Select Committee on Culture, Media and Sport Minutes of Evidence


Examination of Witnesses (Questions 20 - 39)

TUESDAY 20 OCTOBER 1998

SIR CHRISTOPHER BLAND, SIR JOHN BIRT, MR WILL WYATT MR RUPERT GAVIN, MR JOHN SMITH AND MS PATRICIA HODGSON


  20. Will that include regional broadcasting because for someone like myself it would be an enormous advantage if I could listen to BBC Scotland news on your Web-site because I can then get Web which I cannot get on the radio.
  (Mr Wyatt) All these things are possible within finance and certainly we are looking at how we can extend the ability for people to have news in particular when it is convenient for them to have it.

  21. You also gave us a demonstration of what you call Where's Q? which is a digitalisation of all your records and where you have gone so far. That is essentially a Web-site demonstration. How far are you in terms of getting that to the general public? If so, how are people going to pay for it?
  (Mr Wyatt) It is essentially an on-demand proposition, whether via the Web or some other sort of return path to their home. Actually to introduce something like that would obviously be very expensive but first it is essential that there is a good return path and that the quality of the picture which can be delivered is satisfactory. We are not there yet. We developed that system in order to learn for ourselves about what might be possible and how we might need to organise ourselves so to do. In time these are systems of delivery of programmes and services of the BBC which we clearly wish to be able to use.

  22. May I turn briefly to sport. You are obviously beginning to lose out quite heavily, having lost the test matches to Channel 4, yet sport is one of the major areas that makes the BBC attractive to licence fee payers. What are you going to do about it, or can you do anything about it?
  (Mr Wyatt) I cannot pretend that losing cricket was not a great disappointment. We are investing considerably. We are spending around £120 million in this current year in television sport and production and that is a lot of money. The top level sporting rights over the past nine years have gone up by something like over 30 per cent per annum in real terms. Our income over that period has been going up by 3 per cent per annum, which demonstrates in itself that we have been investing increasingly in sport in order to stay in the game and provide a good service for the licence payer. We plan to keep investing in sport. It is an issue of how much more can we afford to invest given the other responsibilities we have, which are laid out in the Annual Report, to children, to news, and science, and the other regional broadcasting and all the other things we have to do. Yes, we have invested and we intend to continue to do so, but we do not have a bottomless purse. We cannot bid what will give us the right result in every contract on every occasion within the limits of our funding.

  23. Did you consider using one of your channels on terrestrial digitals as a sports channel?
  (Mr Wyatt) We are going to use BBC Choice, which is our main new general channel on digital services, which is already launched on satellite and launches on digital terrestrial in about three weeks' time. We will be using that for extended coverage of sporting events that we cannot include elsewhere in the schedules. It does not provide us with any further income. It is a channel which is free to the public but it is a way in which we can get more sport to the public and make more use of the events that we have already acquired.

  24. I will just see if I can be marginally parochial. First of all, where are you in terms of your plans to shift BBC headquarters in Scotland, where there are proposals to build a brand new building; get out of that awful one you are in at the present time. Where are you in that? Secondly, which is in a sense related, what are you planning in terms of coverage of the new Scottish Parliament, and your relationship with that Parliament when it start next July?
  (Sir John Birt) We are actively looking at the accommodation in Scotland and I agree with Mr Maxton. It is some of the least satisfactory accommodation right across the BBC. We are taking, right across the United Kingdom, a hard look at our property to see whether it is appropriate to new production styles in the digital age. I have no doubt at all that we will be coming forward in the near future with new plans in Scotland which will offer people who work there much more congenial circumstances, much better access to technology. It is just a question of how rather than whether we will do that. There are a number of options that we have to explore to make sure that whatever we do is the most cost effective.

  25. I am disappointed to hear you say there is a variety of options. I thought there was only one and that was that you stay in Glasgow and do not dream of moving to Edinburgh.
  (Sir John Birt) It is not a question of moving to Edinburgh. There are really two options on the table which we need to explore but we explore them very much with the ambition to improve our operation in Scotland.
  (Sir Christopher Bland) And to get the best possible deal on any property acquisition and rebuilding. Under those circumstances, it is never wise to consider only a single site.

  26. And the Scottish Parliament?
  (Sir Christopher Bland) The coverage of Scottish Parliament and indeed our total programme response to devolution in Scotland, Wales and Northern Ireland is being actively considered at the moment. The governors are going to Scotland tomorrow and the next day and are meeting with the Broadcasting Council for Scotland to listen to their further views on our draft proposals from the Executive Committee in terms of the programme responses and options. We then hope to present our plans in either November or December.

