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Mr. Ian Taylor: The issue goes even wider than that. The BBC's problem is that it operates in an increasingly multi-channel digital age with different delivery platforms. It may therefore decide that it wishes to reinforce its position not only by using the internet, cable, satellite, and other delivery mechanisms, but by taking an interest in the production of programmes that compete with the commercial sector. If the BBC is to be able to make effective investment plans, it needs to be part of an organisation that has an overview of all those matters—that is, Ofcom.

Mr. Yeo: My hon. Friend speaks on these matters with great expertise and authority. I entirely agree that we are moving into a world that is wholly different from that of even a decade ago. Many of the opportunities presented to the BBC and other broadcasters were not conceived of at that time. Our comments are not intended as a criticism of people who in the past did not require such a regulatory arrangement. Today, the Government have an opportunity

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to acknowledge the extent of the changes that have occurred by accepting what has become a widespread view.

Brian White: Having watched the launch of BBC4 the other night, I agree with the sentiments behind the hon. Gentleman's proposal. However, does he appreciate the danger that, if the amendment were to be accepted, the establishment and initial months of Ofcom would be dominated by discussions about the BBC? The most important matters with which Ofcom will deal relate to communications, but they would be lost in a controversial political debate about the BBC.

Mr. Yeo: The best way to ensure that the debate about the establishment of Ofcom is not dominated by arguments about the BBC would be to accept the amendment. That would largely put the matter to rest.

Mr. Bryant: The hon. Member for Esher and Walton (Mr. Taylor) seemed to suggest—and the hon. Gentleman seemed to agree—that Ofcom should decide on the future investment pattern of the BBC. That would be a dangerous route to take.

Mr. Yeo: I am sure that that is not what my hon. Friend was suggesting, and it is certainly not what I was agreeing with. He was suggesting that the investment decisions that are made by the BBC and bodies regulated by Ofcom will be affected by a whole range of completely new factors and that it would be all the more anomalous if the BBC alone, among the bodies making those decisions, was not subject to a regulatory regime that could take account of all the new considerations.

I want to refer briefly to the views of the right hon. Member for Manchester, Gorton (Mr. Kaufman), although I know that he will speak later. His opinions on the subject, and those of members of the Select Committee on Culture, Media and Sport, which he chairs, have been consistent for some time. This is not an issue that has just loomed over the horizon.

Throughout the passage of the Bill, and in the debates that preceded it, Ministers and others who tried to defend their insistence on a special exemption for the BBC, have increasingly struggled to make a coherent case. Recently, even since the conclusion of proceedings in Standing Committee, the BBC has contributed to the discussions with the publication of the document, "BBC Governance in the Ofcom Age". I welcome that document, which is quite revealing in more ways than one. It frankly acknowledges some of the shortcomings inherent in the present situation. That is a useful step forward, although it begs the question why some of the issues were not dealt with before. [Interruption.] The hon. Member for Rhondda (Mr. Bryant) says from a sedentary position that we did not change the law when we were in power. As I said, we are in a rapidly-changing environment. Even in the five years since Labour took office, the background to the whole media industry has changed fundamentally.

I am not criticising people who have not taken such decisions before. I am saying that, in the light of our present knowledge, and given that after the passage of the communications Bill next Session we may not have

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another chance to legislate on these issues for many years, we must ensure that we react to the situation as it is today. Trying to make cheap points about what the Conservatives did or did not do is completely out of keeping with the spirit of this debate.

Mr. Ian Taylor: As the Minister responsible for science and technology in the previous Conservative Government, I can assure my hon. Friend and the hon. Member for Rhondda that at that time the BBC was put on notice that in the multi-channel digital environment that was already becoming inevitable, the definition of public service and the role of the BBC would need to change, perhaps well before the next review of the BBC's charter. The situation has arisen not as a result of failures by the previous Conservative Government, but because of the rate of progress since 1996 in the whole broadcast and internet technology sector.

Mr. Yeo: I am grateful to my hon. Friend for that information. In a spirit of consensus with the hon. Member for Rhondda, I should say that I am usually the last person to defend the record of the previous Conservative Government.

Mr. Kaufman: Not quite the last.

Mr. Yeo: If the right hon. Gentleman is offering to take over that role, I am sure that my Front-Bench colleagues will be glad of his assistance.

Page 3 of the recently published BBC document reveals that a unit is to be established to ensure that the Government

"are furnished with performance information, gain a proper understanding of audience behaviour and needs, and can access relevant expertise".

