BBC: Finance and Independence

Debate between Lord Bragg and Baroness Neville-Rolfe

Thursday 10th September 2015 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, I am extremely grateful to the noble Baroness, Lady Bakewell, for introducing this timely debate and for bringing her own experience to it in a brilliant introduction.

It is abundantly clear that this House cares deeply about the BBC and the BBC World Service, and that it considers the BBC to be an integral part of our national fabric, along with, as the noble Lord, Lord Smith, said, music, theatre, universities and other great British things—for me, those include the countryside and the monarchy. The noble Lord, Lord Young, mentioned the BBC’s track record on apprenticeships, while the noble Baroness, Lady Bonham-Carter, referred to talent, training, soft power, the fast-growing nature of the digital world and the catalyst that the BBC has provided for the creative industries, including BBC Worldwide.

I will not seek to go through everything that was said by the noble Lord, Lord Stevenson, but I will read his contribution with great interest. I agree with a number of the points that he made in relation to vision, although not all. I am also very grateful for the responses that have been given on the Floor of the House to our consultation. It is a great tribute to all noble Lords that we have been able to have this debate relatively early on in the consultation process. It comes on top of the short debate in July, which has already been referenced, led by my noble friend Lord Fowler, and the debate we had when I repeated the charter Statement. We should also mention the diversity debate earlier this week on women in the media, during which a number of points were made about the BBC.

I will not try to comment on everything that everyone has said because I will not get through it all: one of the problems with the BBC is the scale of interest and importance of the subject. However, the Government share the view that the BBC is an integral part of our national fabric and is incredibly important. But, as the noble Baroness, Lady Bakewell, said in her wide-ranging speech, all things can be improved. She acknowledged that with her correct references to Savile, digital failure, layers of management, remuneration and so on. I agree with the sense that she had that the BBC can emerge from the charter review stronger and better as a result of the debates we are having.

The charter review is a national conversation about the BBC and everyone is encouraged to take part. Today is part of that process. No charter review could fail to consider the size and scope of the BBC in the modern era. It is absolutely right to look at how well the BBC serves licence fee payers and its impact on other broadcasters. The consultation has already received thousands of responses. Over the coming months, there will be further opportunities for people across the UK to contribute their views—both directly to the Government and to the BBC Trust, which is working with the public. Our plan is to publish a White Paper in the spring and our ambition is to complete the charter review by the end of December 2016 and, if we can, to avoid the need for an extension.

Perhaps I may pick up an important point on accessibility made by the noble Lord, Lord Low. An accessible version is available for text-to-audio services and I will make sure that that is made available to the noble Lord. Also on accessibility, as a result of the points made by the noble Lord, Lord Hannay, about input from other countries around the world into this important debate, the consultation is available on GOV.UK and I am assured that it is accessible from overseas. I will have a think about whether there is anything more we can do on that in the next few weeks.

The noble Baroness, Lady Bakewell, my noble friends Lord Fowler and Lord Inglewood, and the noble Lord, Lord Lipsey, talked about the charter and its parliamentary role. It is fair to say that we have heard a wide range of views today about whether a royal charter is right for the BBC, the role of Parliament—both this House and the other place—and whether there should be any statutory controls. These are important questions for the charter review consultation, which asks about the proper relationship between Parliament, government, the NAO and the BBC. We are consulting on these questions, so noble Lords would not expect me to pre-judge the outcome but the Government are committed to making sure that governance and regulatory structures are appropriate. I welcome the views expressed today and subsequent views on this issue.

The noble Lord, Lord Bragg, expressed concern about what I would call the over-75s deal. The noble Lord, Lord Stevenson, and other noble Lords also mentioned that. One vital point has not been made. The deal that the Government reached with the BBC over free television licences for households with over-75s is not happening overnight. It will be phased in from 2018-19 and the BBC will not take on the full costs until 2020-21. In the mean time, the licence fee will be modernised to cover public service broadcast catch-up TV, which is very welcome to the BBC, and licence fee funding currently allocated for broadband rollout will be phased out, giving the BBC access to that money.

[Lord Bragg]

I do not think it was a deal; it was a demand. We should use words carefully in this House.

[Baroness Neville-Rolfe]

I thank the noble Lord. Obviously I was not involved in it. Whether it was a demand or a deal, it is important that we try to explain our thinking and how that will affect the players concerned, which I continue to try to do.

