BBC: Finance and Independence

Lord Stevenson of Balmacara Excerpts

Thursday 10th September 2015 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, we all owe my noble friend Lady Bakewell a vote of thanks for agreeing to lead this debate today, and for the excellent speech with which she started us off a couple of hours ago. I also thank all speakers for their contributions. This has been a very high-level debate—a very full and important one. I hope that the Minister will reflect not only on what was said and the near unanimity of those who have spoken, but the impressive number and wide range of speakers from all sides of the House who contributed. We have had Secretaries of State, Ministers, governors and practitioners. It would be invidious to select the best of those, although my vote would go to the noble Lord, Lord Smith, who for the first time in my experience here managed to silence my noble friend Lord Young, although not for long. In fact, I really wanted to put a plug in for the noble Lord, Lord Low. Noble Lords may not know that he was in the earlier debate that lasted two and a half hours and also made a stonkingly good speech during that. I congratulate him. At least I went out for a cup of tea in the middle, but he did not.

From the general tenor of the comments made today, most speakers in the debate believe that the Government have the BBC in their sights, if not, to use the words of my noble friend Lord Bragg, their teeth already in the BBC’s jugular. Only a few years ago, in a smash-and-grab raid, the BBC was forced to pick up about £500 million per annum in its budget, including the cost of the BBC World Service, city TV, the Caversham monitoring service and S4C and some other elements. In July 2015, the Government announced that the BBC will additionally become part of the social services by taking on the cost of providing free television licences for the over-75s. This second smash-and-grab—sorry, I am supposed to call it the “framework for licence fee funding after 2017”—looks increasingly like a very bad deal indeed.

It is good that the licence fee is to be modernised to cover public service broadcasting video-on-demand services, that ring-fencing is to be phased out and that the licence fee will increase with CPI. But as the BBC announced earlier in the week, this means a total saving of around £700 million a year by 2021-22, or an annual average savings target of around 3.5% a year over the next five years. That is not a good start, particularly as the BBC has, according to the NAO, been very successful in bringing in efficiency savings already and delivering asset sales, although that trick cannot be repeated. As my noble friend Lord Lipsey said, we already have a BBC on a diet.

We are at the beginning of what looks like a quick and dirty charter review process, one that is just not worthy of the sort of care, concern and interest that every Government should have in one of their principal public institutions. And of course our concern is fuelled by a continuing uncertainty about whether the Government really understand, or want to understand, what the BBC is for. In the Green Paper the Secretary of State merely states that:

“The BBC is at the very heart of Britain It is one of this nation’s most treasured institutions—playing a role in almost all of our lives”.

Then it stops; talk about damning with faint praise.

In the recent debate in your Lordships’ House, I asked the Minister if she agreed with me that the BBC is the cornerstone of the sort of open and accountable society that we want in this country, the gold standard for other broadcasters, the fulcrum of a competition for quality in broadcasting, the centre for training and development in broadcasting, the guarantee of impartiality and fair coverage of news and current affairs throughout the United Kingdom and a beacon for democracy and the rule of law. As the noble Lord, Lord Wigley, said, to attack one of the few British institutions which is contributing to holding the country together seems perverse beyond belief. I ask her again to put on record her support for this vision of the BBC.

As we have learnt, we are now less than a month away from the end of the public consultation on 8 October, so I want to use the rest of my time to focus on what might be our only opportunity to respond to some of the 19 questions that were in the Green Paper. We have no information about where the Government got these questions. No research has been published and apparently no expert advice was sought, and while some of the questions are sensible and appropriate for any Government to ask about a body which is supported by public funds, there are others that are laden with bias and dodgy assertions and which raise deep concerns about the direction the Government seem to be signalling as wanting to take. As my noble friend Lord Alli said, the real enemy is the huge international media companies, not the domestic broadcasting companies. Why is the default position to cut and constrain rather than to invest and grow?

The first group of questions are about the mission, purpose and values of the BBC, and the key question is really about universality. The current consensus position is that the BBC,

“should be big enough to deliver the services audiences demand, but as small as its mission allows”.

Are the Government intending to change that, or suggesting that we move away from the Reithian values which have stood the test of time—to inform, educate and entertain? As we have learnt, the BBC is the cornerstone of the creative industries in this country, and the creative industries are the powerhouse of our future prosperity. They represent one in 11 jobs, they bring in £76 billion a year, they enhance our reputation overseas, they are intrinsic to our whole added-value economy, and they have seen growth year on year well ahead of the rest of the economy. But the truth is that the British creative industries cohere as a balanced ecology and the BBC is at its heart. The BBC does not harm the wider industry; rather, it fosters it. It creates a competition for quality programming and the £3.7 billion from the licence fee is the largest investment we make in the arts.

