Digital Economy Bill

Lord Inglewood Excerpts

1st reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 31st January 2017 Lords Chamber

[Lord Arbuthnot of Edrom (Con)]

My Lords, one issue that has not been raised in this debate so far is the effect on small businesses in rural areas of the poverty of mobile telephone networks. That, combined with slow or poor, and sometimes non-existent, broadband speeds, puts rural businesses at a disadvantage. So I have a great deal of sympathy with the amendments that have been spoken to, and I hope that the Minister will show similar sympathy.

[Lord Inglewood (Con)]

My Lords, I join those who have spoken in support of these amendments. Like some other noble Lords, some weeks I come up from the country to your Lordships’ House. The shortcomings of the infrastructure in rural Cumbria, where I live, is far too frequently a topic of conversation.

As a number of noble Lords have said, connectivity is the crucial aspect here, because it is now part of the essential infrastructure of contemporary life. It is important that we look at this issue from the perspective of what people need, but the reality is that what we need today may not be what we need tomorrow. We have to try to bridge the gap between the digital haves and the digital have-nots, and we achieve that by looking at the issue in the way that I have just described. Therefore, I am not approaching this matter from a kind of nerdy, technical perspective. What matters is the result as much as the means by which you get there.

Over the years, there has been a lot of debate about whether a universal service obligation should be in our law and be statutorily enforceable. I had the good fortune to chair the Communications Committee, and a number of years ago, when we conducted an inquiry into broadband, we debated this issue at length. On that occasion we reached the conclusion that what mattered was the rollout and that it was quite conceivable that a USO would get in the way. With the benefit of hindsight, that was probably a mistake, and therefore it is interesting to see the provisions for such a legal obligation coming into our legislation.

However, at the end of the day I come back to where I started with all this, and it is why I will be interested to hear what the Minister has to say. It is not the detail but the result that matters here. We have got to move into a world where the digital divide is bridged. This is particularly important for areas in the country, and I speak from that perspective, but it is also true for a number of urban areas. We seriously deny people access to a whole range of commercial, and other, aspects of contemporary life if there is not adequate connectivity. As a number of your Lordships have said, we live in a country that is adopting a different approach to industry. It is crucial to appreciate that the key to increasing wealth creation in areas outside the south-east of England—which I think everyone agrees is desirable—is improving connectivity. That is the way, as noble Lords have said, to improve the potential of SMEs outside the south-east.

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, I am glad that we are at last able to start this very important Committee. I should immediately declare an interest, which is that I suffer at my home in the country from extremely bad broadband, although we are lucky enough to be able to use microwave technology to do something about this. In addition, last night when I tried to ring my wife from central London on my mobile telephone to complain how overworked I was, I was unable to get a signal. So, I can absolutely sympathise with my noble friends Lord Arbuthnot and Lord Inglewood; I recognise the problems, particularly for rural areas and SMEs, and the Government agree with quite a lot of what has been said in terms of aspirations. I think we will differ when we come to decide how the USO should be used to fulfil those aspirations, and exactly what its role is.

The Government have a clear digital agenda, and our ambition is for world-class digital connectivity. We are determined to ensure that the UK has the digital infrastructure that our businesses and citizens need both now and in the future. The Green Paper published on 23 January makes digital infrastructure a central pillar of the Government’s proposed industrial strategy and identifies good digital infrastructure as a driver of growth.

We support the spirit of Amendment 1, requiring that the universal service order should define a gigabit-speed broadband universal service obligation—or USO—delivered via full fibre to the premises. We differ in that we do not think that the broadband USO is the right tool to use at this stage in the development of the UK’s digital infrastructure market. To pick up on the point of the noble Lord, Lord Aberdare, the rationale for a USO is to prevent social and economic exclusion. It does this by ensuring that where the market does not deliver, a minimum set of communication services are made available, on request, to everyone, no matter where they live or work. In doing so, it takes account of the prevailing technologies enjoyed by the majority of people: the USO follows the market, it does not drive market change. The UK’s fibre market is at an early stage of development—currently only 2% of UK premises have full-fibre connection—so I do not think we have reached the stage where there is a case for introducing a gigabit-speed USO. It is not a prevailing technology used by the majority and it is not needed to prevent social and economic exclusion.