The over-75s concession is, of course, a grant from a government department, the DWP, to the BBC. We have agreed to phase that out. To respond to a question that was asked, following the agreement with the BBC, the trust accepted that decision. On the positive side, the fact that the BBC has agreed to play its part in common with most of the public sector in reducing spending does not mean that it has become an arm of the Government. After this Parliament, the BBC will become responsible for policy relating to the over-75s concession. That will be very important.

I am keen that, as part of charter review, we take a broad look at efficiency at the BBC. Work has been done before, but it is not just overheads: it is how the BBC delivers its public services as well. What is being asked of the BBC in terms of savings is not out of line with what is being asked of most government departments—it is possibly rather less. The licence fee is expected to rise in line with the consumer prices index over the next charter review period, dependent on the BBC keeping pace with efficiency savings elsewhere in the public sector and subject to the conclusions drawn from the charter review about the BBC’s scope and purpose. The noble Lord, Lord Hall, described this as,

“a strong deal for the BBC”.

As the Secretary of State made clear to a committee yesterday in the other place, in the consultation paper we are looking at three options for future funding. We tend to bring to bear new expertise on this issue because all the options have pluses and minuses. It is important that we look at those.

I should comment on the BBC charter review advisory group, because there has recently been rather a lot of nonsense written and spoken about it. It is a group of unpaid volunteers with huge and varying expertise and experience, including of the BBC, public service broadcasting, technology, journalism, governance and regulation. It would be impossible to find a group with significant insight or current knowledge if anyone who worked in the industry had been ruled out. It would be eccentric at best and a dereliction of duty not to seek counsel from experts. The group has met once thus far and will meet approximately every two months. It is only one source of expert advice. I emphasise that, as I did in July. It is not a forum for decision-making. We have our consultation; it is well under way. We have had 25,000 responses already and we have nearly a month to go. The trust is soon to embark on its complementary process. I hope that that will go some way to reassuring those who have expressed concern about the period of consultation.

I am sure that the whole House agrees that the editorial independence of the BBC is sacrosanct. Government does, however, have a legitimate and important role in ensuring that the BBC spends money responsibly and is regulated and governed effectively. The BBC’s governance structure will affect complaints handling, strategic direction, the setting of high-level budgets and changes to BBC services.

I very much agree with what the noble Baroness, Lady Deech, said about the importance of having good independent complaints systems, and, indeed, the value that complaints can bring to an organisation. When I worked in consumer goods, I always felt that complaints were a way of improving an organisation.

The BBC Trust has been widely criticised. As the noble Baroness, Lady Bakewell, said, its own chair—Rona Fairhead—has said that,

“a fault line continues to lie in the blurred accountabilities between the Trust and the Executive board”.

There are three broad options here: reforming the trust model, which I think many noble Lords have reservations about, and I have heard some today; the creation of a unitary board and a new stand-alone oversight body; or moving external regulation wholesale to Ofcom.

The BBC has a duty to exercise total input impartiality. Its reputation at home and abroad depends on it meeting the very highest standards in this regard. There has sometimes been rather widespread disappointment in the BBC’s ability to achieve balance. Indeed, even BBC insiders have acknowledged as much, although generally only retrospectively. I was struck by the recollection of the noble Lord, Lord Smith, that the Chinese sometimes complained about this—along with UKIP, the SNP and others. I do not entirely agree with the conclusion of the noble Baroness, Lady Bonham-Carter, that there is never an issue. I wish that I had dealt with her when she worked at the BBC. On a related point, the BBC must respond swiftly and comprehensively to complaints. As I said in relation to the comments made by the noble Baroness, Lady Deech, this is another issue we will be looking at.

The 2006 agreement between the BBC and the Culture Secretary reached at the last charter review states:

“The content of the BBC’s UK Public Services”—

taken as a whole—

“must be high quality, challenging, original, innovative and engaging”.

There is a feeling that this is rather too broad brush. Meanwhile, the BBC’s latest annual report helpfully set “Quality and distinctiveness” as one of its four strategic objectives. The BBC executive has recently proposed to invest more in original British drama and comedy and to take a more distinctive approach across all of the BBC’s services, including a new children’s service called iPlay. We look forward to seeing further details of these proposals.

