You are here: Parliament home page > Parliamentary business > Publications and Records > Committee Publications > All Select Committee Publications > Commons Select Committees > Culture, Media and Sport > Culture, Media and Sport

UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 598-x

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

CULTURE, MEDIA AND SPORT COMMITTEE

 

 

BBC CHARTER RENEWAL

 

 

Tuesday 2 November 2004

RT HON TESSA JOWELL, MP, RT HON LORD McINTOSH of HARINGEY

and MR ANDREW RAMSAY

Evidence heard in Public Questions 587 - 637

 

 

USE OF THE TRANSCRIPT

1.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

 

2.

Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

 

3.

Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.

 

4.

Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.

Oral Evidence

Taken before the Culture, Media and Sport Committee

on Tuesday 2 November 2004

Members present

Sir Gerald Kaufman, in the Chair

Chris Bryant

Mr Frank Doran

Michael Fabricant

Mr Nick Hawkins

Rosemary McKenna

John Thurso

________________

Memorandum submitted by Department for Culture, Media and Sport

 

Examination of Witnesses

Witnesses: Rt Hon Tessa Jowell, a Member of the House, Secretary of State, Rt Hon Lord McIntosh of Haringey, a Member of the House of Lords, Minister for Media and Heritage, and Mr Andrew Ramsay, Director General, Economic Input, Department for Culture, Media and Sport, examined.

Q587 Chairman: First of all, Secretary of State, could I offer you our condolences on your bereavement. I would like to welcome yourself, your ministerial colleague and Mr Ramsay for what is the final session in our inquiry into BBC Charter renewal. The old National Heritage Committee which we succeeded recommended, as you will recall, a ten year Charter funded by a licence. We do now know what conclusions we shall come to this time. We are grateful to you and your associates for coming here this morning.

Tessa Jowell: Thank you very much indeed.

Chairman: Michael Fabricant.

Q588 Michael Fabricant: Good morning. How do you think the BBC should be funded under the new licence?

Tessa Jowell: This is obviously the meat of Charter review. I have made pretty clear for some time now that I see the licence fee as very much the default option, in other words there has to be a better alternative to the licence fee for the licence fee to be replaced for this Charter. That said, we are certainly looking at alternatives and we have not yet reached any final view. Alongside the consideration as to how the BBC will be funded over the period of its Charter is obviously the role of the BBC in leading digital switchover and in making a substantial contribution to the costs of funding digital switchover. That is my answer to your question. I would rather in reverse, Chairman, like to say two things: first of all, to thank you for your kindness in agreeing to rearrange this session and, secondly, to say what importance we attach to your report as we move to beginning to shape the interim conclusions of Charter review which will form part of a Green Paper to be published in the early part of next year.

Q589 Michael Fabricant: Your earlier answer sounded quite Churchillian - and there is nothing wrong with that - when he said that democracy is not a particularly good system but it is the best one we have got. What do you think of Ofcom's recommendation that there should be a Public Service Publisher? Are you attracted by that idea?

Tessa Jowell: I think what is attractive about the idea is maintaining the value of investment in public service broadcasting. I hope that it will not become tedious over the course of the morning if we say this is obviously something that we are looking at. I am deeply committed, as we move to switchover and as we move to more multi‑channel choice for viewers, to looking at the robustness of the mechanisms to preserve public service broadcasting. I think this is a very important part of our national identity, without overstating the case. The consultation that we have carried out as part of the Charter review has shown that public service broadcasting is popular with people. I think it is a very interesting proposal. I like the idea of locking in the funding which is currently available to public service broadcasting. Obviously it is a proposal that we will give proper and detailed consideration to.

Q590 Michael Fabricant: The BBC has gone into a whole series of different areas over the last few years, including BBCi, which I personally think has been quite successful, but where does it end? We have got BBC News 24, BBC3 and BBC4, which got some criticism, although I think to some degree it was unjustifiable, I think BBC3 and BBC4 do a good job, BBCi and all the other services the BBC offer. Do you think the BBC should be restricted in any way or would you say, providing it has got a licence fee and providing the Secretary of State of the day approves it, there is nowhere that the BBC should not be allowed to go?

Tessa Jowell: No, I do not take that view. My view is closely aligned with the view of the Chairman of the BBC and the Director General. I think this Charter review needs to provide a sharper definition of the BBC's role and purpose and to allow the BBC to flourish within that sharper definition of its role and purpose. I also agree with the conclusions of Mark Thompson's view and Michael Grade's view about some of the diversity of functions the BBC has developed over the last ten years and it should now come under very close scrutiny. There are two questions to be asked. First of all, is this to be part of the BBC's core purpose or is it a diversion from that core purpose? The second is the impact on the wider commercial market. I do not think that by and large the BBC should be investing licence fee payers' money in those areas that are already very well served by commercial services in all their forms, whether it is magazines or whatever. The BBC's role should be one which is a direct expression of its core purpose and here I would quote the Ofcom report, "as the cornerstone of public service broadcasting". I think it is much more besides in this country.

Q591 Michael Fabricant: We do not know how long the licence is going to last, there is no clear definition of that, it used to be 15 years but the last one was for ten years. Let us say it is ten years and that takes us through to 2016, we do not know what the future of broadcasting will bring, although many commentators argue that the sort of system that we have at present whereby there are set channels, where programmes are pushed at the viewer, is not going to be a sustainable system. I know John Lewis are now offering a Freeview box which will record, a little bit like Sky Plus. Instead broadcasters could download the whole week's programming ahead of time and, apart from news and current affairs, you would make up the schedule. Given that particular panorama of broadcasting, how can one define what will be the core function of the BBC ten years ahead?

Tessa Jowell: I think we always have to be cautious about the pace of technological development and, more particularly, the pace of public acceptance of new technologies. Even the technologies which are available now I do not think have presented a huge challenge to current viewer behaviour. By and large it is still the terrestrial channels that, whether they are watched on analogue or on digital television, are still the most watched. As you will be aware, there is a very lively debate going on in the industry about the extent to which the whole concept of a broadcasting channel is a looming anachronism and to what extent there is an appetite for people simply to create their own evening's viewing which technology will shortly allow. I think we need to proceed cautiously on this. There are restrictions on the technology which unless they were addressed would be a break on its development. It is important that the technology keeps pace with viewer behaviour and enthusiasm. I think we can be pretty confident that the more apocalyptic predictions about the end of broadcasting as we know it within the next ten years are likely to be overstated.

