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21 Jun 2006 : Column 1340

Mr. Vaizey: I understand that the selection panel for trust members will include someone from the Department for Culture, Media and Sport and the current chairman of the BBC. How can we be assured that trust members will be truly independent?

Mr. Woodward: The point is that we are not trying to draw up an A list of candidates—we are trying to invite the public to apply. We should have an appropriate process for bringing the candidates together and interviewing them. We are complying with all the Nolan recommendations and using all the appropriate procedures. It is right to have some expertise on the panel—people who know about the Department with which the candidates will deal. The hon. Gentleman will appreciate that it is helpful when one goes for an interview if someone on the other side of the panel has a vague idea about the job. If he genuinely advocates having nobody there who has a clue about the BBC, the applications procedure will end in chaos.

Mr. Vaizey: The Minister has given the game away. Someone who applies for a job is interviewed by the employer. The hon. Gentleman clearly suggests that the Government and the chairman of the BBC will be the trust members’ employers. The trust will, therefore, not be independent.

Mr. Woodward: I have long admired the hon. Gentleman’s logic, but I think that I have lost it this afternoon. I hope that I will encounter it again on a future edition of “Sky at Night”.

We are also inviting the public to describe how they would like trust members to represent them on the trust. In the next few weeks and months, we will continue to invite further consultation with the public on the sort of responsibilities that they would like to be added to the work of trust members. It is an ongoing process of consultation and I believe that it is the best that we have managed to do in any review or appointment of people to the BBC so far. I am sure that, in the future, we can improve on that. We have made significant progress in producing a fairer and better way of running the BBC.

We are aware of questions, especially by some in the local newspaper industry, about the new trust’s effectiveness as a regulator and its ability to hold the executive to account. That seems neither correct nor fair. I remind hon. Members of what we are proposing. The trust will be underpinned by an unprecedented obligation to openness and transparency; a duty to have regard to competition issues; a system of purpose remits, which sets out strategic priorities in each of the public purposes and for how performance will be judged; a system of service licences and the public value test—with market impact assessments by Ofcom.

In addition, there will be new duties on value for money and a strengthened role for the National Audit Office in the existing arrangements. It should be provided with the information about the BBC’s activities that it reasonably needs to make judgments about matters for examination. The trust must and will ensure that that happens. The governors and the NAO have also agreed that it would be helpful for the NAO’s reports to be published as soon as practicable after
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completion. We welcome the response by the current BBC chairman, Michael Grade, to whom I pay tribute for his work in the past few months, especially as he takes the BBC through a period of change, in not only recognising why we are taking action but acknowledging the spirit in which we are doing that.

He has already made a commitment to invite the NAO to examine the extent to which future self-help targets are met. This potentially powerful new development should not be underestimated.

The DCMS has, however, decided not to give the NAO unfettered access to the BBC’s accounts. If it did so, it would risk encroaching on the editorial independence of the BBC and would conflict with the principle of direct accountability to the licence fee payer. I remind hon. Members of what the public have told us again and again. They do not want greater involvement by outside bodies in the BBC.

Mr. Philip Dunne (Ludlow) (Con): The Minister just stated that he believed that the National Audit Office would interfere with the editorial integrity of the BBC. That was the most extraordinary statement. Will he give some examples? What does he fantasise that the National Audit Office might say to the BBC that would affect its independence?

Mr. Woodward: I am sorry to disappoint the hon. Gentleman, but I do not fantasise about the NAO in any shape or form, and I am not going to indulge him by doing so now. However, if he wants to write to me about this, I will be very happy to write back.

The White Paper puts the BBC firmly in the role of a trusted guide, bringing the benefits of new technologies to audiences. To do this, it must have the flexibility to deliver its content in new ways. We want to see increased competition in this marketplace. However, we do not want to dilute the BBC’s ability to continue to set standards; nor do we want to create a neo-protectionist market in which existing and new competition are unable to thrive. The broadcasting landscape is more complex today than ever before, and one of the most important aims of the new charter is to provide clarity.