Contrary to what noble Lords may have read in the press, the Government do not want to abandon popular programmes. “Public service” does not simply mean “minority interest” or providing only for those audiences which will not be served by the market. I agree with a great deal of what the noble Lord, Lord Low, said about the success of every sort of programme from “The Archers” to “Yes Minister”.

The Government will never decide or dictate BBC content—these are editorial decisions for the BBC. As I think the noble Lord, Lord Cashman, emphasised, that is very important. However, as part of an open, thorough and consultative charter review, it is proper that we should look at whether every BBC intervention in the market is justified. Concerns that need to be explored include whether the BBC is too dominant online, especially in terms of its effect on local news. Commercial radio companies have claimed that some of the BBC’s radio output is not sufficiently distinctive. On the other hand, BBC Radio 1 is rightly celebrated for its diverse playlist and breaking new acts.

The noble Baroness, Lady Bakewell, expressed her view that the BBC’s activities do not have a negative impact on the market, and that there is no crowding out. The noble Lord, Lord Stevenson, took us through some of the positive impacts that the BBC has had, which I agree with. However, through the consultation we are seeking evidence about this. The House will be glad to know that we will commission more research on these impacts.

The BBC executive has made proposals for local news coverage that include: investment in a local news service that will report on councils, courts and public services, and making regional video and local audio content available for immediate use on the internet services of local and regional news organisations. These are interesting and timely suggestions but we will want to make sure that they genuinely benefit UK plc and the wider sector. I take the point made by my noble friend Lord Black about whether we should be controlling the BBC’s online offer in some way to ensure that the creative industries continue to flourish. We are awaiting further detail on these proposals and will be listening to industry and the public through the review process.

The noble Lords, Lord Wigley, Lord Williams and Lord MacKenzie, talked about Wales and Scotland and the importance of content focused for the local audience. I agree. Indeed, in July I had the pleasure of visiting Cardiff and meeting S4C’s chairman and other staff. I was struck by their dedication to quality and value for money. S4C is going to relocate to Carmarthen and co-locate its broadcasting with the BBC in Cardiff—an example of efficiency savings. I can reiterate, as I was asked to, the Government’s commitment to minority-language broadcasting across the UK, including Gaelic. To respond to the noble Lord, Lord MacKenzie, this will be a key thread in the charter review and, indeed, the BBC presence in Edinburgh is an important part of it being a British Broadcasting Corporation. The BBC has identified a growing demand for programming that better serves the distinctive needs of Scotland and reflects Scottish life, and is also reflecting on whether it has the right balance across the home nations in its news services.

Charter review is not an unprecedented process. This is a consultation. Many noble Lords who have spoken today are well versed in the fact that a charter review always draws out strong and sometimes polarised views on the future of the BBC. I very much welcome the views of noble Lords on everything—from purpose and funding to scale and scope, and, of course, governance, all of which are central.

The BBC—British-owned and British-run—is vital on the international stage, as was so well explained by my noble friend Lord Fowler and the noble Lord, Lord Williams, who spoke with such passion. It does spectacularly well. BBC services reach more than 300 million people throughout the world each week. The BBC’s recent decision to prioritise parts of the world that urgently need reliable news, such as Russia, North Korea, north Africa and the Middle East, is most welcome, as the noble Lord, Lord Maclennan, made clear in his moving speech. The overseas services are important and I will feed in the point that the noble Lord, Lord Hannay, made about the vernacular services.

The media landscape has changed beyond all recognition in just a few years. We have seen dramatic changes as a result of technology, as the noble Lord, Lord Maxton, articulated so well. It is impossible to predict precisely how the media landscape will look in the years to come, and all these changes will be important inputs into the charter process. The conclusions of the Perry review are also very relevant to this part of the debate and we will make sure that the points made on that today are considered.

As some have said, the noble Lord, Lord Hall, said that he wants,

“the BBC to be Britain’s creative partner”—

the “Ideas Service” he mentioned in the paper he published on Monday—when he announced plans involving, for example, the best content from museums, festivals, galleries and other cultural institutions. This is an exciting development. I am sure that the noble Earl, Lord Clancarty, is also pleased to see the proposals on music.

The BBC is the most celebrated broadcaster in the world. That is, as everybody agrees, worth protecting. But no institution will be as good as it could be if it is seen to be untouchable. In a multimedia age, the BBC has to find its place. It has to improve. It has to build on the excellent strengths it has. We are having a national conversation about our brilliant national broadcaster, and everyone is invited.