Examination of Witnesses (Questions 300
- 320)
WEDNESDAY 25 NOVEMBER 1999
SIR CHRISTOPHER
BLAND, SIR
JOHN BIRT,
MR GREG
DYKE, MS
PATRICIA HODGSON
AND MR
JOHN SMITH
300. That you would try and prevent somebody
talking to you.
(Sir Christopher Bland) No, no, no —
301. I was not speaking to you, Sir Christopher,
if you do not mind, I was asking Sir John.
(Sir John Birt) The important issue is whether the
NAO are the best means of doing it. If Parliament and Government
decide that the NAO should be then of course we will co-operate.
We obey the law of the land. We are arguing that the NAO is not
the best means of satisfying a legitimate public concern.
302. So that is a no, you would not, is it?
(Sir John Birt) We would never stop a member of the
BBC staff doing something which was the will of Parliament or
Government, of course not. I just hope that that position will
not arise.
303. Thank you. I was looking at the work you
have been doing on a campaign in order to generate interest and
awareness for the launch of digital and I have been looking at
the evidence you have given us on what you have been doing. I
understand you say the campaigns are reaching 99 per cent of adults
at least once and 96 per cent of the population more than three
times. You have a digital launch campaign in the national press,
an outdoor poster activity, a target press add, over 275,000 leaflets
have been distributed by mail and exhibitions, including some
22 telephone numbers, that digital has participated in over 50
retail training events, etcetera, etcetera. It seems to me to
have been a very very big campaign to promote digital when you
have not yet received the assurance that you have the money to
extend your services. Why should this be so?
(Sir Christopher Bland) We are not promoting new digital
services for which we have not the money, we are promoting the
future of television and broadcasting in the United Kingdom which
of course is digital. BBC1 and BBC2, our main broadcast services
and BBC Radio, eventually and digital radio broadcasting in the
United Kingdom are our existing services. These are funded. This
is the direction of the future. Chairman, I thought I detected
a note of criticism in Mrs Golding's question. We were criticised
by our competitors for not doing enough to promote digital. We
would accept that the industry as a whole is not promoting digital
enough. This is the future and it is right that the BBC should
be promoting it and it does not assume that we get any or all
of the additional buoyancy we are asking for.
304. So you are doing the commercial companies'
job for them, is that what you are saying?
(Sir Christopher Bland) No, it is not. We are doing
part of a necessary job, one that the commercial companies are
also beginning to do, which is promoting digital and that is the
future of broadcasting in the UK.
305. How much money have you spent on this campaign?
(Ms Hodgson) Both the last Government and the current
Government have specifically asked us to provide generalised information
about digital services, I think the idea being that it should
be information that was reassuring and non-specific about trying
to drive a particular business and we have been very keen to do
that. The majority of this has been done on our own air waves
not only because that is the most effective way of reaching people
but obviously it has very little cost. The opportunity exists.
We can provide you with the costs separately, although it is a
low cost. We have provided a help-line for people to ring in to
be able to get specific questions answered, such as the coverage
of terrestrial transmitters, what the costs are between different
services, what the services are so that the population can be
guaranteed a neutral source of information that is not trying
to sell them a particular package.
(Sir John Birt) I do not think we are apologetic about
what we have been trying to do. What we have been keen to do is
to help our licence payers understand what the digital opportunity
is and to provide accurate and impartial information to them to
make an informed decision. I think everybody is agreed that there
is a national advantage in driving digital take-up, but the sooner
the United Kingdom becomes a total digital society the sooner
the benefits will arise. We feel a responsibility not only to
help that process but also to help in other ways and campaigns
like "Computers Don't Bite" and "Web Wise"
have been fantastically successful in helping individuals understand
the importance of the new technologies and acquire individual
skills. Tens of millions of people have seen our campaigns and
literally hundreds of those people have gone out and acquired
skills as a result of seeing the campaigns we have been running.
So we do feel a responsibility.
Chairman
306. Now will you answer Mrs Golding's question:
how much will it cost?