That is why we have defined the BBC’s public purposes more clearly than ever before. That is also why, in setting out its priorities, the trust will have to work with the grain of what others have to offer. The new purpose remits will provide a vehicle for ensuring that the trust engages with the world outside the BBC in deciding how the public purposes should be delivered. It is also why, to embed transparency and certainty in its decision making, we have put in place a new triple-lock system, comprising service licences, content characteristics and the public value test. It is important that the BBC’s place in the market is not subject to caricature. Let me assure hon. Members that there will be a new public value test to scrutinise new services, as well as significant changes to existing BBC services, with a market impact assessment provided by Ofcom.

Mr. Ellwood: I am grateful to the Minister for giving way again; he has been extremely generous. I must take him back to the question that my hon. Friend the Member for Ludlow (Mr. Dunne) put to him, as it is fundamental to the way in which we scrutinise the work
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of the BBC. Will the Minister please give us an illustration of how the editorial content of the BBC could be challenged by the corporation having its accounts audited by the National Audit Office?

Mr. Woodward: We believe that we have set the appropriate arrangements in place. I shall not fantasise about exercises that I cannot imagine for the benefit of the hon. Gentleman. That would be absurd. We believe that we have set up the appropriate governance arrangements for the BBC, based on consultation with the public and the industry, and on the advice of Ofcom and of others who have given us expert advice over nearly three years. We believe that we have found the right way forward, and in about a week’s time the hon. Gentleman will have the opportunity to examine for himself the evidence that we have put forward.

We have also put in place a new competition framework. Ofcom will have a powerful role in the new system, in which the trust will set specific rules in areas likely to give rise to competition concerns. Taken together, this is a powerful set of reforms for the BBC. For the public, that will lead to improvements in production and in the quality of the programmes that they see. They want a better BBC, and we intend to help them to have it. One of the mechanisms that we want to use to achieve that is the window of creative competition, which will help to stimulate further competition to produce quality and quantity in the programmes produced and put out by the BBC.

On regional production, the hon. Member for Altrincham and Sale, West (Mr. Brady) asked about the proposed move to Salford. I think that we should all welcome such a move. It involves the prospect of several thousand new jobs opening up in the north-west, and several departments of the BBC—not only sport but, appropriately, new media—going to Salford. That will present a very exciting opportunity.

Barbara Keeley (Worsley) (Lab): My hon. Friend will know that we have recently seen a 30 per cent. increase in the number of films being made in Manchester. The number of films being made in Merseyside has reached a new peak, and a new Hollywood feature is being filmed in Cumbria. This has all happened since the BBC move was announced. Will my hon. Friend comment on the further potential for investment and production that will result from the move, which will involve a new base not only for the BBC but for independent companies and other production facilities?

Mr. Woodward: We need to understand that last week’s announcement was that Salford is the preferred bidder. This has not been finalised yet, and it is important to consider the matter in that context. The BBC has clearly declared its interest in that area, and it is now conducting firm negotiations for the future there. My hon. Friend asked me about the potential of such a move. I spent 10 years working in the broadcasting industry in the 1980s, when it would have been almost impossible to conceive of the new media and new opportunities that exist now. This is a bit like trying to see round corners. The media city will provide the kind of opportunities that we see when we visit places such as Seoul or Dubai, where media opportunities have been created as a result of extraordinary growth.

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I do not know whether the hon. Member for East Devon has taken the time to examine what has happened in Seoul or Dubai. He does not need to spend any money actually visiting them; he can do the research here. If he does, he will see that such development leads to huge growth, massive numbers of new jobs and—in the case of Salford—the opportunity to bring in not only the BBC, independent production houses and commercial competition but the games industry, the software industry, the music industry and the film industry.

My hon. Friend the Member for Worsley (Barbara Keeley) mentioned some of the activities that are already happening in the north-west. We have to see this development in the context of the fantastic renaissance and regeneration that is happening in the north-west generally. Liverpool will be the European capital of culture in 2008, for example. There is an awful lot happening, and it is absolutely right that the BBC has made this strategic decision, and that it has chosen the Salford bid. Everything that I have heard about the bid tells me that it was very well put together. It was based on a lot of research and, critically, on an understanding not only of the television industry but of the needs of all the creative industries in the north-west.

