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10.47 am

Mr. Gerald Kaufman (Manchester, Gorton): I agreed with much, if not quite all, of what the hon. Member for East Surrey (Mr. Ainsworth) said about the Gavyn Davies report. I note the Conservative party's new-found fastidiousness towards pre-election bribes: I have always been in favour of a good solid pre-election bribe, provided that it is offered by a Labour Government.

I thank my right hon. Friend the Secretary of State for giving the House the opportunity to debate the future of broadcasting today. I agreed with much in his speech, and welcome his strictures on Mr. Richard Eyre's views on public service broadcasting. I do not believe that the person who was the driving force behind downgrading peak-time television news has much right to talk about the ethos of public service broadcasti-g.

I welcome the hon. Member for Mid-Dorset and North Poole (Mr. Fraser) to the Opposition Front Bench. Knowing the robustness of his views on a great many subjects--with many of which I often agree--I look forward to hearing what he has to say.

The hon. Member for East Surrey spoke about the BBC series "Walking with Dinosaurs". It is appropriate that that series is the BBC's latest success, as the BBC itself is turning into a communications dinosaur.

Mr. Peter Ainsworth: They looked frighteningly alive to me.

Mr. Kaufman: The BBC or the dinosaurs?

Many of the recommendations in the Gavyn Davies report seem foolish, but an even greater problem is that, with one or two exceptions, they are irrelevant to the future of broadcasting. The report examines the BBC alone, not setting it within the context of wider developments in audio-visual communications, which are bringing about the greatest communications revolution in the history of the human race and which might bring revolutions in society and employment that might outstrip even the changes brought by the industrial revolution in the 19th century.

We should first dismiss the Davies report's recommendations on the television licence. A digital supplement on the licence would be a fine on those who subscribe to commercial digital services. The infinitesimally few people--too few to be counted--who watch BBC digital services do so by subscribing either to Sky Digital or Ondigital. My right hon. Friend the Secretary of State for Culture, Media and Sport pointed out that 1.8 million households subscribe to those services, which may mean that around 5 million people pay to watch digital programmes.

It is unacceptable to expect that those people should, in addition to the contracts into which they enter voluntarily, be required to pay a regressive poll tax to the BBC whose digital programmes--if they watch them at all--they can watch only through paying digital subscriptions. That

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point is quite apart from the utter absurdity of the sum proposed for the additional subscription of £1.99. What on earth are these people up to? This is no Tesco bargain offer on which one can take a penny off. The Davies report is proposing a £2 fee, and if its signatories think that they can get away with making people believe that it is less by taking off a penny, that merely shows the patronising nature of their report. It would be equally wrong to increase the licence as Lord Gordon proposes in his note of disagreement.

Let me turn to arguments that torpedo the Gavyn Davies proposal for the digital licence. I have received today a report, "The Impact Of A Digital Licence Fee On The Take-up Of Digital Television", from the National Economic Research Associates. It states, at paragraph 2.5:

The report subjects Davies to just such detailed scrutiny, arguing:

    "We expect a digital licence fee supplement to have an adverse impact on the take-up of digital services by both pay and free-to-air homes . . . The results of our analysis suggest that the digital licence fee is incompatible with the Government's objectives for early switch over from analogue to digital television."

I congratulate my right hon. Friend the Secretary of State on the announcement of his plans for analogue switch-off, which accord with the report of the Select Committee on Culture, Media and Sport. I should add that, although the Select Committee will shortly conduct an inquiry into the Gavyn Davies report, I am not speaking for the Committee today and have no right or authority to do so. I am speaking purely on my own account.

The NERA report continues:

The report's central estimate is that adoption of a digital licence fee of the kind proposed by the Gavyn Davies report would reduce penetration of digital television in households by 10 per cent.--2,570,000 households--by 2004, and by 20 per cent. by 2008. Apart from its misguided nature and its regressive impact--to which the hon. Member for East Surrey referred--the Davies report simply has not taken into account the effect on digital television. That results from the report's utter, tunnel-visioned obsession with the BBC and nothing but the BBC.

I am opposed to the digital supplement. I am also opposed to any increase beyond the settlement decided by the previous Government, which was over-generous, for the licence until 2006. The BBC spends money as if there were no tomorrow. It can do so because it has a guaranteed income of £2 billion because of the licence. It is the only hypothecated tax whose rules are laid down by its recipient and which is collected by the recipient. No doubt, other organisations would like to be able to do that.

The hon. Member for East Surrey referred to "BBC News 24". At the last count, 0.1 per cent. of the television audience was watching that, but it costs £30 million a

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year. The sums being spent on consultants--to little or no avail so far as I can see--are monumentally large. There are other matters on which the BBC fritters finance. There is a forthcoming jamboree at Hampton Court. It was recently reported in the press that £2,000 was being spent on providing ambient noise so that those who work at BBC headquarters in White City should not feel lonely.

Today, another news story tells us that the BBC will spend an unspecified amount to make people feel more lonely; a new system called sound-masking is being introduced at Broadcasting House so that some BBC employees cannot overhear what others are saying. A BBC spokesman has said that personnel and legal staff may obviously not wish others to hear what they are saying. The corporation is spending money on concealing conversations at the same time as spending money to provide bogus conversations.

Mr. Baker: Perhaps journalists at Broadcasting House have good reason to feel lonely, because most of their colleagues have been shipped out to White City and replaced by managers.

Mr. Kaufman: I shall not reveal what employees of the BBC say privately about their management because I favour good employment practices.

