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BBC Royal Charter

My Lords, I welcome the committee’s report. I associate myself with the tribute that the noble Lord, Lord Fowler, paid to the noble Baroness, Lady Howe of Idlicote. It was only the noble Baroness making a thorough nuisance of herself—at which she is very good—which persuaded a reluctant government and House authority to set up the committee. I supported its establishment and its continuance, and I supported the noble Lord, Lord Fowler, as its chairman. His outstanding speech in introducing today’s debate, the robust independence of the committee under his chairmanship, and the quality of its work as evidenced by the report before us, make me feel fully vindicated. I also associate myself with his call for an oversight committee to become permanent. I do not agree with everything in the report, nor would I expect to. The work of such committees is not to bring final answers on tablets of stone, but to test proposals, stimulate debate and allow outside interests a platform for their ideas and evidence. The reports and evidence will fulfil all these functions. I start by reminding the House of the wise words of the noble Lord, Lord Sheldon, when he said that the BBC was one of the great gifts bequeathed by the 20th century to the 21st. The BBC has been one of the great forces for good in our democracy and our culture and in terms of our social cohesiveness. It has been a template for how we speak to each other and, as the noble Lord, Lord Judd, reminded us, how we speak to the world. My late predecessor as Leader of the Liberal Democrats in this House, Lord Jenkins of Hillhead, used, in another context, to talk of responsibility as ““like carrying a very precious vase across a highly polished floor””. I feel the same about the BBC Charter review process. In my final words to this House at the conclusion of the passage of the Communications Bill, I said that,"““the next stage of this matter—the defence of the BBC and the BBC Charter—is a battle that has to be won””.—[Official Report, 8/07/03; col. 259.]" I still believe that we are in a battle for the future of the BBC. I do so because of the strange reluctance of this Government to take pride in the BBC as one of the resounding success stories of public enterprise; I do so because there are massive commercial interests, for whom a weakened and marginal BBC is a major objective; and I do so because there still seem to be politicians in both Labour and Conservative Parties who see Charter review as an opportunity to clip the BBC’s wings and settle a few old scores. I have time to cover only two or three aspects of the report today. So, let me start with the licence fee. There will always be an element of the politics of the souk about the licence fee settlement, but I support the committee’s central recommendation in paragraph 299 that,"““the system of funding . . . until 2017 should be through a licence fee””." I am not sure that there is a need for an interim review. If, as the committee recommends, such a review awaits the completion of analogue switch-off, we are then so close to 2017 that it would be far better simply to start work on a post-2017 settlement. We will be told that rapid changes in technology will demand earlier action, but it is the ferment and turbulence caused by technology change which requires a stable BBC as the iron pole around which our public service broadcasting can set standards of quality and integrity in our communications industries. On the other aspect of BBC funding—its commercial activity—the corporation finds itself in a classic Catch-22 situation. The noble Lord, Lord Smith of Finsbury, when Secretary of State, urged the BBC to maximise its revenue. When, in response, the BBC sharpened up its commercial act, there were immediate squeals of unfair competition. We on these Benches have long argued for greater transparency and separation of accountability in the BBC commercial operations. My noble friend Lord Sharman was instrumental in devising a formula which allowed the Public Accounts Committee some oversight of these matters. We support the committee’s recommendation that,"““the BBC fair trading commitment be reformed to ensure that it is clear and transparent and has the confidence of the wider industry””." However, I repeat the Gypsies’ warning that I have given in every debate since the paving Bill that established Ofcom: I believe that Ofcom’s involvement in the BBC should be kept to a minimum. Ofcom is an economic regulator. It is a very good economic regulator. It is very eager to make the various markets under its control work effectively. What is not in Ofcom’s DNA is an understanding that for over 80 years the British people, through their Parliament, have willed a distortion of the market. Mr Rupert Murdoch has said that public service broadcasting is ““a definition of market failure””. He is certainly right that public service broadcasting operates to different criteria than the market dictates—just look at the schedules of Sky One and BBC1 to see the proof of that. We are saying to commercial operators that we know ours is a distorted market, and you must come into our market knowing that that is the case. That is what we want because we believe that those distortions deliver public goods which the market is incapable of delivering. An economic regulator such as Ofcom is not programmed to defend the public interest by market distortion. That is precisely why Mr James Murdoch has argued recently that Ofcom should oversee the BBC. The BBC would then be subject to a ““whine a week”” from commercial competitors, who have the resources and the lawyers to entangle both Ofcom and the BBC in intimidating and stultifying competition complaints. At this point let me also make my usual disclaimer about Mr Rupert Murdoch. I have no hostility towards Mr Rupert Murdoch at all. Indeed, if I was a News International shareholder, I would be delighted at the robust way he defends my interest. What concerns me is whether Ministers defend the public interest with the same vigour as Mr Murdoch defends his shareholder interest. So, let us have a little test. I wonder if the Minister at the end of the debate could list the number of times the Prime Minister or the Chancellor have met Mr Murdoch or other senior executives of News International in the year coming to an end? Or, if he cannot tell us at the end of this debate, could he put a note in the Library? I have to tell the House that No. 10 have not been very forthcoming to my noble friend Lord Avebury when he asked a similar question. But, as the great John Junor used to say in the glory days of the Sunday Express,"““I think that we should be told””." I make one final point. The committee has already visited Manchester, and, as the noble Lord, Lord Fowler, said, that will be the subject of its next report. I believe that the BBC should stop using the move of certain departments to Manchester as a bargaining chip and make a full-hearted commitment regardless of the shape of the final settlement. The contribution that the ITV Granada already makes to the north-west’s economy is significant. By an immediate and wholehearted commitment to the region, the BBC could be a catalyst for all the creative industries in the north of England, impacting on Leeds and Liverpool as well as Manchester; and such a wholehearted commitment will win the BBC far more friends than the game of poker it is playing at the moment. My noble friend Lady Bonham-Carter will deal with whether there is a better way of dealing with the BBC than by Royal Charter. I believe that she and the committee are probably right in saying that there is; and I look forward to her contribution. In the mean time, I welcome this report as a thorough and stimulating contribution to the charter debate. For more than 80 years the BBC has served this country well. Its system of governance may need some overhaul, but I think that the committee is right to warn against superficially glitzy solutions which have, within them, the seeds of future conflict. A robust system of governance is important, because I believe that history will increasingly see the Hutton report as a na&-uml;ve whitewash, which totally underestimated the need to protect the BBC from hostile political manipulation. That is why we will examine the much delayed White Paper, not only in terms of the Government’s commitment to defend the BBC against vested commercial interests, but also in fulfilling its Green Paper commitment to ““a strong BBC, independent of government””. All political life is transitory. Even David Cameron will be future past one day. But in each political life there come one or two decisions which transcend any short-term politics. I would have been proud to have been part of that 1924-29 Parliament which saw the establishment of the BBC. We are now carrying the vase it created across a very shiny floor. It is our duty not to let it slip in the months ahead.