(Sir John Birt) I am sorry that my memory is not encyclopedic
enough for the Committee, but we will write and send you the figures.
Chairman: Thank you.
Mr Faber
307. Sir Christopher, in just over two hours
we have covered almost everything, but I am sure you will not
be surprised to hear that I would like to have a brief chat about
sport before you leave. Both of my colleagues have left in keen
anticipation of my raising this subject. Last year I criticised
you, amongst other things, for your statement of promises, if
you remember, where you had a photograph of Des Lynam on the front
but no reference to sport inside. You have covered yourself pretty
well again this year, but your statement of promises this year
has almost no reference to sport at all. It mentions a new site
on On line as the only new aspect of sporting coverage which the
BBC is planning. I raised this with Gavyn Davies and pointed out,
in particular, that in the two pages of what you said you would
provide in the future there is no mention of sport again, to which
he said I should not be too harsh on you because you had since
provided this document with a lot more information. I have to
tell you, I can only find the word sport mentioned once, which
is in a heading, "Even greater access to BBC news and sport".
I do not want to go back over old ground and perhaps, in fact,
Mr Dyke, this would be a good chance for you to come in. I would
really like to know what plans the BBC has for the millions of
people who watch sport on it, who have grown up watching sport
on it, who do feel that you have lost events and I think, perhaps
most worrying of all, recently a slight note in the media has
crept in of criticism of content and scheduling which there has
never been before. Mr Dyke, you have great experience in this
field.
(Mr Dyke) Yes. I am a great sports enthusiast and
when I came to take this job part of the conditions of taking
it was giving up the Directorship of Manchester United. So I have
been involved in football for quite a long time. Mind you, after
the result this week maybe that is not such a bad thing.
(Sir Christopher Bland) It is a causal effect.
(Mr Dyke) I shared with you my concern about the BBC
and sport over a period of time, but I understand what has happened.
If you look forward to the sort of amounts of money the live premier
league rights are likely to go for next time, you are talking
about between, I suspect, £5-£6 million per match. I
do not see any way that the BBC can justify spending licence fee
money at that sort of rate given the sort of things we could also
do with £5 or £6 million. £5 or £6 million
makes an eight to ten part drama series of pretty high quality.
Therefore, in some sports I think it is very difficult to get
back in. There has never been that much live football on the BBC.
In other sports I think we will look for the opportunities. As
you know, sports rights come up periodically and you have periods
when there are not many around, but it would be very nice to win
some back and that will be one of the things we will be looking
to do in the next two to three years. I have to temper that with
saying that in almost every sport I know the cost of the rights
is going up at a rate way beyond the BBC's income and therefore
it will mean picking and choosing.
308. What about my point about the content and
scheduling? The BBC historically has always been at the absolute
forefront of sports production. It has always had a fantastic
staff, directors, producers, presenters, people who know what
they are doing. When I raised this point a year ago I was shocked
by some of the letters I got talking about morale and about the
general attitude of the management at the BBC to sport, which
you have all denied and you have all put on the record your support
for it. It is worrying when you now see criticism creeping in
of the content and the scheduling of programmes. Grandstand
is just one example. There is one newspaper which has run a campaign
against Grandstand. That is a worry because that suggests
that the preparation and the production might be allowed to slip
as well, which would be absolutely tragic for all of us.
(Mr Dyke) The newspaper that ran the campaign against
Grandstand happened to choose the two weekends when the
Rugby World Cup semifinal and the final were on ITV, so it is
hardly surprising more people watched ITV on those occasions.
It would certainly not be the case that we would not compete both
in the quality of the output and where it is scheduled. I think
I can give you some assurances on that. Once you have been in
the BBC sports department for a number of years you can understand
how you have gone from a pre-eminent position before pay television
to one where you are now competing with others and therefore I
can appreciate it is difficult for our staff. There is an enormous
amount of money now being spent on sports rights, but the BBC
will only be able to buy some of them.
