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The hon. Member for Milton Keynes, North-East says that to include the BBC would result in continuing arguments within Ofcom about BBC issues, but that is not the case. The big argument is whether Ofcom would control the BBC in the sense of the third tier having access to the BBC. Once the BBC came under the auspices of Ofcom, there would be no further argument because, as several hon. Members have said, on the whole the BBC does a pretty good job. At times, of course, the BBC has shown itself to be a bad governor of its own operations, and the right hon. Member for Manchester, Gorton gave two recent and powerful examples of that. But the BBC has a unique role in British broadcasting, and indeed in world broadcasting, and bringing it under the auspices of Ofcom would strengthen it, not weaken it.

This is the very time at which we should be debating that matter. The hon. Member for North Devon is utterly wrong when he says that this is not the time and place to be discussing the BBC, but he is certainly right when he

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says that we will be discussing it when a communications Bill comes before the House in a year or so, if indeed it appears.

Why should the BBC be included? Recently, the Scottish Media Group made submissions to the Department for Culture, Media and Sport and to the Select Committee about the method of measuring the degree of cross-media ownership. How does one compare the radio listener with the television viewer? Does one equal the other? The formula that the Scottish Media Group came up with is simple—it uses overall revenue. Of course, the BBC's revenue comes from the licence fee, and not from the sale of advertising time. It receives a small degree of revenue from the world sales of programming, but only to the tune of a net profit of £50 million. The point is that its total revenue is about £2.5 billion; it is a major player. To say that it should be ignored is an insult not only to the BBC but to its listeners and viewers.

The right hon. Member for Manchester, Gorton began to paint a picture of how the royal charter came about. Let me briefly add to that and remind colleagues that the BBC started as the British Broadcasting Company in 1922. It operated five separate radio stations around the United Kingdom. One was just down the road at Savoy Hill 2LO in London, and there were others in Bournemouth, Leeds and Birmingham. At that time, the BBC was the only broadcaster, and the idea behind the royal charter was to create a unique monopoly position for it. The royal charter was wholly appropriate at that time. It was advocated by the then managing director of the company, Sir John Reith, who later became Lord Reith.

What was appropriate in 1926 is not appropriate now. Indeed, as my hon. Friend the Member for South Suffolk said, what might have been appropriate five or six years ago is not appropriate now because of the changes in technology, in delivery and in the many different platforms by which television and radio can be delivered to viewers and listeners.

Mr. Kaufman: The hon. Gentleman was present at a sitting of the Select Committee the other day when I made a point that I think it may be useful to place on record in the Chamber. The BBC is the only organisation in this country, in either the private or the public sector, which is organised and governed in precisely the same way as it was 75 years ago. No other public sector organisation—not the NHS, which is not as old as the BBC, nor the pension system, nor the income support system—is administered as it was only a few years ago. The private sector changes all the time. The BBC says, "Stick to the way in which we were organised and financed on 1 January 1927."

Michael Fabricant: The right hon. Gentleman is correct. It is not only a question of the length of time during which the structure has remained static; what is even more extraordinary is the background of the degree to which the broadcasting environment has changed. Even if one compares the BBC with the NHS, established in 1948, one finds that the needs and structure of the NHS have changed less than the broadcasting environment because of all the technological changes in broadcasting. The idea that what was suitable when the BBC had a monopoly in 1927 is suitable now is risible and has to be addressed. As the right hon. Gentleman said, if it is not

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dealt with now, it will have to be tackled by Parliament some time, because in June 2006, when the BBC charter has to be renewed, surely that will not be done yet again by a compliant Government.

That would be wrong, primarily because of perception. It is utterly wrong that the BBC should be perceived to be its own judge and jury in so many different issues. The chairman of the BBC clearly recognises that point. By publishing the document, "BBC Governance in the Ofcom Age", he seeks to give greater independence and more muscle to the board of governors.

The right hon. Member for Manchester, Gorton rightly points out that the whole history of the BBC—and to anyone who argues with this point I commend the excellent books on the subject by Lord Asa Briggs—shows that the board of governors tends to be compliant to the director general and the board of management. Perhaps the changes proposed by the chairman will help somewhat, but I do not think that they will be a complete solution. They will certainly not give the appearance of the BBC being accountable to an outside body, and that is the whole point.

