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BBC: Charter

My Lords, the noble Lord, Lord Macdonald, will excuse me if I do not follow him on the issues which I know are very important to him and which I had the pleasure of hearing him address when we discussed them in Grand Committee. I start by paying warm tribute to my noble friend Lord Fowler. I know that all my colleagues who had the privilege of serving with him thought that it was an outstanding Select Committee and that it did this House great credit. I hope that noble Lords respect that. We attach great importance to the view that there is a genuine role for this committee in the rapidly evolving world of communications. I say that speaking as a former Member of another place, because Members of this House have an independence which, bluntly, Members of the other place do not always have in dealing with the media due to the pressure that can be brought on them and the electoral consequences that they may face. I preface my comments with the clear statement—my noble friend Lord Fowler also made this clear—that if we criticise the BBC or the structure, we do so with the honest and genuine desire to support what we consider to be an outstanding and admirable national institution. The comments and criticisms that we make were devoted entirely towards ensuring that it remains so, and that is at the heart of our concerns. It would be wrong not to remember where the process started and why perhaps the committee faced difficulties and frustrations as regards a number of what it believed to be well founded improvements and suggestions made in the criticisms on which the Government have refused to budge. It was hugely influenced by the most unhappy saga of events concerning Dr David Kelly, Andrew Gilligan and the resignation of the chairman and director-general of the BBC. There was acute anxiety at the time that the charter review process was about to be embarked upon with no BBC chairman in place and with the need for a chairman to be appointed as soon as possible. Questions were asked about whether those unhappy circumstances and the unparalleled row between the Prime Minister’s official press spokesman and the BBC at that time would influence the charter process. History will probably reveal to us to what extent that was the case. I have my own deep suspicions that the problems that we now face and the solution that the Government have put forward may indeed be influenced by a desire to move away from those unhappy circumstances as quickly as possible and, as my noble friend Lord Fowler said, that a deal between the Secretary of State for Culture, Media and Sport and the chairman of the BBC underpins the arrangements that we are discussing today. Following this, our final discussion, this House will then wave goodbye to the matter and will have no further chance to influence events. I make it clear that I regard this as a very unhappy arrangement and I hope that my colleagues will excuse me if I repeat what I said in Grand Committee on 27 March 2006. I took the opportunity to quote Sir Howard Davies, who in a newspaper article commented on the Government’s proposals at that time. He accurately quoted our report, in which we said that we thought that the,"““proposals for reforming the governance and regulation of the BBC are confusing, misguided and unworkable””." He drew attention to the fact that, in evidence to our committee, important features of the proposals were opposed by Ofcom, by Michael Grade, the BBC chairman, by his predecessors, Gavyn Davies and Sir Christopher Bland, by Greg Dyke and by the noble Lord, Lord Burns. He went on to say that, had he been allowed to appear, the noble Lord, Lord Birt, would surely have opposed them, too. The noble Lord, Lord Birt, subsequently appeared before us and, indeed, that was the case. Sir Howard Davies, in his article, went on to ask:"““How has the government achieved this remarkable full house of opposition?””." He also said why he believed that such confusion exists and why Sir Christopher Bland is also extremely critical. He wrote:"““In the light of this devastating and unanimous critique it seems astonishing that the government appears determined to plough on””.—[Official Report, 26/3/06; col. GC 249.]" What we have today is ploughing on. I realise how wide the degree of criticism and opposition was. Yesterday, I happened to have the pleasure of listening to the former Cabinet Secretary, the noble Lord, Lord Turnbull, in an interesting debate in this House on the Statistics Commission. I pricked up my ears because in the middle of it—this is a peek behind the curtain of No. 10—the noble Lord, Lord Turnbull, said:"““Some have argued that the board””—" that is, of the Statistics Commission—"““cannot be responsible for both the delivery and the oversight of the system—pretty much the same arguments that led some, including myself, to criticise the new structure for the BBC””." He continued:"““In this case, however,—" that is, in the case of the Statistics Commission—"““I support the Government’s proposals””.