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BBC: Charter

My Lords, I am delighted to have the opportunity to take part in this debate, and I thank my noble friend for introducing it. I particularly congratulate the noble Lord, Lord Fowler, on the excellent work of his committee and on his persuasive speech, with which I found myself largely in agreement. I should declare a former interest as I was, some years ago, chair of the Broadcasting Standards Commission. I thank the staff of the BBC, Michael Grade and Mark Thompson for the way in which they have constantly been available for our questions and for us to discuss the issues with them. I also thank ITV and the CRCA for their helpful advice, support and information. There are four great British services: the BBC, the BBC World Service, the British Council and the Open University, of which I am a trustee. We ought to be proud of the BBC and the BBC World Service for the contribution that they have made to this country and for enhancing this country’s reputation in the wider world. We all have our favourite programmes and programmes that we do not like. About two weeks ago, I watched Mark Lawson interview the American author, Philip Roth, on BBC4. It was a superb interview and public service broadcasting at its best. I recommend that your Lordships try to get hold of a tape of it because it was an outstanding interview and something one would hardly get in the commercial world. The new governance arrangements—the draft charter and agreement—represent a step forward. They will protect the independence of the BBC, but I have some criticisms, and one can take the arguments a lot further. I shall talk briefly about three issues: first, the role of Parliament; secondly, how we can get the right balance between the BBC and commercial broadcasters, that is to say, ITV, commercial radio companies and new media; and thirdly, the process for setting the licence fee. The noble Lord, Lord Fowler, got it right about Parliament. At a meeting here last week, I asked the BBC about this and, if I understood it properly, the BBC felt that more detailed parliamentary scrutiny of legislation dealing with these matters, which would give us an opportunity to move amendments and so on, might have an adverse effect on the BBC’s independence from the political process. That was the argument the BBC put, but I was not persuaded by it. Of course, we have plenty of debates, and we have lots of chances to discuss the BBC, but we cannot influence the key decisions. That is the difference. We can talk at lot, and can be consulted a lot, but we would like to influence some of the key decisions. I agree with the noble Lord, Lord Fowler, that we might end up with a different set of arrangements if we had the chance to move amendments and vote on the details. I shall now turn to the role of the BBC in relation to the commercial sector. The governance structure of the BBC, as envisaged, is, overall, an improvement, although we shall have to judge the new arrangements in practice. I welcome having a trust that is separate from the executive committee. The BBC now competes with the commercial sector in at least three ways; first, for audience share, which has a knock-on effect on the advertising revenues of the commercial sector; secondly, for talent, and the BBC may therefore set the prices that have to be paid for talent, which may have an adverse effect on the presently less affluent commercial television companies; and thirdly, for new free services, particularly with new media, where it has to compete with subscription services and advertising-funded services. I understand that BBC radio has 55 per cent of all radio listening. As I understand it, the commercial sector feels that whereas it is quite proper for Radio 4 and Radio 3, largely, to be funded in the way that they are, it is concerned about Radio 1 and Radio 2, which compete directly with commercial services. On the other hand, Radio 1 and Radio 2 have been going a long time, and I will come on to what we do about existing services a little later. I note the public value test—that is to say, an assessment of the likely consumer and citizen public value benefits—and, in future, there will be a market-value impact assessment by Ofcom. But the point is that the trust will have the final say on new services. There will be no appeal mechanism that would enable people to say that they do not agree with the decision of the trust because the trust is closer to the BBC than the commercial bodies. There will be clear criteria for BBC commercial services, and the trust will have to have regard to the competitive impact of BBC activities on the wider market. But I repeat that there is the difficultly that in the end the trust has the final say and there is no mechanism by which one can appeal against its decision. I am not sure that gets the balance quite right. I also note that these arrangements apply largely to new BBC services. But there is a range of existing services—I referred to Radio 1 and Radio 2—where the commercial side of broadcasting also has concerns about competition. I wonder what system there will be for somebody being able to have a look at the way in which the BBC’s existing services have an adverse impact on the wide range of commercial services. The outcome might be the status quo, but I would like to see that as part of the system of scrutiny. My third point is that we need a new and independent way of setting the licence fee. In a debate a year or two ago, I suggested that there should be an independent committee, somewhat along the lines of the Monetary Policy Committee of the Bank of England, which could determine the licence fee. The Select Committee suggests that the National Audit Office might perform that function. That is fine, and I would like to develop the argument about how that might be done. I would like to see the NAO able to assess the bid for the licence fee under a number of detailed specific headings and come to a conclusion about each of them. For example, the BBC has been obliged to do something about digital switchover. That ought to be a separate heading; the NAO would consider the case put by the BBC and decide whether the BBC had justified 100 per cent of its bid under that heading or a lesser sum, and so on through every major head of service for which the BBC wants the licence fee. That would enable there to be an open, public and transparent process so we could all see, under each heading, how the NAO had adjudicated on the BBC’s bid. In the end, the BBC might get 100 per cent of four of them, 90 per cent of two and 75 per cent of the last one, or however many there were. That would be a desirable process. The Select Committee may or may not have envisaged the process in that way—in reading the report, I was not able to come to a clear understanding of how it thought the NAO should do this. It is important, for the sake of public acceptance of the licence fee, for the digital responsibility to be separate from the others. It confuses the issue a bit, but I hope that the digital switchover process will work well. I have some concerns about the situation in Cumbria, where my home is, but I will not take up the time of the House with that. The NAO process, as envisaged, would give Parliament an opportunity to scrutinise the BBC bid in more detail. We would have the information under headings with the NAO’s response so that we could also make a judgment. I concede, however, that the final decision about the level of the licence fee would, after this process had been gone through, have to lie with the Secretary of State. It is, after all, a tax imposition, and I do not think that any Government would be prepared to give up their right to have the final say. However, if the arguments preceding this are persuasive enough, it would be quite difficult for a Secretary of State to do other than accept the NAO’s recommendation on the BBC bid. As has been said by other noble Lords, the landscape of broadcasting will change dramatically over the next 10 years. I believe that the criticisms we are making, if acted on, will strengthen the BBC, not weaken it. I hope that both the BBC and the commercial interests will become stronger over the 10-year period, but I am bound to say that I am not certain that this will be the outcome.