  27. Supposedly, according to the media, there is a dispute between yourselves, BBC Scotland and the Broadcasting Council over news coverage in Scotland where there are proposals that the news in Scotland should be done as a package from Scotland, which allows them to headline Scottish news rather than being headlined by news which is potentially English. The word is that you are resisting this. I am not saying you are wrong—I do not have a view on it—but you are resisting it. Is that correct?
  (Sir Christopher Bland) I think "dispute" and "resisting" are not words that we would use. There is an extremely healthy and energetic debate going on as to exactly the right way to respond to these issues. I think it is one of the most complicated issues that the BBC has faced, certainly in my time as Chairman. The BBC finds itself not only commenting on the political process but being almost part of it. It needs to pull itself back and respond, not either to move ahead of legislation or to trail behind it. It is a very careful judgment as to exactly how that programme response should mirror what Parliament's present intentions are in relation to Scotland, Wales and Northern Ireland. It is a very complicated decision and it is not surprising that there are some pretty strong views expressed, not so much from either side but around all the corners of the argument. The debate is by no means over.

Mrs Golding

  28. In the financial statement it says that £109 million was spent on licence fee collection and enforcement. That was an increase of about 13 per cent over the previous year. Yet, on page 50 of the report, it says that the reduced evasion and collection costs from the current level of 13.1 per cent of the licence fee came down. Why has it increased by 13 per cent?
  (Mr Smith) When one is looking at the cost of the licence fee, one needs to look at two different things. First of all, the actual cost of collection and, secondly, the rate of evasion. The two things go hand in hand and they relate to each other such that an increased spend in the cost and collection can have an effect in reducing the cost of evasion. The important things to note are that, when we first took over responsibility for the collection and enforcement of the licence fee in about 1990, the combined cost of collection and evasion at that point was about 16 per cent. In the year before the year under review—i.e., the 1997 financial year—the combined cost of those things was 13.1 per cent. In the year under review, 1997-98, the combined cost is 12.6 per cent. Indeed, in our statement of promises, we have promised to reduce the combined cost further in the current financial year, the 1998 financial year. It remains our general intent to reduce the combined cost of the two. Within the combined cost, there is a one to twenty relationship so that, if a £1 increase in the cost of collection has an effect of reducing evasion, it has a £20 payback. It is worth investing more in the cost if it has the effect of bringing down the overall level of evasion. It is in our interests therefore to increase the costs to reduce evasion and that is what we are doing in order to bring the combined cost of the two down.

  29. It seems to me very odd that the additional benefit from reducing the cost of evasion means that it actually costs you 13 per cent more in one year. I just do not understand how you can justify it. I have listened to what you say but it does not make sense to me.
  (Sir Christopher Bland) Perhaps I can develop the argument. If you created the reductio ad absurdum and we spent no money on collecting, we would plainly have no licence fees, as the Director of Finance said. It is one of the relatively few areas of human activity in semi-commercial areas where the more we spend, provided we spend it sensibly, the better return we get. We have put more financial resources into collection and as a result we get more licence fee money back. To cap the spend at, say, three per cent would make that figure good, but it would reduce the total take from the licence fee.
  (Mr Smith) If I may give one other piece of information on this, if one looks at page 60 of the Annual Report, where we show the actual licence fee income that came in in the year, at the very top of page 60, you can see a figure of £2,009,000,000. If you look at the equipment figure further down in that column for 1997, you see a licence income of £1.915m. You can see a very sizeable increase in the overall level of income as a result of our extra investment in collection costs. Of that increase, about £40 million comes from the fact that inflation has increased that income anyway and increased the level of the licence fee but crucially within it £30 to £40 million extra licence revenue comes from increasing the number of licences as a result of our change in coverage, as a result of our increased investment in the collection costs. While our costs rise slightly, our revenue rises by a much bigger figure, so the investment is worth it.