Mr. Tony McWalter (Hemel Hempstead): Will my right hon. Friend give way?

Mr. Kaufman: I will give way again, but shall not do so often because I do not want to take up too much time and I have several more broadsides to deliver.

Mr. McWalter: I am aware that those broadsides are on their way, but does my right hon. Friend agree that the BBC retains unparalleled authority in many fields? It is held in great regard by many people who use its services. Its internet sites continue to grow at an enormous rate; they have great authority and provide a good service to schools and to adults and children who want authoritative information. Will my right hon. Friend bear those points in mind when he launches his broadsides?

Mr. Kaufman: I have an extremely high regard for my hon. Friend, but that will not allow me to endorse the panegyric that we have just heard--a panegyric that is not shared by many millions of people in this country. Although they may be accustomed to the BBC--indeed, they have to be, because they pay large sums, against their will, to keep it going--they no longer regard it as a special case. They think of the BBC as only one broadcaster among many whose wares they sample, as they feel appropriate.

I disagree with Lord Gordon's footnote to the Gavyn Davies report in which he opposes the digital licence, while advocating an increase in the general licence. However, I agree with him when he asks whether the BBC should continue to do things just because commercial companies do them. When the BBC was the only broadcaster, it was appropriate for it to provide a reasonably full spectrum of entertainment, education and information.

Mr. Peter Ainsworth: Is it not the point of the BBC that it does what commercial broadcasters cannot do?

Mr. Kaufman: Sometimes the BBC does what commercial broadcasters should not do.

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The day has passed when the BBC could do everything--even if we believed that it should do everything. The hon. Member for East Surrey mentioned that BSkyB was willing to spend £1 billion on a deal with the Premier League. In a commercial market, BskyB has a perfect right to do that, but it is not what the BBC should be getting up to. The BBC should provide a wide range of high quality programmes in education and entertainment, without feeling that, whenever anyone else in the commercial market does anything, it should have to do the same.

On page 42 of the Gavyn Davies report, we read of the kind of money that the BBC is asking for in order to fulfil its vision. We are told that it wants a further £700 million, and although the purpose of £300 million of that money was specified to the panel in detail, the purpose of the remaining £400 million was not. The BBC is extremely free with taxpayers' money. I have a high regard for much that the BBC does; it has contributed what is possibly the most precious single aspect of broadcasting in the world today--the ethos of public service broadcasting. Nevertheless, that does not mean that it should receive a blank cheque for whatever pops into its head--a great deal pops into heads at the BBC.

Commercial companies risk shareholders' money in the market. If they fail, they fail; indeed, satellite companies nearly did fail at the beginning. However, failure is a risk for commercial companies. The BBC risks taxpayers' money, and then demands more. There is not merely a case against increasing the licence fee, but one in favour of freezing it in cash terms during the whole of this charter period. There is also a strong case for providing substantial concessions to those who cannot afford what, to many people, is an amount that they can take in their stride, but to many others is money that is difficult to find.

When I was shadow Home Secretary--in days beyond most people's memory--I advocated, as official Labour party policy, free television licences for pensioners. That is an idea whose time has returned. I strongly commend to my right hon. Friend the idea that all pensioners be provided with a voucher equivalent to the television licence. I realise that there are problems in removing from pensioners the obligation to pay the licence fee, because some of them share their homes with their children. There might thus be a justified apprehension that we might be subsidising people who were below pensionable age. However, if we provided every pensioner with such a voucher, they could either obtain a free licence, or pay a subscription to one of the services that are not free to air under the licence arrangements. That is my small recommendation for a pre-election bribe.

The BBC is doing far too little to obtain commercial income. The hon. Member for East Surrey referred to its commercial ventures. We have gone far beyond the question of whether the BBC is a hybrid organisation--part public sector and part commercial. The BBC has commercial partnerships with many organisations here and abroad, such as Flextech and UK Gold. It takes advertising on some of its overseas ventures. The BBC is no longer pristine and pure when it comes to commercial activity. In view of that fact, the BBC needs to earn far more income from its commercial activities, using that money to fund whatever additional activities it deems appropriate.

The Gavyn Davies report records a pathetic target for BBC Resources Ltd. of £82 million revenue over the next five years. The report makes it clear that--petty though it

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is--that sum is over-ambitious because BBC Resources Ltd. is losing money. On the other hand, although I have said on many occasions that I am in favour of the privatisation of the BBC as such--I remain unrepentant in saying it--I certainly do not commend the report's proposal for the privatisation of BBC Resources Ltd. On page 101, the report rightly states:

    "As with any privatisation, these sales would replace a flow of revenue by a single capital payment."

If BBC Resources Ltd. were run so that it made the money that it should make, there would be a most valuable addition to BBC revenues. It is absurd to sell it off for one capital payment when, properly run, it could add a great deal to the BBC's revenues.

There are many ways in which the BBC--if properly, efficiently, effectively and imaginatively run--could make large amounts of money. Reference has been made to BBC Online, which is probably the most enterprising and forward looking of all the corporation's activities. It costs £23 million a year. The Davies report said that, in June this year, the site was receiving 100 million hits--it probably receives even more now--50 per cent. of which originated abroad. It is absolutely typical of the lack of imagination displayed in the report that it says that BBC Online should not be commercialised. Here we have a service, funded by the licence, half of whose usage originates with people overseas, who gain access for the cost of a local telephone call. If the BBC took advertising on it, it could fund the entire enterprise--

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