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25 Feb 2003 : Column 174—continued
Jon Trickett (Hemsworth): I rise partly to correct an omission: because of an oversight, my name did not appear in support of the new clause. I am a member of the PAC, and I would deplore any suggestion that the PAC's support for the proposal was anything but unanimous. All its members, from all parties, endorse all the points that have just been made so persuasively in making what is, frankly, an irrefutable case.
From time to time, probably quite frequently, all hon. Members will encounter constituents who wish to raise certain matters about the BBC and the licence fee. We are answerable for the fact that the licence fee is now well over £100 a year and is sometimes levied on extremely poor households. Yet, as we have just heard, Parliament is unable to scrutinise the mechanisms that the BBC uses to organise itself and its expenditure patterns. That is clearly wrong.
The Chairman of the PAC has just said that there are two only two areas of public expenditure where the Comptroller and Auditor General is not currently allowed to venture—the civil list and the BBC—but the PAC and certainly the NAO have looked at certain elements of royal expenditure, such as royal travel and grace-and-favour flats and other properties that belong to the royal household. So the principle itself has been accepted that Parliament, which votes the civil list, may consider certain items of royal expenditure.
The BBC is the last bastion to resist parliamentary control, although all hon. Members will notice that it frequently knocks on the door when it wants the licence fee to increase. If it expects us to be able to argue the case for raising money for the BBC, as we all do, it should accept the associated principles of accountability and transparency. A fairly puerile argument has been developed as a defensive mechanism by the BBC, which suggests that, somehow or other, its integrity would be affected by such scrutiny.
3.45 pm
All hon. Members understand the difference between a democracy and a totalitarian arrangement. In totalitarian countries—for example, Zimbabwe—the press is subject to close control by politicians. That must be resisted in a democracy. Whatever the political, editorial and creative impulses behind the media, their independence must be protected at all costs. That is precious and must be kept independent of the political
process. That is well understood, and for the BBC to develop such an argument in defending itself from financial scrutiny by Parliament is, frankly, an insult to ourselves as parliamentarians, to Parliament as in institution and to the electorate, by suggesting that they would allow elected politicians to interfere in something as precious and important as the BBC's editorial and creative independence. Frankly, that argument is not sustainable, and displays a fundamental misunderstanding of the way in which the PAC and certainly the CAG conduct their business.The fact is that the argument about the BBC's editorial independence is almost exactly analogous to the argument that we in the PAC frequently have about policy. Every member of the PAC well understands that we may not stray into policy issues when questioning civil servants. The relationship between the policy advice given to Ministers and the ministerial response is beyond the PAC's remit; it is for Parliament to address. Although we understand that, our questions may be robust occasionally, but if a member of the PAC inadvertently strays into policy issues, the other members and certainly the Chairman—I pay tribute to him for his independence and the non-partisan way in which he chairs the Committee—would quickly remind that member that he or she was straying into an inappropriate area.
It is a fact that our modus operandi is well established—the PAC is the oldest Committee of the House—and we do not stray into policy issues, but we frequently tackle financial irregularities, inefficiencies and so on. That distinction is clear in our minds, and it is precisely analogous to the argument about the way in which the BBC's finances, but obviously not its editorial policy, should be accountable to Parliament through that process.
The NAO, supported by the PAC, has identified substantial savings across the public sector over the years. That has been well demonstrated, and I should have thought that the BBC would welcome any assistance that Parliament could provide in identifying savings, which could then be redeployed into additional programming and, perhaps, more creative activities. So, if anything, I see us as an ally of the BBC.
Finally, I would tell those in the BBC who think that they are defending it that they are actually exposing themselves to criticism. This is an Achilles' heel for the BBC. I see myself as a great advocate and friend of the BBC, and I suppose that most hon. Members feel the same. When constituents ask me, "You are raising £110 a year from me"—or whatever the licence fee may be—"How do I know that I'm getting value for money from the BBC?", I would like to be able to tell them that they are getting value for money, that the accounts are subject to close scrutiny and that we are convinced, because we can demonstrate that the BBC is being examined, that such efficiency has been achieved. However, the fact is that we cannot say that, so those hon. Members who would like to defend the BBC are unable to do so, and the BBC is doing itself a great disservice. The argument is beyond persuasive—it is
irrefutable—and I hope that the Minister will indicate that the Government are moving in our direction even if he does not accept the new clause this afternoon.
Mr. Whittingdale: I want to speak to new clauses 6, 7 and 9. Before I do so, I should say how pleased I am that my hon. Friend the Member for Gainsborough (Mr. Leigh) tabled new clause 4. I am even more pleased that the other members of the Public Accounts Committee have put their names to it. We debated the issue in Committee, and it was notable that everyone who spoke in Committee, from all parties represented on it, supported the idea that the BBC should come under the scrutiny of the National Audit Office. I had an impression from the Minister's response in Committee that he, too, could appreciate the arguments, and that it was a question of time rather than a debate about the desirability of such scrutiny. I hope that he may be able to provide a further guide on that point this afternoon.
