Examination of Witnesses (Questions 40
- 59)
TUESDAY 8 JUNE 2004
SIR CHRISTOPHER
BLAND
Q40 Chairman: Sir Christopher, I
would very much like to welcome you back to the Committee. I remember
our delightful exchange when you retired as Chairman of the BBC
and I was asked to contribute to your farewell commemoration,
and you wrote back thanking me and saying you hoped to do the
same for me at some point.
Sir Christopher Bland: I look
forward to it. Any moment now?
Chairman: You have got a vast experience
on this issue of BBC Charter Renewal that we are involved in.
We particularly appreciate your coming because, after all, you
are under no obligation.
Q41 Derek Wyatt: Good morning, Sir
Christopher. In trying to understand where the entertainment platform
might be in 2012 and then again in 2017, given that at the moment
it is a ten-year licence renewal, what issues do you think there
are for the BBC if, say, by 2012 its coverage, its audience participation,
is less than 20%? In other words, do you think we have a commitment
to public sector broadcasting whatever the figure; or do you think
there is something about the audience figure that dictates, as
it were, a relationship with the licence fee?
Sir Christopher Bland: Chairman,
I think it is clear that there is a relationship but it is not
one that is easy to define. I think we could all imagine a point
at which the BBC's coverage, reach and share were such that a
universal licence fee was not sustainable. It is a long way from
that point today; and I suspect in five years' time (indeed in
10 years' time) if the BBC continues to do well it will still
be a long way from that point. There is plainly some relationship.
You cannot expect the whole of the television-watching population
of the United Kingdom, which is virtually all of it, to pay a
substantial licence fee if a large number of those who pay it
do not actually use some of the BBC services some of the time.
To fix a figure I think is pretty tricky. It is a good deal lower
than their present level of reach, which I think is still in the
1990s.
Q42 Derek Wyatt: Reach as opposed
to audience?
Sir Christopher Bland: Share.
Q43 Derek Wyatt: Given that the BBC
set up NHK in Japan after the war, and given that NHK's licence
fee is more than our current one in the UK but given the audience
figures in Japan are less than 10%, it does not seem to have bothered
the Japanese that there is this relationship. Surely the point
is that we need a buffer, as it were, to the commercial world
and it does not really matter what the reach is? You seem to think
it does.
Sir Christopher Bland: I certainly
think it matters. I do not think it is an absolute. Your example
from Japan demonstrates, at least there, that there is not a rule
which clearly applies. There is a need for the BBC as a buffer,
as something that on its good days is capable of raising the bar
of the broadcasting. Of acting as both a national and international
standard I think is as near an absolute proposition as you are
likely to find in broadcasting. We do need the BBC for reasons
and to provide a purpose that no other broadcasting institution
in the UK is likely to provide in full.
Q44 Chairman: That obviously is a
very sustainable case, Sir Christopher. Following on from what
Mr Wyatt has put to you, can I put to you two questions: first
of all, this question of audience—audience reach as calculated
means a very, very small attention span being given for those
who have tuned-in to be counted as part of the audience reach.
On the whole it is not realistic, is it? If people are going to
watch television they are going to watch it more than for that
very minute period, if they are serious about watching, rather
than just zapping through with their remote control. That is the
first question. The second question is a very different question.
Assuming that the Committee decides (and we are a long way from
any decisions whatsoever) that it is desirable in the national
interest, as you put it, that we should continue to have a BBC,
is it therefore in your view requisite that the BBC should continue
to exist on a Charter; after all, Channel 4, which is a public
sector broadcasting channel lives permanently without any need
for renewal under the Communications Act? In a sense would it
not be safer for the BBC not to have these periodic renewals,
but just to be something that is there and remains there under
the Communications Act?
Sir Christopher Bland: You have
to remember this is the first time I have appeared before this
Committee without at least all of these chairs full, and several
people behind me passing the answer and reminding me what the
first question was if I had forgotten it! The first question was
about reach and its imperfections. You are quite right, reach
is a measure of quite a short use of the BBC's services; and share
is of course quite different. I think you need to look at the
two together. If share for example, on BBC1 in particular, declined
far more than reach, you would have to pay attention to that.