  30. You spend to save, in other words?
  (Mr Smith) We spend in order to generate more income.

  31. In 1997-98, there was a promise to spend one third of the BBC's network programme budget outside London and the south east. You did not achieve that target. I understand the reason why, but in the coming year you have now changed it to "broadly" spend. Why should "broadly" be put in there? Do you not think that the rest of the country is entitled to at least a third of the spend?
  (Sir Christopher Bland) A third is our target. I think I agree with you. I think "broadly" is a bit weaselly. We shall probably take it out. Our intention is to get to a third. That is our target. Perhaps Will could explain exactly why we fell only slightly short of our target.
  (Mr Wyatt) It has bobbed around. When we originally set ourselves a target, it was agreed with the then board that broadly a third was the sensible thing to go for, but frankly we try and work to a third. We slipped under 31.2 in the year here. I am confident we will get back to a third this year. The chief reason for it there was a major series from BBC Scotland called Invasion Earth. It was a science fiction drama series which cost about £3.5 million to make, which had been commissioned for delivery in February of this year, but it was a complicated programme with some special effects that had to be done after production. They were unable to deliver it until the current financial year. Thus, it did not fall within these figures. Had that been there, we would have achieved the third.

  32. Could I repeat the question? Do you think a third is enough?
  (Sir Christopher Bland) Yes.
  (Sir John Birt) Yes, I do. Perhaps I might explain why I think a third is the right figure and do it against the sweep of history. If you go back ten years or more, you would have found a BBC in which something like 90 per cent of all of our production was in London and in the south east. I for one thought that was not defensible. Over the ten years, firstly because of the obligation to make independent production and, secondly, our own choice in moving towards a major shift of production out of London to the rest of the United Kingdom, we have moved away from that 90 per cent in London to a completely different picture which is roughly 25 per cent independent production, 25 per cent made within the BBC out of London and 50 per cent made within the BBC in London. In short, the historic centre of BBC production used to be something like 90 per cent of all production. Now it is down to about 50 per cent. One of the reasons for our great creative strength is the strength of our production departments in London. Now I think we have a healthy balance between strong London departments, strong production outside of London and strong contribution to the BBC from the independent sector. I think that is a lot healthier position than we used to be in and broadly right. One has to use the word "broadly" because the odd percentage point here or there is not going to make much difference to that new balance, but I think broadly it is the right balance in our affairs.

Mr Fabricant

  33. The financing of the BBC, like any organisation, is a balance between income and expenditure. It is income I want to concentrate on but first can I just pick up something on the expenditure side? A little earlier this morning in response to Mr Fearn's question the Finance Director said—and I am paraphrasing him—"There has been rationalisation of the organisation to make efficiency savings." He spoke about savings of £281 million so far and then he said, "There will be further efficiency savings too". Some might argue within the corporation—and indeed have argued—that this is a sword of Damocles that still continues to hang over employees' heads. Some would further argue that this has resulted in low staff morale, high staff turnover and a reduction of the creativity within the BBC. I wonder if I might invite the DG to comment?
  (Sir John Birt) Perhaps a word, first of all, about the big picture. We have been doing some work on this recently and, since the beginning of the decade, 1989/90, our costs as an organisation have dropped by something like 40 per cent. Currently they are projected, by the end of the decade, to have dropped by 50 per cent. Put another way, the cost of programme making in the BBC during this decade will have dropped in real terms by something like a half. I think you broadly know how that has been done so far. We have had vast surplus capacity as an organisation, both in facilities and in people. We have addressed that issue and reinvested literally hundreds of millions of pounds in new services and a great expansion in the programmes that the BBC makes. We make a lot more programmes than we did at the beginning of the decade. How will we do it in the future? To some extent, the process I have just mentioned is never at an end. You always have to look at your capacity, but the main way in which we will make savings over the next few years is, first and foremost, by introducing the new digital technologies which enable much more efficient working of one's programme makers. They enable you to do other things as well. For instance, Mr Smith is in the process of fundamentally reforming the BBC's accountancy support systems. Like many organisations of our kind, we had literally scores and scores of different systems right across the BBC, all working to slightly different accountancy procedures, people putting the same information into different systems and endlessly keying it in, over and over again, again not an unusual picture of British industry. We are in the process of reforming that. That will bring a big annual saving to the organisation. A lot of what happens is away from the programme front line and is in the jargon of the back office operations. We see major savings to be made over the next few years. Has it had an impact on quality? I believe it has not. The evidence is here in the annual report. For those who went to the BAFTAs last year at the Sony awards, the BBC won 80 per cent of the BAFTAs in the year in question. The scale of our success is slightly embarrassing. We won 80 per cent of the awards at Sony. This was a year in which the BBC set the nation talking again with programmes like Teletubbies, This Life, Our Mutual Friend, The Nazis and Driving School. I detect, far from a reduction in the course of BBC programming, the very fact that for ten years or more we have been in a position where our income has barely increased in real terms—the figures that Mr Wyatt gave earlier were nominal increases because of inflation—has forced us, like any organisation, to make sure that whatever we do is really good and to address shortcomings where they exist. There always will be shortcomings. We are even less tolerant of quality lapses in the BBC now than we used to be. In short, no, there has not been any diminution in our commitment to quality. There never could be. It is integral to our culture and our whole way of operating.

