Economy: Broadcast Media

Baroness Bonham-Carter of Yarnbury Excerpts

Thursday 28th November 2013 Lords Chamber

Moved by

[Baroness Bonham-Carter of Yarnbury]

That this House takes note of the contribution of broadcast media to the United Kingdom economy.

[Baroness Bonham-Carter of Yarnbury (LD)]

My Lords, I am privileged and pleased to introduce the Liberal Democrat debate on the importance of broadcast media. I thank all noble Lords who are taking part, particularly those who are making their maiden speeches today. Unfortunately, I can no longer declare an interest as I no longer work in television, which is a great sadness to me because I had many happy and, I hope, creative years there.

British broadcast media have been around in one form or another since the creation of the British Broadcasting Company in 1922. Since then there have been many forks in the road, all of which were initially met with portents of gloom and predictions of doom. That will not be the nature of my speech today. It is proving to be a remarkably agile and resilient industry. First, there was the BBC. Next came the creation of Independent Television in 1955, and that first introduction of competition had a profound impact on broadcasting. Not only did the British public lose Grace Archer—the fact that “The Archers” still exists shows the resilience of the genre—but the BBC lost its captive audience and large numbers of viewers deserted it. It had to learn to connect and it did. It did not change its values, but it did change.

Meanwhile the Independent Broadcasting Authority decided that independent TV companies—in those days raking in the money—should spend a proportion on public service broadcasting, so that was enhanced. BBC2 was increased and Channel 4, with its mission to speak for minorities and minority tastes, in parallel with the independent production sector, was created—such a successful part of our creative industries and now worth £2.5 billion a year. At that point, we entered a wonderful world of plurality and diversity. Of course, the window of competition that the BBC now has means that 25% of its programmes have to be commissioned from independent production companies. This purely terrestrial world was further enhanced by the advent of subscription channels such as Sky, and then came the internet and the transition from one age to another: analogue to digital.

As I said earlier, many of those innovations seemed to suggest the end of what had come before. I sat on a House of Lords committee looking at the review of the BBC charter when we were told by endless experts that terrestrial channels were doomed, the viewing of live telly was over and that the future was all catch-up and on demand. Last Saturday—I have to admit I was one of them—an average of 10.2 million people watched “Doctor Who” on the BBC, and 7.7 million tuned into “The X Factor” on ITV. New media—the social networks—have led to a return to live viewing and people watch and interact with each other at the same time. There is a premium on watching not when you choose but when everyone else is. As the RTS Cambridge Convention concluded earlier this year, we are seeing, as we always have, a process of evolution rather than revolution, or indeed outright transformation.

Our broadcast media make their contribution to the economy both directly and indirectly. They invest in home-grown content—£3.3 billion-worth last year—and while non-PSBs have increased their output by a great deal, the PSBs are responsible for 85% of this investment. The BBC generates for the UK economy the equivalent of £2 of economic value for every £1 of licence fee it receives. In other words, it doubles its money.

The effect of initial BBC spending is multiplied as it ripples through the economy, from region to region and sector to sector. For example, the BBC’s move to MediaCity in Salford and its commitment to developing the media industry in the north of England has been of massive benefit to the economy of that area and to the further regeneration of that part of Greater Manchester. Indeed, what is happening at Salford Quays through ITV, BBC and various start-up digital companies, is helping Manchester to become the biggest digital hub in Europe outside London.

In 2012, Pact, the body which represents the independent production companies, estimates that the sector grew by 16.5% compared with 2011. How many other sectors can claim that? I am sure the Minister will agree that the introduction of tax breaks by the coalition Government for high-end TV and animation has enhanced the potential for economic growth in these sectors. Indeed, Aardman, the creators of Wallace and Gromit, says that it believes that the tax credit for UK animation will be transformational—that it will create thousands of UK jobs and that there will be a long-term financial gain for the UK.

UK programmes and TV formats are increasingly in demand abroad, with television export sales growing to £1.2 billion in 2012, and there are huge prospects for more growth. I was speaking to the chief executive of Pact yesterday. He had just come back from China, where he signed an agreement with Chinese television. However, the thing he was most excited about was being, as he put it, treated like royalty because one of his delegation was the producer of “Sherlock”. More surprisingly, apparently “Downton” is a big hit in China, but there we go.

Our television industries have another effect: they are also valuable as a means of bringing Britain to the world—so-called soft power. Our exported television programmes help deepen knowledge and understanding of the UK, as well as championing British creativity and culture. As the Secretary of State, Maria Miller, said:

“TV reaches the parts that our ambassadors don’t”.

I could not help repeating that joke. According to the Institute for Governance-Monocle soft power index, the UK currently holds the top spot, due in large part to the global reach of British media. I was in Mexico a couple of weeks ago, leading a creative industries delegation. The Mexicans were much more interested in the fact that I worked in British television than my being a Member of this House.

As well as showcasing British culture and creativity, the broadcast media also function as a catalyst for the creative industries as a whole and, as such, is a major contributor to our creative economy. It is an increasingly important sector and is forecast to grow by 31% by 2020. However, for this to happen, it needs the right support. One of the most important things is that we continue to create the creators. In this area, we face not a jobs problem but a skills problem. In a recent report, Creative Skillset identified significant skill shortages across all forms of production and concluded that the competitive future of the UK’s creative industries will be secured only by the industries themselves supporting skills and talent development.

