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BBC: Charter

My Lords, this is the third report of the Select Committee, which the House will be relieved to know is rather shorter than the previous reports. I know that all noble Lords here will have studied them with extreme care. This will be the last report of the BBC Select Committee, which was appointed on an ad hoc basis. Therefore, I take the opportunity to thank the members of the Select Committee for their exceptional support. It was an exceptional committee and it was a great privilege to be chairman of it. Following our debate on Wednesday, we shall have to wait to see whether it will be followed by a permanent Select Committee on the media, which I strongly believe would do justice to the importance of this area. On Select Committees generally, it is most important that they are cross party and not party political—and ours was no exception to that. Fundamentally, their role is a questioning role. That is their nature, and anyone who thinks otherwise does not really understand the parliamentary process. We are not cheerleaders, and in our reports we have raised a range of questions about the BBC, to which I shall come. I make absolutely no apology for that, but let me put our comments in this context—that I am a great admirer of the standards of the BBC in its programme making and news reporting. That was the view of committee members generally. At times we talk glibly in this country about companies that are world leaders, but in broadcasting the BBC is an undoubted world leader. In particular, I think of the radio and television reporters who manage remarkably well to provide balanced reporting both at home and overseas, where they have an unrivalled number of foreign news bureaux. Over the years of course they have been accused of political bias one way or the other. As a former chairman of the Conservative Party, I can only say that that has never been my experience. I find that most of the critics do not want balanced reporting; they want reporting that is slanted their particular way. By far the bigger danger is in pressure brought by government—and here I refer to any government—on the reporting process and on reporters and producers. In some ways, the jewel in the crown of the BBC is the World Service. In the months when we have taken evidence, witnesses have predominantly spoken in admiration of the service. Again, it is the balanced reporting and range of reporting that is admired. It is the highest praise you can give a media company that you can actually rely on it. The extraordinary thing is that we do not make even more of the World Service. It is about to launch a new Arab-language television service in the Middle East. You might think that nothing is more important than to have those objective standards and that they should be brought to the political debate there, but extraordinarily the World Service is being denied the resources to run a 24-hour service, which it wants, and will have to make do with a 12-hour service instead. So starting from behind the line, the service is still held back. How much would the extra cost be to have a 24-hour service? How much would the Foreign Office, which supports the World Service, have to pay to have a 24-hour service? It would be an extra £6 million. I think that one of the richest nations in the world should just be able to afford that kind of bill. In no way does the committee approach the BBC in a spirit of hostility, but our three reports—and in particular the third report—highlights one fundamental concern lying behind much of what I think is wrong. That is the BBC’s inadequate accountability to Parliament. On Radio 4 there is an admirable programme called ““File on 4””, which investigates particular scandals, big and small, that it has uncovered. It usually begins with a BBC journalist trailing the contents of the programme with words like, ““We reveal a company that is bypassing its standards””, or, ““We discover a plan to disguise money-raising””, or ““We find fat cat salaries””. The noble Lord, Lord Bragg, would do that sort of introduction much better than I can. However, I sometimes think that it is a great pity that the producers do not turn their attention to the BBC itself, for they would reveal a public corporation almost entirely unaccountable to Parliament, although with an annual budget the size of that of the Department for International Development. If the producers of ““File on 4”” conducted such an investigation, they would discover a government plan to load social costs—they are not broadcasting costs, they are social costs—on to the licence fee payer, rather than on to general taxation, where such a cost would customarily go. The licence fee is a regressive tax, in fact. They would also find that some of the payments now being negotiated could well lead to an upward, inflationary spiral, all financed by the poor old licence fee payer. On accountability, we should be quite clear what the position is. In agreeing the charter and setting the level of the licence fee, the Government simply have too much unchecked power. We are now at the end of the process with the charter; there will be no Bill presented to Parliament and no consideration in committee. The public may be paying for it but the charter is a deal between the Secretary of State on one side and the chairman of the BBC on the other, and the deal has now been done. The Minister has just said that the public can put their views. The public did put their views, but I am bound to say that it did not make a great deal of difference to the general outcome—nor did the Select Committee or virtually anything else. But the point is that Parliament can do absolutely nothing to change what is now proposed. To be blunt, this very debate illustrates the complete irrelevance of the parliamentary process. You could not do worse than to arrange a debate on a Friday, without a vote. But even under these circumstances, I am delighted to see so many speakers and so many of your Lordships present, as it shows the interest in the subject. However, the reality has to be faced, whether the debate happens in the Commons or the Lords, that there are no meaningful consequences from it. The charter is not placed on a statutory basis, which has inevitable consequences; it means that Parliament will be unable to decide on a range of important issues. It will be unable to decide on the new proposal for the board of trustees to replace the governors, which is a proposition almost universally criticised by outside bodies, including the Government’s own advisers. Indeed, Parliament is so irrelevant in that process that the recruitment process is already under way for bringing in the new trustees and started even before the Commons or the Lords had even debated the matter. It means, too, that Parliament will be unable to decide whether it is right to put the costs of helping the vulnerable with digital switchover on to the licence fee. The Government call it a broadcasting cost—and the Minister has just said that; but free licences for the over-75s is a social cost paid for by the general taxpayer. My guess is