  34. Thank you for that full answer but, on a day when sadly there is going to be a BBC strike, can you paraphrase part of your answer by saying that on the creative side you do not envisage further, major cuts in staff numbers, which is I believe what you were actually saying?
  (Sir John Birt) There have not been cuts in overall numbers amongst our creative staff over the last ten years. Again, the big picture is of major reductions in resource staff and support staff matched by a very substantial increase in the number of programme makers in the BBC making many more programmes. That is a process that I anticipate continuing. Will the BBC be making more programmes, supplying more services? This is a year when we introduced a number of new services to the BBC. We have already discussed Online. We introduced News 24. There will be many more services; there will be many more programme makers working on them, but those programme makers will be working in new circumstances with new technologies and, as you know, it is not always easy to introduce new technologies. There are invariably teething problems, but in the end you work through those problems and you have more effective ways of working.

  35. Now let us move to the other side of the equation which is the question of income. The Chairman said again earlier today that if there were not a licence fee it would result in a quite different BBC and a loss of universality. I agree. I also think—which the Chairman did not say—it would have a very deleterious effect. This came out actually in the inquiry that our predecessor Committee, the National Heritage Committee, made. It would have a disastrous effect on commercial broadcasters in the UK if you were funded by advertising. Nevertheless, I do wonder whether there are other alternative sources of funds that you could consider, whether or not you are permitted to do so at the moment by legislation. Let me put this to you: the BBC's existing analogue terrestrial services traditionally have always been funded by the licence fee. The view of the Committee was that the licence fee is not satisfactory but, like democracy, probably for the time being it is the best of several worse alternatives. Would you like to consider—I know you cannot make policy on the hoof—a number of other options? One is you have BBC Online which costs I believe £21 million to operate from the licence fee. Beeb@the BBC is a commercial operation. What is to prevent there being sponsorship, it being a commercial operation, of the whole of your excellent BBC Online services? After all, it is a winner. You are already getting, as you said today, 30 million hits a month in Europe alone. That is a possibility. Another possibility might be the BBC has lost out, as we have already heard, with coverage of sporting events. What about the possibility of sponsorship of outside broadcasts or broadcasts which cover existing events such as The Proms? They are existing events. Therefore, it would not necessarily mean that the sponsors would have any influence at all on how the events are performed. You would continue to carry them as before but the outside broadcasts would be sponsored. What about services like News 24 and some of your new digital channels? Could these not have some degree of sponsorship or advertising? I do not expect you to make policy on the hoof and your answer quite correctly will be it would be difficult to do so anyway because the legislation prevents you from doing so. The real bottom line question is: are you prepared to even consider these options and maybe discuss them with the other Mr Smith, the Secretary of State?
  (Sir Christopher Bland) I will ask John to respond specifically to the Online and the Beeb question, but the general question has to be looked at in terms of the philosophy of funding a public service broadcaster. Sponsorship, as the ITV companies have found, does not greatly increase the total amount of advertising take from the system. It simply redistributes it from advertising to sponsorship and uplifts it a bit. As Mr Fabricant pointed out earlier, you would change the ecology of advertiser-funded broadcasting if the BBC became a significantly sponsorship-funded organisation. That would have an impact on ITV. More importantly, you would have to consider what the BBC is for and whether, as we believe, our Online services are now an integral part of our public service offering and whether News 24 is an integral part of our public service offering. If it is, and if it should be universal, then we—and I am anticipating; we should not make policy on the hoof—might then think that those should be funded by the licence fee, because once you decide any one part of your public service offering can be funded by a form of advertising, which is what sponsorship is, there seems no philosophical reason why the other parts could not too. I have just come back from meeting our fellow public service broadcasters in Europe and elsewhere throughout the world. There is no doubt that those who have a mixed economy and who rely on advertising and a licence fee—and there are many of them; we are almost the only solely licence fee-funded organisation—do suffer because understandably the political response to pressure on the licence fee is to let advertising and the amount of sponsorship take the strain. What starts small inevitably, in my view, would become very substantial. It is those sorts of considerations that have to be taken into account when deciding whether you let the thin end of the wedge into the funding of our public services.
  (Sir John Birt) I think the over-arching question is how do you look at Online. The way we see it is that it is rather like the decision the BBC faced in the late thirties when it was a radio broadcaster and had to decide whether or not to go into television. I am not saying we saw it clearly two years ago; few people saw it very clearly two years ago because the technology Online has developed with such extraordinary rapidity, but we now see Online very much as a third medium. As Mr Maxton's question made clear, we should not even think about Online in terms of where it is now; it is where it is going to be. As the Chairman has often reminded us over the last few years, there is little doubt that, in a world where telecom infrastructure is going to improve, the Online will develop into possibly the main means in future by which all services are delivered. It will not only be the provider of the new services but it will start to develop into an on demand medium. In short, it may be in ten years' time or maybe 15 years' time a highly significant—perhaps even the most significant—way by which the BBC then delivers its public service proposition. What follows from that is that our approach to Online should be primarily a publicly-funded approach. What we have increasingly been asking ourselves, as we did in the late thirties, is what can we do with our unique creative and journalistic resources Online which the market will not. We are proud of much of what we have done. Some of what we have done on the educational sites is absolutely at the cutting edge in world terms. We think our news Online site is unequivocally the best in the world. It has more stories than anybody else. It has the riches and depths of the BBC World Service to expose anything you want to know about what happened today. There is no better way Online of finding out what is happening around the world than on the BBC. We think that is an appropriate use of public funds, recognising, as we do, that even over the next two or three years it is going to change just as rapidly as it has done over the last two or three years.

