Future of the BBC

Baroness Jowell Excerpts

Monday 21st October 2013 Commons Chamber

[Dame Tessa Jowell (Dulwich and West Norwood) (Lab)]

I apologise to the House for not being able to stay for the whole debate. I hope, Mr Deputy Speaker, that you will accept my regrets.

I welcome the debate and the sponsorship of it. I welcome the opportunity for this House to reflect on the present state of the BBC and the future ambitions that have been so clearly set out by Lord Hall, the new director-general. I also welcome the opportunity to contribute to the debate—sometimes a rather confused one, I think—on BBC governance, which I must say is not at the top of the list of issues that preoccupy licence fee payers. The BBC, despite the publicity surrounding the recent torrid and terrible revelations, has shown itself to be a remarkably resilient institution. It is important that we recognise and respect the reasons for that resilience. First, there is the high level of public support and trust, which I must say this institution and politics would be very satisfied with, even after the fallout from the terrible revelations following the Jimmy Savile inquiry and the degree of public distaste about the level of pay-offs for senior managers.

Perhaps one of the most important reasons for that high level of resilience is the public’s devotion to the BBC’s high-quality content, which is almost taken for granted. I think that it is fair to think of the more than £3 billion of licence fee payers’ money as the venture capital for the nation’s creativity.

[Mr Tom Clarke]

My right hon. Friend has done a great job on this issue, as on many others. Will she allow me to introduce a Scottish issue just for a moment? The biggest decision that Scotland will have to take will be in the referendum next September. Does she agree that BBC Scotland, despite its qualities, might focus on greater impartiality on that issue than many people would consider it has done so far?

[Dame Tessa Jowell]

Sadly, I am not as regular a viewer of BBC Scotland as my right hon. Friend. One of the BBC’s founding codes of trust with the public is its responsibility for accuracy and impartiality, and I think that extends to every outlet for which it is responsible. I hope that BBC Scotland will also reflect on the fact that we are better together. I thank him for that point.

[Mr Redwood]

I am interested in the right hon. Lady’s point about the very high pay-offs going to managers. What does she think should be done about the very high salaries and pay-offs going to managers and talent when it is paid for by a poll tax that, among other things, is levied on a large number of people who have very little income at all?

[Dame Tessa Jowell]

I thank the right hon. Gentleman for his intervention. I think that transparency is absolutely of the essence in that regard. The BBC, as an independent entity, must be able to account to licence fee payers for the decisions taken about remuneration. I certainly think that increased transparency would be one of the ways of rebuilding trust.

[Robert Halfon]

Given what the right hon. Lady has just said, does she not agree that the best way to improve transparency would be by giving licence fee payers a vote on the board, on the running of the BBC and on major decisions, such as whether or not it should spend money on local radio, BBC 3, Formula 1 or whatever else?

[Dame Tessa Jowell]

I thank the hon. Gentleman for his contribution; I hope that he will find some common cause with the point that I am about to develop.

The licence fee income that comes to the BBC is the public’s money and not public expenditure in the normal sense, so I argue that it should be dealt with differently. This is an opportunity to rehearse some of the often cited arguments, so I should also say that of course the BBC distorts the broadcasting market. However, it exists, by consent of the public, as a deliberate market intervention. When I was Secretary of State for Culture, Media and Sport, I realised the importance, at a time of rapid innovation, of ensuring that the power of the BBC was not chilling in its effect on other areas of investment and innovation. We need constantly to keep a close eye on that issue.

I want to say a couple of things about the recent revelations. They are historical, but disturbing none the less. There was much in Lord Hall’s speech on strategy to be optimistic and enthusiastic about, but the BBC as an organisation has to be concerned about culture, as that will always trump strategy and undermine the ability to deliver a strategy aligned to the licence fee payer. There has to be a sense that the Augean stables have been cleaned out. Transparency and shining a bright light on such practices is one of the ways of doing that.

I turn briefly to the BBC Trust. There has been a profound misunderstanding about its role. The BBC Trust is the cheerleader not for the BBC, but for the licence fee payer. That places a different set of expectations and responsibilities on it. I want to set out some ways in which it might cheerlead in that way more effectively. As we move to charter review, which the Secretary of State will be thinking closely about, one of the big threats to the independence of the BBC is interference by Government—any Government. That is why the BBC must be structurally reinforced against the temptation of Governments to intervene and unduly influence it.

The public and licence fee payers should be in the driving seat. The argument is that the BBC should indeed be owned by its licence fee payers and should become the country’s biggest mutual. I do not want to take too much of the House’s time going through the detail of how that would work, although I have given a lot of thought to that. I offer the House this idea at a time of charter review to raise public confidence and create a firewall between the public interest and the Government of the day.

[Mrs Gillan]

The right hon. Lady has done considerable work on this subject. Does she therefore agree that it is highly dangerous even to consider giving devolved Administrations—another set of politicians—any role over the BBC? Has she had an opportunity to look at my earlier suggestion to my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) that we could extend the roles of the audience councils, particularly to something like Audience Council Wales, which represents the people who are speaking on behalf of the licence fee payers?

[Dame Tessa Jowell]

I will study the right hon. Lady’s proposals. Certainly audience councils are widely seen to be successful, but we have to recognise that their impact on the direction of the BBC executive has been minimal.

