Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 1-19)




  1. Ladies and gentlemen, I would like to welcome you here today at the first session of this inquiry. I would like to wish you a happy new year and I would like to welcome Mr Davies on his first appearance before this Committee as Chairman of the BBC. I understand that Mr Davies would like to make a short opening statement and of course we are very happy to hear that.

  (Mr Davies) Chairman, thank you very much. I am joined today by the Director-General Greg Dyke, the Director of Radio, Jenny Abramsky, and the Director of Public Policy, Caroline Thomson. Chairman, I hope that the relationship between this Committee and the BBC this Parliament will be friendly and fruitful. I am aware there have sometimes been difficulties between our two organisations in the past but I want to assure you and the Committee that I do regard our appearances before you as a core part of the BBC's accountability to Parliament and that is very important for us. I think, Chairman, you would be quite surprised if I said I agreed with every single word of your speech on the BBC in the House last Monday.

  2. But I would have been gratified!
  (Mr Davies) There were one or two issues of detail, such as the privatisation of the BBC, the abolition of the Charter and the abolition of the Governors, with which I think there are nuances of difference between us. But on one issue I agree with you completely and that is that no-one at the BBC should display—and I quote you—"the kind of arrogance" to which you say BBC chairmen are all too prone. I hope the BBC will state its case clearly and forcibly before this Committee but without a trace of arrogance. I also largely agree with you—and I quote you again—in saying that "the BBC should be regulated in the same way as every other broadcaster in this country". You may be surprised to hear that. In fact, if anything, it should be regulated rather more robustly, given its unique access to the licence fee. But I do think you underestimate the degree to which the Government's White Paper would already deliver a level playing field between the BBC and other organisations. In the case of economic regulation, basic standards and quotas (Tiers 1 and 2) the BBC will be treated just like any other broadcaster and will be fully within OFCOM's remit. We think that is only right and proper and we welcome this change. On the remaining area, which is the delivery of the public service objectives of different broadcasters, we also think that the differences between the White Paper treatment of private broadcasters and the BBC are much less than is often claimed in the debate. Both the BBC and ITV and other private sector broadcasters will in this area be largely self-regulated. The backstop powers for ITV will go to OFCOM and the backstop powers with regard to the BBC will go to the Secretary of State. But in our view that is a correct, but rather small, difference where the backstop powers lie. We believe the Secretary of State and Parliament, with this Committee no doubt playing a central role, are very well suited to make judgments about the public service remit of the BBC. OFCOM, which is a body designed mainly to deliver light-touch regulation in the private sector might, we think, struggle to discharge this particular function adequately. But of course we look forward to working alongside OFCOM and indeed under its jurisdiction in many other respects. Thank you.

  Chairman: Thank you very much indeed, Mr Davies. It is good of you to set out that stall for us. I wonder to what extent the Secretary of State is aware of your views taking into account her answer to the questions yesterday. But that is a rather provocative remark.

Mr Bryant

  3. Thank you, Chairman. Can I just preface my remarks by saying a sort of thank you to everybody whom you employ on behalf of the licence payers in my constituency, who I think have for a long time had a love affair with the BBC and I think that will continue. BBC2-W in Wales is an enormous success—a bit of a tendency for having rather second-rate comedy programmes on a Friday night but otherwise a success. And a specific thank you to Jenny Abramsky for Deadringers, which I think is the funniest thing I have heard for many years. Can I ask a question of Mr Dyke. What on earth is the point of the Governors? They always seem to be supernumerary members of the board of management. If you cannot get a member of the board of management to an event, you get a member of the board of governors. Today we have all of you together; there seems to be no distinction between board of management and board of governors. Why bother having them at all?
  (Mr Dyke) I am not sure that is a question for me. I am not sure that it is not actually a question for the Chairman of the Governors. There is clearly a distinction between what the Governors do and what the management do. It is pretty obvious: the management of the BBC are professionals in a particular field and the Governors are there to represent the public interest. The idea that somehow they are the same is just not the case. Quite often, if we wish to make significant moves at the BBC, we have to persuade the Governors of that and they do not always agree. But there is a distinction, as in any other organisation in which I have ever been involved, between the board and the management, and in this case that board is also the regulator in certain areas. I find it quite difficult to answer the question because it seems to me it is pretty obvious.