309. One of the points you make in your response
to Davies is, "the Panel cite no evidence which leads them
to recommend a £1.99p figure as opposed to £2.99p and
£3.99p a month." Why did you not give them this document
and more information when the Davies Panel were considering their
Report rather than giving it to them afterwards when there is
only a page and a half in the Davies Report on what you plan to
do with the extra money? Would that not have helped?
(Sir Christopher Bland) Yes, I think it would. Our
plans have been developing through the year and, as is the Davies
Panel's deliberations, it was a very compressed timetable. We
agree that it would have been better to have had as fully developed
plans as we now have then but we did not.
Chairman
310. How did you arrive at the figure, Sir Christopher?
On page 42 of Gavyn Davies they have the title "Funding Needed
to fulfil the BBC's Vision," news services, £700 million,
of which £300 million was specified in detail to the Panel
and £400 million was unspecified in detail. If you did not
have that information how did you arrive at the figure?
(Sir Christopher Bland) Of course we did. I did not
say we had no plans I said that the document we submitted in response
to the Davies Report contained considerably greater detail and
our plans will go on becoming both more detailed and will change.
Broadcasting is an activity that changes and develops. They should
not be seen as set in stone, but they were a good first estimate.
We have now produced detailed back-up and there is a considerable
body of work lying below the tip of that iceberg which is now
on the record.
Mr Faber
311. It would be nice to know that some of that
money might be spent on sport. I am sorry to go on about it. It
is not mentioned at all.
(Sir Christopher Bland) We share your passion for
sport, but it would not be right for the three senior people in
the BBC to let that passion dominate at the expense of those licence
fee payers. The people who like sport like it and the people who
hate it hate it with a passion. Our budget for sport is going
up by seven per cent in real terms per annum. I hope you will
be pleased to hear that since we last met we have retained Wimbledon,
we have regained the European Rugby Cup and although Des Lynam's
departure was regretted, I think it is absolutely remarkable how
well and how seamlessly it looks as though Gary Lineker has always
been there. Things move on and in my mind he looks terrific and
does an absolutely brilliant job. The BBC is a strong organisation.
It has still got a good sports department. It is building up athletics.
It does things in sport that the ITV companies will not touch
and it is worth pointing out that the ITV coverage of the Rugby
World Cup was absolutely slated. Schadenfreude is a deplorable
emotion, but I thought I should point this out to you.
(Sir John Birt) The journey for the BBC away from
having a virtual monopoly in sport through a world which exploded
before our eyes with the introduction of subscription and services
and a great wall of money coming in to buying sports rights has
not been, as Greg says, an easy one. It has been particularly
painful for people in the BBC and they themselves often say to
us and in public that they feel they have been under-supported.
The reality is that our spend on sport has increased at a more
rapid rate than in any other programme area. It doubled in five
years and in that same period it has grown at a compound growth
rate of RPI+13 per cent a year. We are now spending over £150
million a year on sport. We have put lots of new resource into
it, but despite that we find even just the scale of the competition
is so enormous. Our estimate is that industry spend on sport over
the last three years has increased by 50 per cent and is growing
at a very very rapid rate indeed. You could be forgiven for thinking
that at the end of all of this fewer people were watching sport
on the BBC than on other organisations. That is not true. There
is twice as much viewing of sport on the BBC as there is on ITV.
People simply forget the scale of sport that we do have and the
success that that becomes with our viewers.
312. The very first part of your answer does
take us back slightly to the discussion we were having earlier
about the potential penalties on the early adopters of premium
channels, people like yourself and myself who have gone out, bought
the premium channels driven by sport and driven by films are who
are, in effect, going to be penalised by the digital supplement.
(Sir John Birt) We have already said that we are all
sports enthusiasts. I was one of the early subscribers to Sky.
I get my bill like anybody else. I got my bill last month. What
do I see on it? I see that I am paying £30 a month for Sky.