  36. The BBC's adventure into television in 1936 is a good analogy, but now we are talking about such an explosion in new technologies that I just wonder whether the BBC can keep pace. It is not just one incremental step; it is many incremental steps. There is another difference with 1936. The BBC is perhaps less "pure" than it used to be in 1936 in that you already have BBC Worldwide. You have, albeit a separate organisation, a commercial BBC Online, although you call it Beeb@the BBC, so you are already going into these areas. Have you, for example, considered subscription or pay per view with some of your new digital services? Sky News feel that they are facing unfair competition by the fact that News 24 is available free to cable channels.
  (Sir John Birt) I think there were a number of points made there. Firstly, I strongly agree with you that there is an absolute explosion going on at the moment and that is a big challenge for the BBC. We have to be highly alert to what is going on, right across the world, and in particular we have to be alert to how the new technologies are developing with dizzying rapidity to understand the significance of that for us, how we can deliver services to our licence fee payers and how we make our programmes. There is no doubt that we have to be an ever more alert and ever more agile organisation. We have not had to be very agile over the first 75 years of our history. I think we are going to have to learn agility. I do not think the BBC is less pure in your words. I think that what has happened over recent years is that we have got better at doing what we have always done, which is to exploit the assets created with public funds with ever greater vigour commercially. That is not only just because we have been more vigorous but because the existing generation of new technologies has allowed us to do that. In the year in question, we introduced with our partners, Flextech, three new commercially funded channels in the UK: UK Horizons, UK Style and UK Arena. This was the year when we signed our deal with Discovery. What will that deal mean? It will mean that we stand a jolly good chance, in partnership with Discovery, of introducing factual programme channels right across the world and probably being the world's leading provider, with Discovery, of factual programme channels in five or ten years' time. That will undoubtedly, as Mr Gavin made clear earlier, greatly increase our commercial revenues. I do not think we are doing anything that is in principle any different from what happened in the twenties when the Radio Times was started. We have new opportunities and we just exploit them more vigorously.
  (Ms Hodgson) The market is clearly polarising as we see all these new services developing and it is possible for our commercial competitors to charge not only general subscription packages but pay per view. What we will see happening on the commercial side is that numbers of channels will suck in a lot of acquired material from overseas because those channels will need to be filled at low cost and the higher value material will become increasingly expensive for the viewers. We will see it being concentrated in premium subscription channels and in pay per view. By contrast, the BBC's commitment on the basis of the universal funding mechanism is to make high value programming of the kind that we have been mentioning earlier available to everybody, to have an inclusive and therefore I think increasingly different vision of what we bring to the market, in terms of the range of services that we are able to fund, on the back of the licence fee. We have the capability to be a major investment machine in particularly valuable genres of programming, with £300 million or so into news gathering, the best news gathering operation for broadcasters anywhere in the world; £300 million in drama, arts, performance, the biggest cultural patron in the UK. That investment feeds our main services, BBC1 and BBC2, and enables us to have very high investment core networks but because there are critical masses of investment in programming we can, at a marginal extra cost, deliver the fruit of that investment across new services now that digital gives us the capacity to do so, so I think there will be a higher value pay-back to the licence fee payer for their investment.

