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21 Jun 2006 : Column 1334

Mr. Woodward: If my hon. Friend means the excellent programmes that the BBC makes, I agree absolutely. If he means the way in which the BBC appropriately gets involved in innovation so that it can compete in the global media market, that is right, too.

The hon. Member for East Devon suggested that the Government somehow made known the date for the announcement at The Guardian cocktail party. However, he chose to forget the fact that a specific date has never been set for the announcement of the date for settlement of the licence. There is a date by which the announcement must be made, which is early next year, but I am sorry to tell the hon. Gentleman that, despite the jokes and caricatures, he is simply wrong. Throughout the process, we have made it clear that the figure will be produced by the beginning of next year. We have always said that, although if we can produce the figure more quickly, we will.

What matters is that we get the fee right. The hon. Gentleman cannot have it both ways. One cannot say that one wants absolute certainty that value for money has been obtained, that the bid has been taken to pieces and that the figure is right, but then say that it would be far better to publish the figure tomorrow. What matters is getting it right for the BBC and for the licence fee payer. The settlement will not be driven by inappropriate pressure or haste. Trying to play politics with settling the licence fee by arguing for an early settlement is not in the interests of the hon. Gentleman’s constituents or of viewers throughout the country.

Mr. Tobias Ellwood (Bournemouth, East) (Con): My hon. Friend the Member for East Devon (Mr. Swire) raised specific questions about BBC funding, particularly in relation to the licence fee, and the heart of the matter is the cost of the spectrum charge. One reason why we called the debate is that the figures used to calculate the licence fee are ambiguous. Will the Minister take the opportunity to discuss who will pay the spectrum charge and how it will relate to the taxpayer and the BBC?

Mr. Woodward: The spectrum charge is not the biggest component of the bid, and, if the hon. Gentleman can contain himself, I shall discuss it later, because it is better dealt with in context.

Philip Davies (Shipley) (Con): There are legitimate concerns among commercial broadcasters about advertising revenue, and an excessive licence fee settlement would distort the market and prevent some commercial broadcasters from spending money on quality productions, such as dramas. It would not be good for the viewing public if the BBC were to produce all such content and end productions by commercial broadcasters.

Mr. Woodward: The hon. Gentleman has made an important point about the commercial sector and advertising. However, it may be worth reminding him that the problems faced by the commercial sector in television and advertising are not unique. Some regional newspapers, for example, face a crisis generated by advertising spend. Advertising and the commercial media is a huge issue, and the danger is that it is viewed as a problem created by the BBC, which is not the case. The
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last licence fee was settled seven years ago, when there was unprecedented growth in advertising for commercial television. Since then, the market has changed dramatically, which has created a whole new set of pressures.

We must examine the impact of the settlement on not only commercial ITV, but regional newspapers. There is a problem, but there is also an opportunity. Most people who run regional newspapers agree that they have been slightly late in recognising the advantages offered by online facilities. Innovation and competition will probably allow regional newspapers to sort out some of their problems, but there is no simple solution for the commercial problems faced by ITV in a market in which overall advertising has decreased in the past few years. It is a mistake to caricature the matter by saying that the problem is the fault of the BBC and that it can be fixed by removing the BBC from certain areas. That is not the right solution, and it would be dangerous to go down that road.

Mr. John Whittingdale (Maldon and East Chelmsford) (Con): The Minister has rightly said that regional newspapers must look to alternative methods of distribution, such as online content, in order to preserve their market position. Does he recognise that that will be made much more difficult if the BBC moves into that market and makes local television available for nothing? The BBC should work with local newspapers rather than competing against them.

Mr. Woodward: The hon. Gentleman has made a fair comment. The new charter and the agreement contain measures to mitigate the impact of some of the points about which he is worried.

I want to make some progress, although I regard interventions as an essential part of having a constructive debate in the House.

Sammy Wilson (East Antrim) (DUP): I take the Minister’s point about putting terms in the contract. Does he accept that if the BBC has an increase in its budget over the next few years of nearly £6 billion, which would be 6.6 per cent. above the retail prices index, it will be bound to compete unfairly with other sources of media, which, as he has said, face declining revenues because of changing advertising budgets?

Mr. Woodward: The hon. Gentleman has a great ability to look into the future—I am sure that he sees a bright future for his party and its leader in late November this year. On speculation about the settlement, I urge a little caution, for reasons that I shall later adumbrate.

The Government are committed to getting the settlement of the licence fee right and ensuring that it provides value for money for licence fee payers. Conservative Members have asked us to allow Parliament to approve the settlement of the licence fee, but they never wanted to introduce such a provision when they were in government.