  4. Is that not why the BBC ended up seeming to be an organisation that regulates itself because the secretary to the board of management is secretary to the board of governors, financed/resourced by exactly the same organisation. There is no sense of independence of the board of governors, is there?
  (Mr Dyke) I will ask Gavyn to join in because, as I say, I am a paid employee of the BBC, I am not one of the Governors and therefore that is for the Governors. Perhaps the BBC is in the end the responsibility of the Governors. The secretary being secretary of both is an administrative function: it acts to make sure that the right papers go to the right places at the right times and the rest of it. But in terms of the running of the organisation there is a very real distinction. The organisation is run by the Director General and his management team. We are answerable in what we do to the board of governors.


  5. Could I intervene—and obviously I will return the question—following up. Mr Davies, I was about to address my remark to you. It has been decided that you are eminently well qualified to be the Chairman of the BBC. You went through the Nolan procedure. As I understand it you were the unanimous choice of the interviewing committee, therefore, whatever controversy may have been aroused in one way or another, nobody can deny that you are eminently well qualified to be the Chairman of the BBC. On the other hand, I would be interested, following up on what Mr Bryant has said, to ask if you can explain how people who are appointed as Governors are qualified to be in charge of this country's most important communications organisation and one of the world's most important communications organisations in a very, very competitive environment.
  (Mr Davies) Chairman, the Governors are appointed nowadays in exactly the same way as I was; in other words there is a Nolan panel and it is freely advertised and locally advertised and anybody can apply, and the Nolan panel makes a recommendation to the Secretary of State and she makes the final decision. So I think the selection of governors actually has improved enormously as a process in the last several years. I know, Chairman, that you have said in the past that the Governors are "essentially a bunch of amateurs"—and that is another quote from a recent speech—but I think there is some strength actually in having people who are not from the industry and are not experts in the industry, performing the role of Governors. The experts in broadcasting are on the executive board of the BBC and they have a responsibility to operate the services. Actually on a day-to-day basis they run the BBC; the Governors on a day-to-basis do not and should not. What the Governors do is represent the public interest and I think it is, if anything, a strength that they come from a wide variety of backgrounds and are not solely taken from the broadcasting industry.

  6. I do not see what difference you make by your existence. The Dearing Report in 1947 or 1948 recommended that the board of governors should be separated, should be separately financed and resourced and should have a separate secretariat, and it seems to me that would give you a greater freedom from the managerial responsibility of the BBC to exercise that public function.
  (Mr Davies) We have actually, Mr Bryant—you may be pleased to hear this—in the last two or three months looked quite closely at the internal functioning of the board of governors and the executive board, including the role of the secretary's office. We are not yet in a position to announce changes to our customer practice, however we are eager to delineate more clearly what it is that the Governors do and the roles that they fulfil and what it is that the Executive does and the role that the Executive fulfil. I hope that within a month or so we will have come to conclusions, as the entire BBC will have come to conclusions, that will have been ratified by the Governors and we can make an announcement. We are certainly thinking Mr Bryant about exactly the subjects that you raise.

  7. I see in your submission that you say, "BBC1 remains the television flagship channel, delivering the quintessential public service aim—making the good popular and the popular good"—which is an old—I am not sure whether it is "Reithean" but somewhere round about there—phrase—
  (Mr Dyke) Later, I think.