My hon. Friend the Member for Gainsborough has set out a powerful case. The BBC receives some £2.5 billion of public money, and anybody who has had any dealings with the BBC recognises that it is not exactly a model of efficiency—one does not have to look hard to discover examples of waste. Nor is it a model of transparency. I am sorry that the hon. Member for Rhondda (Mr. Bryant) is not present this afternoon, as he played a considerable part in debates in Committee, and he is a former employee of the BBC. He said:
- "When I was at the BBC, whenever there was a threat that somebody might start looking at the books, it was a bit like Saddam Hussein trying to hide things from the weapons inspectors; things would move from one office to another and an exciting time was had by all."—[Official Report, Standing Committee E, 6 February 2003; c. 1063.]
The report to which I wanted to draw attention in particular, to which my hon. Friend the Member for Gainsborough has already referred, is the review of the funding of the BBC conducted in 1991. It stated:
- "The most serious lacuna that results from this structure concerns financial control. The BBC is disposing of a substantial sum of what is essentially public money."
- "The Panel does not accept, therefore, that more scrutiny need mean more interference. There is nothing in the National Audit Office's remit which threatens the proper independence of the BBC."
- "should be given access to the BBC as originally recommended by the Davies Review".
One or two reasons have been given for why the BBC has been so reluctant to allow the PAC and the National Audit Office access to its accounts. I recall that when the right hon. Member for Swansea, West (Mr. Williams) attempted to draw those out from the director-general of the BBC at the PAC hearings, the director-general said that he knew what they were but was not prepared to tell the PAC on that occasion. In the past, however, the BBC has argued that involving the NAO might result in interference with programming decisions.
In relation to the Minister's point about a programme that might lose money, my hon. Friend the Member for Lichfield (Michael Fabricant) is right: it is difficult to say whether a BBC programme loses money. The raison d'être of the BBC is not to make money but to fill a market failure and, therefore, make programmes that are likely to have a relatively small audience. It might be possible to sell those programmes overseas, providing an income in future, although BBC programmes are produced not for financial reasons but as part of the public service remit. I see no evidence to suggest that the Comptroller and Auditor General would wish to get involved in any question relating to programming decisions. Nor is there evidence that the involvement of the NAO would in any way affect the impartiality of the BBC, which is another argument that has been put by those who are opposed to allowing the CAG in.
My hon. Friend the Member for Gainsborough made the decisive point that the PAC and the NAO already scrutinise one part of the BBC's output—the World Service. If there is one part of the BBC in which it is most important that there should never be any suggestion of partiality, interference by Government or any political consideration, it is the World Service. The reason why the World Service is respected across the world is that people trust it for its objectivity and impartiality. When the permanent secretary was questioned on that point, she made it clear that the Foreign Office had never had any complaints about interference in the World Service. It is on that freedom that the World Service's reputation rests, yet it can be subject to examination by the NAO without any damage to its impartiality.
The arguments in favour of new clause 4 are absolutely overwhelming. I was encouraged when the Minister said in Committee that he was examining the matter, and that he would present the Government's conclusions in due course. I hope very much that he will be able to say this afternoon that he has reached a
conclusion, and that he will support new clause 4, which has the unanimous support of all the members of the PAC.New clause 7, which is linked to new clause 6, relates to the question of the future of the licence fee and its part in financing the BBC. That question, too, has a long history. It has been the subject of examination by outside bodies over several years. It was considered by the Peacock committee, and it was examined again by the committee chaired by Gavyn Davies in 1999. Most people who have examined the licence fee have recognised that, as a method of financing, it has many drawbacks. Until now, however, it has been argued that it is perhaps the least bad method of financing the BBC. Examination has been made of possible alternatives such as financing the BBC through advertising, subscription, and, possibly, direct Exchequer grant. I fully recognise that drawbacks are associated with each of those methods, too.
There is no question but that, since the issue was last examined, the whole broadcasting world has completely changed. I shall resist the temptation to refer to broadcasting ecology, as I share the Minister's distaste for the term, although I found in my research that it appeared in the original Peacock report, so it has been around for some time. The fact that we live in a world in which people have access to hundreds of television channels rather than just three or four means that the time has come when we need to look again at the licence fee. That appraisal is also particularly important given that the licence fee has been increasing year after year. Indeed, the Secretary of State confirmed only the other week that it would rise to £116.
The licence fee, as everyone who has examined it knows, is a highly regressive charge that bears heavily on those with the lowest incomes. The Gavyn Davies review said:
- "The licence fee, correctly described, is a tax and a poor tax at that. It is levied on everyone who has a television set. It takes the same amount from every household, rich or poor. A wage-earner on the national minimum wage has to work for a week to earn enough to pay it, but pay it he or she must, whether they choose to watch the BBC or not."
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