligations. The financial statements do not disclose the back-story that the British Government’s legislation caused the demise of a company that had been operating successfully and had been on a growth trajectory that had allowed it to merge with Radio Atlanta to double its broadcast capacity and commence a takeover of Radio City. The prescriptive legislative controls of the British Government that targeted Radio Caroline’s revenue-making ability and ensured the station’s insolvency is no less an example of accounting as a control mechanism than direct uses of accounting controls more commonly recognised in the extant accounting literature (Armstrong, 1987; Armstrong, 1994; Bakre, 2008). The feature of the Radio Caroline example is that because financial disclosures do not include notes that explain how a failure occurred, the British Government’s role in the demise of Radio Caroline remained hidden

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from an accounting perspective: it was not evident from an examination of Radio Caroline’s accounts. Extant literature has recognised that in government, the use of blame avoidance strategies can be subtle and sophisticated (Hood et al., 2001; Hood, 2007) and the use of accounting control mechanisms can be insidious (Covaleski et al., 1995). Cooper (1995) expressed concern that the many uses to which accounting is put can obscure other more politically fruitful ways of seeing. The example of Radio Caroline shows that accounting can also obscure responsibility for corporate failure. Although responsible for Radio Caroline’s failure, the British Government did not appear connected with the failure from a reading of Radio Caroline’s financial statements. There is no evidence of awareness in the British Government that from an accounting perspective, the British Government appeared unconnected to the demise of Radio Caroline. However the financial control mechanisms adopted by the British Government did have the effect of distancing the government from Radio Caroline’s insolvency and hence, acted as a blame avoidance technique by insulating the British Government from responsibility for the impact of its legislation. The blame avoidance strategies of the British Government were not wholly successful because at the next national election, which was the first time the youth audience of the pirate radio stations were old enough to vote, the British Labour Party Government that had suppressed the pirate radio stations was voted out of office, primarily by younger voters (Campbell, 1993). The British Government’s use of revenue control against Radio Caroline illustrates the insidious potential of financial control mechanisms: when all other attempts by the British Government had failed to suppress Radio Caroline, attacking Radio Caroline’s ability to operate profitably succeeded. When the British Government could not bring about the demise of Radio Caroline by other methods, suppressing the business’ revenue stream to ensure Radio Caroline moved from the black to the red achieved the British Government’s desired outcome. However, although the British Government proved successful in suppressing pirate radio, the status quo was not restored because society at a broader level had changed (Donnelly, 2005), requiring a change to BBC programming that, while not providing a clone of Radio Caroline, provided its minimum acceptable replacement in BBC1.

Conclusion This research has considered the example of the British Government’s use of blame avoiding strategies in attempting to prevent radio broadcasting into Britain in the 1960s. Critical to the strategies used by the British Government was legislation that cut off Radio Caroline’s revenue stream, causing it to become a loss-making organisation. This made it appear that Radio Caroline’s directors were inefficient, distancing the British Government from the impact of its legislation and thereby providing a blame-avoiding strategy for the British Government even though it had put in place that legislative mechanism that caused Radio Caroline’s parlous financial state. This research concerns intergenerational conflict but its main contribution is in making visible the

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protection afforded to government by corporate financial statements adversely impacted by policies and mechanisms of government, and how that protection assists government to avoid blame.

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From the song “My generation” by the Who Townshend P. (1965) My generation. Recorded by The Who on "My Generation" LP record. London: Decca. 2 Pirate radio has in recent years once again been an agenda item for Parliamentary debate in the British House of Commons Brokenshire J. (2006) Speech in the House of Commons on 26 June 2006 about the dangers of illegal pirate radio. In: House of Commons (ed). London: Hansard, Brokenshire J. (2009) Speech in the House of Commons on 1 June 2009 about the dangers of illegal pirate radio. In: House of Commons (ed). London: Hansard.. It is ironic that the House of Commons now looks to the days when it sought to suppress Radio Caroline and, in the glowing light of nostalgia, only recalls how Radio Caroline was much loved by the British public. The Gallo report from the European Union goes further, viewing pirate radio stations as innovative entrepreneurs that caused Britain to discuss the goals of radio and issues concerning air-wave freedom van Oojen, Robert. (2010) Why piracy is good for innovation. Have you heard it.. In reality, that discussion did not occur until more than a decade later Johns A. (2011) Death of a pirate: British radio and the making of the information age, London: W.W. Norton and Company, Inc.. Despite this warm fuzzy attitude to the 1960s pirate radio stations and in particular, Radio Caroline. It is pertinent to note that in recent years Radio Caroline has fought a long and embittered battle to gain a digital radio license. Although its current playlists no longer represent a subversive counterculture, perhaps redemption and forgiveness are not as easily won as the nostalgic recollections of British members of parliament might suggest. 3 When BBC Radio 1 commenced broadcasting on 30 September 1967, it was three months since the three-day Monterey Pop Festival, which included performances by Jimi Hendrix, The Mamas and the Papas, Grateful Dead, Jefferson Airplane and Janis Joplin Cox E. (2006) The Monterey Pop Festival of 1968. Rewind the fifties. (accessed 25 September 2011).. Artists with singles at or near the top of the record sales charts included Aretha Franklin, The Rolling Stones, The Small Faces, The Who, Janis Joplin, The Beatles and Jimi Hendix. The Kinks, The Doors, Eric Burden and the Animals, and Martha and the Vandellas had recently released albums everyHit.com. (2011) UK top 40 hit database.. Sergeant. Pepper’s Lonely Hearts Club Band was the best-selling album and quickly became the iconic album of the British invasion Lodge T. (2010) The ship that rocked the world: How Radio Caroline defied the establishment, launched the British invasion, and made the planet safe for rock and roll, London: Bartleby Press.. Procol Harum’s A Whiter Shade of Pale was the best-selling single in Britain throughout September. The BBC chose as its first song Flowers in the Rain by MOVE, a light folk-pop offering with lines such as: Woke up one morning half asleep With all my blankets in a heap And yellow roses scattered all around The time was still approaching For I couldn't stand it anymore Some marigolds upon my eiderdown Chorus: I'm just sitting watching flowers in the rain Feel the power of the rain making the garden grow I'm just sitting watching flowers in the rain 1

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Feel the power of the rain keeping me good Wood R. (1967) Flowers in the rain. Recorded by The Move on "Move" LP record. London: Regal Zonophone..

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