BBC Charter

Debate between Lord Ashton of Hyde and Lord Berkeley of Knighton

Wednesday 12th October 2016 Lords Chamber

[Lord Ashton of Hyde]

I think I said right at the beginning that I was in listening mode. Speaking as a former Treasury Whip, I use that expression. I certainly understand the strong views on this point expressed by the noble Lord and many others. I am not going to give a guarantee from the Dispatch Box tonight that this process will change, but I can guarantee that I will take back what has been said to the Secretary of State. I have already said that I will write to noble Lords, although I did not say that that would necessarily be before the next debate. I cannot do more than say that I am listening and that I will take back the views of the House.

Quite a lot of mention was made of training. We agree that the BBC plays an important role in skills and training. I do not think it is appropriate for Ofcom to regulate what the BBC does on training—in contrast to what it does regulate, which is the BBC’s output or its effect on the wider market. I am confident that the BBC will continue to make an important and valued contribution in this area.

There has been a lot of talk about salary transparency and the decision to drop the threshold from £450,000 to £150,000. Many spoke passionately and somewhat disparagingly about that. We have been clear that we believe that licence fee payers deserve transparency in this context. It is, after all, public money. Indeed, a number of those affected, including the noble Lord, Lord Berkeley, agree that increased transparency over salaries will not drive talent away. On the other hand, we have listened to some of the issues relating to BBC Studios, which will be competitive. There are concerns about whether the new salary transparency requirements will cover BBC Studios. We have thought very carefully about the concerns that both the BBC and a number of noble Lords have had about this outstanding question. I can today confirm that full, named salary disclosure will not be applied to BBC Studios in future.

[Lord Berkeley of Knighton]

I am very sorry to interrupt, but I must make one small correction. It is absolutely true that I did say that at one point. However, I was very convinced by what I heard from the noble Lords, Lord Grade and Lord Patten, and from my noble friend Lord Birt. Therefore, I would slightly retract from the position that I took. I think there is a danger that this disclosure could create an uneven playing field. I am sorry to disappoint the Minister in that small respect.

[Lord Ashton of Hyde]

I have noted the noble Lord’s lack of agreement with me and will take it on board.

As I was saying, named salary disclosure will not be applied to BBC Studios in future. It will not be benefiting from taxpayer funding. It needs to operate on a fully commercial basis to be successful, so we agree with the BBC that to require full, named transparency would undermine BBC Studios’ ability to compete effectively in the market. However, we expect BBC Studios not only to conform to best practice standards across the industry around pay and transparency but to lead the way.

We have also had reassurances from the BBC that it will respect the overall principle of pay transparency, which is clearly set out in the drafts. We expect that all those who have worked for the BBC this year and have earned more than £150,000 from the licence fee will be disclosed in the BBC’s 2016-17 annual report, even if some of those individuals will have moved into BBC Studios before the end of the current financial year. I hope that shows that, at least in some respects, we are taking on board points, even at this late stage.

The National Audit Office is part of an important change that was made. I start by saying that the provisions that deal with the NAO in the draft framework agreement result in an arrangement that has, in practice, changed very little from that under which the NAO currently conducts its work on the BBC. It has been conducting value-for-money studies on the BBC’s publicly funded operations for years, and the reports that have come out of this are welcome and have helped the BBC to improve.

All this work has been done in an environment where the NAO has been precluded from assessing the merits of the BBC’s editorial and creative decisions, and that remains the case, as the agreement makes very clear. The agreement clarifies that it is ultimately for the Comptroller and Auditor-General to define that boundary. This is so the BBC cannot claim that a number of issues are editorial in nature, thus taking them out of the scope of the NAO’s scrutiny. But, importantly, the NAO will also need to take responsibility for those decisions. I am sure the BBC will make it very clear publicly if it thinks the NAO has overstepped its powers. I do not accept that the NAO is a conduit for Parliament to lay its hands on sensitive BBC information. The Comptroller and Auditor-General is an officer of Parliament but he is fully independent.

The memorandum of understanding between the BBC and the NAO was mentioned, and the MoU between the Bank of England and the NAO was alluded to. We think the two organisations are perfectly capable of agreeing a memorandum of understanding, and that will include a dispute resolution mechanism. The statutory power of the NAO is a backup—a last resort—so that it continues to do the audit, but we expect the memorandum of understanding to be agreed between the two organisations. If there are any difficulties, my department and the Secretary of State herself, if necessary, will get involved to make sure that that happens.