Examination of Witnesses (Questions 160
- 177)
TUESDAY 22 JUNE 2004
CHANNEL 4, S4C
Q160 Alan Keen: May I ask a very
simple question, John? Can you paint us a picture of what would
happen if the BBC ceased to exist in so many years' time? If it
were given away, sold off, what would the broadcasting arena be
like? What would be the advantages and disadvantages?
Mr Newbigin: If the BBC was, as
you said, sold off, then what would happen is that over a period
of time there would be a degrading of the quality and the level
of innovation and the range of skills that are available in British
broadcasting, and the long-term consequence would be dire.
Mr Scott: If I may add, one would
need to ask how would the new body be funded? Because if it was
funded by advertising it would have significant impact on ITV,
Channel 4 and Channel 5 as well.
Professor Stephens: Could I add
to that, that certainly from the point of view of Wales and the
culture of Wales and the politics of Wales, the contribution of
the BBC to Welsh life has been immense since the 20s, not just
in terms of news gathering and regional—now devolved—and
national news, but also in such things as the National Orchestra
of Wales, and the support it has given to young singers, and so
on; it has been an immense cultural asset. As we look to the long-term
future of the commercial broadcaster, ITV, and the kind of economic
models that are coming out with digital switchover, and how far
PSB can be sustained in that atmosphere, then I think that the
presence of the BBC in the national regions is of acute importance.
Q161 Alan Keen: Is there any way
you can tell us how it could maybe be democratised further than
it actually is at the moment?
Mr Newbigin: In our submission
to DCMS we suggested a structure which is actually closer to the
Channel 4 structure, which is that there should be a Management
Board, which is a proper Management Board of the BBC, which might
include some non-execs, and that they should report to the Board
of Governors and the Board of Governors should be an arm's length
regulatory body with clearly a majority of lay persons, but it
also ought to include some heavyweight broadcasting expertise
and it should be broadly representative of the population of Britain.
That, in our view, is the best way to make the BBC more accountable.
If, in the long-term, it were to come fully under Ofcom then that
would be the second stage in that process.
Mr Scott: I think that if each
of our services had a more explicit remit laid down, which was
measurable, accountable and transparent, that would be a proper
role for the governors to supervise and report on, and actually
agree those remits at the outset.
Professor Stephens: I suppose
there could be an argument for strengthening the regional bodies,
the Broadcasting Council for Wales, the Broadcasting Council for
Scotland, and so on. At the moment they have an advisory role
but not a budgetary or regulatory role in the proper sense. So
that is an area that could be explored.
Q162 Derek Wyatt: Good morning. I
have been on record as wanting to try and persuade the BBC to
create a UK film channel only, and Channel 4 has some experience
of that. If I fail to persuade BBC governors and new management
to do this, do you not think that there should be some way that
we can address that which is missing in the public sector, by
top slicing 5% or 10% of the licence fee, and, if you could, would
that have influenced the way in which you have approached film
in the last two or three years yourselves, Channel 4?
Mr Scott: There are two issues
there, one of production of the films and then the running and
the organisation of a channel. Our Film 4 channels, I am glad
to say, are doing well and will be profitable this year, and that
is a great achievement. On the production side, as you know, we
have had to scale back our ambitions. A couple of years ago we
found that the structure which we were pursuing was not really
effective, and in particular we had scaled up an operation in
the hope of getting a decent American studio deal, which we did
not get in place. So our production model has gone back to where
it had been in the time when we were being successful. We are
commissioning films out of the main channel's programme budget
and those films are beginning to come through now. As for the
running of a UK film channel, are you suggesting that that would
only have British films on it, or be broader than that?
Q163 Derek Wyatt: No, I was thinking
of a British film channel. You have huge film libraries that are
just laid bare, which would need digitising, but there is a cultural
need to show film. If you cannot show it on the BBC then why should
we not have a public service UK Film Channel? The logic escapes
me at the moment.
Mr Scott: I have not seen a business
model for that.
Q164 Derek Wyatt: There is not a
commercial business, as you know, and I have talked to the commercial
entities, but why could there not be a Public Service Channel?
Mr Scott: It sounds a very interesting
idea.
Professor Stephens: Could I add,
that wearing my other hat as a governor of the BFI that obviously
I would be delighted to see more film on, by whatever means possible.
Q165 Derek Wyatt: But we will not
attract children, we will not attract the next generation unless
there is a public service need, and that is a failure; that is
what everyone says the public service means. It is a failure of
the commercial, or you cannot run a UK film channel?
Mr Scott: I really do not know
the complexity of the rights position and where those catalogues
sit and who owns them, but I am certain that those are all issues
that can be dealt with.
