BBC Charter

Lord Clement-Jones Excerpts

Wednesday 12th October 2016 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, my noble friend Lady Bonham-Carter has eloquently set out our general view on these Benches, both positive and less positive, of the draft charter and framework agreement. Other of my noble friends have put their finger on a number of other particularly important points

I want to explore two specific aspects of the framework agreement in detail—one of commission and one potentially of omission. I listened very carefully to what the Minister said but I agree with the noble Lord, Lord Alli, my noble friend Lord Lester and the noble Baroness, Lady Kidron, that the way in which the new requirement for distinctiveness is framed is a potentially serious weapon in the hands of commercial competitors to the BBC.

Paragraph 1 of schedule 2 defines distinctive as,

“substantially different to other comparable providers across each and every UK Public Service both in peak time and overall”.

There are five separate criteria set out in paragraph 1(2), each of which must satisfy this test of substantial difference. This is a much bigger hurdle than the BBC has been asked to negotiate before, and it comes close to saying that the BBC should be doing only what its commercial competitors cannot or do not want to do.

Paragraph 2(1) states that, as well as keeping all current requirements, for the first operating licence Ofcom must,

“consider the case for increasing”,

them to further distinctiveness, and that it must consider the case for new requirements.

Paragraph 2(2) then sets out in further detail what Ofcom should “have particular regard to” in increasing or setting new requirements, and specifies,

“(i) music, arts, religion and other specialist factual; (ii) comedy; and (iii) children’s programming”.

This is prescription of a kind that was abolished for commercial PSBs back in the Communications Act 2003. Moreover, it refers to those genres in terms of whether they are “underprovided or in decline” across PSB as a whole. So Ofcom, while presiding over a decline in these areas on commercial PSBs, could impose compensating obligations on the BBC. A classic example is children’s programming: expenditure has fallen drastically on the non-BBC PSBs. Is the BBC therefore to become the victim of Ofcom’s leniency as regulator of these PSBs?

We on these Benches are particularly concerned about the combination of the provisions of schedule 2 and paragraph 57 of the framework agreement, which means that competitors can complain about breaches of the onerous and highly specific schedule 2 distinctiveness requirements and force a review. It seems that a complaint can be prompted at any time by a commercial competitor. Given the wording of the framework agreement, does the Minister seriously believe that commercial competitors will not take advantage of these provisions and chip away at the broad remit the BBC currently has? Furthermore, under paragraph 12 Ofcom is now entitled at any time to carry out a “competition review” of any BBC service where it believes that it may be having,

“adverse impacts on fair and effective competition”.

This appears to be unrelated to any “material change” and can therefore be prompted at any time by competitor complaints. The impact of this on the BBC in terms of planning and gaining commercial partners could be enormous. All this could give rise to a relentless series of complaints and further erosion of the breadth of the BBC’s output—death by a thousand reviews.

Ofcom may try to resist the onslaught, but that risks it becoming a political football in a way that it has largely managed to avoid. Does the Minister accept that these are real dangers? Can he assure us that the provisions of the draft will be reviewed again to meet these criticisms?

My second main point arising from the draft framework agreement is one of omission and relates to the BBC’s role as a key provider of training and development for the UK’s media industries, referred to by my noble friend Lady Benjamin. Creative Skillset has pointed out that paragraph 13 of schedule 3 of the draft framework agreement places a duty on the BBC to train its own staff and to “work in partnership” with the rest of the industry on the development and maintenance of a highly skilled media workforce. But the training duty in the framework agreement is set out in very broad terms and is similar to the duty in the current agreement, under which the BBC has cut its investment in the BBC Academy disproportionately in recent years, by 35% between 2010 and 2014. Can the Minister confirm that the Government expect the BBC to make training and development a clear strategic priority, integral to the fulfilment of the BBC’s public purposes? Further, can he say that they expect Ofcom to set clear regulatory requirements, encompassing all the necessary elements, and to be rigorous in holding the BBC to account for its compliance?