Q592 Michael Fabricant: The type of encryption which Freeview has at the moment, MPEG-3 or MPEG-2, means that, given the frequencies that are available, there are a restricted number of channels available, but it is a big improvement on terrestrial. For example, the launch of ITV3 has meant a re‑engineering of ITN's provision and yet the technology now is available using the same frequency as used by Freeview. In fact, you could get three or four times as many channels as there are at present. The only problem is that you would have to take back all the Freeview boxes and upgrade them and you would have to change the whole system. Given that there is a problem of digital switchover from analogue to digital, there may well be a looming problem ‑ I do not know whether the Department has thought about it ‑ in having to have a switchover in the next few years if we are going to exploit digital technology from the current rather basic digital technology to a digital technology which will enable digital terrestrial television to have virtually as many channels using the same spectrum as is available from satellite. Has DCMS given that any thought?

Lord McIntosh of Haringey: I am sure that in due course you will be having a full inquiry on digital switchover. We are in danger of going over the boundary between Charter review and digital switchover, although they are very properly linked. I think the answer is yes, DCMS has given a great deal of thought to this and the conclusion that we have to come to is that if you are planning for digital switchover you have just got to take the technology at the time that you are planning it and you have got to stick to it otherwise you will never get anything done at all. I have been listening to overseas broadcasters who argue that in France, for example, you should not be touching a switchover with MPEG-2 because MPEG-4 is coming along and when I ask them how long that is going to last they say ten or 15 years and I do not believe it because if you wait for the next technology and certainly if you wait for convergence you will never make the change at all.

Q593 Chairman: I would like to follow up what Michael Fabricant has been asking about digital switchover in relation to the Barwise report that you recently received. The assumption in the Barwise report appeared to be that there was never going to be a digital switchover because he was basically recommending that BBC3 and BBC4 be turned into clones of BBC1 and BBC2, in which case we would have four very similar channels. Secretary of State, when you say, rightly in my view, that the BBC should not necessarily go into everything, on the other hand there seems little point in creating new digital channels unless they have some individuality for better, in my case in BBC4, or for worse, BBC3. BBC4 do have an individuality. On the other hand, BBC3 does not have much individuality if you compare it to E4 or Sky One and so it is an interesting question of what justification there would be for that. Although Professor Barwise praises the two children's channels, there are huge numbers of children's digital channels already, so you might say that there is no particular justification for the two BBC children's digital channels. To what extent in digital switchover are you looking at the appropriateness of the BBC doing everything, as Mr Dyke appeared to believe that they ought to do, and you still having a power under the Charter to refuse to authorise new channels, which you exercised in the case of BBC3 for a while?

Tessa Jowell: The question you raise is in relation to Paddy Barwise's report. This report is now with the BBC for their observation so I will not comment extensively on the detail of the report until I have had the opportunity to get their reaction. The question goes right to the heart of the issue, which is the extent to which the future of digital television is a future of the kind of mixed genre channels, as a continuation of an analogue model, or to what extent we will see, and indeed want to see, channels which are more specialist, covering a narrower range of genre and very particularly geared to particular audiences. When I gave approval to BBC4 that was what I had very clearly in mind, that there is an audience which is reportedly unsatisfied. I do this from anecdote rather than anything rather more systematic, but I think among its devotees BBC4 is extraordinarily popular. BBC3 has found it harder to define its identity because in a way its challenge is greater. I thought that Paddy Barwise's observation that channels which are specifically geared at a specific age range will find it difficult to generate a big enough audience or to discharge that ambition successfully is right and that BBC3 ought to broaden its age range appeal both down the age range and also up the age range. I think it is worth remembering that ‑ and I think in time this will become an important way of judging BBC3 and help us to think about this ‑ when Greg Dyke and Christopher Bland put in their proposal for BBC3 it was because they felt that there was a demographic of young people who were not bound in to the understanding of enthusiasm for and commitment to public service broadcasting through the BBC in the same way that older people and young children through the children's channels were and so BBC3 was the answer to that. I think that we have to give BBC3 rather longer to develop. I will be interested to get the BBC's response to the Barwise report. I think BBC3 is a bigger challenge in terms of the contemporary debate about broadcasting than is BBC4. In relation to BBC4, I think the future will see the growth of niche channels rather than the continued growth of mere genre channels.

Chairman: BBC4 seems to be very imaginative. Let us take the Booker Prize as an example. You would have coverage on BBC2 and then, when that was over, if people wanted more information and more coverage they could go on to BBC4 and that seemed to me a very, very good way of having a spectrum of coverage by the BBC.

Q594 Mr Hawkins: Secretary of State, it is often said that the Public Accounts Committee is one of the most important and prestigious Parliamentary committees. They were, as you will know, pretty savage in their criticism of the amount of money that in their view, particularly in the view of the former Labour Minister Alan Williams, was wasted on digital channels when in some cases the number of people watching was so low it could not really be measured. How seriously do you take that very strongly expressed view by the PAC?

Tessa Jowell: I would take any view of the PAC very seriously indeed. One of the facts about digital channels is that we cannot measure their value purely in terms of how many people watch them. In relation to the BBC digital channels, the audiences are developing and the audiences will grow as particularly Freeview continues to be as popular as it is. I am not saying that if you have 3,000 people regularly watching a channel it is necessarily a success and value for money, but we have to get used to the fact that instead of looking at viewing figures in the high 20 millions we are going to be looking at viewing figures in the future for channels which are half or less than half of that. However, I think there is an important consideration here which is what I would call the disproportionate benefit or disproportionate appreciation test and this would be one of the answers to justify BBC4 and to set alongside the criticisms of low ratings and that is that I believe that one of the BBC's many roles is to service with a high quality of programming offering the interests, enthusiasms, the curiosity of the British people across a very wide range. Your viewing tastes and my viewing tastes may be quite different. If we analysed the viewing tastes of all the people in this room and the things that we would particularly like to see more of I suspect we would see quite a wide range of programming preferences which are not yet being fully met. Digital channels are a way of doing that, they are a way of providing disproportionate benefit, pressure or interest to people who have a particular interest in a particular topic and I do not think that that is a factor which is (a) sufficiently taken into account and (b) which fits with the conventional way of judging the success of channels.

Q595 Mr Hawkins: In the harsh world of the rest of the media things are measured by audience size, are they not? If any commercial people were here they would be saying the BBC are really being protected by their privileged position of the licence fee and they are able to waste vast amounts of money on producing programmes nobody wants to watch.