Would the BBC be better off without a Charter? I think arguably
it might. I am not sure as a citizen and I am not sure that you
as parliamentarians would be better off without a Charter. Charter
Renewal does give you a chance to review, as you and the country
is entitled to and should, the purpose and funding of the BBC
at regular intervals. If there is a kind of rolling continuum
then you do not get that ten-year opportunity to question what
the BBC is for. The BBC, I think, is immensely privileged as an
organisation, in a way that Channel 4 (although it has got a privilege
of its own) does not have the unique privilege of a licensee;
it does not have the access, the radio, television and Online
frequencies, which the BBC has. I think the BBC is sui generis
in that respect, and I think a Charter does, as it were, identify
that very clearly. There is another value to the Charter too:
it is via the Charter and its mechanism and the Queen and Privy
Council that appoints the Chairman and the Governors at the BBC,
and that puts them in a hugely strong and independent position
both in relation to the Government once it is done, and also in
relation to each other. The Chairman of the BBC, as you find very
soon after joining it, cannot fire (although from time to time
you may long to) any of his fellow governors, as they are there
independent and for as long as the Queen is prepared to have them
until the end of their three or five-year period. The Chairman
and the Board of Governors are in a very strong position, and
that derives from the Charter.
Q45 Derek Wyatt: Is there a dilemma
as the BBC moves forward—in that BBC3 and BBC4 cannot be
seen by most of the population and much of the digital radio stations
cannot be either—that if we were to say to you, hypothetically,
by 2012 the entertainment platform was perhaps some sort of mobile
communicator, and that is how our children and grandchildren will
receive their information, should the BBC have a public sector
remit for that entertainment platform; or should it just be basically
radio and television currently? In other words, should it be a
software producer, should it move with what is going to happen
to the marketplace, or should it just stay in the radio and television
business?
Sir Christopher Bland: Of course
it is not only in the radio and television business. In a sense
it has invented its own Online role. I think actually of the great
benefit of the expansion and quality of digital and Online services
in this country at very considerable cost. It is difficult to
see where else that kind of money would have come from and, as
a result, Online in the United Kingdom has grown, I think, far
more rapidly and its quality is far more interesting than would
otherwise have been the case. I think it would be unwise prescriptively
to say the BBC should not do X or Y. It involves a view of the
future which is inevitably likely to be proved wrong. I do not
think that kind of prescription would be wise—at least at
this stage.
Derek Wyatt: Chairman, could I ask about
BT?
Chairman: Provided it is relating to
the BBC's Charter. Sir Christopher is good enough to come here
but he has not come here to talk about his role as Chairman of
BT.
Q46 Derek Wyatt: Do you perceive
at any time that BT will be a content provider, so that it will
come to rival the BBC Online, or anything like that?
Sir Christopher Bland: No, I do
not. I do not think that BT's strengths lie in the area of content
provision. One can see, although we are some distance from it
at the moment, a broadband world in which increasingly video is
a part of the services that people use. We are not there yet,
but BT is doing some investigation and experimentation and that
is going on in a lot of countries. It is all about the kind of
band width you need to deliver high quality digital images, and
that is a good deal more than 512K. You can argue whether it is
4Mb or two with compression techniques and these are improving
all the time. To deliver sport, for example, you need a lot more
band width than is available at the moment. To deliver action
movies again you need a lot more band width. Chat shows, that
is fine. The deliberations of this Committee, that is fine—we
can do that at 512 you will be glad to hear. We are some distance
away from that. I believe that broadband will become, at some
stage in the next five to 10 years, a very significant means of
distributing television, film and moving pictures, and that is
already starting.