They also say that the process is not transparent enough. I would say in all honesty to the hon. Member for East Devon, who reminded the House that I have a
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little experience of his party, that I was not aware of a great rush for more transparency on any subject during the two years when I sat on his side of the House. Looking back on the way in which Conservative Members conducted themselves in relation to the BBC and the licence fee review, let alone the charter, I do not recall that transparency was up front. That compares significantly with the process in which we have been engaging.

The hon. Member for East Devon completely ignored the levels of public consultation that we have engaged in relentlessly for three years. He completely ignored the work of the independent advisers commissioned to scrutinise the bid of the BBC and the fact that we have published, and will continue to publish, the advice that we receive. He ignored the research we have conducted into the public’s willingness to pay, which we have said we will publish, as we will. That research is helping to inform us in the Department in getting the right figure rather than the hasty figure that he would like. He ignored the work that has been done by Lord Burns in the course of advising us on the settlement, and he ignored the advice that we have invited and received from the industry.

If it is transparency and robust scrutiny that inform the demand for debate, I urge hon. Members to reflect on the sheer scale and volume of consultation and the transparency in which it has been conducted. It is of course open to Parliament to express its views on such matters in such debates, as it is to Select Committees. In fact, Select Committees have been looking at this issue for some time, not only in this House but in another place. It is right that they offer clear advice and conclusions about the level of the licence fee and the process that produces that settlement. Parliament has the right to object to changes to the level of the licence fee. Under the negative resolution procedure, it remains open to the House to debate the statutory instrument that sets that level.

Before we lose sight of the real argument, let us remember that in the course of the consultation we went directly to those people whom we represent here in this House, as we have relentlessly for three years. One of the documents produced more than two years ago on the review of the charter said that when the public were asked who they wanted to have a greater say in running the BBC, Parliament did not do very well. I suggest that hon. Members who want more and more say should go back to what the public said to us about whether they wanted us to have more involvement or less. One cannot have it both ways. One cannot say, “Let’s have less interference,” and then demand more.

Mr. Ellwood: The crucial matter at the heart of this is that the licence fee is now called a licence tax. That means that we have a right to debate it here in Parliament, regardless of what other views there are. Does the Minister agree that from now on we should have a debate in the Chamber, not in some Committee on a statutory instrument?

Mr. Woodward: The hon. Gentleman may be aware that there is a debate happening now, and we will offer the House a debate on the BBC later this month. It is always interesting to see changes made inside the Conservative party, and it is stunning to see them being
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made at the speed that they are the moment. If the hon. Gentleman and his hon. Friends are offering a prospectus for how they will deal with this in future, we would be delighted to see it, but he would have to cap a process of consultation, openness and transparency that has never happened before in the history of settling the charter or the licence fee.

Mr. Ellwood: Licence tax.

Mr. Woodward: Of course it is a tax; that is why the Government should be at the heart of setting it and should not abdicate the responsibility to the National Audit Office. The NAO should be involved in advising us, but at the end of the day it is rightly a decision for Government.

Let me offer further reassurance to Conservative Members who say that they are concerned that the BBC might have a larger than necessary licence fee settlement. It is very simple: it will not. That is why we are not proceeding with the hasty and pressured response that the hon. Member for East Devon would like. The settlement will give the BBC the funds that it needs to deliver its work for the public—in the words of an author slung out of the Conservative party, “not a penny more, not a penny less”. The licence fee is not flawless. We recognise that for those on lower incomes a greater proportion of their disposable income will be spent on their licence fee—that is common sense. However, as a percentage of household income, it has declined since 1982. In survey after survey, the licence fee still emerges as the best way to continue funding the BBC. We may call it the least worst option, because nobody much enjoys paying tax, but nobody has come up with a better way of doing it that commands the same incredibly high level of public support.

Mr. Edward Vaizey (Wantage) (Con): I agree with the hon. Gentleman, but the licence fee settlement takes us only as far as 2017. The press has reported his thoughts about the future funding of the BBC after 2017, which seem to indicate that the Government are thinking along the lines of a sort of digital tax on personal computers and the like. Will he expand on those remarks?

Mr. Woodward: It would be tempting to talk about our plans for Government in 2017, but I think that that might be a little premature. However, I would be happy to do so on another occasion if the hon. Gentleman invites me.

We have a very clear view on the way ahead to benefit the licence fee payer. The vision that we have expressed in the White Paper is for a strong BBC independent of Government—a BBC that delivers the quality of programme making that the public expects, has expected and continues to expect, with the highest quality broadcasting, efficiently produced, and with the creation of a trust to serve as guardian of quality and efficiency that is able to prioritise on that basis.

Mr. Michael Wills (North Swindon) (Lab): I agree with everything that my hon. Friend has said about the licence fee, but does he agree that the BBC’s enforcement of it could sometimes be done a little more tactfully and sensitively?