The second group of questions—there are 10 of them—deal with what the BBC does; its scale and scope. The key question here, although it is not made explicit, is whether the BBC should be constrained simply to provide what the market does not. But far from crowding out commercial operators, since 1985 the BBC has taken a smaller and smaller share of the market, and soon it will be less than a fifth. In the past, it has been broadly accepted that the BBC should remain a cultural institution of real size and scope, and should not simply be a broadcaster of minority interest programming. It should provide a wide range of different programmes to a wide range of different audiences. There is no evidence to show that, if the BBC were not to exist, other broadcasters would invest in more production. They are shareholder driven, and the short-term needs of the market will require higher returns well before it allows more public service broadcasting expenditure. Indeed, Ofcom’s recent review of PSB shows that there has been a £400 million fall in investment in new content. So the very idea that the BBC should be cut down to size is madness.

The third group of questions deals with funding; the key question is obviously whether the licence fee should be retained. It may well be that in the future we need to reconsider the licence fee, and the idea of a household levy, as the noble Lord, Lord Macdonald, said, has its attractions, although, as the noble Lord, Lord Lipsey, reminded us, there are reservations. For the present charter period, however, it is clear that if we want the BBC to be an independent, universal broadcaster, committed to serving everyone and to investing in British creativity, the licence fee remains the best way of paying for BBC services. It is simple and accountable; we all pay it and we all benefit. Overall, the market delivers better, more varied programmes as the competition is for quality in programmes rather than funding. The TV Licence Fee Enforcement Review by David Perry QC has recommended that, while the current licence fee collection system is in operation, the current system of criminal deterrence and prosecution should be maintained. Can the Minister confirm that this issue is now settled?

The fourth group of questions asked how the current model of governance and regulation of the BBC should be reformed. These are serious issues, and ones for which there is probably more agreement on the need for change. The last charter introduced the BBC Trust, and while there have been some positive changes, including the introduction of some new elements such as public value tests, this structure has come under sustained criticism throughout the period. Of the three options, the one that seems to offer the most benefit would create a unitary board for the BBC with regulation moving wholly to Ofcom. However, I agree with the Green Paper that it is important that, in any change, the progress that has been made to date under the trust is not lost. But there is a wider question, raised by the noble Lord, Lord Fowler, and others, about whether the royal charter is the right basis under which the BBC should be established and whether the current periodicity reflects properly the role that Parliament should play in that process. These are very important issues, and I look forward to hearing the Minister’s thoughts.

We welcome the opportunity to contribute to the debate about what should happen to the BBC over the next period, albeit at the same time worrying that most of the decisions have, in effect, already been taken. We are concerned about the general approach being taken, the tone of the public consultation document and the sense that, taken along with the recent Budget decisions, the Government have already decided to cut the BBC down to size.

My biggest regret will be that, if at the end of this process we find that the Government have not been able to respond to the very good ideas proposed by the BBC in its new paper An Open, More Distinctive BBC, we will be the losers. It would be a tragedy not to have more original high-quality British drama; an ideas service providing the public with the best of British ideas and culture; a new children’s service—desperately needed—providing more content for children across more platforms and making it safe and trusted; and investment in the World Service, which as the noble Lord, Lord Williams, reminded us, was once described by Kofi Annan as Britain’s gift to the world. Where there is a democratic deficit in impartial news, we will be able to uphold better Britain’s place in the world and the promotion of British values. The idea of a new partnership with local newspapers and local reporting may, as the noble Lord, Lord Black, said, not be the right formulation, but it is a good idea; we should pursue it and make sure that something comes from it.

The BBC says that it must adapt and change and that it believes that these proposals will have a positive impact on the creative industries. I think that the Government are lucky to find themselves being offered this at all from a body under such attack. The BBC has already slimmed itself down; it is one of the most efficient bodies in the public sector. I just hope that the Government have the wit to recognise what a good deal they are being offered, and that they will do the deal needed to secure this for the nation for the long term. As the noble Lords, Lord Fowler and Lord Smith, across the political boundaries said, we should be cherishing this very British broadcasting corporation —the envy of the world.