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Moreover, advertising spend has been diverted to online services. Yesterday, the Select Committee heard that TV’s share of advertising had declined from 32 per cent. in 2004 to a forecast 27 per cent., while internet advertising has grown by 50 per cent. The introduction
of personal video recorders and timeshifting will exert even greater pressure on commercial television. For that reason, the BBC’s claims that, even after the licence fee settlement, it will have a smaller share of media revenues is at best disingenuous, since that includes internet advertising.
In 1998, ITV and Channel 4 revenues exceeded the licence fee income by £300 million. Indeed, the BBC argued at the time of the previous settlement that it needed an increase to keep up with commercial television. Now, the income from the licence fee is significantly greater than the combined advertising income of ITV, Channel 4, Channel 5, GMTV, S4C and all their associated channels.
That is the context in which this licence fee bid must be judged. The BBC is already by far the biggest player: an increase of the size suggested would distort the market still further, and place it in too dominant a position.
Of course, the BBC claims that the licence fee is good value for money. That is supported by some opinion surveys, but as long as the fee remains a compulsory television tax that people have no choice but to pay, it is difficult to judge its acceptability.
The Government claim that the licence fee is subject to parliamentary scrutiny, but the Minister said earlier that that is achieved through the negative procedure. In no other area is a £3 billion tax increased by a procedure that does not allow amendment and which is often not even debated. When it is debated, the proceedings last 90 minutes in a Committee Room upstairs.
The negative procedure also means that Parliament has no ability to approve or disapprove particular uses of licence fee money. We know that the BBC has asked for an increase of 2.3 per cent., but that does not include the cost of the assistance package. My Committee, like others, took the view that the licence fee is a social rather than a broadcasting cost, and that it should therefore be financed from Exchequer funds. I regret that the Government are unwilling to accept that.
Chris Bryant: Will the hon. Gentleman give way?
Mr. Whittingdale: I hope that the hon. Gentleman will forgive me, but I have very little time.
We still do not know the total cost of the assistance package, but it will represent an extra amount on top of the licence fee. It will not be just a stealth tax, but rather a stealth poll tax, as the licence fee, as the motion correctly points out, hits low-income families hardest.
The reason for that is a flaw in the licence fee itself. In the previous Parliament, the Select Committee under the chairmanship of the right hon. Member for Manchester, Gorton reported that the fee was regressive and unfair. In the long term, I do not think that it is sustainable, and I regret that the Government appear to have batted that question into the long grass for the course of the next licence fee period. I hope that the Government will consider at least some of the anomalies when they come to make their announcement. One in particular has been identified by the Select Committee—that people who pay the licence fee by instalments end up paying more than those who make a one-off payment. That is another way, therefore, in which those on the lowest incomes have to bear the largest burden.
I want to speak briefly about charter renewal. I welcome the creation of the BBC Trust; it improves the position of the governors, which was widely recognised as unsustainable after the Hutton report. However, Michael Grade had already put in place arrangements to distance the governors from the management of the BBC, so it is not clear how the new arrangement differs from what the BBC has already done. It does not resolve the underlying difficulty that the final arbiter of the behaviour of the BBC is a body that is part of the BBC. Ofcom has responsibility for tier 1 questions, but not for the key areas of the BBC’s public service remit—impartiality and fairness. Nowhere is that more important than in the area of the BBC’s creative futures plan.
The world is changing rapidly, as the right hon. Member for Manchester, Gorton pointed out; people are accessing media via the internet, iPods and mobile phones. It is right that the BBC should make programmes available on whatever platform people choose to use, but the BBC’s plans go considerably further. It is not just making its programmes available on different platforms; it proposes to introduce whole new services. To take just one example: the BBC plans to make news content available to mobile providers for nothing, so that the consumer will pay a charge only to the mobile operator and not to the news provider. When asked about the impact of that new service on ITN, the BBC told the Committee that ITN could finance the service through advertising, but advertising is not developed on mobile so that suggestion is wholly unrealistic. The result will be that the BBC service undercuts a commercial service before it has even got off the ground.