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Mr. Woodward: Yes. Brevity is sometimes one of the noblest things in this House.

Dr. Tony Wright: There is hardly a television programme on the BBC these days that does not involve people voting for somebody or something. Is there any reason why licence fee payers should not be able to vote for somebody or some people and thereby gain direct representation on the new governing arrangements for the BBC?

Mr. Woodward: That is a tempting idea, and I hope that the trust might want to consider it. Applicants are submitting themselves to the selection process, which has a deadline of 26 June. We want to involve the public more. As to whether we end up with an “X Factor” for trust members, we will have to ask Simon Cowell if he can come up with a suitable way of doing it. In the long term, there is no teleological reason why the logic of what we are doing should not be extended to that, but I would have to disappoint my hon. Friend in the short term as regards changing the current arrangements. However, I am open to offers from my hon. Friend, especially if he wants to submit himself.

One of the most important changes in the new charter is the creation of the trust and the executive board. Let me briefly explain what that means. For the first time, there will be an effective separation of the responsibility for challenging, scrutinising and strategic oversight of the BBC. The trust will undertake that responsibility. In a separate structure, the executive board will look after day-to-day management. That separation of powers is critical. That is critically different from what happens with the existing board of governors because we want to ensure that the conflicting roles that governors have been obliged to play in the past are appropriately separated.

The governors were responsible for both the delivery and the oversight of BBC services. Under the new charter, a new executive board will be formally constituted for the first time. It will assume responsibility for delivering the BBC’s services, allowing the trust to maintain the objective distance from the day-to-day running of the BBC that is needed for it to be effective in its oversight role.

Mr. Don Foster: Surely the Minister is wrong. Is not it the case that the chairman of the BBC Trust will be called the chairman of the BBC? Does not that show that a conflict will remain?

Mr. Woodward: Only in the hon. Gentleman’s mind, I am afraid. We are clear about the separation. The hon. Gentleman, by interestingly tying himself up in matters of nomenclature, ignores the fundamental strategic difference, which we have been at pains to set out in various papers and the published charter review.

Sir Gerald Kaufman (Manchester, Gorton) (Lab): Will my hon. Friend remind hon. Members that the new chairman of the BBC has moved his offices from Broadcasting house and from the television centre to a separate location in Marylebone road to establish the fact that the governance of the BBC will be separate from its running?

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Mr. Woodward: My right hon. Friend’s brilliance is that I no longer need to remind hon. Members because he has so eloquently done so for me. He is right and gives a good example of the separation of powers.

Mr. Swire: The Minister is right that the powers of the public value test will reside with the trust rather than the Department for Culture, Media and Sport, as currently happens, and that Ofcom will provide the market value impact assessment. However, would not providing for Ofcom, rather than the trust, to make the final decisions about market value impact assessment on a new service be one solution to the uncertainty that the varying roles create?

Mr. Woodward: I am grateful for the hon. Gentleman’s acceptance of the clarity and division between the roles of the trust and the executive board. However, I disagree with his interpretation and his conclusions about who ultimately determines the services that the BBC offers. I shall revert to that shortly.

We were concerned about the dual role that the board of governors played as regulator and cheerleader. The old system was not up to the job of providing clarity, which all hon. Members want, of direction and purpose for the BBC, especially in an increasingly complex global communications market.

The charter and agreement will define the responsibilities of the new bodies clearly. That is critical in ensuring that the trust can hold the executive board to rigorous account in the interests of the public, who are the licence fee payers. The trust will have wide-ranging duties to consult the public and publish the reasoning behind decisions.

We and the public believe that the trust represents the most efficient way of protecting both the independence of the BBC and the interests of the licence fee payer. To do that, it needs the expertise to discharge its responsibilities in a professional and businesslike way. To have the best trust, we must ensure that its members are paid an appropriate salary to do their job. I recognise that criticisms have been made from some quarters in the House as well as in the wider press of the remuneration of the trust members.

I stress that the decision on the rate of remuneration reflects the increased responsibilities and the commitment of time needed from trust members. That is entirely in line with the proposals in the White Paper on the charter review, which proposed that rates should be comparable with those for Ofcom board members. We believe that that will attract the widest range of candidates with stronger backgrounds and ensure that new trust members are the best people for the job.

Since we put out the advertisement, we have received many applications and we expect more before 26 June. We want to encourage a diverse range of appropriate applicants. I stress to hon. Members who are present and those who may read the debate in Hansard that we should encourage those who are interested in broadcasting to apply. When hon. Members say that a flood of constituents come to their surgeries every Friday afternoon or Saturday morning to discuss the BBC, a short-term but good solution might be to ask some of them whether they have considered applying. It would be appropriate for more members of the general public, whatever their background, to put themselves forward to represent the public as trust members.

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