  37. Finally, is not the flaw in that argument that, without sponsorship, without subscription or some other mechanism, you will continue to lose sporting and other major events to the highest bidder? I do not think there is an answer.
  (Sir John Birt) I am happy to try to give an answer. Firstly, in terms of the broad funding, the funding question is at the heart of the Government's licence fee review next year, but we certainly can go a very, very long way to funding the vision that we have outlined because we will achieve further major improvements in efficiency and I am sure we will, over the medium term, improve our commercial revenues. Just how far we can go obviously depends on the broad level of the licence fee. As Mr Wyatt made clear, losing the test matches has been an extremely disappointing experience for the BBC. We plainly started in the world when we had the overwhelming majority of sporting events. It cannot surprise anybody that as we have new channels—Channel 5, Channel 4 now in the market, Sky, a major investment machine for investing in live sport—we face competition and people have been able to take away events from us by spending very large sums of money. We have not taken it lying down. As Mr Wyatt has made clear, we have invested more in sport in terms of yearly inflation than in any other programme area, but I think we have to accept the underlying reality that the broadcasting environment has changed in a fundamental way and some of the sport which we hold dear and that we think we have done well by—we have provided coverage of real excellence and insight and set standards around the world over many decades—we are very sorry to see go, but some of it is bound to go. It is a matter of simple economics. We will hold on to as much as we can as long as we can.

  Chairman: Mr Maxton was asking whether you would buy a football team and suggested that you could only afford to buy Burnley. I said that Alastair Campbell might well approve of that.

Mr Faber

  38. I come from a generation of sports fans that, with the possible exception of Brian Moore on a Sunday and a bit of wrestling, was weaned almost entirely on BBC sport. To be honest, I find your last answer desperately sad because I think it shows that you really have completely thrown in the towel at the BBC as far as sports coverage. I wonder, Sir John, if you can just tell me where you personally see BBC sport going and what you consider its importance to be in the overall scheme of things at the BBC nowadays?
  (Sir John Birt) It is hugely important. I am sure Mr Wyatt will be happy to remind us of the extraordinary amount of sport the BBC still has. If you list the sporting events that we still hold rights to, it is an enormously long list and we will do all we can to maintain our level of sports coverage for as long as we possibly can. We have been greatly helped by government policy this year in settling the issue of listed events and in making it much more likely that recorded coverage will be available to terrestrial broadcasters. In recent years, we have done other- things too to increase and improve the range of kinds of programmes that cover sport on the BBC, Fantasy Football League and so on.

  39. When you lost the rights to the FA Cup Final earlier in the year, your anchor man, Des Lynam, said, "Losing the Cup Final is the biggest loss to the BBC. In my view, the BBC should have and could have found the money." He then carried on: "People who run the BBC rarely take any notice of what I call the performing seals, those of us with a ball on the end of our hooters. They never have." Given those quotes, could you tell me why you chose to put him on the front of your "Our Commitment to You" leaflet?
  (Sir Christopher Bland) As a direct response to his comments. He is an extremely important part of the BBC. It is simply not fair to say that the BBC does not pay adequate attention to sport. If you are, like me, passionately interested in sport of every kind—I am a Southampton season ticket holder, which will demonstrate the lengths to which I will go—to become chairman of the BBC in the year in which we lose the Cup Final and then shortly after lose Twickenham is deeply disappointing, but you have to remember that for every sports passionate aficionado there is an equal and opposite part of the audience that cannot stand them and I am married to such a one. We have to think of the overall interests of the licence fee payer when planning our expenditure on sport. The figures demonstrate that in the year in which our overall income increased by about the rate of inflation we upped our total expenditure I think by 18 per cent. I think that is a measure of our commitment. It is hard to keep pace, even with an 18 per cent hike, with the speed at which the costs of sports rights are rising. As the Director General has said, over time, if you start with all of them, you are bound to lose quite a lot, but I do not think it is fair to say that, within the BBC, we do not give sport its proper priority or take it seriously.


 
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