sovereign body within the BBC,
The Minister said that it was right and proper for Select Committees to give clear advice to the Government. Certainly, he will be aware that the House of Lords Select Committee on the BBC Charter Review gave very clear advice on the issue. It said that the
proposals for reforming the governance...of the BBC are confusing, misguided and unworkable.
As I said in an intervention earlieryes, it is surely right that the Government have carried out an extensive consultation exercise, but what matters is that they then listen to what people have said during the consultation.
We are convinced that the trust is an improvement on the current governor arrangements, but it still does not provide an independent regulator, so the BBC will be its own judge and jury. That will certainly give no confidence to people who fear that, as was suggested by the hon. Member for Rhondda (Chris Bryant), the BBC will use its powers to crowd out others from the marketplace if it does not have an independent regulator to make those decisions.
Indeed, we have already heard from a number of hon. Members that similar concerns have been expressed by a wide range of bodies in the broadcasting and media sector. I have certainly heard such views from local and regional newspapers including The Bath Chronicle in my constituency , which is excellentfrom the commercial radio sector and from other TV and internet companies. Yes, we have a better system now, but if the BBC is ultimately to be its own judge and jury, the system will not give the BBCs competitors confidence about whether they will be protected from being crowded out.
Just before I turn to the licence fee, I want briefly to mention three other issues relating to the BBCs future. First, although I acknowledge the advice that Lord Justice Auld gave in 2001, I fail to understand why licence fee evasion should continue to be a criminal offence. I hope that the Government are prepared to reconsider that issue, and find out whether such evasion could become a civil offenceand, incidentally, whether we could introduce a fixed penalty system, like those used for failing to pay parking fines, the congestion charge or whatever.
Secondly, hon. Members have already expressed the view that we want to see a strong BBC, but not an omnipotent BBC. The BBC benefits from competition in public service broadcasting. A monopoly would benefit no one, including the BBC. We need to do more than is currently proposed to protect the other players who deliver public service broadcasting, including some, such as Sky and those in the commercial radio sector, who are not defined as public service broadcasters but make an important contribution to public service broadcasting. I certainly welcome the BBCs proposals to work in partnership with, for instance, Channel 4, but we also need not only stronger measures to protect the market but a much more urgent review than is currently planned of what the hon. Member for East Devon called PSB in the round.
Thirdly, all hon. Members would accept that the World Service is the jewel in the crown. Many of us are delighted at the World Services proposals to introduce a new television service in the middle east, but I simply fail to understand why, for the sake of just £6 million, we cannot ensure that it becomes a 24-hour service, rather than the 12-hour service that is proposed.
Now I come to the crucial issue of the licence fee. Like others, I am concerned by the undoubted delay in the Governments announcement of the licence fee. It worries me enormously that we will end up with two separate announcementsone about the charter and agreement, and the other about the licence fee. Surely those announcements need to be brought together. In other words, we need a menu with prices.
Daniel Kawczynski (Shrewsbury and Atcham) (Con): I, too, applaud the hon. Gentlemans sentiments about the BBC World Service, but does he agree that it is regrettable that the BBC is cutting some radio services to eastern Europe?
Mr. Foster: In fairness, I must say that the BBC has looked very carefully at that issue, and has been in discussion with the Foreign Office about the services that it will cut. I hope that the hon. Gentleman will agree that the listening figures for the vast majority of those services do not justify their continuation in comparison with the benefits that will accrue from the new television service in the middle east. Of course, in an ideal world one would want the continuation and development of all those services, but people must work within a tight budget. Sadly, the BBC cannot even get an extra £6 million for the middle east television service.
On the overall figure, the BBC proposes to use the formula of the retail prices index plus 2.3 per cent. Since it made that announcement in November, a number of its figures have changed. For example, the cost of the welcome move to Manchester has gone down, whereas its expected pension costs have gone up. I understand from the BBC that the net effect of all the changes will not substantially alter the proposal to use the RPI plus 2.3 per cent. formula. I hope that, as the Minister has indicated, the most up-to-date costings supplied by the BBC will be published in the near future.
I suggest that, for two reasons, the BBCs proposed figure is too high. First, we must be mindful of the effect of a cash-rich BBC, combined with inadequate independent regulation, on the rest of the broadcasting and media ecology. That point has been well made already. Secondly, the BBCs figures include costs that simply should not fall on the licence fee payer. Providing free television licences for the over-75s was a Government policy, and the Department for Work and Pensions rightly hands over millions of pounds every year to the BBC to make up its lost revenue. Similarly, digital switchover is a Government policy, so it should be paid for by the Government, possibly from the revenues that they will gain from the disposal of the analogue spectrum. It certainly should not be a cost for the licence fee payer.