That is interesting. If the BBC has lacked those things for all these years, one wonders how it has managed to do its job.

The document also sets out why the BBC believes that oversight by Ofcom, in the manner of all other broadcasting organisations, would be wrong. I am afraid that some of the arguments advanced are very unconvincing. It is claimed on page 6:

"Taking back-stop powers over the public service remit of the BBC would make Ofcom's effective early operation much more difficult."

Because something is difficult does not mean that it is wrong. The remainder of Ofcom's very considerable tasks will scarcely be a doddle. I do not see how it should not be able to accept the difficulty—if, indeed, it is one—of dealing with the BBC at the same time. It would be much easier to deal with it from the outset than to have it imposed at a later date, spatchcocked in when Ofcom already has operating procedures in place.

Equally odd is the argument advanced in favour of continued internal BBC regulation. The document states:

"Unlike an external regulator, the Governors can take direct action if they believe that the BBC is not serving the public interest. They can change the management, and they can alter the BBC's budget allocation. In other words, they can ensure that the BBC must adhere to their judgement of what is in the public interest"

Nothing proposed in the amendment would prevent the governors from doing that in future. In my view, they would and should continue to have exactly those powers

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and to exercise them on a regular basis. Sadly, the reforms proposed in the document do not add up to a great deal. The first of the four aims of the reform plan, as it is described, is said to be

"To ensure that the distinction between the Governors' role and the management's is clearly understood inside and outside the organisation."

That is a worthy enough aim, which, after more than 70 years, it might have been hoped would have been addressed already. However, it is certainly not an aim that reduces in any way the case for bringing the BBC fully under Ofcom; nor, indeed, do the other three aims of the so-called reform plan.

The document sets much store on the improved support that the governors will receive in future, enabling them to discharge their duties in what they describe as "the Ofcom age". This restructuring may or may not help the governors; that is not for me to judge. However, it does not answer this question; why should not the BBC now be regulated on the same basis as the rest of the industry?

I will not stray from the subject matter of the amendment, but before leaving the document—which I commend to hon. Members as a worthwhile study, and something that will be useful when we discuss the future of the BBC in the context of the debate about charter renewal in the future—I should point out that it refers to the licence fee payers as shareholders. I was interested to pick up on that. I had not noticed that before in a BBC publication, although I have not studied them for as many years as some of my colleagues. I do not know whether that is a pointer to a secret agenda existing somewhere within Broadcasting House.

On page 2, the chairman's foreword claims:

"But nor do we have any desire simply to replicate services which could be provided equally well by the private sector."

I wonder whether he cleared that with the director general before he included it in his foreword. Certainly that is something else that I look forward to returning to when we scrutinise some of the new proposals and the existing activities of the BBC.

I happened to be in the shadow Cabinet meeting when the right hon. Member for Manchester, Gorton (Mr. Kaufman) raised a point of order at the start of our proceedings, but I agree with what I believe to be the thrust of his point. I was surprised today to receive a letter from a BBC employee, saying that this House has spent too much time considering this issue and that Parliament should now debate the subject in a more constructive way. The person concerned is fully entitled to his view, but whether it is for the BBC to use licence fee payers' money to employ a member of its staff to act as a lobbyist who then writes to Members of Parliament to say that we are spending too much time debating a particular issue—suggesting that it has been discussed in a way that is not constructive—seems highly questionable.

The BBC is a powerful organisation with a distinguished history. I hope that it has a successful future. In a multi-channel world and an increasingly global industry, its role in the future will be very different from in the past. When it started as a small organisation operating a monopoly radio station—a pioneering organisation—the role of the governors was totally different from what it is today.

Today, the BBC enjoys immense privileges. It is funded, uniquely in our national life, by a more than inflation-proofed, guaranteed compulsory levy on

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consumers; a levy that is highly regressive in its impact on households and which leaves consumers with no alternative but to pay. Against this background, to leave the BBC as a self-regulating organisation in an industry where no other organisation enjoys that status is wrong.

The time for the BBC governors to be judge and jury in their own affairs has ended. Those governors will still have an important function in the future, but it will be a different one. It is clear to me that most of the media world believes that the BBC should be fully within Ofcom's remit. It is clear that many hon. Members on both sides of the House believe that as well—it is clear, I suspect, even to many within the BBC. Eventually—sooner rather than later, I hope—it will be clear to Ministers. They can save themselves and Parliament a great deal of time if they accept the amendment, which I commend to the House.

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