that if the Government put their proposition to Parliament, they would be defeated. Virtually no one I have heard pretends that it is a very good solution; it is simply a not very skilfully hidden tax. Parliament will also be unable to consider whether it would be right for the BBC to be charged for the use of spectrum, which it never has been before—a change that would come straight from the pockets of the licence fee payer. It will also not be able to consider the issue of whether some of the licence fee should be used for public service broadcasting outside the BBC, which is an increasingly important issue. There will not be one view on a question like that, but what one cannot deny is that it is an important question. Yet to all this, the Government say they have followed precedent—that it has always been done like this. I am bound to say that if we followed that advice, we would still have the Poor Law in this country. Indeed, most of the injustices that the party opposite came into existence to change would also still be present. Let me emphasise that this is not a party point that I seek to make. My criticism would be the same or even rather severer if my own party were in government and proposing these things. You might say that some of these issues will be taken up in the licence fee debates, but again that is not the case. There is no realistic debate. It is true that an order is put before Parliament, but it is done only on the basis that it is accepted or rejected; it cannot be amended. We cannot say yes to the licence fee but no to loading on the social costs of digital switchover. I do not argue for a Bill each year, but I think that at the start of a process where the proposition at present is that the licence fee should rise by RPI plus 2.3 per cent for the next seven years there should be proper discussion and Parliament should be able to change what is proposed. We are talking of a cost of £3 billion a year now rising to a cost of £4 billion a year. Parliament, particularly the House of Commons, has every right to think that it is the guardian of the licence fee payer’s interests. Again, to be clear, the committee believes that the proposal of RPI plus 2.3 per cent is too much. The licence fee has been increased by an unprecedented amount over the past few years. Costs are being loaded by Government on to it which should not be included, and the BBC itself has been making claims such as the initial claim on the cost of the move to Manchester which was not justified. What would be very helpful, and helpful for the public, is if the National Audit Office could be involved in scrutinising the BBC’s bid and given generally a wider role. Indeed, I cannot understand the argument against that. The NAO has all the necessary experience. It is nationally respected and would provide an objective and non-political assessment of the bid. It already, and perhaps most crucially, looks at the BBC World Service without any complaint; indeed, the BBC World Service says that it is very helpful. The NAO could examine the costs of the BBC; it might even include some of the salaries now being paid. I notice that I am not alone in expressing concern here. None other than Jack Straw, the Leader of the Commons, gave it as his view that newscasters who ““prance around”” the studio—I use his words—were ““paid too much””. If that is the view, the Government have the solution in their own hands. If they turned this issue and issues like it over to the National Audit Office, then we could at least have some check. I think that some of the fees and some of the salaries—I express a personal view—now being paid lead to a number of questions. Clearly there is a market and a perceived market price, but something like £18 million for a contract over the next three years for Jonathan Ross seems to me to be in danger of creating its own inflation not only in the BBC but also in the television area generally. Frankly, it goes against the grain that no one can find £6 million to finance a proper television service to the whole of the Middle East when amounts of that kind are being mentioned. The Government’s reply, repeated remorselessly by the Department for Culture, Media and Sport press office at the weekend, is that their opinion research shows that the public do not want any further parliamentary checks. It is an entirely bogus point, based on one question in a MORI survey in which the public were asked:"““Do you know who, if anyone, is responsible for making sure that services provided by the BBC are of an acceptable standard and who of these, if anyone, should be held to account when things go wrong?””" We are not suggesting, on questions of decency, taste and quality of programmes, that Parliament should have a role. I believe, however, that the results of the poll would have been a little different had they asked the question: ““Do you think that the BBC, which has a power unique to other public bodies to levy money, should be free from normal accountability to Parliament?””. I think that you might have got a slightly different reply on that basis. The great irony is that what we propose would not weaken the BBC; it would strengthen it. It would benefit from objective examination by the NAO, both internally and in public perception. It would benefit from proper parliamentary scrutiny and the striking out of items the Government want to load on to the licence fee payer. As it is, we are heading for a licence fee that at the end of the period will cost £180 and the risk that the licence-fee basis for the BBC will be undermined. I think that that is a real danger and one that we should recognise. I have one last point. One of our last witnesses was the noble Lord, Lord Birt, following his release from No. 10. He certainly looked back entertainingly, as when he tried to persuade the Foreign Office about the importance of the internet. The Foreign Office apparently did not really believe it would catch on. But he also looked forward as well. Here, one of the issues is the very future of public service broadcasting outside the BBC. However good the BBC is, we do not want a monopoly. Some of the important innovations in television have come from ITV and Channel 4. The question is how such public service broadcasting can be sustained. For there are many inside and outside the television industry who doubt whether it can be sustained on the present financial basis of independent television. I do not argue whether that is right or wrong, but I do argue and emphasise that in television and the media area generally we are in a position and a period of profound change. Despite the Foreign Office prediction, the internet has caught on, and there is a whole revolution in the way that news, and much more than news, is being brought to the public. These are vital questions in a democracy and are one reason why I believe they should be kept under review by a permanent Select Committee. But I believe above all that every opportunity should be taken for these issues to be properly debated in Parliament itself and, where appropriate, decided in Parliament itself. I fear that that is not the case at the moment.