Similarly, the Minister talks about the hundreds of millions of pounds that will be spent on the very important targeted assistance to help the elderly and vulnerable to benefit from the digital revolution. That is a sensible policy, but it is a Government social policy, and therefore it should be paid for by the Government, not by the licence fee payer. Those are not broadcasting costs, as the Government keep describing them, but Government policy costs. Charging the licence fee payer for them is simply a smash-and-grab raidyet another stealth tax, as others might call it.
If the Government were to go still further, as some have already suggested, by imposing a spectrum charge on the BBC, which, in turn, the licence fee payer would have to bear, it would be yet another smash-and-grab raid. I therefore hope that the Government will look carefully at the independent report produced in April this year by .econ that concluded:
Overall we find that the case for imposing spectrum charges on such broadcasters
is weak, and that it risks disrupting their ability to fulfil their public service obligation with no countervailing benefit.
I hope that the Government will listen to that view. The case for imposing spectrum charges on public service broadcasters simply has not been made. The RPI plus 2.3 per cent. formula contains items that should not be paid for by the licence fee payer.
As other hon. Membersnotably, the hon. Member for East Devonhave already pointed out, it has been argued in various other reports, such as ITVs Indepen report or the PKF report, that the BBCs licence fee is too high for other reasons, and I shall deal with those reasons briefly.
Mr. Whittingdale: The hon. Gentleman is presenting a number of very good arguments. He said that the BBCs bid of RPI plus 2.3 contained elements that were unjustified. The assistance package is not included in that figure; once it is included, the bid becomes even larger.
Mr. Foster: That is absolutely true. A number of other issues have not yet been taken into account, which is why it is so important for us to debate them. However, because I do not believe that any Member of Parliamentand that includes meis capable of doing full justice to all the competing claims that have featured in the Indepen report and the PKF report and have emanated from the BBC and others, it is also crucial for us to ask the National Audit Office not only to take a greater role in scrutinising the BBCs accounts, but to take a much greater and an immediate role in scrutinising the various reports and proposals. As I am sure the hon. Gentleman knows, some reports have suggested that the BBC has not taken adequate account of the number of new homes that will be built and the number of households that will consequently pay the licence fee. The hon. Gentleman will also know that a number of people have said that the BBCs proposals do not give enough weight to the savings that could be made through greater efficiency.
I am aware that the BBC has contradicted those claims, but as I have said, I am not in a position to judge the competing claims being made. That is why the NAO must have that crucial scrutiny role, and must report to Parliament following its scrutiny. Not only is that in the Conservatives motion, but the Liberal Democrats proposed it back in 2003.
The hon. Member for East Devon was absolutely right to say, as does the motion, that Parliament should have the final say on the level of the licence fee. That is not a subject for a debate in a Committee Room on a negative resolution. There must be a substantive amendable motion, which must be approved on the Floor of the House. I accept what the Minister said about research evidence: the public will be willing to wear an additional licence feebut only if they are confident that they will not be paying for things for which they should not be paying, and that they will benefit from improved quality and value for money.
This is a crucial debate, and one that the Government should have initiated by now. The BBC is the envy of the world, and we want it to remain so as we begin to meet the challenges that the digital age brings. As I have acknowledged, the Government's plan will helpbut I
hope that they will not just listen to, but act on the concerns expressed by many who have responded to the consultations and to those expressed here today, so that the BBC can continue to be strong, independent, and well but not excessively funded.
Sir Gerald Kaufman (Manchester, Gorton) (Lab): I think the House will agree that under its new chairman, Michael Grade, and its new director-general, Mark Thompson, the BBC has made a fresh and encouraging start, and that the work they have done since their appointments is commendable.
One thing that the BBC has done is make a major contribution to digital switchover through the innovation of Freeview, following the failure of the ITV digital project. I pay tribute to Greg Dyke for his initiative in bringing that about. Another of his initiatives, also deserving of tribute, is the decision to move to the north-west. I am convinced that the BBC fully intends the move to go ahead. It would be idle of me to deny that there is disappointment in the city of Manchester over the provisional decision to move to SalfordI understand that that is likely to happen, although not overwhelmingly likely, as the BBC has still to make the final decisionsbut whether the move is to the constituency of my hon. Friend the Member for Manchester, Central (Tony Lloyd) or to Salford Quays, which is a superb area of innovation, what is important is the recognition that a new centre of media initiative and a new cluster of enterprise is being created. I pay tribute to the BBC for making it clear, very firmly, that it wants the move to the north-west to go ahead.
It is obvious that all broadcasters face huge challenges. As a tax-funded public corporation, the BBC has a special responsibility for meeting those challenges. When the Select Committee on Culture, Media and Sport, which I chaired before the election, looked into BBC charter renewal, we wantedanticipating the possibility of a new 10-year charterto think about the nature of the technological and content-related environment not just in 2006, but in 2016. Since the Committee reported and since the Government decided that the BBC should have that new 10-year charter, technological change has moved exponentially ahead within not much more than a year. Given the prospect of 10 more years following the end of this year, it is essential for the BBC, when making its plans, to take account of what Bernard Shaw had in mind in his play Back to Methuselah when he entitled the last act As Far as Thought can Reach.