We do, however, agree that more extensive fibre connectivity is crucially important to the UK’s future digital growth. We are planning now for the networks that are going to be needed to ensure continued economic growth and development across the UK in both urban and rural areas. In the Autumn Statement we announced more than £1 billion to support digital infrastructure, targeted at supporting the rollout of full-fibre connections and future 5G communications. The Government are consulting on how we might further encourage full-fibre rollout.

Amendment 2, in the name of the noble Lord, Lord Fox, proposes a superfast broadband specification for the USO. This specification is, as the noble Lord said, in line with scenario 3 of Ofcom’s USO technical advice, which the Government commissioned to help inform the design of the USO. All the scenarios set out in Ofcom’s report are being given careful consideration. Once that work has been completed there will be a public consultation on the design of the USO and the specifications that will be included in the universal service order, including the minimum speed.

Digital Economy Bill

Lord Inglewood Excerpts

2nd reading (Hansard): House of Lords
Tuesday 13th December 2016 Lords Chamber

[Lord Inglewood (Con)]

My Lords, I believe that in practice this welcome Bill will be one of the most pervasive in its impact of any legislation we are currently considering in this House. It is in a sector where the world is probably changing as fast as anywhere. Indeed, these days, the future is closer to us than it has ever been before. Hence, it will not be the last word on anything, but it matters because it sets the framework for the development of the operation of the digital economy in the foreseeable future. We must, of course, remember that that economy works through and across legal jurisdictions without paying much heed to traditional boundaries.

The Bill’s detailed provisions will take effect in all kinds of ways, probably many of them unexpected, which in turn may radically affect everyday life in this country and beyond it. This will be especially true in the age of the internet of things, which is already dawning. In this brave new world, communications, which are traditionally perceived as person-to-person transactions, will be replaced by devices talking to other devices, instructing myriad tasks with little or no human intervention. It will go far beyond computer dealing in the financial markets or robotic milking of dairy cows, or even adjusting the level of central heating in one’s Cumbrian home from a Spanish golf course, as a friend of mine does.

The detail of all this involves science and processes way beyond my own expertise, and my knowledge is too scant fully to understand it. Having said that, I know that the starting point is connectivity, as has already been mentioned in the debate—in particular, connectivity coupled with adequate bandwidth. That is why the clauses on the universal service obligation in respect of broadband are, in my view, so important.

When I had the honour and good fortune to chair your Lordships’ Communications Committee, one of the first reports for which I had any responsibility was on the rollout of broadband. In drafting that report, we anguished, as the noble Lord, Lord Gordon of Strathblane, commented, about whether a universal service obligation should be legally enforceable. After considerable deliberation, we concluded that it should be a political obligation, not a statutory legal one. However, like the noble Lord, with the benefit of hindsight I think we were wrong.

Now that 2016 is drawing to a close, political commentators are all discussing the revolutionary events of the year that is about to pass. They include Brexit, Trump’s election in the United States and the Italian referendum. On one level, each event is quite different, yet on another they are the same—an uprising by those who feel they are being left behind by the world as it evolves. They have nothing directly to do with the apparent subject matter of the poll behind them. In this country, there is no bigger division than between those who have decent broadband and those who do not. I should declare an interest: I live in rural Cumbria, in a near mobile not-spot—if I want to get mobile from one operator I have to go out of the house on to the lawn—and I have lousy broadband. The consequence is not merely that I cannot read the Sunday papers at breakfast on my iPlayer—that does not really matter. Rather, there are myriad entrepreneurs and, quite simply, ordinary households who cannot enjoy the connectivity of much of the rest of this country. This kills off many small businesses and erodes the quality of life and the economic potential of these disadvantaged areas. Rural Cumbria is not alone, and neither does this apply only in the countryside. Even a short distance from where we are now, there are very disadvantaged areas measured by this criterion.