  8.  —which I indeed wrote into many speeches that were used by previous chairmen of the BBC. Is that what you understand to be public service broadcasting: making the good popular and the popular good?
  (Mr Davies) I think it is one element of public service broadcasting, but at the beginning of the memorandum there are probably around two pages that define public service broadcasting in the best way that we can. Those two pages have been built on previous evidence to this Committee which Christopher Bland gave I think last year. We do not, Mr Bryant, have a new definition of public service broadcasting to bring to you today. This is something that has been literally crawled over . . . well, not literally. It has been crawled over by an enormous number of people and I think the definition at the beginning of the memorandum is as good as we can manage.

  9. My own instinct is that whilst politicians tend to talk about public service broadcasting meaning Shakespeare, Schiller and Shostakovich and work their way down from that, most of my constituents when they talk about what they get out of the licence fee think about EastEnders and programmes with vets in them and work their way up. Where would you place yourself in that spectrum?
  (Mr Davies) I think the list of things that we are looking for from programmes, which includes concepts such as universal access; real quality; distinctiveness; range and diversity; doing things the market is not alone doing; encouraging our national culture and creativity; providing for independence and impartiality; these things are qualities that can apply to programmes of many different types and of many different genres. In my mind, they do not only apply to Shakespeare and Schiller but they can also apply to EastEnders. So I would like to see this series of objectives fulfilled in most of the broadcasting that we do. Something that I think people tend to forget is that every household in this country pays £109 presently for the BBC. We do have to deliver value for money to those households as well as hopefully widening their horizons and opening opportunities to them which they otherwise would not get. I am resistant to picking either end of your spectrum. I think at both ends of the spectrum we should be delivering this kind of quality.

  10. Do you think the Secretary of State or OFCOM should decide on your propositions for new services in the future?
  (Mr Davies) We are happy with the current White Paper proposal which is that the Secretary of State should decide—I think, Caroline, after taking advice from OFCOM.
  (Ms Thomson) Yes, that is right.
  (Mr Davies) That seems to us a good, sensible way forward.

  11. Would you be unhappy if it changed?
  (Mr Davies) Well, I think we have got the good, sensible way forward.


  12. Just on that last exchange, before I call Mr Fabricant: a Labour Member of Parliament, a new Labour Member of Parliament, said to me last night that so far as he could work out the only arts programme on BBC1 in the past year was Rolf Harris. The fear that I have got is that not only have you been shifting serious programming on from BBC1 to BBC2, but you are now shifting serious programming over from BBC2 to BBC Knowledge. While of course you have a duty to carry out the remit referred to so eloquently by Mr Bryant, it is very important indeed—and I hope you will accept this—that you offer the highest quality programmes on your main stream channels as well as your niche digital channels.
  (Mr Davies) Chairman, I absolutely agree. Can I ask the Director-General to comment on this.
  (Mr Dyke) I agree, I do not think we should be shifting from BBC1 and BBC2 onto Knowledge. Actually one of the conditions of BBC4 is that we do not do that. That is one of the conditions laid down by the Secretary of State. We have recently gone through our whole art policy and taken a new arts policy to the Government and said, "This is what we are trying to achieve." I do not think any of us would sit here and say we have been through one of the best times for arts; however I would say that if you look at the record in the last three or four years on science and on history, it is outstanding. Creative departments have good times and poor times. They always do. What we have in our policy is a commitment to a minimum of 230 hours of arts programming on BBC1 and BBC2, of which a minimum is 23 hours on BBC1 and 192 on BBC2. There are two points you are referring to, it seems to me. One is Rolf on Art. I do not think we should be at all sniffy about that. We are very proud of it. Six million people sat and watched a proper exposition and discussion about serious painters. It is probably the highest rated arts programme of all times. Surely that is one of our roles. One of our roles is not to provide arts only for those who are interested, for the artistic elite; it is to provide arts programming which tries to bring people to the arts and what it is about. Secondly, we did move Omnibus—although we still do Omnibus Special on BBC1 (we did one just before Christmas on J K Rowling which I think got 5.5 million viewers)—from well out, playing at 11-11.15 at night on BBC1, to playing at nine o'clock on BBC2 and actually the audiences have gone up. In fact the audiences for Omnibus on BBC2 are 60 per cent higher than the South Bank Show on ITV. On a point Miss Kirkbride was making in something I read this week, the days when you could hammock programming have gone, they have disappeared. You cannot force people to watch programmes they do not want to watch any more. What is certainly clear is that Omnibus on BBC2 is more successful than Omnibus was on BBC1 in the slot it was played. But I think you will see over the next 18 months a commitment to arts that is perhaps more so than you have seen in the last couple of years. I think the opportunities have come with BBC4—and, again, remember 50 per cent of the population will be able to receive BBC4 as of now, when it starts, and that percentage presumably will increase as digital grows. The point of BBC4 is a schedule that actually is unashamedly aimed at a particular audience, therefore we will see most of The Proms on television for the first time ever. The advantage is that we have five orchestras, we record a lot of material for regions that in future will go both into the regions and BBC4. The opportunity is to make more things available. We are also—and Jenny will probably talk about it in a bit more depth because she has seen it in operation over the weekend—at the Barbican trying to do clever and innovative things with the coverage of music.
  (Ms Abramsky) We launched what was a joint venture with the Barbican on Sunday as part of the John Adams Festival Weekend at the Barbican, where we have put in new digitally operated and remote controlled cameras that will enable us to broadcast live from the Barbican Concert Hall, the Barbican Theatre, the Barbican Cinema, the Barbican foyer. That alone is going to get 12 extra programmes, for instance, of concerts onto BBC4 a year but it will also enable us to do a lot of other things, including theatre, which we have not been able to do on television at a significant reduction in cost and this is going to mean a real increase in the concerts and the amount of live music we will be able to do on BBC television. We will also be able to do things on BBC2 and are planning with the Barbican as a result to do things on BBC2. As a result of this, we are talking now with other institutions to try to get access to places and get performance live on television in a way we have never been able to do before.
  (Mr Dyke) I was on Friday evening in Wales talking to the orchestra there and saying this could be the most exciting period in the history of the orchestras because suddenly you have the means to put it on to television as well as on to radio. It could be a very exciting time and they seemed very enthusiastic.