Q166 Derek Wyatt: So let me ask you
all, are you in favour, therefore, of being able to apply for
a fund so we could top slice the licence fee? Film is not the
only channel that the BBC does not do; it does not do sport, it
does not do sport health, sport psychology or sport education.
It could easily run a sport channel but chooses not to.
Mr Scott: Whether it is the role
of the BBC licence fee to do this or whether it is something which
the Film Council should look at, I do not know, but it is an interesting
idea.
Mr Jones: It seems to me that
the question is what then gets cut in order to fund the additional
channel? We sometimes portray our own dilemma in deciding how
we decide on our priorities by saying we could spend the whole
of our programme money on making a single blockbuster film each
year, but then you would not have a television channel. Somewhere
in the range between that absurd extreme and the other pragmatic
policy there is the truth of what we do, which is to fund up to
two films a year because we think that is appropriate. But your
proposition is that something would have to go in terms of the
general presence of broadcasting at the moment.
Q167 Derek Wyatt: Forgive me, but
BBC3 is watched by less than 2,000 people an hour and costs £100
million; it would cost less than £100 million for a UK film
channel.
Mr Newbigin: I would have thought
with the BFI and the Film Council exploring the possibilities
of E-cinema that, if one was going to look at a film channel,
to do something on broadband is something that would be worth
exploring and would be infinitely cheaper than starting a television
channel.
Derek Wyatt: I agree it would be cheaper
in broadband if we can get the bandwidth. Thank you, Chairman.
Q168 Rosemary McKenna: You may not
be able to answer this question, but I think it is interesting
that the creation of S4C, did you at any time consider making
a similar arrangement in Scotland, because there is an upsurge
in Gaelic broadcasting in the language in Scotland? Has that ever
been considered or would you consider it in the future?
Mr Scott: I think that it was
briefly considered some time during the 80s and the outcome of
that consideration was the setting up of the Gaelic Television
Fund, which was then providing programming, which was transmitted
on ITV's Scottish Services, and I think on the BBC as well but
I am not entirely certain.
Q169 Rosemary McKenna: There certainly
is not anything like the volume.
Mr Scott: The commercial impact
on Channel 4, if we had Scotland separated away from Channel 4,
would be quite severe; it is obviously a large audience for us.
I hope people in Scotland enjoy our programmes as well, so it
is probably good to have Channel 4 there and a Gaelic Fund.
Professor Stephens: Of course,
as the new digital age evolves Channel 4 will be UK-wide side
by side with other broadcasters such as ourselves, which is a
very good thing for viewers—they are provided with a diversity
of programming. We are very aware of the needs of Gaelic speakers
for greater coverage and more programming. I think that the difference
in Wales over the years has been the political will to make the
language survive. At the moment the language is, as you know,
compulsory in schools; it is the avowed intention of the
Assembly Government that it should survive and that it should
be encouraged. Therefore, the position is somewhat different in
political terms over the whole of the country, and I think we
are the beneficiaries of that political will. However, one could
argue that the small drop in the number of Gaelic speakers at
the moment is an argument for enhanced coverage because we are
all the losers when a certain culture disappears.
Q170 Chris Bryant: S4C, it is interesting
that you said it is good for viewers that you have Channel 4 and
S4C alongside each other in Wales, but I guess it is difficult
for you because you have lost a third of your audience in the
last three years. But today is not about you, it is about the
BBC. You argue in favour of the licence fee, but you are funded
by grant-in-aid and I guess you want a bit more grant-in-aid as
well, and the World Service is funded by grant-in-aid and not
by the licence fee. Why are you in favour of the licence fee?
Why should it not just be grant-in-aid, as it is in Holland?
Professor Stephens: I suppose
it is an argument we would have to have with the Treasury as to
the way in which they would wish the licence fee to become a grant-in-aid.
Would that then have repercussions for their own rate of inflation,
RPI, whatever? I am sure that there are issues around this subject,
which they have already debated. I suppose the old way of looking
at it was to say that this is the buffer zone between an arm's
length government intervention and the broadcaster. I am not quite
certain that that argument prevails totally.
Q171 Chris Bryant: Are you compromised
by being funded by grant-in-aid?
Professor Stephens: No, we are
not, and I would say that the fact that Parliament in a sense
sets the licence fee is in itself a little bit of a compromise
on the absolute independence of that fee. It has been a useful
device, which currently most people subscribe to, and, as we heard
from Lord Burns, the research and the Ofcom research shows that
at the moment it is not under immense threat. Therefore, all we
are saying is, so long as that remains a viable way for people
to pay for their Public Service Broadcasting then we are supportive
of it.
