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Mr. McWalter rose--

Mr. Kaufman: If my hon. Friend is about to tell me that the BBC has as well, I have to say that is a mere fledgling, whereas BBC Online is up and working and could bring in a great deal of money for the corporation.

Mr. McWalter: I am grateful, because I know that my right hon. Friend does not really want to give way., which is the commercial arm, exists, but there are no trails from to If those links from the free BBC Online service to commercial products were established, it would be a way of making work much harder.

Mr. Kaufman: My hon. Friend's suggestion demonstrates the dilemma now facing us: he is saying that a wholly licence-funded service should be used to advertise a commercial service, which brings us to the issue of transparency of financing within the BBC--a matter with which many of us are dissatisfied. The BBC is a hybrid organisation, so BBC Online being used to gain audiences and money for would mean that licence payers' money was being used to finance a commercial service, whereas we have been told--somewhat unconvincingly--by the BBC that it ring-fences the licence funded services. My hon. Friend's suggestion is worth considering, but he has illustrated the increasing commercialism of the BBC.

Although it makes some rather strange recommendations, the report says something quite wise on page 65:

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    That is absolutely true and that is the way of the future. We are approaching the era of convergence and it is that which makes the Gavyn Davies report not only foolish, but irrelevant. The report describes not only the BBC but the entire audiovisual communications environment that is now coming into being, and the panel's comments apply to that revolutionary environment as well as to the BBC.

While the BBC whinges about a supplementary digital licence for services that no one watches, its rivals march into the future and cost the taxpayer not a penny in doing so. While the BBC stagnates in a poll-tax financed backwater, the real cutting edge of enterprise and innovation is found in the private sector. Every day, one finds more information about new developments. The Times today tells of W H Smith being

    "in talks with a number of 'big names' to help it to bolster its new Internet service and construct a second side to the business to rival its traditional bookselling."

Analysts are talking about the development of holiday services, supermarket services and special deals on home delivery. That is the future.

Photo-Me International, best known for its passport photograph booths, has already announced that it is to transform 1,000 of those booths to enable people to access the internet and use e-mail. The company announced only a few days ago that some of its booths are to be used to pioneer the downloading of music on to CDs with which people can then walk away. Carlton Communications is moving away from the transmission of films via celluloid distributed in cans to cinemas; it plans to replace analogue spools with film that can be stored on disk and beamed down from satellites or sent down fibre-optic cables. The era of e-cinema may bring films e-mailed to people's homes so that they can watch them on their own television. Telewest Communications has announced that it is to recruit 840 staff to expand the scope its digital services.

A great convergence revolution is taking place--people talk about the prospect of convergence, but it is already here. Today, we can get television sets on which we can not only watch television programmes, but log on to the internet and use e-mail. Although the BBC has set up its BBC Online service, it appears to be utterly impervious to the idea that such services are the future. Soon--possibly within months--we shall be able to buy an entirely converged box that combines the capacities of the computer and those of the television set. That will result, not in the realisation of the "family around the fireside" vision described by Sir John Birt in his recent lecture, but in limitless opportunities for everyone in society, regardless of income, to participate in entertainment.

The hon. Member for East Surrey spoke of the fall in television audience: the reason that that is occurring is that people are turning to the internet. There are now 10 million people in Britain who have access to the internet, ranging from schoolchildren in their bedrooms to pensioners, who increasingly use the internet to access the world. One can get all sorts of things via the internet. When I was in Palestine taking part in a recent conference, I was able, via a computer, to read The Daily Telegraph and The Times and to refrain from reading The Guardian every day. When the picture quality has

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been sorted out, which will happen soon, we shall be able to watch entertainment of all kinds on television-quality or even cinema-quality screens. That is the future for our country.

My right hon. Friend the Secretary of State said, rightly, that we in this country have a primacy in the basic lingua franca of broadcasting that no one else in the world possesses: the English language is the key to communications. We see abroad the creation of vast media conglomerates: last month, Viacom, which already owns Hollywood's Paramount studios, the MTV channel and the Blockbuster video rental chain, bought the CBS Corporation for $34 billion; and News Corporation is already an immense transcontinental organisation. Meanwhile, the BBC whinges about a supplementary digital television licence, when it could be a major player in world communications.

The BBC has the most famous and respected logo in the communications world. We need the BBC to compete, expand and safeguard the public service ethos that is its priceless legacy and gift to world communications. Instead of paddling about in backwaters, it is time to swim purposefully into the tide. I hope that my right hon. Friend will consider the future of broadcasting in its real context. He must set aside the irrelevancies in these finicking reports and ensure that our country, which pioneered broadcasting, can continue to lead the world.

11.20 am

Mr. Peter Atkinson (Hexham): After that broadside, I feel rather nervous about risking my rigging by sailing close to the right hon. Member for Manchester, Gorton (Mr. Kaufman) to defend the BBC from his attack. It is a pity when debates about the future of broadcasting and the BBC boil down to an argument about what kind of potted plants should be put in the office of the director general. We should talk today about quality. The Secretary of State was absolutely right when he said that the BBC still provides quality broadcasting, although perhaps not in sufficient quantity. Despite his great vision for the future, I, as a fully paid-up member of the forces of conservatism, like to switch on the television and sit down to watch a programme that I find interesting. I do not particularly want to sit alone in an attic playing with the internet: I am happy to be an old-fashioned, conventional television viewer.

The poor old BBC has marched up and down the same hill in successive generations: it does not know whether it should compete for ratings or produce quality programmes. It has always faced that dilemma. The licence fee is a regressive tax and the BBC argues, quite properly, that, because many people pay for it, it should provide programmes for the many and not simply for middle-class, educated Members of Parliament who go on about quality programmes. That is a difficult decision for the BBC; ultimately, I believe that Parliament will have to take it. We will have to decide, following proper consultation, in which direction we want to send the BBC. I agree with the Secretary of State that it should concentrate on quality: it should establish a benchmark in the broadcasting spectrum.

People often criticise the BBC for being wasteful--and I have no doubt that, like many large, sleepy corporations, it often is wasteful. BBC producers and production staff at lower levels worry that their budgets are cut endlessly

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while management remains top heavy. A report was published recently by an organisation called the Campaign for Quality Television. It is a pressure group, so one must be cautious about its findings, but it conducted some alarming interviews with BBC staff and other television companies. It found that, as a result of budget cuts in the BBC, there is

    "a growing culture of self-censorship: 'Every year, they keep cutting. We feel we've become so budget orientated that we've clipped our own wings, we don't even suggest ideas because we think it will be too expensive.'"

That alarming attitude must be addressed. However, it does not change my basic view that the BBC forms a valuable part of our broadcasting spectrum and should be defended, not ceaselessly attacked and demoralised.

I welcome also the Secretary of State's remarks about the roll-out of digital terrestrial television. He said that the test of availability will be a crucial benchmark in deciding when the analogue switch-off will occur. I was particularly pleased to hear him say that at least 99.4 per cent. coverage will have to be achieved and that he would like to aim for universal coverage.

As I have said before, I represent a constituency in which live some of the 0.6 per cent. of people who cannot receive television. I am afraid that it is a little like a soap opera: every time that I talk about broadcasting, I like to speak up for the few remaining people in the United Kingdom who cannot get television. Their lives are quite different, and, I believe, not as rich, because they do not see the soap operas and the news programmes. They will miss out on the new interactive and digital services that are coming on line. Therefore, it is extremely important that we make studious efforts to achieve 100 per cent. coverage.

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