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BBC: Chairmanship (Communications Committee Report)

rose to move, That this House takes note of the report of the Communications Committee on The Chairmanship of the BBC (First Report, Session 2006-07, HL Paper 171). The noble Lord said: My Lords, I shall give the Minister time to pick up his new script. It would be quite unfair of me to say that we are moving from dormant bank accounts to the dormant Department of Culture, Media and Sport, but we are certainly moving. Last week, I received a wonderfully double-edged recognition of our work. It was at the premiere of the new and vastly enjoyable film ““Cranford””. The Evening Standard diary reported that there was a glittering attendance: Judi Dench and Eileen Atkins, and from the world of politics Neil Kinnock and Geoffrey Howe. It added that Norman Fowler was also there, presumably because he was chairman of the House of Lords Communications Committee. So there we are. The Liaison Committee will be pleased to note that, after a certain amount of constructive debate, the Communications Committee has now been well and truly established in the BBC’s mind as a successor to the BBC Charter committee, and established with a wide and experienced membership, many of whom served on the original BBC committee and whom I thank for all their effort and commitment. Indeed, I am glad to say at the outset that the Government have now accepted one of the principal recommendations of the BBC committee, which should be noted. When we reported on the charter, we stressed the importance of the BBC World Service, which has great influence throughout the world. We welcomed the proposal by the BBC to start an Arabic language television service, but we were strongly critical of the inadequate funding offered by the Government which allowed only a 12-hour service. We could not see how such a service could compete with the already established 24-hour broadcasters—Al-Jazeera and the rest—although, for very little extra cost, the BBC could also offer a 24-hour Arabic language service. I strongly welcome the Government's decision to make more funds available so that a proper 24-hour Arabic language service can now be provided. I congratulate the Minister on that, and will not embarrass him by quoting the reasons he consistently gave us why this eminently sensible step was entirely impossible and unnecessary. The important thing is that it has been done. We hope that, whatever may have been the initial response to our report on the chairmanship of the BBC, in the end Ministers will agree with all our proposals here as well. In part, this inquiry was provoked by the sudden resignation of Michael Grade as chairman of the BBC and his just as sudden transfer to the executive chairmanship of ITV. The BBC had already lost one chairman quite recently and here was another, this time not only resigning but switching to the BBC’s direct competitor. I remember the response of the Minister—who is replying to this debate—when the point was put to him in this House. His response was: "““it is a free country””.—[Official Report, 30/11/06; col. 848.]" I doubt if the Minister can say with a straight face that this was the immediate reaction in the Department of Culture, Media and Sport when the news first came through. I doubt that Tessa Jowell did a little jig to celebrate the free and successful working of the market. It seems altogether more likely that there was a collective chewing of the carpet at the totally unexpected departure of a chairman who everyone thought would serve a full term, not least to see through the new governance arrangements for the BBC he had agreed and to work through the consequences of the new licence fee settlement. As our report makes clear, we recommended that the chairman of the new BBC Trust should be subject to a six-month notice period. We thought it absurd that the BBC could be left virtually without notice in this potentially vulnerable position. The Government's response was that the charter provided only very limited powers for setting terms relating to the chairman’s employment; although it is perhaps relevant to point out that the Government could have taken such powers in the charter that they have only recently provided for the BBC. Nevertheless, I welcome the statement in the Government’s response that, in the absence of legal power to make such provision, they accept the need to establish a clear understanding between the department, the BBC and the chairman about the requirements of the role, including the expected length of term of appointment. The understanding on the length of term of appointment for the current chairman, as in the Government’s response, was set out in writing and will be for future appointees. That is a sensible step forward. I also welcome what the BBC Trust said about a non-compete clause. We proposed six months; the BBC Trust said in effect that the current non-compete clause in the trust’s code of practice is for three months, introduced voluntarily by the trust earlier in 2007 following Michael Grade’s departure. Legal advice at the time was that the enforceability of any non-compete over three months was doubtful. We obviously accept that advice and welcome the steps that have been taken. I am not going to describe in a short speech each and every recommendation that we made. In the process of appointing a chairman, we have tried to set down a procedure that would make the selection as open, transparent and independent of government as possible. We proposed, for example, that the chairman of the independent selection panel should no longer be a civil servant who, by definition, works to a Minister. We proposed that the Secretary of State’s powers to make the final choice should be more limited than at present. Perhaps not surprisingly, Ministers are entirely happy with the present position, given their power, so we will have to wait for change there. However, there is one point where I think the Government should look at policy immediately. The members of the committee all remember a rather embarrassing moment in our evidence-taking when Mr Woodward—who I remember as my director of communications at Conservative Central Office but appeared before us as broadcasting Minister of the current Government—declined to answer some questions before he had checked back with headquarters whether this was allowed. Eventually it was agreed that he was allowed to answer, but it poses the question of whether other information was being withheld. I say that because under the Freedom of Information Act the