There is public concern about Government involvement compromising the independence of the BBC. I believe that there is public support for the kind of proposal that I am making, which would strengthen the Trust’s hand in relation to the executive and make it absolutely clear that the Trust is the cheerleader for the licence fee payer. There would have to be further public consultation. However, in the public consultation that I oversaw in the run-up to the current charter, it was absolutely clear that the public wanted a break from the BBC being run by the usual suspects from the establishment or governing classes, and we should respect and respond to that.

The second argument for mutualisation is that while members of the Trust continue to be appointed via DCMS, the question of independence from Government will remain. It is clear that the public greatly value the BBC’s reputation and its charter responsibility for accuracy and impartiality. Respondents to the 2005 pre-charter consultation welcomed the lack of advertising in BBC sport and drama and the fact that the BBC set the standards for other news programmes. Therefore, a stronger Trust, backed by licence fee payers’ support, could provide a greater bulwark against those who seek to put undue political influence on the BBC or cut corners under pressure from the rest of the broadcasting market.

The third reason—this addresses the point made by the right hon. Member for Wokingham (Mr Redwood)—is that it would give the public more of a say over programmes and direction. It is a simple principle that if we pay for the BBC, the institution should be more accountable to us. It is undoubtedly the case that following the Jimmy Savile scandal public trust in the BBC has dropped significantly. As Onora O’Neill remarked in the BBC Reith lecture on trust in 2002:

“Reasonably placed trust requires not only information about the proposals or undertaking that others put forward, but also information about those who put them forward.”

Again, that makes the case for building public confidence and public ownership through greater transparency.

I hope that this is a debate whose time has come. The BBC, along with most of our national institutions, is under scrutiny at the moment. What better opportunity and better time to think innovatively about how it can change, not just in response to crises such as Savile but in reflecting the shifting relationship between the citizen and the public service, with a stronger voice for those who pay and ultimately own their public broadcaster? Reith said that the role of the BBC was to “inform, educate and entertain”. I believe that only radical public ownership by the people of this country themselves will continue to ensure that those values are firmly embedded at the heart of the BBC and safeguard the BBC as a truly public institution for years to come.

--- Later in debate ---

[Mr Whittingdale]

I hope that my hon. Friend will forgive me if I do not follow him in talking about the legal liabilities that may flow from the various cases. He made the point earlier that the BBC has been fined for breaches of the broadcasting code. If a publicly funded organisation such as the BBC is required to pay a fine, it of course comes out of the licence fee. It may be that we have to consider other measures. A fine is not necessarily the best way or even a sufficient way to punish failures by the corporation.

Although the severance payments are a serious issue, the amounts of money involved were relatively small. By far the worst financial failure of the BBC is the digital media initiative, which has cost the licence fee payer £100 million, to no benefit whatsoever. It angers people in the BBC, as much as people outside, that they have been required to deliver savings in front-line programming, when they see huge amounts going on senior management salaries and pay-offs, and the huge waste of money in the digital media initiative. It worries me that, in making efficiency savings, the BBC has made cuts in some of the areas that it is most important for it to invest in, such as news and current affairs and local radio. It is no wonder that there is serious anger throughout the BBC when its employees have been told that investment in certain types of programming cannot be afforded, but they then find that £100 million has essentially been thrown away on the digital media initiative. That reflects a failure of governance.

I listened carefully to what the right hon. Member for Dulwich and West Norwood said. She recognised that the existing model is flawed and that there needs to be change. That is clear to me. There is a conflict between the two roles of the trust, even though I hear what she says about the trust being the cheerleader for the licence fee payer. I was interested in her idea about a mutual status. Perhaps she would like to expand on that further when the Select Committee considers the future of the BBC in the new year. It is certainly something that we would consider.

My view has always been that the BBC needs to be properly regulated from outside. It already is in some areas by Ofcom. I have always found the argument that Ofcom is well equipped to carry out the regulatory functions persuasive. Perhaps the BBC should have a more traditional model of corporate governance. Those are issues that we need to consider. What is clear is that the existing model is not working.

I welcome the announcement by the Secretary of State that the National Audit Office will have full access to the BBC. That has been called for by successive Chairmen of the Public Accounts Committee over the past 20 years. The BBC has said repeatedly that that would be a dangerous intervention and that it might interfere with editorial independence. That is absolute nonsense. There is no reason why the NAO should not examine the accounts of the BBC—that does not represent editorial interference. In my view, what has come out over the past year, particularly with the DMI, makes it plain that the NAO needs that full access. I therefore very much welcome my right hon. Friend’s announcement.

[Dame Tessa Jowell]

I agree with the hon. Gentleman about the NAO and think that arguments against that view are insubstantial. I take issue with him, however, about his assertion that the present model is flawed. It is not the present model of governance that is flawed, but the failure of individuals within that to make the right decisions and intervene sufficiently early. For example, the trust could have conducted an investigation into levels of pay-off, but it did not do so quickly enough. Many lessons have been learned, but it is a mistake to conclude from that that the model itself is flawed.

[Mr Whittingdale]

I certainly agree that there have been failures by individuals, both in BBC senior management and in the trust. Whether we can draw from that a more fundamental problem with the model of governance is open for debate. I was opposed to that model of governance when the right hon. Lady created it some time ago, so I can at least claim consistency. It is clearly something we will need to consider and debate in the run-up to charter renewal.

I hope that this discussion and the Select Committee inquiry will begin a debate about the role of the BBC today. The BBC is good at displaying all it does. It has a huge range of TV channels and radio stations, and it is expanding online and launching more services on the iPlayer. However, the world has changed—and is changing—so much in the media. There has been an explosion in the past few years in the number of different content outlets, and that is continuing. We now have a successful ITV commissioning really good content.