As has been said, there are concerns about the BBC’s ambitions in the area of local newspapers, the creative archive and MyBBC Player, and the fact that the BBC’s licence fee bid is for £1.2 billion to finance new digital services means that there will be a major impact on the market. Under the new arrangements, the BBC’s new services will be subject to a market impact assessment and a public value test, which is certainly a step forward. However, although Ofcom is due to carry out the market impact assessment, the final decision—the public value test—will rest with the BBC. By definition, that will be a subjective judgment. What criteria will the BBC apply to judge the public value of a new service when compared to the market? I share the view of my Front-Bench colleagues that it would have been better to give that decision to Ofcom rather than leaving it with the BBC. If the BBC is to make it, it is essential that each new individual service is subject to a public service licence and a market impact assessment. It is not good enough to have one service licence embracing all of them.
The BBC is an immensely powerful organisation and is often a force for considerable good, but it needs to be subject to proper checks. The measures in the motion will achieve that.
2.33 pm
Ian Stewart (Eccles) (Lab): I am a firm supporter of a strong, independent BBC. The BBC is a world-standard broadcaster of international renown and enjoys a high level of domestic satisfaction, which we should remember. We like the Beeb. I want to see the BBC grow, prosper and diversify.
In 2004, the BBC gave a commitment to relocate some of its activities to the regions. That will complement the Government’s strategy for investment in the regions, and the north-west is perfectly placed to nurture that creative investment and capitalise on it, which will be most beneficial to my Eccles constituents.
In 2004, the BBC committed itself to establishing a state-of-the-art BBC centre in the Manchester area with
“brilliant career and creative opportunities”,
moving London-based children’s TV and radio—including CBBC and CBeebies—BBC Sport, Five Live and Five Live Sports Extra, new media headquarters, research and development and formal learning departments to the Manchester city region; moving an estimated 1,800 staff from London to the Manchester city region; increasing the amount of TV drama filmed outside London from 30 to 50 per cent. during the next charter period; and creating a media zone that could include other broadcasters, publishers and independent companies. All that was to be achieved by 2010.
It is a wise commitment. In the past decade, cultural and economic development in the north-west has been increasing rapidly, and the area is now the busiest production centre outside London. The success of the BBC’s investment will be central to sustaining the growth of the media industry and the regional economy. I shall summarise that growth. Filming in Manchester rose by 30 per cent in 2005-06, with 2005 being the busiest year ever. In the first quarter of this year, production in Merseyside reached £6.7 million, constituting a huge increase on the previous year. Following the opening of North West Vision’s film office in Cumbria, a two-week shoot in the county was secured for the Hollywood feature film “Miss Potter”, starring Renee Zellweger. The Cheshire-based company Mackinnon and Saunders won its first children’s commission for the BBC after receiving development investment from North West Vision. One hundred and fifteen Lancashire-based crew and facilities companies with current TV credits have registered on the North West Vision database used by productions that need to employ crew and use facilities.
Last week, the BBC announced in principle that it is proposing to establish a northern centre in Salford’s MediaCity:UK, based at Salford Quays, subject to resolving some outstanding issues. The project must also pass the two tests of value for money for licence fee payers and affordability, so the BBC has said that a final decision cannot be taken until the licence fee settlement is known. There are lots of t’s to be crossed, but everything is still to play for.
I do not blame the BBC for using its bargaining strength to get the best possible funding deal. As a former negotiator myself, I respect that tactic. However, although I support a reasonable increase in the licence fee, I point out to the BBC that the Salford MediaCity:UK is such an exciting, world-class development that its move there should be confirmed in any case. The move should go ahead whether or not there is an above-inflation increase in the licence fee.
Although the new MediaCity:UK—about which I would like to say a little more—will be located in Salford, it will bring considerable benefits to the Greater Manchester area and the region as a whole, as I have
just demonstrated. The project has the support of the Northwest Development Agency and a range of partners across the region. The vision is powerful: a globally significant, new media city to compete with emerging media cities in Seoul, Singapore and Dubai; and a modern, digital city for the UK, surrounded by four excellent universities, which will be the centre of BBC production on Salford Quays. Salford will have a silicon canal to match the US silicon valley and Scotland’s silicon glen. It is estimated that the project will bring 15,500 jobs, and it includes a recording studio for the BBC Philharmonic orchestra, floating stages for concerts and theatre, studio and technical facilities for media industries, a media skills institute and a research academy. I support the proposal that the BBC should become a world player as a search engine, but I am also keen to see the corporation established as a media and communications-oriented digital global university.