Tessa Jowell: They are protected because that is what the people of this country want and to that degree the public service remit for the BBC is different from the public service remit for the other commercial public service broadcasters. The point you make is an important one and it really does establish the dividing line. The BBC is different from commercial broadcasters. I think the very interesting ideas that are being developed within the BBC as a way of expressing this distinction are that we make clear that the BBC's protected status is not an accident, it is a democratic choice, but it is a democratic choice which creates for the BBC very clear responsibilities and one of them is to ensure that money is not wasted, so the sustainability of the licence fee relies to a very large degree on public confidence that it is their money that is being properly spent and waste and evidence of waste is one of the surest way of undermining that.

Q596 Mr Hawkins: I agree with you entirely on your last point because that is what this Committee has to decide, whether there would be a better way of avoiding waste if they did not have a ten year Charter or they did not have a licence fee. I wanted to ask you about a slightly different but still related point which is to do with the complaints that have been made to us by commercial channels who have established an audience for their own particular digital channel in the world of history or the arts and then have found that the BBC have said they have been successful, we can now come in and compete with them, but with the benefits of what they regard and we might regard, I do not know how my colleagues feel about this, as an improper cross‑subsidy and improperly beneficial position because they can use their existing channels to advertise what they are doing in their digital channels. How do you react to that concern?

Tessa Jowell: I think there are two parts to the answer. First of all, I think we have to be rigorous in judging the impact on the wider market of BBC activity. That is not to say that the BBC should stay out of anything which is commercially attractive or is commercially successful for other providers, but we do need to be vigilant about the impact on the wider market of BBC activity. On the second point, the evidence by and large shows that BBC intervention in the market can create choice for consumers. It does not necessarily lead to the destruction of the competitor channel. It is not the BBC's job simply to act as a commercial predator and to identify what would be, if they were a commercial broadcaster, regarded as profitable gaps in the market or to move into areas of the market which are already overcrowded. You may remember that one of the reasons that I turned down the first submission for BBC3 was that I was not persuaded that it was a distinctive offering in what is a pretty crowded part of the marketplace, the marketplace for 16 to 35 year olds. I think those are the two considerations that need to be borne in mind. I think a sharper definition of the BBC's role and purpose and greater certainty about its scale would quell some of the reasonable fears in other parts of the territory.

Q597 Mr Hawkins: I am very concerned about the pressure that there seems to be building up for an earlier switchover and you will have seen what Ofcom have said about the need to have a SwitchCo and that kind of thing. One of the things that you and your colleagues have been vaguely suggesting is that if there were to be a switchover at a time when perhaps 30 per cent or thereabouts of the population did not have digital television there might be some protection from the Government in relation to those who were elderly or not in good health or with very low means. If your party were to be in Government at that time - and we are looking a number of years ahead - do you have a firm commitment from the Chancellor of the Exchequer of a specific amount of taxpayers' money that would be available to enable people who were not able otherwise to afford to buy digital television to have that at a time of switchover?

Lord McIntosh of Haringey: The first thing to be said is that whatever time you have a switchover, and I am not conscious of any particular pressure for an earlier switchover, 27 per cent of the population will not be able to get digital terrestrial television in advance because the transmission simply is not there. The pressure for an earlier switchover is from the people in that 27 per cent who are deprived of it and that is what I am getting from MPs' letters at the moment. In answer to the question about those who are deprived at the time of switchover, this is something which we will be covering in the announcement that we will be making about digital switchover early in the New Year. At that time we will have to cover all of the outstanding issues that need to be resolved in public about the switchover, including all of the issues over the timing region by region, the total timing, the spectrum allocation and indeed any issues over targeted assistance and we will do that having taken into consideration the financial resources available for it.

Q598 Chairman: Do you know whether in your own Department or in the Treasury there has been any assessment made of the financial implications of the trade off between assisting deprived people to have access to digital television and the income there would be from the sell off of analogue spectrum?

Lord McIntosh of Haringey: Those are both potential elements in the cost‑benefit analysis which has been done both by our Department and the DTI, who are the partners in digital switchover, with the involvement of the Treasury. They are not the only considerations. The revenue from the sale of analogue spectrum is perhaps the least finalised of the amounts of money because decisions have to be taken about what the analogue spectrum will be used for and some of the potential uses are not revenue producing, but certainly it is all part of the analysis, yes.

Q599 Chris Bryant: That did not sound like a figure, but you seemed to think there was a figure somewhere around.

Lord McIntosh of Haringey: There is a figure for the benefit in net present value to the United Kingdom of switchover and the figure that we have at the moment is between £1.5 billion and £2 billion, but that will be affected by the timetable, whether there is any slippage or advance in the timetable and by quite a number of factors which are yet to be decided. However, you have to start with having a cost‑benefit analysis and we did that and we published it at the time of the Secretary of State's announcement in September last year.

Q600 Chris Bryant: But with many digital set top boxes coming down to £25 that £2 billion would go a long way, would it not?

Lord McIntosh of Haringey: It is not the intention that we should be paying for everybody's set top boxes, nor has it ever been the intention

Q601 Chairman: This Government has got an interesting record in terms of assisting people with various expenses, ie the £200 winter fuel payment for pensioners, £100 towards the Council Tax, the free television licences for 75 year olds. Has there been any consideration whatsoever, including of these various benefits, of a free set top box for people either of pensionable age or 75 years old or whatever because that would certainly take into account the kind of thing Mr Hawkins has been talking about and also the kind of thing that Chris Bryant is just talking about?

Lord McIntosh of Haringey: We have been consulting and we have been talking to representatives of poverty charities and Age Concern and people of that sort about a number of options and those options have included the provision of free equipment or a voucher towards free equipment or the possibility of technical assistance, in other words helping people to understand how to put the kit in, which seems to us to be more important for the over 75 year olds possibly than financial help. All of these options have been very closely studied, they have been costed, they are being discussed with the people concerned and we shall be making an announcement about it at the same time as we make our next major announcement about digital switchover.

Q602 Chris Bryant: You mentioned different MPs writing to you. I think it would be true in my constituency that the vast majority of people would want us to move to digital switchover as soon as possible because that would resolve many of the issues that they have. We are talking about access issues in part because everybody pays the same licence fee but not everybody gets the same deal in the end because they do not have the same access to all of the channels. Do you think that in the next Charter there should be specific obligations or targets of some kind in terms of access for the BBC?

Lord McIntosh of Haringey: These are targets which are not only for the BBC but they are for broadcasting as a whole. Chris Smith set those targets five years ago now when he set targets of affordability and accessibility and we feel bound still by those targets, but they do not just apply in the BBC, they apply to all public service broadcasters.