Already, over the past few months, we have seen vast changes. A year ago, the iPod was an enviable cult object; today it is pretty universal. The downloading to mobile phones of news, information, entertainment and music is proceeding rapidlyand, as I have said, this is only the beginning.
There is great concernand rightly soabout the declining attention paid to the BBC and other conventional broadcasters by the young people who will be key participants in technological communication in the future. Anyone who moves around any of our cities, such as London or my own city of Manchester, will see young people wearing earphones and constantly looking at their mobile phones, not simply to make calls and send text messages but for all sorts of reasons. If the BBC is to be ahead of the game, as we all want it to be, and if it is to attract the kind of participation that will justify its being financed by a tax, it is essential for it to understand one thing. Although the concerns of many Members of Parliament are focused on the most conventional forms of BBC transmission, such as Radio 4, Radio 3 and even Radio 1 and Radio 2mentioned by my hon. Friend the Member for Rhondda (Chris Bryant)those are now very small minority channels in comparison with what a large number of people are using the BBC and broadcasting for. The BBC must not simply keep pace with technological change; it must keep ahead of it.
It is good thatas those of us who have been watching the World cup matches will have observedthe BBC has progressed to high-definition. So far it has one high-definition channel, and I hope that it will have many more. However, the BBC needs to take another careful look at its non-direct broadcasting activities. The interactive services that it provides on BBC News 24, for example, are miles behind what Sky provides. The BBC mechanism is very clumsy, whereas Skys is very clear.
At one time, the BBCs principal website was regarded as the pioneer for all such sites, receiving large numbers of hits. I fear that that is no longer so, and newspaper websites such as those of The Guardian and The Daily Telegraph are far ahead of what one gets from BBC Online. That is another matter that the BBC needs to consider.
It is perfectly clear that we need a public service broadcasting corporation that is not funded by advertising. I am very glad that we have the public service Channel 4, which does a superb job, as does the More4 channel. Channel 5 is now doing very well with its innovative and cultural broadcasting, but the BBC is unique, because it is funded by a tax. The House of Commons has decided that there should be a new BBC charter, and it is extremely important that the BBC reciprocates by ensuring that it leads technological change.
That must not happen just for its own sake, as the BBC must take account of social change in this country. More and more peoplemainly but not exclusively young peopleare creating their own visual and audio entertainment and information channels.
The day has gone when people would sit in front of a box, or drive along in their cars, and be fed by what was provided. People now create what they want. In many ways, the proliferation of the addiction to mobile phones is maddening, but it shows that people have a new way of communicating, and that they want their own voices to be heard as much as they want to listen and be told things.
On occasion, I have been considered to be something of a sceptic about the BBC, but we owe it a lot. However, as I have explained, I believe that it, in recompense and reciprocation, owes us a lot too.
Mr. John Whittingdale (Maldon and East Chelmsford) (Con): I by thank my colleagues on the Opposition Front Bench for giving us this opportunity to debate the future of the BBC. Despite the Ministers claims about the number of debates that have been held and the scrutiny that has occurred, this is the Houses first opportunity to debate it since the general election. We last debated it in March last year, when we considered the report of the Select Committee on Culture, Media and Sport, which I now chair, but which at that time was chaired by the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman). It is a great pleasure to follow him this afternoon.
Since then, the Government have published a White Paper on charter renewal, and the BBC has unveiled its bid for a licence fee settlement to cover the seven years from next April. The BBCs chairman and director-general chose to reveal the bid for the first time during the course of their evidence to the Select Committee last October. The Select Committee was able to question them about their plans, and I congratulate the BBC on a bold and brave initiative, which I hope will be maintained.
The BBC bid was for 2.3 per cent. each year, over and above inflation. At the time it looked excessive, but increasing pressures since on commercial broadcasters have made it look even more disproportionate. However, if we are to consider the case for a licence fee increase, we must look at the case made at the time of the previous licence fee settlement. That was for 1.5 per cent. over inflation each year for seven years from 2000, and has led to the licence fee rising by well over a third since 1997. Yet the income from the fee has risen much faster, as the number of homes has increased steadily as well. As a result, the BBCs total licence fee income has grown by more than 50 per cent.
not going to allow the BBC the massive injection of funds that it has sought from the licence feean increase reaching more than £700 million a year by 2006.[ Official Report, 21 February 2000; Vol. 344, c. 1239.]
In fact, the BBCs income in the period will have risen by very nearly £1 billion, so it is no wonder that the present director-general saidwhen he was in another capacity at Channel 4that the BBC had been bathing in a jacuzzi of cash.
At the same time, the funds available to commercial broadcasters have been squeezed. There has been a proliferation of digital channels, and the switch to digital has meant that the main commercial broadcasters have seen a steady decline in the market share that they command and, as a result, in their advertising revenue as well.