Graham Stringer (Manchester, Blackley) (Lab): I am very grateful to the Minister for his support for the devolution of many of the BBC’s functions and personnel. He knows as well as I do, however, that there are factions in the BBC, fuelled by cosmopolitan arrogance, that are fighting hard against the relocation to Salford Quays. Will my hon. Friend do everything in his power to ensure that the BBC does not use the blackmail of a lower licence fee, or any other argument, to prevent the move to the north-west?

Mr. Woodward: Having had a number of conversations across the industry, I have not received the impression that the senior managers in the BBC who are making this decision have any intention of wriggling out of it. They genuinely see the advantages of moving to the Greater Manchester area, and of diversification and greater regional production. They also see the advantages of bringing in talent that has been constrained by the perception of the BBC as being so London-centric. My hon. Friend has made an extremely good case for his constituents and for others in the Greater Manchester area in helping to secure this bid.

The people involved in the bid have been smart enough to recognise that, by not going down the protectionist route of saying, “Let’s stay in London,” and by recognising the advantages of opening themselves up to more competition and diversification, they will bring in greater talent and creativity to the BBC. At the end of the era, if it does not have that, it will not have the services to offer. They have also recognised that places such as Dubai, Seoul and other locations in the far east—which offer different services but use a similar model—create opportunities through diversification, which does a huge amount of good to the local, regional and national economy.

One of the big tasks ahead in the UK is to recognise the role of creative industries, as I know my hon. Friend does. The future for Britain lies very much with
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those industries, which represent nearly 8 per cent. of gross value added for the UK economy. It is a huge mistake to think that we can handle it all out of London. It is absolutely right to see it as regionalised and absolutely right to go to places such as the north-west, when we know that incredible talent can be harnessed to one of the main growth industries for the whole of the UK.

Pete Wishart (Perth and North Perthshire) (SNP): Does the Minister agree that more than just personnel and resources are involved in devolution, as the mindset is also important, along with recognition of the different features and factors of the modern UK? Scotland has its own Government and its own national life, but we still have a news service that is metropolitan based and becoming increasingly irrelevant. Surely as part of devolution, we should start looking into having a Scottish news service that serves the Scottish people. We should be moving towards regional and national news services.

Mr. Woodward: I acknowledge that. Of course we believe in devolution, but the programmes are a matter for the broadcasters. We already have services such as BBC Scotland. Some hon. Members were rather denigrating the BBC’s creation of local news services earlier. I invite them to go and see what the BBC does and the services it offers. In an interactive age, it will get easier for people to make local programmes—exactly what the hon. Member for Perth and North Perthshire (Pete Wishart) is asking for. The BBC is moving in the direction of empowering local communities to produce local news services and local programmes. That is why I welcome the innovation that the BBC has embarked upon.

My final point about digital switchover is that we believe that the BBC is uniquely placed to deliver the benefits of digital to every viewer. That is why we put it at the heart of our plans for digital switchover. It is absolutely right that we have designed a scheme of targeted assistance to help elderly and disabled people, who are most vulnerable.

Members understandably ask whether we should do more to help the poorest people in our communities, so one important thing needs to be said about targeted assistance and digital switchover. We have learned from the 70 per cent. of the UK that has gone digital so far that the real barrier is not income. By and large, the barrier to has been age and disability. If targeted assistance is to mean anything and we are to get best value from the money given to the BBC to enable the rest of Britain to complete switchover by 2012, we will have to take some tough decisions.

On the Government Benches—and, increasingly, from what we hear, on the Opposition Benches—we all want to do something to help poorer people, but the fact of the matter is that, when it comes to digital switchover, the biggest impediment to making the switch is not one’s income. I do not deny that it might be in some cases, but the real barrier is the people who are 75 or 80—or even my age of 47—and feel challenged by a remote control. We have to deal with that problem. The Bolton trial helped us to realise that more needs to be done, and the several hundred million pounds of targeted assistance will be used to help the
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elderly, particularly those on pension credit, the disabled and people who are registered blind or partially sighted.