It is often said that the modern world is a huge, complex network, but it is not if you cannot join it. Anyone who doubts that should look at the correspondence columns of local papers in these areas, where the anger, frustration and disillusionment of those who live there is plain for all to see. Equally, I am quite sure that such views are to be found in MPs’ incoming mail. It is some satisfaction to me that it is not my responsibility to have to read it.

Governments trumpet their successes in the rollout of superfast broadband—itself a rather weasel phrase—and the availability of squillions of megabits in the favoured corners of south-east England and the metropolises. But that is absolutely no help if you are not connected. In this respect, much of the contemporary UK is like that of Disraeli’s. There are two nations in digital connectivity: those who have it and those who do not; and those who can use it, and those who cannot. If you are in the second category, underprovision and lack of availability create a real sense of alienation and antagonism.

No one is suggesting that it can be identical everywhere, but I believe that there is a dawning recognition that a necessary degree of equivalence consistent with an even-handed approach to the provision of essential national infrastructure is important. As I said, this is not achieved by proclaiming wonderful successes in further improving what the “haves” have got, while the “have-nots” still have more or less nothing. It is for this reason that the provisions which provide a legal basis for USO are to be welcomed. I would like to think that they represent a political commitment much stronger than the legal phrases in which it is drafted. That is how I interpreted my noble friend the Minister’s opening remarks.

I turn briefly to a different topic for the second and final part of my remarks. In the debate in this House on the BBC charter and agreement on 12 October, I expressed the opinion that the BBC charter should be set in a statutory framework. I still subscribe to that view and the approach that I and others have endorsed on that and other occasions, and on which the noble Lord, Lord Lester, elaborated. There is no point in repetition, but I endorse what he said and suggest that the opportunity of this Bill to take it forward should be grasped. After all, nobody needs to be reminded that the use of the royal prerogative is a rather controversial political topic at present; we are living at a time when the desirability and requirement to consider whether checks and balances should surround it is prevalent. In my view, there are a number of areas where this is so, and this is one of them.

Finally, I might have discussed a huge number of other points that have been discussed by other speakers this afternoon. I have said enough for now, but I may well come back to some of them later. In conclusion, this is a desirable and necessary Bill which I support, despite having a few reservations about certain aspects—to which I shall, if I may, return on another occasion.

Digital Economy Bill

Lord Inglewood Excerpts

Report: 1st sitting: House of Lords
Wednesday 22nd February 2017 Lords Chamber

[Baroness Kidron (CB)]

My Lords, I want to reiterate a point I made in Committee about the context in which young people receive this material. Almost 50% of 16 to 17 year-olds are streaming, and along with the streaming comes advertising, pop-ups and adult material. This is a subject that is close to the Government’s heart, as shown by Part 3. This seems a wonderful opportunity to deal with it again in this part. It is not just 16 and 17 year-olds; whole swathes of younger children are getting the habit. As a maker of original IP and as someone who cares very much about the context in which children have their digital diet, this is a very small thing and I support the noble Lords in their amendment.

[Lord Inglewood (Con)]

My Lords, I understand that the extent of what is happening is such that it is a genuine mischief. It is important that the Government are in a position to deal with it because of the damage that is taking place.

From my perspective, it does not really matter how it is done, provided that it is done, and that “when ‘tis done, ‘tis done quickly”. That is the way we will deal with this. Whatever response the Government may have to the particular amendment being put forward, I hope that they will be able to assure us that they are in a position to deal with the problem and intend to do so, rather than letting it drift on.

[Baroness Buscombe]

I thank all noble Lords who have taken part in this important debate on an issue that we take extremely seriously. It is very much on the Government’s agenda, and I am happy to confirm that again.

Amendment 20 seeks to provide the Secretary of State with a regulation-making power in order to prohibit the manufacture, sale or hire of unauthorised decoders. We have discussed previously in the House the pressing threat to subscription broadcast services caused by illicit set-top boxes, especially those which provide IPTV functionality. These IPTV boxes can in certain cases be considered unauthorised decoders, although that may vary depending on how they are set up to function.