Michael Fabricant

  13. May I join Christopher Bryant in saying how much I, and I am sure my constituents too, enjoy the work of all the staff at the BBC and the programme output. I travel from time to time and see what is happening in other public service broadcasters funded by the licence fee and the sheer volume of output, given the resources you have, I think exceeds many other broadcasters. Certainly in the past, when I worked in the industry, I was always struck by the fact that the BBC television studios, for example, let alone the BBC radio studios, were constantly being used. When you visit other public service broadcasters funded by the licence fee abroad, often the studios are empty and not in use. I certainly endorse the line stated earlier that £109 is very good value for money. May I ask Gavyn Davies. He attempted to give a definition of public service broadcasting which is explained more fully in his submission or the Corporation's submission. Would you say you are the only British public service broadcaster?
  (Mr Davies) Definitely not, Mr Fabricant, no. In fact I think there is another one sitting right behind me.

  14. Only one other.
  (Mr Davies) No. "Another" one is sitting behind me. No. I think that there are elements of public service broadcasting in most private sector broadcasters, and in some, such as Channel 4, arguably they have the same commitment to public service broadcasting as the BBC does. I think the BBC is special, both through its scale and scope, through its objectives and through its funding, and that gives a special responsibility on the BBC and on its Governors and on its Executive which is actually more intense, in my opinion, than it is for most other broadcasters.