Q603 Chris Bryant: But many of the licence payers who only pay a specific amount of money for the BBC through the licence fee are troubled by the fact that they do not have the same access to all the channels that other people do for a whole series of different reasons and on top of that we are entering a world where the electronic programme guide, the technical standards inside the box and there may be lots of different kinds of boxes, some people with Home Choice, some with Sky, some with Freeview and so on, all these difference systems mean ordinary licence fee payers will have to navigate their way through. Do you think that the Charter should be very explicit about the way that the BBC has to operate in that field to maintain universal access?

Tessa Jowell: I think we will want to think about that. This is the point at which the action that we are taking to achieve switchover interconnects with the role of the BBC as one of the major funders of switchover and I think Andrew has put the position very clearly indeed. There is another point which you have raised with me and others on a number of occasions, which is the sense of being short-changed that many licence fee payers have if they cannot get Freeview. That is why we are moving ahead as fast as we think is prudent and achievable with switchover, because I think that if that position remained more or less unaltered for another five or ten years then the high level of public support that we have at the moment for the licence fee would begin to break down and show quite a large degree of regional differential and the parts of the country that would begin to withdraw support for the licence fee would be those that felt they were being denied the benefits, a sort of full membership of the BBC. This is a factor which is very much influencing our thinking both in relation to the principles underpinning switchover but also to the principles underpinning the BBC's new Charter.

Q604 Chris Bryant: I want to change tack slightly and ask about what level of involvement there should be from outside in the running of the BBC either through the Charter or through ministerial or Parliamentary scrutiny because on the one hand everybody will want to see a fully independent BBC that sails off into the sunset and produces wonderful programmes for everybody and everybody loves it, but on the other hand some people might say that the fact that the BBC has got 300 journalists in the United States today for the American elections means there may be a certain degree of wastefulness going on there. Some might say the BBC does a wonderful job and yet they are thinking of moving Panorama and it will not be on at the right time. When you gave your licence for BBC3 you intervened quite directly in quite a series of issues about genre. Do you not think that the Charter renewal process itself is one of the few ways that we can keep the BBC honest because they know there is a time when they have to produce a lot of public service broadcasting on television so that politicians think they are doing a very good job and so on? If so, do you think a long Charter is a bad idea or should there be other points where scrutiny can be more robust?

Tessa Jowell: Just as I know this is reaching to the heart of your inquiry, this is an issue that we are giving a great deal of thought to, Terry Burns is giving a great deal of thought to it and I think the BBC are themselves. I know that in the course of your inquiry you have looked at whether or not the Charter, the relationship between the sovereign and the BBC, is the best institutional structure to preserve the independence and integrity of the BBC and we will obviously look with interest at what you have to say about that and about the role of Parliament in this. We are looking at another dimension in this relationship, which is how the BBC can build its accountability to licence fee payers, its shareholders if you like and we are looking at a number of modes of governance and a number of ways in which the regulation of the BBC might give expression to this. Where we would agree with the thrust of your argument is that this continued and explicit accountability is important. Governments are not elected for ten years without a break in the middle. This sense for the BBC that it is under scrutiny and that its obligations to licence fee payers are constantly under scrutiny is important. What we have to achieve is a balance between this sense of uncertainty and turbulence and accountability; that is the tension that we are grappling with at the moment.

Q605 Chris Bryant: At the moment one of the things the governors do is they are set objectives or tasks every year and they have reduced their number from 30 down to ten or so. I just wonder whether that job of setting the annual targets should not be set by somebody outside the BBC, for instance this Select Committee, the Department or Parliament or whoever and then for the BBC governors to adjudicate against that set of objectives. What do you think?

Tessa Jowell: I certainly think that that is an idea worthy of consideration. I think my feeling is that we want the BBC to be moved away from what is the perceived influence of Government, that was actually a very interesting but consistent piece of feedback from the consultation and that within that by and large people support the idea of this relationship between the BBC and the sovereign, but they were less keen on the idea of a stronger relationship between the BBC and Parliament, feeling that that could compromise the independence of the BBC. You may well make some specific proposals on this which we will obviously give proper consideration to, but I expect that the debate about governance and accountability will be the debate that will characterise this Charter review both at the time and in retrospect.

Q606 Chris Bryant: Paddy Barwise made the suggestion about the BBC3 and BBC4 that they should have targets for audience share and reach. Do you think that is the right route or does that leave you in a situation where the BBC, contrary to the logic of the licence fee, is basically scrambling for audiences? We have been trying to say that audience figures are not the only thing that matter.

Tessa Jowell: For the reasons that I set out earlier we would obviously want to avoid that because if the BBC is only scrambling for audiences all the pressures are towards the middle ground and away from the distinctiveness of BBC4 and the distinctiveness that BBC3 is aspiring to.

Lord McIntosh of Haringey: I think what we have got to guard against all the time is the idea that a public service broadcasting obligation can be defined as dealing with market failure. You really have to have a public service broadcasting obligation which covers the full range of quality programming that people want in all genres rather than picking up the pieces and that is why plurality of public service broadcasting is so important.

Q607 Chris Bryant: Is not one of the dangers about a very large BBC, and it does get a large amount of money, it is going to get another £320 million over the next few years simply by virtue of the fact that there are more single person homes, that it becomes such a monolith that it is very difficult to get a plurality of voices, whether you are talking about regional accents and different coloured faces and different perceptions of the way Britain is through that monolith? Is that a problem?

Tessa Jowell: I think it is a risk.

Lord McIntosh of Haringey: It is an opportunity too.

Tessa Jowell: I also think that it is a risk which the BBC are addressing and something that we are looking at in the Charter through recognising that they have got to move substantial parts of the operation out of London for precisely that reason.

Q608 Chris Bryant: Would a bigger independent production quota help that?

Tessa Jowell: I think that could well, yes. As I have often said, I see the licence fee as venture capital for the nation's creativity and I think that the BBC investment in the independent sector is not only good for working but it is good for the state of that particular and very important part of the creative industries more generally.

Q609 Rosemary McKenna: The Chairman mentioned children's digital television earlier and that it is a very good example of where the BBC has a very important role to play. If you look at the vast majority of digital children's programming, it is Disney and all of that genre, which is fine, but BBC Digital actually provides quality programming which I know lots of parents and educators value and I think that shows how important it is that they should be in there doing that. However, the Chairman and the Chief Executive are saying at the moment that they want to look very carefully at the core purpose of the BBC and what it ought to be providing. If they do that and they decide that something is not working and it is not their core purpose, how can they deal with that? Can you provide something in the Charter review that will say that it is appropriate for them to remove some kind of programming that they are providing, because it seems to me that that is something that would be extremely difficult for them to do? Once an area of broadcasting is provided, how can you remove that without there being this major uproar that happens in this country every time there is some change?