Mr Jones: And the size of the
population of the UK gives you a product of the licence fee, which
enables a very wide, rich range of services to be provided, which
would not be the case in a smaller country where other mechanisms
have to be put in place in order to sustain what is considered
to be a desirable service.
Q172 Chris Bryant: A different question.
At the moment you get 10 hours a week from the BBC, produced by
the BBC for you, and that comes out of the licence fee, and you
are going to lose 10 hours a week of English broadcasting from
Channel 4 when Channel 4 is available to everybody in Wales?
Mr Jones: More like 70 or 80 hours.
Q173 Chris Bryant: A week?
Mr Jones: Yes.
Q174 Chris Bryant: So an enormous
hole in both money, because you are not able to sell the advertising,
and in terms of programmes. Would it not make more sense in this
new Charter just to put you into the BBC?
Mr Jones: The reason why S4C was
set up as a separate channel and as a separate authority was in
order that there should be this space, which gave primacy to the
Welsh language, and when you have 200 to 300 English language
channels that argument still prevails in respect of giving that
space, where the Welsh language has primacy in Wales. The reason
a separate authority was set up was to ensure that there was a
body which had the interests of that channel as its primary function.
A separate funding stream was set up, again so that that primacy
was sustained throughout. We think those arguments are still as
strong as ever.
Q175 Chris Bryant: But there must
be costs to having two structures, to having a separate Board,
a separate organisation, a commissioning through to the BBC, and,
at the same time, you have no power really to say to the BBC,
"Excuse me, you are spending lots more money on English language
programming in Wales, but you are not spending proportionately
the same amount of money on Welsh language programmes that you
make for us." So actually you lose out.
Professor Stephens: We are a very
hybrid organisation; we take advertising, we take sponsorship
and so on, in an upfront way which is not currently the BBC model.
So I think there are some problems as to the way in which we are
a suitable fit for the BBC. Having said that, I do not think that
there are sufficient savings in just the movement from a single
Board, which is probably costing in the order of £200,000
per annum, to actually make up for 70 hours' loss of programming.
The most important point—and I think this is a serious one,
because I take your point very seriously—when I am trying
to be very good and very moral I try my best not to suffer from
institutional-itis, and to say, "I am defending the present
structure at all costs." In the interests of the viewer we
have to look beyond that. When you look at the print media in
Wales, at the lack of diverse voices in that print media, when
you look at the power of the English Press in Wales, as opposed
to Scotland, when you see what could be happening to ITV Wales,
I do think it is important that there is more than once voice
in Wales, and that is one of the principal arguments for the existence
of a separate channel.
Q176 Chris Bryant: Thank you very
much for that. One question to Channel 4—and it looks as
if you are going to get away without any questions about Big
Brother today, which is going to be quite an achievement—on
the governance of the BBC, do you think it will make any significant
difference if the governors were to become more independent from
the Board of Management, as Michael Grade seems to be suggesting,
as well as obviously independent from government?
Mr Scott: We certainly believe
that is the direction they should move in. As John was saying
earlier, we envisage a Board of Management with perhaps non-executive
directors, who would manage the business and the governors as
regulator at some distance, arm's length, in their own building,
with a degree of separation. We think that would strengthen the
whole structure of governance at the Beeb.
Q177 Chairman: Just to proceed on
the question that Chris Bryant was putting about funding the BBC
through grant-in-aid. I made some headway in persuading Harold
Wilson, when he was Prime Minister, to do exactly that, but Denis
Healey, who was Chancellor of the Exchequer, would not have it
because grant-in-aid can only come out of general taxation. The
licence is hypothecated tax for which the Chancellor does not
have to find the money; you are a public sector organisation but
you find your own money. It is in a sense a rhetorical question,
is not the only future for funding of the BBC in those circumstances
either to go on being funded by the licence or to find its own
way of funding in the way that Channel 4 finds its own way of
funding?
Mr Scott: We believe that the
licence is the correct way of funding the BBC. If they were to
be funded through subscription I think what we would find is that
perhaps half the country would want to pay it and it would have
to be £200 a year, and the other half of the country could
not afford it or did not want to pay it, and I think much of the
benefits of the universality of the BBC Services would be lost.
I think that if the licence fee is the right way, even after switchover
we will find that many of the DTT Free-view boxes will have no
conditional access slots and cards. Even at that point I do not
think that the equipment which will be in people's homes would
enable a simple charging mechanism. I think the issue on the licence
fee—and we believe in the licence fee—is the question
of how much should it be? I think there is scope there to look
at the quantum of it and the cost to the various BBC Services
and what things we want them to do. I support a licence fee.
Chairman: Thank you very much indeed;
we are most grateful to you for attending.
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