Q47 Alan Keen: I was as enthusiastic
for a combination of Chair, Chief Executive and Director General
when you were there as I was for the two who followed you. The
problem the BBC had, and led to the resignations, I thought was
extremely sad. The problem seemed to be that the Chair was perhaps
too involved in the day-to-day running of the BBC and therefore
was not the backstop that the Chairman could have been. That is
not a criticism of the previous chairmen. I thought the relationship
worked extremely well and I saw it on many, many occasions. You
may not be able to comment on how it worked after you left, but
did you think about that dilemma of whether you should be involved
as an Executive Chairman, or should you have taken more of a backseat
to have an overview of what was going on at the BBC? If somebody
had been further back or had there been a separate Chairman of
the Board of Governors from what looked like an Executive Chairman,
would that have stopped the problem that arose at the BBC?
Sir Christopher Bland: I do not
think there is any form of organisation that stops mistakes, things
that, with the benefit of hindsight, you would have done differently
or you would conclude were an error of judgment. I do not think
there is a structure that avoids that. It is clear that the BBC
would recognise, and have recognised, they made mistakes. It is
true of BT as well. I am a part-time Chairman (and I never allow
myself to be called "non-executive" because that implies
you are not very active or interested in what is going on) and
have a very distinctive and different role from that of the Chief
Executive of BT. The same is true at the BBC. The Chairman's job
is not to run the organisation; it is to know what is going on
and, from time to time, distance himself where he needs to from
the Director General, from the Chief Executive. I think that is
in-built, as it were. Knowing when that moment has arrived is
pretty important, and sometimes you may not do it. It is a matter
of balance. Again, I do not think you could be prescriptive about
it. The most important moment, of course, in the Chairman's life
is when he and his Board appoint the Director General and the
Chief Executive; and the next most important, if and when that
comes—and it is interesting to point out over the last four
Director Generals of the BBC, three have been fired and one only
missed it by a whisker—is when the Chairman and the Board
of Directors decides that the time has come for a change.
Q48 Alan Keen: There is a strong
argument in any organisation—and wish my private sector
experience had been as successful as yours because I worked in
the private sector—and it is very handy, is it not, for
a Chief Executive (the one driving the thing) to have a Chairman
who is involved, not every day of the week but involved in a very
constructive way and keeping his eye on things and helping things
along? For the BBC, with an extra problem the private sector does
not have, would it not be a good thing to have a Director General,
a Chairman of the BBC, but then a separate Chairman of the Board
of Governors as the backstop?
Sir Christopher Bland: I do not
think so. I understand the argument and the apparent appeal, but
that raises the difficulties of: who is the Chairman of what;
and what do the two chairmen do which is different? I think that
would actually create more problems than it solves. With all its
imperfections, with the relationship between a Chairman who is
clearly not the Director General, is not responsible for running
the organisation, and can and should stand back from time to time,
along with the rest of the Board of Governors (again the BBC's
structure is not like a FTSE100 company, none of the Executives,
including the Director General, are members of the Board of Governors)
there is the structural opportunity to stand back and say, "We
are the Board of Governors. We are not the Executives of the BBC",
and the BBC does need to do that from time to time.
Q49 Alan Keen: Maybe it is because
I am in favour of keeping Ofcom further away from the BBC than
some would have that I am saying possibly there should be a separate
Chairman of the regulators of the BBC. That is what I am thinking
about, but you would not be for that?
Sir Christopher Bland: I would
not. I agree with Lord Currie when he says there is a difference
between regulation and governance. At least I define "governance"
as being responsible for what happens at the BBC; and "regulation"
as being ensuring that the BBC obeys the general and particular
rules that apply to that organisation. I think you can take regulation
outside the BBC, but you cannot take governance. You cannot sub-divide
or second guess the responsibility for making sure that the BBC
achieves its remit and its Charter responsibilities. Once you
divide that, that is the equivalent of saying to the Board of
BT, "You're responsible but actually so is Ofcom". Now
Ofcom is not responsible for BT. The Board is clearly responsible
to its shareholders for what is in the end a fairly simple, in
contra-distinction to the BBC, remit. Our job is to deliver shareholder
value and you can measure that; the BBC's is much more difficult
but it still cannot be sub-divided or shared. You have to decide
who is in charge of that; making sure that the BBC delivers its
responsibility. You cannot share that with Ofcom. You can on the
other hand, and that has already happened, give Ofcom specific
regulatory responsibilities in relation to the BBC, and that already
exists.