Tessa Jowell: I would certainly see children's broadcasting as part of the BBC's core purpose. Paddy Barwise's report makes the case for children's broadcasting through the BBC very clearly indeed, the assurance of quality, no advertisements and so forth. I think CBBC was described as a triumph which has not undermined the preschool programming on BBC1 and BBC2, so its offer is distinctive. He praised CBBC, but I do not think he liked young people sticking their tongues out and some of the language was a bit rich for him, nonetheless he recognised that this was a justifiable part of the BBC's remit. I think that in a way children's broadcasting is the easy part of the answer to your question, there is not a huge dispute about that. I think what is more difficult is the role of religious broadcasting on the BBC, the role of arts coverage for instance, those areas of the genre range for which there will not continue to be enormous audiences and this is an important point that came up in the course of the consultation. Even though people do not want them, they like to know they are there. That would be my answer to those who say that if nobody is watching them then the range should be shut down. Once you start reducing the BBC's range then you risk the BBC becoming a broadcaster like any other.

Q610 Rosemary McKenna: Let us take BBC News 24 which people criticise for its cost in comparison to the number of viewers that they have. If the BBC decided as part of the review that BBC News 24 was unnecessary and they were not getting the audience share or whatever, can they make that choice? Is it part of the renewal to say that that would be a choice open to them, to say we are not going to go into 24 hour news broadcasting?

Tessa Jowell: Within the present structure the most draconian step I could take where it was established through independent review that the BBC had not complied with the conditions that were attached to a news service would be to say that it should be discontinued.

Q611 Rosemary McKenna: It is said that the public sector broadcaster should be a risk taker in all sorts of areas, music, radio, everything, they should always be able to take risks and try something new. I think the problem arises if they then try to say it does not work. How do they get out of that? How can they remove that without creating the huge campaign to save something that is clearly not working?

Lord McIntosh of Haringey: Surely the two go together. If you are encouraging the BBC to take risks, that is why it has long‑term funding rather than year-by-year funding, then they are going to make mistakes and they are going to have to have the power to correct them and the role of the BBC governors in their non‑executive director rather than their regulatory role is precisely to make sure that they do react appropriately. If you try and make any change on Radio 4 there are hundreds of thousands of people who will scream about it, but they have to be prepared to do that.

Tessa Jowell: I think there are a number of ways of addressing this. One is having very clear expectations attached to different services, so you have a degree of transparency against which the public assessment, not just the rather private process between the BBC and the Secretary of State, can actually be conducted. There is, of course, the experience where BBC Choice and BBC Knowledge came from. BBC3 and BBC4 actually arose because BBC Choice and BBC Knowledge were not regarded to have been successful. That was a judgment that was made by the BBC. Had the Charter review coincided with that period of realisation that these were not working, would the Charter review process have addressed them? I suspect that probably it would have done. Michael Grade's suggestion about service licences, which is a way of capturing the expectation of a particular channel and capturing the standards by which the effectiveness of a channel can be judged, is a very good way through this. It slightly begs the point as to how those standards are reached and to what extent there is some kind of involvement of licence fee payers in helping to shape the process of individual channel identity, but I think that that is a discipline. In a sense we have moved ahead in effectively setting a service licence for BBC3 as a condition of approving it. I welcome the fact that the BBC have now seen this as a model which could be applied to other channels as well and I think that that will answer some of the questions that you are expressing.

Q612 Rosemary McKenna: Is it part of the Charter renewal that they should do more in terms of public consultation? I know they invite people in from the regions. I think they should do a lot more of that.

Tessa Jowell: I absolutely agree with you. One of the problems of the present arrangement is that there is this great flurry of activity round about the period of Charter review and suddenly more of the kind of programming that everybody thinks the BBC is about appears to be put back into the schedules. I think that the BBC need to have a continuing conversation with the people who pay for it and for that not to be something which is focused on the period of Charter review. How you keep that process fresh and stop it becoming a sort of box ticking exercise is quite a challenge, but I think it is an important one for them.

Q613 Mr Doran: That last suggestion suggests that it might be a good idea to have a permanent Charter review.

Lord McIntosh of Haringey: Trotskyism!

Q614 Mr Doran: I am not sure we should get into a debate about that. One of the things we are trying to do on this Committee is to look ahead and to see how the landscape of broadcasting is going to change and obviously we are living through a period when there is substantial change afoot. New technology is providing consumers with a choice which they have never had before. On some of the visits that we have made we have heard some staggering assessments of just how things might change. As this is a review which potentially will last until 2016 or 2017, can you say a little about the assessments that the Department is making about the way the landscape will change through the life of this Charter?

Lord McIntosh of Haringey: That is futurology with a vengeance, is it not? It is difficult enough to say whether the start of the Charter review period will be the same broadcasting landscape as now let alone two or three years away and to start to make estimates of what it will be 12 years away in 2016, if that is the period that we adopt, is even more difficult. I think the challenge to us is not to estimate the speed at which in particular convergence will happen, it will happen and the distinction between broadcasting and telecommunications will gradually diminish, but to make sure that we have a Charter which is robust enough to deal with that. I think the great advantage that we have in this country of having a BBC which is not only independent of Government but also has historically maintained an astonishingly high audience share for public sector broadcasting is a very good augury for our ability to manage convergence and yet not to lose the standards that we value.

Q615 Mr Doran: Some of the evidence we have had says that that is unlikely to be the situation in the future, even the near future. One of the people that we have met, an American analyst (and this was backed up by others) was quite clear that the future of broadcasting has to change because the consumer is becoming more and more in control because of the technology and the ability that the consumer now has not simply to sit there and be forced to watch a programme but to choose if he or she watches a programme and the form in which he or she watches it. We have heard all sorts of assessments that public sector broadcasting and broadcasting as we know it, whether it is digital or analogue, could reduce and become a niche market and a niche market at the low end of the market.

Lord McIntosh of Haringey: That was the distinction that the Secretary of State was making half an hour ago. There is the potential for technological change, the potential for convergence, and nobody denies that that is proceeding apace, but the distinction that the Secretary of State was making was the speed at which consumer take-up of it exists. It is certainly true that over a long period of time people will be more likely to take up the new opportunities which technology provides. It is also true that a very large number of people, perhaps not the youngest people but a large number of people, are going to stick to the comfort of the broadcasting that they know and are going to stick to the existing five terrestrial channels. I think a lot of the forecasts of the decline of those channels and therefore of their viability in terms of advertising or in terms of justification for the licence fee are, shall we say, excessive.

Q616 Mr Doran: So in 2016 you think we may have a landscape which is similar to what we have at the moment, still with a strong terrestrial broadcaster?

