Digital Economy Bill

Lord Lester of Herne Hill 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.

--- Later in debate ---

[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.

[Lord Lester of Herne Hill]

The Minister has not answered my question, which was, quite simply, whether this Government—not one in five years’ time—accept that the Secretary of State has a duty, whether under the charter or otherwise, to ensure that the BBC is so funded as to function independently and effectively as a public service broadcaster.

[Lord Ashton of Hyde]

I was aware of the noble Lord’s question and was just about to come to it. The BBC charter already provides that the Secretary of State, in determining the funding settlement, must assess the level of funding required for the effective fulfilment of the mission and public purposes.

[Lord Lester of Herne Hill]

What does that answer mean? The charter does not say what I have just asked the Minister. Is he saying that, in looking at the charter, the Government accept this obligation and that it is embodied in the charter? If so, I welcome that. However, I am not clear whether the Government accept this duty or not. My final question, which no doubt he will come to, is this: please can I come and see the Culture Secretary with him?

[Lord Ashton of Hyde]

I think I can answer that to the noble Lord’s satisfaction. Yes, I will certainly talk to the Secretary of State and ask that the noble Lord can come and see him—with or without me, depending on his choice.

I do not want to dwell on this too much, but when we talk about sufficient funding and what the Secretary of State has a duty to do, of course the Secretary of State has a duty to abide by the royal charter in the same way that the BBC, the new unitary board and Ofcom do. I said:

“The Secretary of State, in determining a funding settlement, must … assess the level of funding required for effective fulfilment of the Mission and promotion of the Public Purposes”—


which is what the charter says. I agree that the Secretary of State must do what the charter says. I hope that answers the noble Lord’s question.

I will go further. The noble Lord’s amendment talks about the independence of the BBC, but Article 3 of the BBC’s charter already states:

“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”.


The question of enshrining parts of the BBC’s royal charter in statute should be a matter for the Government of the day to decide ahead of the next charter review. Given noble Lords’ ongoing interest and informed views, I am confident that the Government of the day will be minded to consider this carefully.

In summary, the Government have already increased the transparency of the way in which the BBC’s funding settlements are agreed. We have given the BBC stability by regularising the settlement period, which is now removed from the election cycle. The BBC will be required to provide information to the Secretary of State on its funding needs, and the Government of the day will consider taking independent advice. The licence fee is a tax and the Government do not consult on taxes. The amendments could have unintentional consequences in constraining the ability of the Government—