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BBC: Charter

My Lords, I declare interests as a former BBC vice-chairman and as a former chairman of commercial radio companies. The BBC, for all its foibles, is an institution that enriches all our lives and is envied, as other noble Lords have said, the world over. The licence fee is the only way to secure its future. The Secretary of State has always shared those views and I congratulate her on navigating the charter review reefs with such a deft touch. I applaud the general drift of the drafts of the new charter, with just a single reservation about the nature of the trust. When I joined the board of governors, my long-held misgivings about its corporate governance were confirmed in full measure. A minuscule governance and accountability department served both the governors and the executive. The department’s staff were appointed by the executive and their future career paths depended on executive patronage. The secretary of the BBC, a key figure over the decades, served in the same capacity for the executive and for the governors. Conflicts of interest abounded at every level. There was no clear separation of powers between the governors and the executive. As soon as I became acting chairman of the BBC, with the full support of my fellow board members, including my noble friend Lady Deech, I moved to alter the imbalance of those scales. We agreed to establish an independent governance unit, properly resourced, with a staff appointed by the governors and answerable only to them. We agreed to commission independent external research. We agreed to tap into specialist industry knowledge, independent from the executive. Those and other significant reforms worked from the outset. They evolved rapidly and formed the core of the governance chapter in Building public value,of which I declare an interest as author. I believe that those reforms would have withstood the test of longer exposure, although I was, of course, conscious of the strong sound of other voices. From the moment that my noble friend, Lord Burns, and his quango-minded panel proposed a public service broadcasting commission, the Secretary of State was bound to devise a compromise form of governance—hence the trust. I am happy to support its establishment in preference to the Burns doctrine, although I am not optimistic about its longer-term survival. However, the DCMS’s governance recommendation, specifying the responsibilities of the trust and the executive, cannot be characterised as a separation of powers in the strictest constitutional sense. On that I agree, in part, with the noble Lord, Lord Clement-Jones. The description of the trust as a sovereign body would have raised the eyebrows of Alexander Hamilton and James Madison, the architects of the separation of powers principle. They would not have published the White Paper as a federalist paper. Clearly, the concept of the sovereign body was engineered to secure the supremacy of the trust over the executive. That will help to legitimise the trust in the short term, but, as years proceed, we may rue its application. Sovereignty has no gradations. I would have preferred a subtler, less prescriptive approach—an authentic separation of powers. I fear that, in time, the trust, or a future chairman, could interfere with excessive zeal in the administrative detail of the BBC. It will be hard to maintain two boards in watertight compartments with the functions of one defined as sovereign and, at the same time, to avoid the perils of overlapping and, worse still, intrusion into operational matters by the trust. Governance by numbers is in fashion. The White Paper does not buck the trend. I tend to share the views of my noble friend Lady O’Neill about this culture. Four years ago, in her outstanding Reith lectures, she argued that new controls on the public sector are more than rhetoric. She declared:"““They require detailed conformity to procedures and protocols, detailed record keeping and provision of information in specified formats and success in reaching targets””." In the BBC’s case, I hope that these sovereign powers—the key word is ““sovereign””—conferred on the trust do not discourage innovation or obstruct creativity, two essentials of broadcasting. But, in the present climate, with all the Government’s boxes to be ticked by executives, my anxieties curb my natural optimism. The decision on the scale of the licence fee will be made in due course. The BBC has made a bold case, but the Government should be cautious. I hope that they will offer no more than RPI plus 1 per cent. The BBC management has announced thousands of redundancies. These enforced measures reflect as much on present prudence as on past imprudence. Managements change; human nature does not. The temptations for executives in a non-commercial organisation with a guaranteed annual revenue remain unaltered. The Government’s generosity should stretch to the shortest sensible limit. I fervently pray for the success of the new governance arrangements. I pray even harder for the trust members to retain confidence in their own good sense and the lessons of their own experience, and above all to rely on the sovereignty of their own judgment—the sovereignty that matters most in every field of governance. The BBC, as other noble Lords have said today, is a special British institution. We should all give thanks for its existence, confirmed in the documents before us today.