Lord McIntosh of Haringey: We will have a lot of convergence. We will have a lot of people, market-led, who will be taking advantage of the huge new opportunities which will be available. In addition we will still have a lot of people behaving as they behave today.

Q617 Chairman: How do you know? And what is "a lot"? If you have, as I take it you have, been doing the kind of research that we have been doing in this Charter review, you will know that by 2016, to take that particular date that we have been concentrating on, the variety of ways of receiving audio-visual entertainment will be such that sitting down and watching a continuous stream of entertainment supplied to you by television channels will not be the way that most people are receiving television and is not the way already that 15-24 year-olds are receiving television. That being so, and that what people are already doing to a considerable extent but, as Frank Doran points out, are going to do to a very much greater, perhaps almost exponentially greater extent in a dozen years' time, will inevitably mean that, whatever the virtues or otherwise of the BBC, its proportion of the audience may well have fallen a very great deal in the sense of doling out the kind of entertainment that we used to accept as given. At what point does the BBC's share of the audience fall to a level where a licence fee as a way of funding the BBC is no longer justified?

Lord McIntosh of Haringey: I have two comments on that, Chairman. First of all, you have been receiving a lot of evidence about this and therefore you are particularly well informed and you are collectively up to date but I think you will acknowledge that the futurologists do not agree about these matters and that there are very significant differences of view between them about the speed at which this takes place and the degree to which it will have taken place at the end of a new putative ten-year Charter review period. The second comment I would make is that in responding to Mr Doran I very specifically did not say that linear viewership of the kind that we have now where we accept the time slots which are given to us by the broadcaster will continue to be anything like as important as it is now.

Q618 Mr Doran: One of the other important pieces of information that we have taken on board is that the content producers will be king in the future when we have a range of broadcast options and receiving options available to consumers. Potentially, given its back catalogue and its ability to make programmes, we could see an even more powerful BBC, one which is obviously receiving money from the taxpayer through the licence fee and in addition to that will have a library which will be potentially the envy of the world in the programmes it is able to sell, which could skew its relationship with the commercial broadcasting industry even more than it is skewed at present. Is that an issue that you have addressed and do you see the potential for that and, if you do, will you have any remedies for dealing with it?

Lord McIntosh of Haringey: We have certainly had a lot of evidence on this point. You have been listening to Peter Bazalget(?), I guess, on some of these things but yes, certainly this has been a significant element, not just in our public consultation but also in the seminars which Terry Burns has been running and it is part of our consideration.

Q619 Mr Doran: On the relationship between the BBC and the rest of the broadcasting industry there are a couple of points I would like to make. We met Ofcom last week and there were two points that concerned me about their evidence. One was, in the context of the public sector service broadcasting requirement, the position of film. I have to say I was a wee bit surprised that when I asked questions on this it did not seem to figure at all on the Ofcom landscape. I would be interested to know just where DCMS sees the role of film. The context in which I asked the question was the pretty appalling record which television generally in the UK has, including the BBC, of showing recent British films. We seem to go for third-rate American films which are very cheap rather than our home produced product, something which people would argue is a key point of our culture.

Tessa Jowell: To take your second point first, we would largely agree with you on that. Secondly, we welcome the fact that we have seen since 2000 an increase in what the BBC spends on UK acquisitions. The figure was £1.75 million in 2000. It will be £4.75 million ---

Q620 Mr Doran: It is still a tiny part of the £80 million that we spend on films.

Tessa Jowell: I absolutely agree with you. You will know that we wrote a specific requirement in relation to film into the Communications Act during its committee stage. No; much of the analogy applies to film that applies to the independent sector and independent programme makers more generally.

Q621 Mr Doran: The second issue is on regional broadcasting. You will be familiar with the phase two document which Ofcom produced on the public service broadcasting requirement. Regional broadcasting is something that every politician takes an interest in. The only interpretation I could make of the Ofcom position - I understand it is a consultation document - is that it seemed to suggest that in the new digital era the Channel 3 companies are going to find it almost impossible and financially unattractive to continue with a regional requirement and that that should therefore be shunted on to the BBC. Including some other areas, in the Ofcom view we should be moving towards a worthy BBC which deals with the programmes that are not commercial and that no-one else should be dealing with. I know I am probably exaggerating their view and they would be horrified at the way I am presenting it, but it is certainly the way it came across to me and I would be interested to know what you, the department, has to say on that general approach to broadcasting.

Lord McIntosh of Haringey: We rely on the very tough provisions in the Communications Act which cover not just regional production but also programming directed at people in nations and regions. Ofcom, of course, is free to express its own view about commercial trends but, as we have public service broadcasting obligations as laid down by section 264 of the Communications Act, they are very tough and they are still minimal as far as we are concerned.

Q622 John Thurso: Secretary of State, I would like principally to ask you some more about governance within the BBC but before I do that can I ask one question with regard to the licence fee? All of the mood music seems to be that the default position, as you have described, it is probably where we are going. Will you be able to look at how the licence fee, if that is what comes in, is operated, and particularly with regard to one area we have already accepted that it is a bit of a regressive charge and we give it to people over 75 free? Two groups of people, it strikes me, do rather badly out of the licence fee. One is service people, who very often have a home where they pay for a licence fee but it is a long way from the barracks where they live, so service people now are having to pay a separate licence fee in their barracks which is a multi-occupation building. A similar thing is for students, or indeed staff working in the catering industry, who live in hostels and have multi-occupation buildings where they are required to pay a licence fee for one room almost. Would you consider looking at those to see if there is some way in which there could be a multi-use licence that could cover them because that is clearly an area where probably a lot of work is done for unpaid licence fees and it is probably quite expensive?

Tessa Jowell: I know, Chairman, that John Thurso will be aware first of all what a difficult area this is. We have great difficulty in reaching a fair solution for people living in sheltered accommodation, for instance, but yes, of course we will look as we draw up the proposals at any area where the present system appears to be an inequitable one. I was interested in the Ofcom research that they published as part of their part two report. It was a public consultation on the licence fee where, contrary to expectation, people appeared by a majority to recognise that the licence fee is a regressive tax but not to mind the fact that it is a regressive tax because it was seen as paying for something that was not a core essential of everyday life. I think the regressive nature of the licence fee is not necessarily its greatest threat and certainly if there are very specific instances of unfair treatment then of course we will look at those.

Q623 John Thurso: Particularly the service personnel.

Tessa Jowell: I have certainly had representations about that point.