Broadcasters are doing their bit and there are good new schemes—the Sky Academy, for instance—but in hard times, historically, training budgets are too often the first to be cut. The BBC’s investment in the BBC Academy, the branch of its operations through which all training funds are distributed, is a case in point. It is to be cut by 35%. These are not only efficiency savings but a deep cut. It will affect the freelancers that the academy trains as well as BBC staff. Those of us who know the business, know that freelancers are the life-blood of the broadcasting industry. It is also a bad signal to other television companies. I fear the response will be: “The BBC is cutting; so can we”. Therefore, does the Minister not agree with Creative Skillset that investment and training should be an obligation, particularly for PSBs?

Another area in which the industry disappoints is diversity. I am not just referring to Harriet Harman’s very well made point about the lack of older women on television. The broadcast media simply does not reflect diverse, 21st-century Britain on or off the screens. As Julian Fellowes—the noble Lord, Lord Fellowes, I should say—recently said:

“We have got to turn that corner. In 10 years nobody will know what we are talking about. That is what I hope”.

So do I.

There is, however, one area in which great strides forward have been taken, and that is the area of disability. For this we have Channel 4 to thank. It has admirably fulfilled its remit, not least through its spectacular coverage of the Paralympics. Some 11 million people watched the opening ceremony, which was almost a record for them.

Now I come to what cannot have escaped anyone’s notice: the BBC is under attack. It is under attack by the Home Secretary and the chairman of the Conservative Party; even a Dimbleby suggests that the BBC is too big. I prefer the view of another veteran David, Sir David Attenborough, a man who, in my opinion, exemplifies what our broadcasting system—at the heart of which sits the BBC—has allowed to flourish. He recently said:

“The BBC is, in my view, one of the most important strands in the cultural life of this country … and it is going through a bad patch. I just hope that it will emerge from the bad patch ... There are plenty of people with interests which conflict with those of the BBC and will be glad to see the BBC diminished … But what could happen is that it is diminished, or it is so starved of money that it has to abandon many of its public service responsibilities. If it did that, it would no longer be the BBC and that would be a catastrophe for the country”.

These are strong words, but ones with which I agree.

However, what cannot be disputed is that the BBC has been going through a bad patch. There were revelations about unacceptable severance pay-offs to senior executives and £100 million wasted on digital media initiatives. I was an employee of the BBC for 10 years; I know how hard the people who make the programmes work, and for relatively modest salaries. I know how angry they are at the waste of licence fee money, which should be enhancing their budgets, not lining the pockets of those who, in my day at Television Centre, inhabited the sixth floor.

As the Secretary of State has said, however, the problem is about governance, not about the integral worth of the BBC. Under the leadership of director-general Tony Hall—the noble Lord, Lord Hall of Birkenhead—I believe this is being addressed. It is correct that it is he who should be addressing it. The biggest threat to the BBC is interference by government; it belongs to the licence fee payer—the public, not politicians.

The old joke—which noble Lords may not know—that the BBC would be an efficient, well oiled machine if it were not for the pesky programme-makers was always a joke. Events of the past year have proved just what a bad joke it was. The value of the media industry rests on the talents, ideas and achievements of creative individuals. The officer class—as the noble Lord, Lord Hall, recently referred to it—has indeed got out of step and this is not just about remuneration. There are too many layers of management between creator and screen.

To conclude, the broadcast media are a jewel in our crown and arguably the best broadcasting system in the world. Many distinguished contributors to this success story are taking part in today’s debate, and I thank them. A report about to be published by Inflection Point Media on the impact of PSBs on commercial media investment concludes what we can see on our screens. It states:

“The UK broadcast market works. The public and private sectors are competing for audiences but not for funding sources. The result has not led to lower standards and a race to the bottom, but a race to the top—better programmes, creative innovation and growth of the overall economic pie. But it is British creators who underpin the industry”.

Danny Cohen, director of television at the BBC, said:

“Up until now, seniority and status have been related to management and I want to break that link and give greater status to creative people”.

David Abraham, chief executive of Channel 4, has said that the “suits vs creatives” division is effectively “redundant” in television. The noble Lord, Lord Hall, director-general of the BBC, has said:

“I want to build a ladder of opportunity for the talented. I want to open up the BBC to more people—to people from every part of the country—to people from a greater variety of backgrounds”.

They all seem to get it, and now they must act on their words. When the noble Lord, Lord Hall, says he wants to build a ladder of opportunity for the talented, it strikes me that the most important point is that the word “ladder” is singular. We must also, of course, successfully banish the snakes. I beg to move.

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[Baroness Bonham-Carter of Yarnbury]

My Lords, I thank all noble Lords who took part in the debate. I also thank the many noble Lords who have contributed so greatly to making the broadcast media great, in all their different ways. That enriched the debate today. I particularly congratulate all the maiden speakers. I am pleased that so many of them chose this debate and look forward to them being champions of this area, not least my noble friend Lord Holmes. Finally, as “Doctor Who” has dominated the debate and I see my noble friend Lord Grade in his seat, I cannot resist wondering whether, had he known that Sylvester McCoy would regenerate into John Hurt, he would still have cancelled the programme.

Motion agreed.