As noble Lords will be aware, to better understand this area and what new legislation might be needed, the Government have committed to conducting a call for views on IPTV boxes, which I referred to in Committee. When we were last discussing this topic, I promised that the call for views would be published within a few weeks, and I am very pleased to announce that we have secured a publication slot for the document for 23 February—tomorrow. The purpose of the call for views is to help the Government understand where further action is needed to address the problem. If there is evidence to support changes to legislation, then we have promised to bring forward proposals in due course.

This information-gathering exercise will enable us to properly respond to the most pressing current threat caused by IPTV boxes. If there are other issues specific to unauthorised decoders that fall outside of the scope of this work, I would very much welcome details. We can then consider whether we need a further exercise to look at those distinct areas. The call for views runs for six weeks, until 5 April 2017, at which time the Government will assess the responses and determine the best course of action. The Government fully understand the harm done by illegal set-top boxes and IPTV, which is why it is crucial that we have a robust evidence base for effectively tackling this problem.

With regard to the manufacture of the hardware devices specifically, as your Lordships may expect, this usually happens outside the UK. That is why the IPO is working with partners across the world, including the Government’s IP attaché in China, to explore what can be done in source and transit countries.

Having said all that, I very much take on board what noble Lords have said this evening, including the noble Lords, Lord Clement-Jones and Lord Stevenson. The noble Baroness, Lady Kidron, of course has talked, quite rightly, several times in your Lordships’ House now, about young people and their digital habit, which starts frighteningly young. This is something we have to confront, and we sense the urgency with which we have to deal with this very real problem. Although I cannot make any commitment tonight, I hope that noble Lords will allow me to take this back and see if we can think of something more that we might be able to do. On that basis, I would be grateful if the noble Lord would withdraw the amendment.

Digital Economy Bill

Lord Inglewood Excerpts

Report: 2nd sitting (Hansard - continued): House of Lords
Monday 20th March 2017 Lords Chamber

Moved by

[Lord Inglewood]

31: After Clause 81, insert the following new Clause—
“The independence and funding of the BBC
(1) The Communications Act 2003 is amended as follows.(2) After section 198ZA (inserted by section 81 of this Act) insert—“198ZB The independence and funding of the BBC(1) The BBC is to be independent in all matters concerning the content of its output, the times and manner in which its output is supplied, and the governance and management of its affairs.(2) The Prime Minister, the Secretary of State, the BBC, OFCOM, and all other persons and bodies with responsibility for matters relating to the governance and establishment of the BBC must ensure that the BBC is able to operate independently from Ministers and other public authorities in the United Kingdom.(3) The licence fee is to be for the exclusive benefit of and use by the BBC to fund the performance of the BBC’s functions and public purposes.(4) Subject to sections 365 and 365A, the Secretary of State may not transfer to the BBC responsibility, including liability and costs, for any public expenditure.””

[Lord Inglewood (Con)]

My Lords, in the absence of two of the United Kingdom’s leading courtroom advocates, it is left to me to make the case for Amendment 31. The rationale for the amendment—and for a number of others to which I and other noble Lords put our name—is very simple. It is based on the fact that we have here, as your Lordships all know, a state-funded broadcaster: the BBC. It seems to us to follow that, in a democracy subject to the rule of law, its independence from government must be honoured and seen to be respected. At the same time, for very obvious reasons, they have got to have a relationship with each other, and it seems to us that the nature of that relationship is not properly defined.

With many others, not least the Lord Speaker in his previous incarnation, I have felt that establishing the BBC by royal charter, using the royal prerogative, is, in the reality of the world we live in, no guarantee of its independence. Indeed, it is rather the opposite, since we all know that, over the years, there has been a whole series of deals completed in smoke-filled rooms—not least in the case of money, where Governments of all persuasions have seemed to take Dick Turpin as their role model.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, I am grateful to noble Lords for their remarks. In returning to this issue, I am sorry that the noble Lord, Lord Lester, is not here to speak to his amendment as we have debated this issue at length with him as part of the recent discussions on the BBC’s royal charter. We have debated it at Second Reading, in Committee and in other debates and Questions. The amendments that the noble Lord, Lord Lester, has tabled, and my noble friend Lord Inglewood has proposed, seek to constrain future royal charters for the BBC through statute. I should have said that I hope the noble Lord, Lord Lester, makes a speedy recovery and returns not to bring this subject up again but other subjects.