Q624 John Thurso: At the outset you said there were a great many things that you were still looking into, which is absolutely right and proper for an open review, but recently there seem to be reports that quite a lot of things have become a kind of done deal. I was particularly interested to read the article in The Independent of 18 October, which stated, "The BBC is close to a historic deal that will protect its licence fee, its basic structure and its institutional future, complete with a new Royal Charter to run for another ten years. The decision is all but taken and a comprehensive deal is now clearly there to be struck."

Lord McIntosh of Haringey: Why are we here?

Q625 John Thurso: That was my question.

Tessa Jowell: That is excellent journalism but the journalism of anticipation. Of course, no historic deal has yet been done; that is absolutely ridiculous. There is a process which I have been at great pains to set out and ensure is a process which is trusted because it is a transparent process. The point which we are at is in focusing on the specific recommendations that we will make in the green paper and to what extent we have a mixture of in effect white paper decisions as opposed to proposals for further consultation. That is the point where we are at the moment but I think it is absolutely right to say that the areas that the debate coalesces around, which will be no surprise to you, are governance, funding, scale and purpose and some of the issues that you have touched on in relation to the future: the BBC's role in what is an environment of very rapidly changing technology.

Q626 John Thurso: You mentioned governance there and I personally think that is one of the most important elements of this. You talked about a sharper definition for the function of the BBC but I think there needs also to be sharper definition within the governance, which clearly failed earlier in the year. The BBC itself, when I asked this question of the Chairman, set out what they are doing voluntarily and they clearly recognise themselves that much needs to be done. Voluntary solutions, however, tend to be towards the minimum end of the scale rather than necessarily where one might want them to be. At the core it seems to me there are these two conflicting functions, one of being the champion of guarding the BBC's independence, of championing what it does, and the other of being the regulator of it. What thoughts are the department having with regard to how much should be enshrined in the Charter relative to governance, actually taking what the BBC is doing voluntarily and putting it into the Charter and what consideration of perhaps even taking it a bit further?

Tessa Jowell: As you rightly say, the BBC have recognised the unsustainability - it is a strong word to use but I mean unsustainability - of this dual function. There are, as you say, two roles, if not more. There is the non-executive role, if you like; there is the broader governance role, but there is also the regulatory role. This is the topic of Terry Burns's most recent seminar, is it not?

Lord McIntosh of Haringey: And the one at the end of November.

Tessa Jowell: Yes. The work on this in preparing the advice on options is not yet complete but I think that, just as the BBC has made very welcome moves to achieve this separation, it is fair to say that we would not regard the status quo as an option that would be acceptable or sustainable for the next Charter review. That said, this is very much a discussion and a conversation which is in train at the moment, so have we reached firm conclusions? No, we have not yet reached firm conclusions. Does that mean that we do not know what the alternatives are? We have a very good idea about a range of alternatives. Obviously, these need to be developed by discussion, they need to be tested and by the time we get to the green paper we will be in a position either to set out options with a preference or to invite further discussion and reaction to a scaled-down range of options. As a postscript to that, the area that we are most keen to address is how you strengthen the relationship between the public, to whom the BBC belongs and who pay for it, and the BBC as an institution.

Q627 John Thurso: Can you confirm that any future changes when the Charter is proposed will be debated by both Houses of Parliament although the standing order requiring that was repealed in 1997?

Tessa Jowell: For the reasons I have given I am not in a position to give a binding guarantee on that for ever. I think that in principle that is a good approach and I welcome the fact that we will have at the beginning of next year a Lords committee on Charter review sitting. That will obviously assist the process. I have always said that scrutiny, consultation, exposing proposals which are in the early stages of development to wider debate is a good thing. It is an extraordinarily difficult thing to do in government, believe me, but just because it is difficult does not mean we should not continue to try and do it.

Q628 John Thurso: As it is a one-in-ten-year opportunity it would be a good thing if Parliament could have that once-in-ten-years debate.

Lord McIntosh of Haringey: We have said that parliamentary scrutiny will be no less than in the last Charter review.

Chairman: One area that we have not dealt with but which is absolutely fundamental to the future of the BBC (in whatever form) is governance. The BBC is governed in the way that it was 77 years ago when it was set up. The events of last year, which this committee has not considered and will not consider as such, nevertheless demonstrated the utter inadequacy of the Board of Governors as a system of governance of the BBC. The Board of Governors consists almost totally, if not totally, of people with no experience or knowledge of the media and that included the Chairman until he resigned a while ago. How is it possible for this country's most important and internationally renowned broadcasting organisation to have as those in charge of it, both as its champions and, irreconcilably, as those to whom it is accountable, the group of people who are chosen on the basis of tokenism, whether it is gender tokenism, ethnic tokenism, class tokenism, regional tokenism or in some other way? Is it not really time now, 77 years later, for the BBC to be run in a professional way and is it not also time that there were a form of accountability by the BBC run by people who knew what they were about and also who were independent of the running of the BBC?

Chris Bryant: Do you mean there are too many posh ladies, Chairman?

Q629 Chairman: If I had meant that I would have said it, Chris.

Tessa Jowell: Chairman, I do not want to repeat the answer I have given to John Thurso on this but I hope that the answer I have given you gives you a flavour of our thinking to date. It is thinking which is currently in the course of development and we will spend much of the next three or four months looking at precisely the kinds of questions that you have addressed. We look forward to your committee's report, as ever, for a number of reasons but I will be particularly interested to see what you conclude on governance. Just on the membership of the governors, you will know that there is now more broadcasting expertise represented on the Board of Governors. I think the way you characterise it is a very interesting one. Accountability needs to be clearer, I think that the whole arrangement needs to be more transparent, but my very particular concern is about a stronger sense of connection between the governance and regulation of the BBC and the people who fund it. There should be a line of accountability that keeps the BBC honest and keeps it true to the purposes and functions that it has for which the licence fee is paid.

Q630 Chairman: Whatever form of governance or executive control for the BBC arises from this Charter review, and there has been a view put forward that particularly with the kind of experience that the new Chairman of the BBC has this could work very well, namely, that there should be an executive chairman and a Board of Governors and the Director General - excellent person as he is - turned into a chief executive, is the government considering seriously whether this form of governance is now appropriate with the BBC competing in a way it has never had to do before against an array of other broadcasters with it being a big business, an international business, and nobody (at least I would not) would quarrel with that? Is this something which could be regarded as fundamental that the government is considering seriously rather than just saying, "Oh well, we might as well go on as we are"?

Tessa Jowell: Yes, it is, and, as I have said already, I see this as probably the most fundamental area for reform arising from the Charter review.