department has now provided copies of the Civil Service submission to the Secretary of State on whom to appoint as chairman of the BBC Trust, including how the appointment was to be handled and announced. I observe that those documents were never offered to the committee, and it would be an enormous pity if departments were not to offer maximum information to parliamentary Select Committees. I suggest that the fundamental recommendations in this report are to deal with the role of the chairman and the role of Parliament. On the role of the chairman, I suspect that there is still a great deal of public confusion because Sir Michael Lyons is not the chairman of the BBC, but chairman of the BBC Trust. ““Chairman of the BBC”” is now only an honorary title and Sir Michael is not chairman in the way that that has previously been understood at the BBC. Very substantially he is a regulator: his stated aim is to represent the licence-fee payer. The question then becomes who is representing the BBC. At the time of the faked phone-ins, we thought that the director-general looked an isolated figure when he was trying to explain what had gone wrong. Of course, I do not believe for a moment that the BBC chairman or any other chairman should be there to defend the indefensible, but he should be there to advise and support and to tell management when he thinks that things are going wrong. That is what happens in the best companies in the private sector. It is what good governance is all about. However, it is also the case that a corporation such as the BBC has legitimate interests that need to be expressed. For example, there is a gathering debate on whether the licence fee should be top-sliced for purposes apart from those of the BBC and for other companies. It is entirely legitimate and expected for the BBC to enter that debate and argue against top-slicing. We would expect it. It has already had £600 million sliced off the licence fee to support social spending on helping people in need with the digital switchover, yet curiously when the question of top-slicing the licence fee was put to Sir Michael Lyons at a recent meeting I was at, his reply was to the effect that he was keeping an open mind on the issue. I can think of no chairman in the past giving such a reply. They would quite legitimately put the case for the BBC, against, I have to say, some very organised opposition organisations which, for one reason or another, argue in favour of top-slicing. I emphasise this not in any way as a personal criticism of Sir Michael. He has certainly impressed me, and not just because he lives in my old constituency of Sutton Coldfield. It is a criticism of the structure of the job he has been given. I would much prefer him to be chairman of a regular board jointly responsible with the executive for the success of the BBC. If I am allowed a personal aside, I see that the Commons committee has come out in favour in principle of top-slicing the licence fee. In the now famous words of the noble Lord, Lord West¸ I need to be convinced of the case, and I may not be converted quite as quickly as the noble Lord. My final point concerns the role of Parliament. We had hoped that the Government would agree that the chairman of the BBC Trust should be one of the appointments which could be scrutinised by a parliamentary Joint Committee which would focus simply on his qualifications and aptitude for the job. Predictably, the Government rejected that. I say ““predictably”” because, as we say in our report, there is a democratic deficit concerning the BBC. This is a point on which the committees in the Commons and the Lords speak as one. Although the public are providing more than £3 billion a year through the licence fee, they have very limited power through Parliament to change anything. Parliament—particularly the Commons—is the only body that can claim to represent the public, yet the new charter of the BBC, including the new arrangements for the chairmanship, was not subject to approval by Parliament. It was a deal between the BBC and the Department for Culture, Media and Sport. It is virtually the same with the licence fee; it does not need a debate in either House and proceeds by negative resolution, which means that even if there is a debate Parliament has only the choice of accepting or rejecting it. There is no power to amend; for example, there is no power not to accept that the £600 million of social spending should come from the licence fee. I know that there are those in the BBC who are wary of any parliamentary check. To them I say that if the £600 million funding for targeted help with the switchover had been put in legislation that Parliament could have amended, my judgment is that it would have been amended. How can you say that free television licences are social spending to come from the Exchequer but that helping old people with digital switchover is not? It is logically unsustainable. In the same way, there would have been a fierce debate on the charter provisions relating to the role of chairman of the BBC, and I am by no means certain that that would have got through either. The Government's answer, which is set out in their response, is that their public opinion research does not favour what they call in their response, "““increased Parliamentary control over the BBC””." In truth, the research shows no support for government control over the future of the BBC either, but, of course, the Government are not reducing their powers accordingly. It is a pity that the department keeps on quoting that opinion research because, to be frank, it is hardly worth the paper that it was written on and would be worth even less if the issues were properly set out for the public. I simply observe that there might be those in the BBC today who would place more trust in Parliament than in Governments of any party. I am very grateful to all those who gave evidence to the committee. I am very grateful to the committee, a number of members of which are here tonight. I welcome the movements to our point of view that have been initiated by the Government and the BBC Trust. However, I warn that confusion and some conflict remain on the role of the chairman of the BBC Trust. Above all, I believe that Parliament should be more involved with some of the important decisions affecting the BBC, such as the charter and the licence fee that raises more than £3 billion from the British public. I beg to move. Moved, That this House takes note of the report of the Communications Committee on The Chairmanship of the BBC (First Report, Session 2006-07, HL Paper 171).—(Lord Fowler.)