I note that, following the discussion we had in Committee, the noble Lord, Lord Lester, made a number of changes to his amendments proposed tonight in the areas of governance and funding. I appreciate the thought that he put into this and the dialogue that we have had on this so far. However, we still maintain that very serious risks are associated with the amendments and therefore we cannot support them.

As noble Lords will by now appreciate, the disagreement between the Government and those who tabled this amendment comes down, as the noble Lord, Lord Wood, said, to a matter of principle. Is the BBC best governed and protected through a charter or through a charter underpinned by legislation? I accept that there are instances where it is desirable and appropriate for a charter to be underpinned in statute but it is the Government’s view that this does not apply to the BBC.

Noble Lords may be interested to know that this is a discussion as old as the BBC itself—indeed, it is almost exactly 10 years older than the noble Lord, Lord Lester. When the then Postmaster-General announced in July 1926 that the BBC would be established through its first royal charter, he remarked that the new corporation would derive its authority from royal charter rather than from statute to make it clear to the public that it was not,

“a creature of Parliament and connected with political activity”.

In practical terms, noble Lords will appreciate that there is little difference between the effect of the BBC’s charter and its accompanying framework agreement and an Act of Parliament. Both are binding on the BBC and on Ministers. Article 3 of the current charter provides:

“The BBC must be independent in all matters concerning the fulfilment of its Mission and the promotion of the Public Purposes, particularly as regards editorial and creative decisions, the times and manner in which its output and services are supplied, and in the management of its affairs”.


That carries the same weight in a charter as it does in primary legislation, but in my view the latter option carries unacceptable risks to the independence of the BBC. From a practical point of view, amending an Act of Parliament in the event that a change is required—with all the party-political debate and pressure that that would entail and the uncertain legislative timetable—is not the right vehicle to make sure that the BBC can be governed effectively. Who can tell what political pressures will exist entirely unconnected to the detail of the BBC charter when the charter comes up for renewal?

Charter review remains the right vehicle. It affords an ample opportunity for debate and consultation but also allows for full consideration of all the connected and complex key issues, for effective decision-making and, crucially, for a negotiated agreement with the BBC.

Incidentally, I cannot resist mentioning that my noble friend Lord Inglewood referred to the Government as Dick Turpin in this case. I may be entirely unfamiliar with the story of Dick Turpin but I did not realise that he gave £3.7 billion annually to his victims.

Therefore, I submit that a statutory underpinning will leave the BBC under constant threat of change and monitoring what the Parliament of the day sees as the national interest. I fear that fellow parliamentarians, some of whom may not have my noble friend’s pure motives, will find it an irresistible temptation to tweak here and there, and, even with the best of intentions, we cannot expect the BBC to operate effectively and plan for its future in such circumstances.

I believe that this should be a matter for the Government of the day to decide ahead of the next charter review. The charter model has stood the test of time since 1926—through economic depressions, world war and huge technological change—to achieve what has been praised throughout the passage of this Bill as the BBC we have today. Given your Lordships’ ongoing interest and informed views, I am confident that the Government of the day will be minded to consider this carefully. With that explanation, I hope my noble friend will be able to withdraw his amendment.

[Lord Inglewood]

My Lords, I am very grateful to my noble friend for his very full response to the remarks that have been made on this amendment. He went to the heart of it at the outset when he said that he was opposed to the suggestion in the amendment because it would constrain the royal charter in the future. But that is precisely the reason why we moved the amendment. The mechanism of the royal charter enables the Government, in practice, to have a huge and relatively unscrutinised and uncontrolled ability to adapt and adjust the framework for the relationship they have with the BBC to their own preferred ends.

As I listened to my noble friend, it occurred to me that it was about 25 years ago that I stood at the Dispatch Box at which he was standing a moment ago, discussing the same issues. It crossed my mind—ignoble though it may be to say it—that almost the same speech could have been given to me to deliver all those years ago.