Two areas are addressed in "BBC Governance in the Ofcom Age". One is programme content and the other is fair trading. There have been numerous claims in the past few years that the BBC has used its unique position, funded by the licence payer, to trade unfairly against commercial organisations that have to operate in the real world, where their revenue is generated by sales. Those claims may or may not be true, but people who make them continue to believe that the BBC is not addressing the problem. My God, if I were chairman of the BBC, I would welcome Ofcom's independent scrutiny and judgment on that issue. But what can the chairman do? What can the director general do? All he can say is, "We have had an internal inquiry, and it found us innocent." Well, innocent they may be, but people do not believe it because they do not believe any organisation that is its own judge and jury.

Nick Harvey: The hon. Gentleman comments on how those commercial activities might be perceived to work directly against the interests of other commercial organisations, but surely it is anticipated that Ofcom will be given precisely the relevant powers in the lower tiers mentioned in the White Paper.

Michael Fabricant: No, the hon. Gentleman is wrong. It is for that very reason that the issue is now being addressed by the BBC. The BBC perceives that fair trading does not come under tiers 1 and 2, which is precisely why it is making changes to the board of governors to address that issue. Perhaps the hon. Gentleman has not seen the letter by Gavyn Davies, which appears to have been circulated quite widely—

Nick Harvey indicated dissent.

Michael Fabricant: I see that he has not, perhaps because his is a minority party. After the debate, I shall photocopy the letter and put it on the Board for him, so that he can see that fair trading is an issue of which the BBC is conscious, because it has been criticised in the past on that ground. I think that the BBC would welcome coming into the ambit of Ofcom—and it ought to be so.

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Given that BBC revenues total £2.5 billion and it represents a major proportion of British broadcasting, it would be anathema were it not to come within Ofcom's ambit.

The BBC gives many reasons why it should not become a part of Ofcom. One such reason is that it occupies a unique position—but no one here today has argued that the BBC should not continue to occupy a unique position. I half expected the right hon. Member for Manchester, Gorton to argue about the way in which the BBC is funded, but he chose not to do so today. I shall not do so either, because for all sorts of economic reasons I do not believe that the BBC can be privatised, nor do I believe that British broadcasting would be assisted if it were.

No one is arguing that the BBC's unique position should be weakened in any way. In fact, as I said, I believe that the BBC's position would be strengthened by its becoming a part of Ofcom. The BBC says that its position is unique because it is a public service broadcaster—but as the right hon. Gentleman rightly says, so are Channel 4 and S4C, and many would say that many aspects of ITV broadcasting constitute public service broadcasting, yet they willingly come within Ofcom's ambit.

Time has moved on since 1 January 1927. Even Parliament in its procedures is changing; perhaps the next few months hold radical changes to the way in which we operate. It seems to me that only one organisation, uniquely in the United Kingdom, has not changed: the BBC. The BBC is unique not because of the way in which it is funded, nor because of the fact that it is a public service broadcaster, but because since 1 January 1927 it has succeeded in not changing its structure, despite the fact that it exists in a dynamic and changing world.

Mr. John Grogan (Selby): My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said that there were two objective people in the Chamber tonight: himself and the hon. Member for North Devon (Nick Harvey). I shall take up and reinforce three points made by the latter.

First, the hon. Gentleman said, and I agree, that this is not the last opportunity Parliament will have to determine the relationship between the BBC and Ofcom. My right hon. Friend the Member for Manchester, Gorton will see to it that in years to come we spend many happy hours discussing such matters. Not only is there the prospect of the communications Bill, but there is to be a pre-legislative scrutiny Committee on that Bill and further opportunities during the run-up to charter renewal.

The hon. Member for North Devon is right to say that the character of the Ofcom regulator and its relationships with not only the BBC but other public service broadcasters cannot be determined until the main Bill is produced. It is not clear what powers Ofcom will have in tier 3 regulation—the backstop powers he mentioned—in relation to ITV, never mind the BBC.

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