Q50 Alan Keen: What would be the
main disadvantage if the BBC was not given a further Charter?
It would go to the market, presumably? What would happen?
Sir Christopher Bland: That would
be to change the structure and nature of British broadcasting
and, I would argue, for the worse. Broadcasting would survive.
You have got a perfectly lively commercial model in the United
States with PBS as a begging bowl stub that does, given its lack
of funds, a remarkable but very, very small and minority job.
It has very little influence and very little power and very little
money. You could move to that model; you could make the BBC a
commercial organisation overnight; it would fight its commercial
weight; but you would destroy ITV in the process, or marginalise
it, and you would have a far worse broadcasting ecology in the
United Kingdom than we are lucky enough to enjoy at the moment.
Q51 Chairman: Sir Christopher, if
you have not seen it, I recommend you and my colleagues on the
Committee to read the article on PBS by Ken Auletta in the June
7 issue of the New Yorker. It is a terrifying prospect,
is it not?
Sir Christopher Bland: I have
read it and it is very, very good.
Q52 Michael Fabricant: But not half
as terrifying as actually watching PBS at times! Thank God the
BBC provides much of its output.
Sir Christopher Bland: Principally
British shows.
Q53 Michael Fabricant: Sir Christopher,
I take the point you made to Alan Keen regarding the effect that
a privatised BBC would have on other commercial broadcasters.
Clearly, the pot is only one particular size for advertising subscription
and it is not going to expand that much, if at all, if the BBC
were privatised. With the benefit of three years' distance now
from the chairmanship of the Corporation, do you see any room
for any change at all in the governance of the BBC, the way it
is funded, or any of its commercial operations? Or are you saying
that it should remain forever static, or at least in the next
10 years?
Sir Christopher Bland: I see one
significant change in the relationship between governance and
regulation. I think that there should be an appeal against the
BBC's decisions on matters of fairness, in the same way as there
is on taste and decency. I took that view when I was Chairman.
It was not a view shared by the majority of my fellow Governors
at the time, who felt that was so important that the BBC needed
to do it itself. I took a contrary view: that it was so important
that there needed to be an entirely external body, and it could
be Ofcom—they, after all, have those responsibilities in
relation to taste and decency so you are not actually inventing
a new principle—or it could be somebody else. That there
should be an appeal against the decision of the BBC on matters
of fairness I think would be a major safeguard—actually
for the BBC, as well as for the public interest. That would be
a change for the better.
Q54 Michael Fabricant: I think what
you have just said is hugely significant because a number of us
have always argued that, even when the BBC Board of Governors
came up with a correct decision, perhaps to the outsider it would
seem not to be completely impartial because the BBC was being
its own judge and jury. Could you just expand on that? What sort
of areas of fairness are you talking about? Are you talking about
balance in politics?
Sir Christopher Bland: Yes.
Q55 Michael Fabricant: Solely that?
Sir Christopher Bland: In effect
I think there is no decision of the BBC's that should not be appealable.
That is the case for taste and decency. I forget what the exact
definition is in the Charter and the Act of Parliament, but I
think fairness is the overarching description: of fairness in
coverage of politics; of the affairs of the Corporation; the affairs
of an individual. An appeal against that—at the moment the
opportunity for that does not exist. For the reason you have just
given, I think it would be better for the BBC. Even when the BBC
is right you may not be happy until you have gone to a third party.
Q56 Michael Fabricant: On the subject
of third parties, the BBC for a long time resisted any opportunity
for the National Audit Office to look at its activities in respect
of its operations—whether they were in the public interest
financially. Do you welcome the fact now that the BBC is beginning
to accept intervention by the NAO.
