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25 Feb 2003 : Column 192—continued
Michael Fabricant: They are related to the new clause, Madam Deputy Speaker. The Minister rightly pointed out the locus of new clause 4, which would allow the NAO to investigate the BBC. I simply mention "The Great War" as an experimental programme made by the BBC. It was the first time that a broadcaster—ABC also showed the series—had ever invested in producing a 24-episode series on such a specialised issue. [Interruption.] Hon. Members may chortle, but from that came the series on the second world war. That was produced not by the BBC but by the old Associated Rediffusion, which reinforces the point made by my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) that it is not only the BBC that produces public service broadcasting.
5 pmThe National Audit Office would and should not look at that area, and as I suspect that that is the only area that concerns the BBC, it need not worry. The BBC can be reassured that the NAO would consider only the structure within which the corporation's operations take place in the broadest terms, not the cost of producing individual programmes, such as that groundbreaking series, "The Great War".
As my hon. Friends the Member for Maldon and East Chelmsford and the Chairman of the Public Accounts Committee have said, universities are investigated by the PAC and they have not complained. The Arts Council falls within the ambit of the PAC, and it has not complained. I hope that the BBC will regard the change as a protective shroud, not as something that will endanger the BBC or its ethos.
I have mixed feelings about the licence fee. It is a regressive tax, but there are no easy solutions. The BBC costs £2.5 billion, which is, on the whole, probably well spent. We do not know for sure, because the NAO has not been allowed to investigate. However, if £2.5 billion were taken out of the total amount of advertising revenue available to television now, it would cripple an already semi-crippled ITV, it would cripple Channel 4 and it would destroy Channel 5. Nor would it be possible for the BBC to be funded from subscription. In that case, it would be the BBC that was destroyed. It would no longer be the public service broadcaster that most of us respect at present.
On the other hand, I support new clause 7, which would provide for research on television licensing and alternative funding for the BBC. I do not share the fears of the hon. Member for Selby (Mr. Grogan)—he spoke eloquently in support of the corporation, and I agreed with much of what he said—that if the BBC were funded by a system based on council tax bands or a percentage of income tax, it would necessarily result in the Government interfering in the daily operation of the BBC. I do not seriously suggest either method as a way of raising funds for the BBC. A percentage of income tax might be a better form of revenue for local government, although I would certainly be out of order if I pursued that thought Madam Deputy Speaker. The NAO would not wish to interfere in the daily operation of the BBC either.
In 1936, the Government—I presume that it was a Conservative Government, although I look to the historians among us to correct me if I am wrong—
Mr. George Osborne: National Government.
Michael Fabricant: The National Government set up the BBC World Service, which has received a grant in aid ever since. In 1940, there was a battle between the Government and the World Service over editorial policy, which the BBC won. Ever since, no such battle has taken place. No Government, Labour or Conservative—or a future National Government, God forbid—would ever wish to interfere with the internal editorial independence of the BBC, regardless of whether it was funded by licence fee or some form of income tax. We could always ensure that protection was provided, by modifying this legislation or the royal charter.
The BBC should regard the new clauses as helpful to its future governance. More importantly, I hope that the Government will consider them helpful, and that they will accept them.
Mr. George Osborne : I begin by saying that I enjoyed very much the speech introducing new clauses 6 to 9 by my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale). It was very eloquent and did credit to the Guild of Speechwriters, of which I am also a member.
I rise to support new clause 4, so ably moved by my hon. Friend the Member for Gainsborough (Mr. Leigh), the Chairman of the Select Committee on Public Accounts. I note that almost every hon. Member to speak in the debate also supports the proposal. The diversity of that support shows that this is a non-partisan issue. I draw the Minister's attention to the words of the right hon. Member for Swansea, West (Mr. Williams), who has enormous experience. He was a member of the Public Accounts Committee before I was born. I always bow to his much greater experience. In Committee, the Minister said that there was
- "no one else in the House to whom I would look for more wisdom on the subject of public accountability."—[Official Report, Standing Committee E, 6 February 2003; c. 1065.]
