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25 Feb 2003 : Column 189—continued
4.45 pm
Mr. Andrew Mitchell: I draw the attention of the House to my registered interests.
I enter into debate with some hesitation, having listened to an interesting discussion as an outsider surrounded by many experts on media and culture in all parts of the House.
The case made by my hon. Friend the Member for Gainsborough (Mr. Leigh) when moving new clause 4 was unanswerable. I am ashamed to say that I was not aware that his Committee was unable to look at the BBC in the manner in which he described. I hope that the Minister, who has an enviable reputation for his willingness to unsheathe his sword and do battle with powerful vested interests, will not forbear from doing so on this occasion with the governors of the BBC.
I rise to speak as a humble seeker after truth. The Bill clearly addresses an important lacuna in broadcasting arising from far more competition and much more economic activity. All independent surveys show that
the media and other creative industries will grow enormously over the next 10 years and that we will all spend much more money on such activities. It is in almost everyone's interests that the position of independent producers is improved. There is a need for a good plural marketplace in which dominant broadcasters cannot be overbearing and property rights will be properly protected.The BBC raises by means of a compulsory tax £2,500 million a year in public money. That represents a massive privilege for the BBC and a massive interference in normal practices and terms of trade in the commercial marketplace. I listened with great interest to my hon. Friend's comments about the licence fee. I do not entirely agree with his analysis but recognise the power of his arguments. I yield to no one in my admiration for the BBC, but where there is a powerful, rampant force in the marketplace it is important that we understand the ramifications.
The Minister will recall that in 1988 Lady Thatcher made the landmark decision that 25 per cent. of public sector broadcasting should be made by the private sector—a decision that was welcomed at the time. News and sport were exempted, so in fact the percentage is probably nearer the low teens.
I think we would all agree that the best ideas in the marketplace should attract the money. That is good for our culture and for our country. Some 75 per cent. of the BBC's production is therefore in-house. Given that that does not tend to vary much over the years, the 75 per cent. is clearly guaranteed; otherwise the figure might be 76 per cent. or even 80 per cent. in one year, and rather lower in another.
That brings me to a point made by one of my hon. Friends, whose view is that the BBC's position is entirely justified by the fact that it cures market failure. Certainly it is responsible for some wonderful productions, such as costume dramas and foreign affairs documentaries, but what worries me is that it seems to cause more market failure than it addresses. Let me give four examples.
First, I understand that the BBC—funded with public money—attracts more than 50 per cent. of all radio audiences. That must have a real effect on the marketplace. Secondly, I believe that the BBC has the dominant website in the UK. It does not, as I thought, cover only news, although it covers a huge amount of news; it also deals with entertainment, children's issues and lifestyle. That dominance is deeply resented by the commercial operators, and it must crowd out some of the commercial markets.
Thirdly—I mention this with some misgivings—there is BBC Worldwide. We should be fair to the BBC, which was charged with greatly increasing its revenues by commercial means. At the same time, however, it enjoys a luscious funding settlement. BBC Worldwide is, in my view, an example of unfair competition, although that is hardly its fault. It should be told either to maximise its income, or to trade fairly in the market. It cannot do both.
Fourthly—this strikes me as, in many ways, the most powerful justification for the argument—the BBC is a publisher of books and magazines. Those publications, however, seem to me to constitute an exploitation of pieces of intellectual property. "Top Gear Magazine" is
an example. I do not think the BBC has any right to intervene in the magazines market in that way, or that it should be allowed to do so. Books and magazines should be licensed into the magazines market. There should be a bidding process to provide transparent valuations in the marketplace, enabling the licence fee payer to receive the benefit and preventing the magazines market from being distorted by public money.I end as I began. We are dealing with a huge, rampant beast in the market, at a time when many of the companies with true commercial interests are in a greatly weakened state. That is clear from some of their share prices, valuations and profit schemes. In no other UK industry do we allow public money to distort the market in this way.
I hope the Minister will give us his views, and perhaps encourage us to believe that tight control will be exercised. I should certainly like to think that ministerial attention will be focused on the points I have made.
Michael Fabricant: My hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) has raised an interesting and important point. The BBC would argue that the magazines to which he refers are not funded by licence fees, but operate in a commercial market. It would argue that the profits made from their production are used to supplement television licence fees so that programmes can be made. The point is that we have to take the BBC's word for that.
Perhaps the BBC is right, but we do not know. This returns us to a fundamental point that I made time and again in Committee, in connection with both the National Audit Office and Ofcom's role in controlling the BBC—that the BBC ought not to be its own judge and jury. Time and again, people and commercial organisations have complained about the BBC, and not just in respect of publications. When the BBC launched its own computer some years ago, in competition with other manufacturers, it was said that it was using the licence fee to fund a commercial operation.
The BBC has produced a grand document about fair trade. It states that the BBC will never compete using licence payers' money, that it always operates independently, that it is audited by a good firm of auditors, and so on. However, as I said, we can never be sure about such matters, and we need an independent organisation—not merely an auditor—to look after them. I shall be interested to hear whether the Minister proves to be the only person in the Chamber who argues against the NAO having the power to investigate such matters. It is quite extraordinary that in this day and age, only the civil list—as has already been pointed out—and the BBC are exempt from such investigation. Although I have the greatest respect for the BBC, I do not put its chairman, whose hospitality I so recently enjoyed, in quite the same category as Her Majesty the Queen.
The NAO would give protection to the BBC. Many of the accusations made against the BBC are probably not well founded. When the Bill was being considered in
Committee, we were approached by The History Channel. It suggested that the BBC was acting unfairly in setting up UK History, which is available on Freeview. The BBC argued hard and well, saying, "No. We are operating in competition. Why should we provide programmes to The History Channel any more cheaply than we provide them to the public service broadcasting organisation in the United States, to the Australian Broadcasting Corporation, or to any other broadcaster?" I rather suspect that the BBC was right, but The History Channel rightly felt that this was yet another case of the BBC being its own judge and jury. How can we be sure that the BBC was right? In my view, the NAO would give the BBC the necessary protection in that regard.I realise that the BBC would not want the NAO to interfere in its direct running, and particularly in the creative side of the corporation. The Chairman of the Public Accounts Committee offered good reassurance that the PAC has neither the time nor the inclination to interfere in that way; nor, indeed, would the Comptroller and Auditor General have the necessary resources or interest to do so. The Minister mentioned a particular programme or series perhaps proving a loss-maker. The only such programme that I can think of is "Eldorado", but on the other hand the BBC has to experiment. It seemed like a good idea at the time—isn't that what it always says?—and it would be very wrong for a particular organisation to say with the benefit of hindsight that the BBC was wrong to experiment. It is experimentation that has given the BBC its very strength.
I wonder whether you, Madam Deputy Speaker, saw "The Great War"—the 40-year-old series that was originally shown on BBC2, and which is being re-run on Saturday nights. Before it was broadcast, a documentary was shown about how it was made, including the arguments and the struggle within the BBC that led to its production. The series "The Great War" was earth-shattering—
Mr. George Osborne (Tatton): So was the war itself.
Michael Fabricant: As my hon. Friend points out, the war itself was obviously earth-shattering, but so was the series. It was the first time—
Madam Deputy Speaker: Order. The hon. Gentleman should relate his remarks to the new clause.
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