It is good value for money as far as I am concerned. I pay £5.99
a month for the excellent Film 4 which I very often watch. I ask
you to think about the level of DLF that Gavyn Davies and his
Committee proposed of £1.99 a month. Set against the scale
of that investment I honestly do not believe that at this sort
of level we are talking about anything that is a significant disincentive.
You have to set against that that a well-funded BBC will produce
a very rich array of what Gavyn described as exciting and compelling
new services. So the net impact of a well-funded BBC will not
be to deter digital take-up but I have no doubt at all will incentivise
it.
Chairman
313. You choose to pay the two former sums you
mentioned. People will be compelled to pay the digital supplement.
(Sir John Birt) Chairman, that has been true since
1922 and that is the thing that is uncomfortable about the licence
fee and it always has been uncomfortable. For 75 years this country
has made a decision that it wants a well-funded public service
broadcaster and I would like to think it has been rewarded (and
this is a view the world over) with the most successful cultural
institution of its kind anywhere in the world. The issue when
you cut through all of this is about what sort of United Kingdom
do we want in ten years' time. The BBC has had a massive impact
on the United Kingdom in the 20th Century. What sort of impact
do we want it to have in the 21st Century? If we want to remain
the nation's leading cultural patron, if we want a country which
has a more civilised national debate and a more informed debate,
if we want an organisation that is dedicated to science, that
is continuing to make programmes like Dinosaurs and Human
Body and Life of Birds and Earth Story (that
is just four of the outstanding science programmes that we have
made just in the last 12 months), if Britain wants to continue
to have a BBC playing that role and doing it in different ways
then I hope the tradition, however uncomfortable, of saying, "Yes,
we would like every home that has a television set and a digital
television set to pay a licence fee" does have a very big
impact on the life of every single individual in this country.
This is a decision of absolutely historic importance. I have worked
in broadcasting for 35 years. There has never been a decision
as important as this. I know the Committee takes a really keen
interest in these affairs. I hope the Committee will see it is
a historic decision.
Mr Keen: I feel guilty coming in after
what could have been a wonderful finishing speech.
Chairman: And he did not even have time
to mention Vanessa Feltz.
Mr Keen
314. My first memory of the BBC is Larry
the Lamb and Mr Mayor and then I find out that Mr Mayor is
the main item on the news. I remember the cinemas used to show
continuous films and so I cannot help feeling this is where it
all began for me. Is there nothing else left in life? What we
are really trying to decide is how the BBC and its special relationship
fits into a more and more commercial world. There are not many
unprivatised bodies left. Would you agree with my theory that
if something happened and the BBC was going to be sold off tomorrow
and I was Bill Gates and could buy it and if I could stick the
licence fee up from £2 a week to £4 a week then 99 per
cent of the people who pay the £2 now forcibly would pay
the £4 voluntarily? Is it right to think that it is cheap?
I know people are using the word poll tax as a pejorative term,
but people do get good value. Is there anybody who loses out by
having to pay that £2 a week?
(Sir Christopher Bland) Our recent research does show
a remarkably high degree of satisfaction about the licence fee
as a means of funding the BBC. We have been surprised at the extent
to which there is general acceptability of this. It has built
up over 75 years and evasion, which in a sense reflects the same
thing as its historic low level, I think there is an awareness
of and paradoxically—I am not sure it was Rupert Murdoch's
intention—the high cost of Sky, over £340, although,
as the Chairman pointed out, this is voluntary, does make the
package of services the BBC is offering look incredible value
for money. For £101 you get two national television stations,
five national radio stations, over 40 regional and local radio
stations and a range of new services on digital. It looks good
value for money. But what is the price elasticity? Could you only
lose ten per cent if you doubled it? We would suspect not. If
the BBC became a wholly subscription service what you would have
is the ability to put up your fees but a marked reduction in the
total amount of take-up required. We cannot demonstrate this,
but we would expect that if you doubled it you would probably
end up with the same income from half the number of subscribers
and that would remove at a stroke one of the key values of the
BBC to this nation, which is its uniformity and I think that is
absolutely at the core of the public service broadcasting role.