It is perhaps a mistake to simply assume that because something gives the impression of having worked reasonably well for 70 years—it may or may not have—it will continue to work equally well in the years to come. I look around the Chamber this evening and see that some of us are perhaps not quite yet 70 years old but heading that way—and that some may even have passed it. I am afraid that it is the nature of the human condition that when you get to 70 years old, you may not be as fit, spry and sharp as you were in years gone by. So it is not good enough to say that because it has worked well in the past—and it has worked only moderately well—it therefore follows, as night follows day, that you can extrapolate that it will work well indefinitely.

However, I was encouraged by the concluding remarks of my noble friend. He said that he was confident that Governments in the future would seriously consider the point that was being made. I think that is important. On any measure, we have just started a BBC charter and there is a bit of time until the next one comes into effect. While I think that it would have been desirable to have placed in the Bill the statutory provisions that are contained in the amendment, not to do so may not be fatal to the underlying project. Certainly this is something we ought to think carefully about in the hours and days to come—not least the noble Lords, Lord Lester and Lord Pannick, who have not had the advantage of listening to the remarks of my noble friend. Against that background, I beg leave to withdraw the amendment.

Amendment 31 withdrawn.

Digital Economy Bill

Lord Inglewood Excerpts

Report: 3rd sitting (Hansard): House of Lords
Wednesday 29th March 2017 Lords Chamber

[Lord Lester of Herne Hill (LD)]

My Lords, I regret that my ill health prevented me from being present on Monday 20 March, when the noble Lord, Lord Inglewood, moved the amendment on the BBC’s independence and funding late that evening. I am grateful to him for doing so, and I have read the speech by the noble Lord, Lord Wood of Anfield, and the Minister’s reply. I agree with the critique of the noble Lord, Lord Best, but I will confine myself to Amendment 32E, included in this group. It is supported by the noble Lords, Lord Inglewood, Lord Pannick and Lord Alli, to whom I am grateful.

The noble Lord, Lord Ashton, accepted in his reply on 20 March that there are instances where it is desirable and appropriate for a charter to be underpinned by statute, but he said that the Government’s view is that that does not apply to the BBC. He also said, intriguingly, that in practical terms there is little difference between the effect of the BBC’s charter and accompanying framework agreement and an Act of Parliament because both are binding on the BBC and Ministers.

The modest purpose of Amendment 32E is to create a link between the BBC’s charter and the Bill. It requires the Secretary of State to ensure, in accordance with the BBC’s mission and purposes under the charter, that the BBC is funded so as to be able to function independently and effectively as a public service broadcaster. Unlike the amendment moved on 20 March by the noble Lord, Lord Inglewood, supported by the noble Lords, Lord Stevenson of Balmacara and Lord Pannick, and by me, Amendment 32E does not refer specifically to the licence fee. That is in the hope that being less prescriptive will be more acceptable to the Government. I see the Minister smile wanly, as he knows that I am an optimist.

Do the Government accept that they have the duty to ensure, in accordance with the BBC’s mission and purposes under the charter, that the Secretary of State must ensure that the BBC is funded so as to be able to function independently and effectively as a public service broadcaster? If not—if the answer is no—what do they accept as their duty in this respect? Remembering that on 20 March the Minister said that in practical terms there is not much difference between a charter and legislation, I ask this question irrespective of whether there is a charter or legislation. I repeat: do the Government accept that the Secretary of State has that obligation, whether under the charter or otherwise?

The amendments made to the Bill in this House will need to be considered by the House of Commons after it leaves here. I hope that at that stage, if not now—I would prefer now—the Government will respond positively with an amendment on the lines of Amendment 32E. I have in mind that by that time we will be coming near to the end of the Session, the Government will want the Bill to go through and that this will at the least be something that needs to be considered then, if not now.

I am grateful to the noble Lord, Lord Ashton, for having met me informally and suggesting that I might usefully meet the Culture Secretary. I would welcome that opportunity and would be grateful if the Minister could say whether that would be acceptable.