Sir Christopher Bland: I think
"welcome" would be overstating it. I accept it as a
political need of our times. It would be very significant to see
the way in which the NAO discharges that responsibility. If it
does it properly and well that will be fine. If it tries, for
example, to take over some of your job that will not be fine;
because you will have two groups rather than one in Parliament
doing that. If it tries to take over the job of either Ofcom or
the Governors that will not be fine either. I think it needs to
confine itself to what it properly does, which is an audit and
that is a financial audit and a value for money audit. If it starts
widening its remit—and that is the temptation and the thing
which the BBC fears—then that will not turn out to be successful.
Q57 Michael Fabricant: Alan Keen
mentioned the recent turbulence within the Corporation, and I
personally very much regret the departure of Greg Dyke whom I
think was a very able Director General. You mentioned that part
of the strength of the Board of Governors was the Director General
not sitting on that Board of Governors. I put it to you: was that
a strength? Might not the situation have been resolved more quickly,
and perhaps for the better, had the DG been an integral part of
the Board of Governors, just as you have a Managing Director on
the main Board of BT?
Sir Christopher Bland: It might,
but I doubt it because the Director General is an integral part
of the top structure of the BBC. He, as do the senior members
of the Executive team, comes to every single meeting of the Board
of Governors. The days are long gone when the Director General
and others waited outside to be sent for. It is integral in that
sense. Again, I do not think structure would have overcome the
mistakes that were made.
Chairman: Without being in any way critical
of the line of questioning, I prefer us not to pursue the line
about Hutton. I do not think that is really relevant to Charter
Review.
Q58 Chris Bryant: Good morning, Sir
Christopher. Can I just press you on the issue of Charter Renewal,
whether or not to have a Charter, or to have statutory powers
for the BBC? If one were cynical one could point to the ten-yearly
process whereby the BBC and policy people put together a grid
of great television programmes that are going to appeal to politicians,
that are going to be on in the six months or nine months before
the Charter Renewal; lots of people taken out to lunch in Government
and on select committees and things like that, and a great wooing
of government over a certain period of time, and once the Charter
has been renewed go back to normal. Would it not be better for
the BBC, and for the steady progress of broadcasting, if the BBC
instead of having a ten-yearly cycle was in statute?
Sir Christopher Bland: I think
you are right, that is a cynical view. As you went into politics
plainly that would not be an attitude of mind you would hold.
You and I are more optimistic about the human condition than that.
As you quite rightly say, that is a cynical view of what happens
and a bit of a caricature. Some of it of course happens but even
if the worst comes to the worst and you said that was the only
time the BBC behaved well, the rolling continuum, I would suggest
they never did any of that. I think the truth is actually that
the Charter Renewal does give you—Parliament and the public—a
very, very significant opportunity to review the BBC in a way
that on a rolling basis you would not do. The BBC is going to
respond to that and plainly it should. The important thing if
the Charter is renewed is for the Board of Governors to make sure—and
for this Committee to play its part in making sure—that
the Charter objectives continue to be fulfilled even when it is
seven years away from the licence fee and from the next Charter.
I think the processes by which that is done can be improved. I
think, for example, this Committee can improve the ways in which
it deals with the BBC. In my experience you do not grasp fully
the opportunity that the Annual Report gives you for a really
thorough-going review of the BBC's performance each year. I think
Parliament as a whole—and the BBC did try and present its
Report to the House of Lords and the House of Commons in Westminster
Hall—also does not grasp that opportunity. That is something
methodically and annually this Committee and Parliament as a whole
should grasp. It should really hold the Board of Governors to
account. That process should be an annual one rather than a Charter
Renewal one.
Q59 Chris Bryant: One of the innovations
in the last few years is the review of individual services which
the Secretary of State now does. We have had a review of BBC News
24; and there are reviews of the other news services, because
there have been so many news services coming out at the same time.
How important do you think that process is? Or do you think there
is a danger of politicians getting their sticky fingers on broadcasting
in a way that would be inappropriate?
Sir Christopher Bland: There is
always that danger, but I do not think in the case of the review
of news services that is an inappropriate thing for the Secretary
of State to do. Most organisations do not welcome annual reviews
or having their processes scrutinised, but I think the BBC in
particular has such a privileged position it really needs it.
Actually the Board of Governors need it too.
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