—[Official Report, 15/6/06; col. 416.]" What he meant was that, in the case of the BBC, he certainly did not support the Government’s proposals, and I am still on the hunt to find anyone other than the Secretary of State, her loyal supporter the Minister and the chairman of the BBC, who has no choice, who supports these proposals. Perhaps I may instance why I think we are moving in such difficult country. The Minister kindly allowed me to intervene to ask what was happening about the appointment of the chairman of the executive board. I made a mistake in calling him the chairman of the BBC. I had not read the passage in the draft charter which makes it clear that I should not have done that, because the chairman of the trust may also be known as the chairman of the BBC. However, I then looked at the complaints procedure, which sets out how complaints will be handled in the BBC. In case anyone thinks that they can write to the chairman of the BBC, the complaints section of the revised draft framework agreement states:"““The Trust should not have a role in handling or determining individual complaints in the first instance””." The point that many of us made was that we would now have two chairmen and the poor public would wonder who was going to be seen as the chairman of the BBC—as I understand it, as we sit here, we do not know. We do not know when the new chairman of the executive board is to be appointed, or whether he is to be executive or non-executive. If he is to be executive, it has to be the director-general, because that is set out in the conditions of the charter. But we do not know who that will be and we do not know when he will be appointed. I may not have heard the Minister correctly, so perhaps, when he replies to the debate, he will make that clear. The chairman has to be appointed by the trust but, as I understand it, things are going to go ahead before the trust is fully appointed and there will be a shadow situation. I did not quite understand that point. I can see that a bit of scribbling is going on in the Box, so the Minister may have a reply to that point before he makes his winding-up speech. I make that point to show that many of us are worried that duplication and confusion will exist. I have already made a mistake myself and I have been considering these issues on the Select Committee for God knows how many months. The point about the public knowing who the chairman of the BBC is going to be illustrates that very well. The next shock concerns how the trust members will be appointed. If the Minister does not understand why some members of the committee—perhaps all of us—got frustrated when what we thought were a number of constructive and correct suggestions were continually rebuffed by the Government, perhaps I may deal with the appointment of trust members. We suggested that the chairman of the BBC should be chosen on the recommendation of a truly independent panel; that the selection panel should have a majority of non-political members; that its members should be balanced between those with explicit political allegiances; that it should be chaired by a non-political member who is not a civil servant; and that it should operate according to Nolan principles. We recommended that other members of the BBC board or the BBC Trust should be appointed in a similar manner to that described above. So my mouth fell open when, on 7 June in this House, the Minister, the noble Lord, Lord Davies of Oldham, replied to the noble Baroness, Lady Howe, on what I thought must be broadly acceptable to a Government who claim to be interested in transparency and openness in these matters. She had asked about conforming to those principles and the Minister said:"““Nolan principles will apply. The selection panel will consist of a DCMS director, the chairman, Michael Grade””.—[Official Report, 7/6/06; col. 1256.]" There is also to be an independent assessor, which I take to mean that he will not actually be on the panel, but that he will assess the work of the other two. That is absolutely outrageous. How will people have confidence in the BBC Trust? Some may criticise my noble friend for saying that it always appears that some of these arrangements are a stitch up between the Department for Culture, Media and Sport and the chairman of the BBC. Finding that that is to be the arrangement by which the trust members are appointed, I hope it is not too late, as other noble Lords have suggested, for that to be looked at. I want to comment on one point that my noble friend addressed: the involvement of the National Audit Office. In the vacuum of a proper independent assessment of the licence fee and the justification for it, others are joining in. ITV has retained consultants to advise it on the financial justification for the licence fee application by the BBC. The Minister and other noble Lords may have received, as I have, that independent accountants’ report, which says, in summary, that the BBC has underestimated household growth revenue, which on its own adds up to £800 million, sufficient to cover the BBC’s ““overstated””£640 million digital switch-over infrastructure costs. I know that the DCMS has used other consultants, perhaps subject to commercial confidentiality—I do not know. I do not know whether the ITV independent consultant is right. In such a situation, is there not a compelling case for having a respected, independent body, of the standing of the National Audit Office, that can conduct an inquiry, so that it is not turned into a battle between outside paid consultants and accountants who are retained to advise the different bodies? As regards the involvement of this legislature, we now say goodbye to the BBC charter. I have made a number of criticisms which, as the Minister will know, are echoed by many, much better qualified people than me, commenting on the difficulties and challenges of the governance of the BBC. I recognise that the die is now cast and that the Government are determined to plough on. They have a very heavy responsibility and the chairman of the BBC and the new trust members now have a major challenge. Any organisation, no matter how unwise, ultimately can be made to work with the willingness and the capability of the people determined to address it. I do not believe that the Government have given them the best opportunity to achieve that but, at the end of the day, that is what will happen. I am obliged to say that I hope to goodness that it does not damage the BBC which, as I said at the very start my remarks, is such a valued and admired part of our national institutions.