In the bipartisan spirit in which the new clause was moved, I want to congratulate the Government on the way in which they set up the Sharman inquiry and on their acceptance of almost all the inquiry's recommendations. In the coming months and years, the Comptroller and Auditor General's remit will be extended to many non-departmental public bodies that previously escaped public and parliamentary scrutiny.
That that is an excellent thing is accepted on all sides of the House, and it makes all the more strange the Government's refusal to accept Sharman's recommendation about the BBC. That is the only major recommendation in Sharman that the Government do not support, and it is a glaring omission. The arguments advanced by the Government are not convincing to any hon. Member who has taken part in the debate.
My hon. Friend the Member for Gainsborough made it clear that the BBC is nervous about the proposal because it believes that it threatens the corporation's editorial independence, the way it goes about commissioning programmes or covering political events, and all sorts of other activities. That concern demonstrates an ignorance of the work of the CAG and the National Audit Office. I hope that that ignorance is genuine and innocent. As has been said several times, the new clauses deal with the implementation of policy, not with policy itself. That must be right, given the amount of public money—£2.5 billion—involved.
It must be a central principle in a democracy that there should be clear and transparent accountability when it comes to the spending of public money. That is not the case with the BBC at the moment. There are 12 BBC governors, supported by a small staff. Even if they had the inclination, they are unable to provide the same scrutiny of the BBC's finances as the NAO, which has more staff and greater expertise.
The BBC has nothing to fear. After they have survived an encounter with the PAC, departmental permanent secretaries say that they have learned something and that the discussion has served to improve the way in which they manage their Departments and run Government programmes. It is one of the reasons why the Government accept the overwhelming majority of the recommendations from the National Audit Office and the Public Accounts Committee. It would do the BBC a lot of good, on its own terms, to have its work scrutinised and improved on by the NAO. As my hon. Friend the Member for Gainsborough said, there is no question that the Comptroller and Auditor General would try to second-guess the BBC's right to make a drama series out of a Jane Austen book or to cover a particular political event. That would not happen; it is not the way in which the Comptroller and Auditor General operates. It must, however, be correct that someone—I would argue that it should be the Comptroller and Auditor General—should examine matters such as the way in which the BBC commissions programmes and the cost of commissioning programmes vis-à-vis other organisations, how it makes use of its extensive property holdings and whether those buildings are being efficiently used, how it provides digital services, and the way in which it commissions IT systems. That is the bread and butter work of the PAC and the Comptroller and Auditor General in relation to Departments, and they produce pretty outstanding results. The BBC has nothing to fear from that kind of scrutiny.
That is not just my view but the view of a vast range of organisations, reports and independent inquiries into the subject. It is the conclusion of the Sharman inquiry and of the independent review panel chaired by Gavyn Davies. It is worth reminding hon. Members of what the review panel's report said:
- "The most serious lacuna that results from the structure of the BBC concerns financial control. The BBC is disposing of a substantial sum of what is essentially public money."
- "The Comptroller and Auditor General's inability to report to Parliament on the way the BBC uses the licence fee seriously weakens the accountability of the BBC."
- "We agree and, accordingly, recommend that the National Audit Office should be empowered . . . to carry out periodic financial audits of the BBC's accounts and its fair trading arrangements."
- "The idea that Parliament, which creates you and funds you, ought not to have the right for the NAO to investigate you I have to say . . . is a misuse of the very important ethos of BBC independence in terms of politicians not interfering in any way with what you broadcast."
I shall be interested to hear what the Minister says. Every hon. Member who spoke, on both sides of the House, supported the new clause. If the Minister were to say that it does not have to be done through legislation, but can be done by amending the BBC charter, and gives a commitment to do that, we would all be satisfied. I want to hear from him either a defence of the indefensible—the exclusion of the BBC from the remit of the Comptroller and Auditor General—or, I hope, a clear indication that the Government will move forward on a central recommendation of a report that they initiated.
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