In summary, we on these Benches agree that Ofcom has been an effective and responsible regulator, but the question is how it will use its powers over the BBC in future. Will it have adequate discretion and flexibility? First, will it have a robust approach and specific powers to reject vexatious and frivolous complaints which may be made in respect of the BBC? Secondly, how do the Government envisage Ofcom’s ability to conduct competition reviews at any time under clause 21 of the agreement being exercised, even when there are no changes in services? Thirdly, what exactly is meant by,

“adverse impact on fair and effective competition”,

specifically in the context of scheduling and the competition reviews that Ofcom will now be able to make?

Fourthly, how Ofcom goes about its duties in doing this will be critical. What leeway will Ofcom have in carrying out its regulatory functions and its duty to enforce compliance before it is open to legal challenge? I look forward to the Minister’s reply to those crucial questions.

--- Later in debate ---

[Lord Ashton of Hyde]

Absolutely. I may be able to come to that, but if I do not I will certainly write to the noble Lord. I take his point.

The noble Baroness, Lady Liddell, and the noble Lord, Lord Williams, talked about the World Service. I agree with all noble Lords who spoke about that, saying that it is one of the most highly regarded offerings of the BBC. We acknowledge that. I can personally testify to that, having just come back from Myanmar, where it played a huge role during the time the generals were in charge. That is why we have protected funding for the World Service from the licence fee for the next five years and we have increased its funding even further by £34 million in 2016-17 and by £85 million for each of the three years thereafter. I will write to the noble Lord, Lord Williams, about the World Service in Korea.

BBC Monitoring is a Foreign Office responsibility and is co-ordinated by the Cabinet Office. An agreement between them and the BBC is expected very shortly.

I take on board the point made by many noble Lords about the statutory underpinning of the BBC. We do not agree with the noble Lord, Lord Lester, and other people on that. I will write to noble Lords about it. I have promised to listen; I do not hold out great hope that it will happen in this charter, but I recognise that it is an issue which has been raised around the House.

On the contestable pot mentioned by the noble Baroness, Lady Benjamin, we will consult in the autumn on precisely how the fund will work—I look forward to her full contribution to the consultation—to ensure that the fund can support under-served genres as effectively as possible. We will have to see at the end of the pilot exactly what we do.

I agree with the noble Baroness that diversity is one of the most important issues, which is why we have made it a new duty for the BBC. I do not think we can be much clearer about how much of a focus it should be. She may have seen in the newspapers a couple of days ago that Sharon White of Ofcom went public in saying how important she thought diversity was and that Ofcom intends to look at it.

There are a number of points to which I will not be able to respond—from the right reverend Prelate about accountability to licence fee payers, and from the noble Lord, Lord Lester, on Clause 67(4) and on his further point. On appointments, we think that we have moved quite a long way and are in considerably better shape than we were when all members of the trust were appointed by the Government. On independence, I think that there are things which the noble Lord, Lord Inglewood, will be happier about and the Government agree with him about the importance of that.

I need to come to a close because I am over time.

[Lord Clement-Jones]

I apologise to the Minister because I realise he is coming to the end, but there is one huge area that he has not dealt with. It is the whole issue of complaints on competition matters. Will he undertake to write to the House on that subject? After all, it is the death by a thousand reviews that I mentioned in my speech and that was echoed by my noble friend Lord Foster.

[Lord Ashton of Hyde]

I apologise for not mentioning that; I agree that it is a big issue. In short, we think that Ofcom is an experienced enough regulator to deal with that, but, as I have said several times, I will write to all noble Lords on all questions that I have not answered adequately, including those on the list of the noble Lord, Lord Stevenson.

I repeat my thanks to all noble Lords who have spoken tonight and who met us previously. I thank the devolved Assemblies and Parliaments, as well as the BBC negotiating team. I am particularly grateful to the officials who have got us here, including educating a new Lords Minister at short notice.

Whatever one thinks of the outcome, I think we will agree that this has been a genuine process of negotiation. While the White Paper established the principles that guided the outcomes of this charter review, the devil has been in the detail. Neither side has got exactly what it started with, but we should not undervalue what each side has achieved. Together, we have ensured that there will be a BBC fit for the future —one we will continue to be proud of. This charter and agreement will give it the tools to be exactly that. Now we must let it get on with the job.