[Lord Inglewood (Con)]

I refer briefly to our previous debate when the House was considering the Bill, when I raised my concern about the independence of the BBC and its relationship with the Government of the day, because there must be a relationship and it is important that it is both transparent and rules-based. That is why I have added my name to a number of the amendments; I do not want to elaborate further than that to explain clearly why I have done so.

I also owe an apology to my noble friend, because on that occasion I referred to the Government as behaving like Dick Turpin in respect of the licence fee. He picked me up on that point and said he thought that it was very wrong because a lot of money was being given back, so I apologise for suggesting that; instead, I should have said Robin Hood.

[Baroness Bonham-Carter of Yarnbury (LD)]

I support the amendments. As I mentioned in Committee, I am a Member of the House of Lords Communications Committee, so ably chaired by the noble Lord, Lord Best, and I stand by our report, Reith not Revolution, although I accept the slight change in who should oversee the setting of the licence fee, as the noble Lord, Lord Best, mentioned.

The Minister referred more than once in Committee to the licence fee as a tax. As the noble Lord, Lord Best, said, it is a hypothecated tax, paid by the public to fund the BBC. As such, it is surely correct that in future there is clarity and public scrutiny and no more midnight raids, and that the licence fee is used to fund the BBC’s functions and public services, not those of the Government. These proposals would, rightly, leave an elected Government with the final say in determining the BBC’s revenue but would introduce an important element of accountability in the process, which is surely appropriate.

--- Later in debate ---

[Lord Ashton of Hyde]

I take the noble Lord’s word for that because he knows more about it than I do.

[Lord Inglewood]

The Minister said that the Government did not consult on taxes in the way that has been suggested. I put it to my noble friend that there is not another hypothecated tax like this, so there is no precedent one way or another for this set of circumstances.

[Lord Ashton of Hyde]

The point that I made was that, when setting taxes, the Government have to take account of the overall revenue raising, and this is just one element of revenue raising. I agree that whether it is a hypothecated tax is another question, but the point is that it is a tax and the Government do not consult on taxes.

Perhaps I may continue. I was talking about public consultation. The BBC’s funding needs are complicated and technical, as we have seen with every licence fee settlement, and agreeing the overall package is a finely balanced act. The requirement to ask the BBC for information and seek external advice is a sensible way of ensuring that Ministers’ decisions are well informed.

Despite what the noble Lord, Lord Best, said about consultations, the recent charter review found that, although almost 75% of the public consider the BBC’s programming to be high-quality, just 20% said that they would like to see the licence fee rise even in line with inflation, thereby helping the BBC to maintain those high standards. At the same time, the BBC also needs to become more efficient from reducing layers of management and property costs.

Public consultation needs to be approached with due sensitivity. It is right that decisions that balance the funding needs of the BBC and pressures on family budgets are taken by Ministers, who are accountable for those decisions, and that they are not decisions strongly influenced by an unelected new body. In answer to the noble Lord, Lord Pannick, the Government’s view is that it should therefore remain for the elected Government of the day to decide how to approach reaching an appropriate level of BBC funding in a detailed and extensive negotiation with the BBC. Despite the difficulties associated with the last licence fee settlement, as I have said, it resulted in what the noble Lord, Lord Hall, has said is a strong deal for the BBC, giving it financial stability, and we can see that the licence fee will rise for the next five years.

The noble Lord, Lord Lester, has tabled an amendment to put a duty on the Secretary of State to ensure that the BBC is funded to function effectively and independently as a public service broadcaster. I am pleased to see the noble Lord in the Chamber today—it was unfortunate that he was not able to participate in last week’s debate on his previous amendment. Without repeating myself unduly, I remind noble Lords that the Government remain of the view that the BBC is best governed through a royal charter. A statutory underpinning, however limited initially, would leave the BBC under a constant threat of change from what parliamentarians of the day might see as the “national interest”. Where a change might be genuinely required, the uncertain legislative timetable, party-political debate and pressure could all militate against resolving the issue at hand in an efficient manner.