  15. Public service broadcasting is a mixed output and can be funded in many different ways. At the moment the BBC is funded by the licence fee. Criticism that has been levelled against the BBC is a lack of transparency at times about how it spends its money, even though the BBC do public accounts and do attempt to be transparent, and it has often been said that the BBC uses licence fee money to support commercial ventures. A recent example of this, it might be argued—and I am not sure this is totally the case—is the excellent film Iris. People have said, "Look, it is getting a lot of publicity on the BBC. Of course it has just won an award, which demonstrates the value of the movie, but at the end of the day it is a BBC movie and it has got a lot publicity both in the Radio Times and the BBC publications and on BBC mainstream channels and that is unfair." How would you respond to that?
  (Mr Davies) Mr Fabricant may I respond on transparency and fair trading generally and then ask Greg to say whatever else comes to mind. On transparency, I was responsible for a report on the BBC about three years ago where I asked for greater transparency, among other things, in the accounting of the BBC. The BBC has made great efforts to improve its transparency. We have an absolute responsibility to be as transparent as is consistent with running a partly commercial enterprise and I would welcome any suggestions you have for improving our accounting and financial transparency, and I am sure we will look carefully and hopefully implement any suggestions.

  16. On that point, do you think that there is any cross-subsidy? Because that is the main argument which is made: cross-subsidy from the licence fee going into commercial ventures.
  (Mr Davies) No, I honestly do not. The fair trading framework that we have at the BBC is extremely, extremely rigorous, imposed by the Governors and the Executive together actually through a fair trading committee. We take enormous pains not to allow licence fee funding to leak into or help or subsidise in any way the commercial enterprise of the BBC. I think I am right in saying—and Caroline will tell me if I am wrong—that there has actually never been a successful challenge against our fair trading practice. We do have some challenges occasionally and we have looked at them very carefully, but we have never had one upheld against us. So I would like to set your mind entirely at rest that this is uppermost in our minds. If we make a mistake, it will be a genuine mistake, but it will not be for lack of trying to get this one right.
  (Mr Dyke) In the years I had worked in the commercial sector I had never once discussed the Office of Fair Trading and at times that is all I discuss at the BBC. I think we are terribly conscious of that suggestion and we make enormous efforts to ensure that we separate the two. In terms of the films, when I got to the BBC we were spending £10 million a year on the production of cinema films but a disproportionate number were films that actually the controllers of BBC1 and BBC2 did not then want to play: they were what I would describe as "art movies". The decision we took was that we would use the same £10 million—no more, no less, we would use the same £10 million—but buy partnerships. We would try to produce British films—and that was the criteria: they must be British—that may also be successful in the box office. We have been very lucky in the last two years, we have had first Billy Elliott and now Iris. The money we put in is the equivalent to what we would buy at. You take your chances. We agree to put a certain amount of money in for the equivalent of the licence fee for BBC television. On some of the films that disappear without trace it is probably a loss, but on something like Billy Elliott or Iris it will be considerably cheaper than we would have to buy it if we were buying it from an American distributor.

  Michael Fabricant: If I may speed things up a bit because I have another area of questioning and I know other colleagues want to get in.

  Chairman: Not too much, Michael, because I am going to have to move on.

Michael Fabricant

  17. In that case, let me get on to another area of questioning, if I may. You inherited a position where some people working within the Corporation would say that more money was being spent on ancillary activities rather than mainstream broadcasting and indeed journalism activities. Firstly, may I ask—and perhaps you can give me some quick answers: Is it true that the BBC is the only United Kingdom broadcaster to have a public affairs office in Brussels?
  (Mr Davies) We certainly have a public affairs office in Brussels. I do not know if others do. I believe Caroline can answer that.
  (Ms Thomson) Yes, I think that is right. I think other broadcasters sometimes retain consultants in Brussels. We do have our own staff.

  18. Back to the transparency issue. Do you state in your accounts—I do not believe you do—the amount of money spent on corporate entertaining, both in the European Union and here in the United Kingdom?
  (Mr Davies) I do not think we do, Mr Fabricant. The accounts of course comply with accounting requirements.

  19. But you are not a PLC, you are paid by the licence payer. Earlier on you said you would like to see great transparency, so really the Companies Act should not be the minimum criterion to use, surely.
  (Mr Davies) No. I was going to say, we comply with the best standards in the UK accounting profession, but, you are quite right, the transparency should be greater than would be applied to a private company. Whether we should go into detail on specific items of expenditure of that type, I am less clear in my mind, I must say.

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