The BBC as a subscription service cum pay-per-view would thrive
and prosper but it would not be the BBC.
315. I can understand all of you being reluctant
to say what you would give up if you had to give something up.
Can we look at the areas where you could raise money. You have
talked a lot about education and we all value what is produced
by the BBC in this regard. What children need to get through this
education system is different from the education that I get from
BBC programmes. Could we divide education? Maybe education should
be charged for. The education that I get from the BBC is from
watching programmes about astronomy and mathematics, which I do
not understand 100 per cent but I get great value from. Could
the BBC charge for those services?
(Mr Dyke) I think what we all feel on education is
clearly there is an issue in this society still about the high
percentage of people who do not gain much still from our education
system and educational take-up. I believe that one of the roles
of the BBC in this new world is actually to try to produce education
material that is easily accessible to them and help drive people
to it. The technology is now available and in my opinion as Director
General that is one of the priorities. If you start charging for
that you immediately undermine part of the aim, which is to target
people who are not gaining a great deal from our present educational
system.
316. I was trying to draw a distinction between
the education services which are directed at the National Curriculum
and those which I take advantage of.
(Mr Dyke) I think we see the two combined so that
you will be watching general programming that can actually at
a click take you into more information and at a further click
take you into the curriculum information. That is one of the interesting
things about the future.
317. One of the problems that Government has
is what level of funding there should be because Government takes
the blame for it rather than the BBC. Would that not be a way
of the Government being able to help the BBC, by paying for those
educational services which are directed at the BBC?
(Mr Dyke) If they wish to pay it by another means,
again that has to be a matter for Government rather than us. Clearly
the material we will produce for the curriculum we will try to
sell overseas because if the licence payer is funding it and people
want to use it overseas then clearly we should try to sell that.
In this country our aim is to try to provide this free to the
end user.
(Sir Christopher Bland) I think we would expect the
commercial market, which does exist for educational products and
services, where there is a genuine and a substantial pay market
for those services to be met by commercial organisations and we
do not wish unnecessarily or unfairly to compete. I think what
we are aiming at is children in the National Curriculum and, as
Greg said earlier, the great number of people who have been let
down by the educational service thus far and who at the age of
30 and 40 are non-numerate, illiterate and unemployable.
Mr Maxton
318. And that is the graduates!
(Sir Christopher Bland) It is reaching those audiences
that we see as a genuine public service obligation.
Mr Keen
319. Some people say that one way of raising
money would be to privatise BBC Resources. What is your response
to that suggestion?
(Sir Christopher Bland) It would raise a bit of money.
I must point out to you that Resources is a loss-making business,
as you can see from its separately reported accounts. It is operating
in a very tough market which is dogged by over-capacity, particularly
in studios but also in Outside Broadcasts and other areas. It
will be a tough haul to get resources to break even. There is
not a great hidden pot of money in there that could easily be
realised certainly at present. Equally important, we think that
resources provides a critical craft base underpinning both for
the BBC in its present form and for the industry as a whole. The
BBC does most of the training for most of the BBC television and
radio industry and resources is part of that.
(Mr Dyke) In my previous incarnation I remember going
through exactly that discussion in Australia, i.e. buying a big
resources base from a broadcaster. The only basis on which you
are prepared to buy it is at a guarantee of output and at a guaranteed
price from that broadcaster. If we could give that guarantee of
output a guaranteed price we might as well keep it ourselves unless
someone is going to give you a significantly higher figure for
it than it is worth, but why would they do that? All you are doing
is bringing your cash forward. You are paying for it yourself
in the end.
Chairman
320. You have been very generous in making yourselves
available for such a prolonged session. We are most grateful to
you and we look forward to seeing you again. Thank you.
(Sir Christopher Bland) Chairman, can I thank you
and ask all of you to watch Wives and Daughters this weekend,
the second instalment of the The Renaissance and to listen
to the Aeneid on Radio 4. If you do those three things
you will understand what the BBC is for.
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