Ann Keen (Brentford and Isleworth) (Lab): The Minister has provided us with important information, because vulnerable older people often have contact only with a small number of people. Some of the most significant groups are charities and voluntary organisations, so will the Minister ensure that they are properly involved in the process?

Mr. Woodward: A categorical yes.

Mr. Swire: We are now about two years from the commencement of digital switchover, so it is critical to know what the licence fee will be before it begins, but there appears to be some dislocation. When we debated the announcement of the licence fee, the Minister stated categorically that at no stage would a date be published. However, I have with me a document, “BBC Charter Review: Your BBC, Your Say”, which was printed five minutes ago from a DCMS website. It states that phase 3 includes

which we are having now, I concede, but it also refers to

It is now mid-2006 and the Minister says that the licence fee level has not been agreed. One source must be wrong. Is the Minister wrong, or is it the website? If it is the website, I suggest that the Minister urge his civil servants to amend it. If he is wrong, perhaps he will retract his statement.

Mr. Woodward: I am grateful to the hon. Gentleman for bringing that to our attention. What it reveals is that we said that we were going to have a debate, which we are having. Secondly, it shows that we said that we would make an announcement about the licence fee. The hon. Gentleman has referred to the fact that a document mentions mid-2006, but it does not provide a specific date— [Interruption.] That is what the hon. Gentleman said. Let me tell him that he will get a date when it is right for us to make the announcement. What we will not do, however endearing, charismatic and persistent he is in his demands, is make the announcement before the right time, which will be when we have achieved the right number.

After nearly three years, this process is drawing to a close and the announcement on the fee will be made shortly. It might be made in a few months, but I am afraid that the hon. Member for East Devon will have to wait. We have conducted the debate with extensive public consultation and the issues have been discussed in Parliament through Select Committees and in Green and White Papers. An extensive process of consultation has taken place on the charter and the licence fee settlement. The end product will be a BBC that is right and forward-looking, helping to create the appropriate marketplace for the UK in the digital age.

1.56 pm

Mr. Don Foster (Bath) (LD): Whatever our disagreements, at least we all agree that for the last 80 years, the BBC has been the pre-eminent public service broadcaster, making a major contribution to our democracy, to our culture and to our standing in the world. I suspect that we all agree that in the rapidly
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changing world of broadcasting, we must ensure a future for the BBC that enables it to remain the best in the world and the envy of the world. That means, in my view, that it must be strong, independent—not least from the Government—and well and securely funded. It must be equipped to meet the challenges of the digital multi-channel, multi-platform age.

We believe that much in the White Paper, to which the Minister has already referred, and in the draft charter and agreement will help to achieve those aims. Liberal Democrats certainly welcome the decision to have a 10-year charter, which will provide stability for the BBC through the period of digital switchover. We welcome the increased opportunities for independent television production through the window of creative opportunity, but I hope that the BBC will work harder to provide more opportunities for independent radio producers than they have at present. We welcome the concept of service licences for each BBC service, but like the hon. Member for East Devon (Mr. Swire), I certainly believe that we need greater differentiation in the services covered by such licences.

Although I have some concerns, which I shall explain in a few moments, we welcome the improvements in the system to assess market impact and public value in respect of new BBC services or the development of existing services. We accept that the licence fee is, as the Minister described it, the least worst option currently available. It is certainly far better than alternatives such as direct Government funding, subscription, advertisements or sponsorship. We also welcome and support the planned move to Salford Quays in Greater Manchester.

As critical friends of the BBC, we have a number of remaining concerns about some of the Government’s proposals—most notably governance, which the Minister dwelt on. He was absolutely right to say that the old system under which the governors were both flag wavers for and regulators of the BBC was simply untenable and had to change.

We propose that a totally independent regulator should be established for all public service broadcasters. We certainly do not believe that what the Government propose will give us what is urgently needed—a genuinely independent regulator. For example, some of the existing governors will transfer to the new trust. That is certainly evidence of continuity, rather than radical overhaul. Perhaps more importantly, the White Paper very clearly describes the BBC Trust as a

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