Q631 Chairman: Linked to that, the Charter is going to expire at the end of December 2006. The BBC has been governed by a Royal Charter since 1927. We have got another public sector broadcasting organisation, Channel 4, which is not governed by a Charter. It is embedded in a Communications Act. Whereas the BBC, curiously, has got no clear remit in its Charter, Channel 4 has got a statutory remit and if it fails in adhering to that remit - and there is some discussion now as to whether it is adhering to it - then there is an external regulator which can hold it to account or which can, if need be, fine it, and indeed there has been a very severe reproof of Channel 4 quite recently. Without saying whether an external regulator ought to be Ofcom, as it is with Channel 4, has the government considered or will the government be considering whether it might be more appropriate for the BBC in future to be governed by a Communications Act with a statutory remit in an act in the way it is for Channel 4, and although Chris Bryant has made the point that the Charter review gives an opportunity for reviewing the extent to which the BBC is adhering to its objectives, Communications Acts, which are more frequent than Charter review, could provide the same opportunity? Is the government wedded to the idea of a new Charter or is it looking at the possibility of continuing the BBC as a permanent institution in a different way?

Tessa Jowell: The balance of analysis and the balance of discussion to date have been within the context of a renewed Charter rather than putting the BBC constitutionally on a different footing that would establish a closer accountability to Parliament rather than to an external regulator. The parliamentary relationship, you are right to point out, is an ambiguous one and John Thurso's question about the nature of parliamentary scrutiny I think underlines that. I would mislead you, however, if I said that we had given detailed consideration to a structure for the BBC that moved it out of its constitution by Royal Charter. That said, I go back to the point I made about the overhaul of governance, and of course, just because there is a Royal Charter it does not mean that there cannot be an external regulator. It is not precluded in any way by the Charter relationship of itself.

Q632 Chairman: But the government in no way whatsoever has a hands-on relationship with Channel 4.

Tessa Jowell: No.

Q633 Chairman: Channel 4's remit can be reconsidered when the Communications Bill is brought forward. Its accountability can be reconsidered. Nobody can say that the statutory basis for Channel 4 has meant that Channel 4 is less independent than the BBC; far from it. There is a huge temptation for government - and I do not mean necessarily this government; I mean any government - to try to find ways of meddling in the operations of the BBC. Leon Brittan did it in the Zircon affair. Anthony Eden did it in terms of coverage of the Suez war. If the BBC has this peculiar and, some might say, anomalous relationship with the government and the Parliament, it can be argued that governments of any political persuasion have a far greater temptation to meddle one way or another with the BBC than with Channel 4, to meddle with which no government has ever attempted. It would seem to me that it would be a very serious error if the government were simply to operate on the basis, whatever conclusion it came to, that it was utterly wedded to a Royal Charter as a way of continuing the BBC because an opportunity might be lost to set the BBC on a new independent path.

Tessa Jowell: I can assure you that we will look at all the available options for strengthening the independence of the BBC. I have said on many occasions that we want to see as a result of this Charter review a BBC which is strong and independent of government. In discussions we had very recently we commissioned further work on ways in which the independence of the BBC might be underpinned. I do not feel that there is a problem in having diversity in our broadcasting ecology of forms of governance, forms of regulation and forms of statutory constitution. The BBC is different from Channel 4 in many respects, not least in terms of scale, and also purpose, but securing the BBC's independence, securing a greater degree of accountability and a greater degree of transparency in the way the BBC operates and its availability to its shareholders, is a major objective for me in this Charter review.

Q634 Michael Fabricant: I just want to pursue one point. Regardless of whether there is a Charter or whether there is a BBC Act or whatever, your predecessor, Chris Smith, used to argue strongly - and I am not attacking Chris Smith in any way, by the way - that the BBC's current position should not be changed with regard to external regulators, and then when he stopped being Secretary of State he took an alternate view, which is perfectly legitimate and in my view very understandable. Given that the Broadcasting Act, when that came out, was almost out of date within six months, and given that since the Communications Act there has been a whole series of events which the Chairman has mentioned, do you not think that despite the fact that there was argument during the committee stage for Ofcom or some other external regulator to have some additional control over the BBC - partly to protect the BBC, I might add, because being its own judge and jury is not always a good thing - have you given some thought to that? It would need a change in the law, I know, and there may not be time available to do that, but do you think that the Communications Act is as up to date now as it was 18 months ago when it was first drafted?

Tessa Jowell: The short answer is yes, I do. You are well aware of the extent to which the BBC is subject to Ofcom and (a point which is often forgotten) is subject to dual regulation rather than simply the regulation by the Governors.

Q635 Michael Fabricant: In certain areas though.

Tessa Jowell: In certain areas, absolutely. I hope I have made clear to you this morning that none of the options for regulation, and indeed none of the options for securing the strength and independence of the BBC, has been shut down. We are looking across a very wide range. As I say, when we come to publish the green paper either that range will have been reduced to a narrower range of options or we may by then be sufficiently certain. This will be one of the biggest decisions about the future of the BBC taken for many Charters. I cannot think of another Charter that took a decision of such profound importance for the BBC. We may well want further consultation in a green paper before reaching a conclusion on that. I would only say - and it links to the Chairman's point about the regulation of the BBC by Ofcom - that I do think that there are benefits in broadcasting of plural regulation and, secondly, I think that another objective of this Charter review is to define the distinctiveness of the BBC being a broadcaster which is unlike any of the other broadcasters, even its close siblings.

Mr Hawkins: Secretary of State, you have said that you are particularly interested in what this committee may have to say in due course about governance and you gave what I would regard as a very constructive response to the Chairman's recent questions. I just wanted to ask you, - and I have no idea what our committee is going to recommend; we have not, of course, started discussing the nature or content of the report or anything - if our report were to contain the kind of radical suggestion about moving completely away, not only on governance issues but on the whole concept of the licence fee, taking account of some of the views expressed recently, for example, by David Elstein's committee, would you take that equally seriously if that were to form part of our thinking?

Michael Fabricant: Or would the shredding machines be used?

Q636 Chairman: Order, Michael, order.

Tessa Jowell: I have always treated the recommendations of this committee with seriousness and great respect. Of course, I am not sure when you expect to publish your report, Chairman, but certainly from our point of view the sooner the better in order that we can have the benefit of your view and the very extensive analysis of the market and discussion that you have been involved with, not only here but also internationally. Of course we will give very serious consideration not just to the proposals but also the argument that you mount in support of the proposals that you have made.

Q637 Chairman: With regard to publication of our report, we hope to be able to publish it before the House adjourns for the Christmas recess.

Tessa Jowell: Oh, good.

Chairman: Thank you very much.