I understand that some BBC staff may be fearful of a move north. Relocations have to be managed positively and sensitively, but I believe that BBC workers will be pleasantly surprised by the varied and vibrant environment of Greater Manchester. I hope that the Government will give the BBC all the support it needs in that regard.
To sum up, we need an early but considered licence fee decision from the Government. It is important to get that right. Even if the BBC does not achieve the licence fee it wants, it should carry out its commitment to relocate to the Manchester city region and be a partner in the development of the exciting new media city in Salford.
I hope that the House will forgive me if I leave now, as I hope to contribute to the Westminster Hall debate on funding for local transport—yes, the new media city proposal will involve development of our successful Metrolink tram network to service the city and local people, so I shall go into the Government Lobby to oppose the Conservative motion.
2.40 pm
Daniel Kawczynski (Shrewsbury and Atcham) (Con): It is a great pleasure to follow the hon. Member for Eccles (Ian Stewart). I would like to say that he is a friend of mine. I like him very much and my wife is very fond of him as well, as he knows.
The most important thing that I have picked up in the debate—I was listening carefully to what the Minister said—from the point of view of politicians and the scrutiny by Parliament of the BBC, is the question raised by my hon. Friend the Member for Gainsborough (Mr. Leigh), the chairman of the Public Accounts Committee. He called for a greater role for that Committee in scrutinising the BBC licence fee. I was greatly encouraged by my hon. Friend the Member for East Devon (Mr. Swire), when he assured us that the next Conservative Government would allow greater interaction from the Public Accounts Committee on that issue. I am still somewhat mystified by the Minister’s response. I do not really understand what he said in that regard, so I shall write to him.
The BBC is a tremendous asset for our country. The first time that I realised its importance was on a visit to Warsaw in 1983, immediately after the martial law imposed by General Jaruzelski. Many of my friends in
Warsaw were listening intently to the BBC World Service, which brought a true reflection of the world to those oppressed people—it brought them the reality. It also brought great hope to people behind the iron curtain. It could be argued that the BBC World Service helped to bring about the revolutions in eastern Europe that finally drove out the communist oppression that had held them for such a long time. People could not trust their local radio. I feel a great shame, as I said in my earlier intervention, that the service to eastern Europe will be cut. I am pleased that the Foreign Secretary was defeated by 24 votes to one in her intention to stop the BBC and other channels broadcasting the events of the Council of Ministers, because broadcasting has an important role to play in the scrutiny of this Parliament and of what goes on in Brussels and the European Parliament.
The BBC’s pedigree is tremendous, and gives it the opportunity to challenge CNN and other American broadcasting corporations when it comes to being the global voice of broadcasting. That is important in today’s global world. I know that President Chirac of France is intent on spending hundreds of millions of euros on trying to come up with an equivalent to the BBC World Service and CNN. He realises that France is losing out on a tremendous amount of influence globally because it does not have an equivalent. The French version of events is not being broadcast around the world.
The BBC World Service is excellent and is very broad in scope. Its programmes involve many discussions about political, social and economic issues all around the world. Recently, I watched a television programme on the BBC World Service that was extremely incisive about the new political developments in Bolivia. I wish that we had more of that type of broadcasting in the United Kingdom. We need to have more programmes like that to teach our children about other countries and cultures. We live in an increasingly multicultural United Kingdom and we need to make sure that our young citizens know about the good things around the world, rather than just listening to the coverage at the moment, which is so negative about world events. [ Interruption. ] Yes, about the Government in particular—quite right. I should say negative but effective and correct. The programmes that we tune into on the domestic BBC tend to focus on problem areas such as Iraq, Afghanistan and other areas of great conflict. There is a tremendous amount of good going on around the world, particularly in developing countries. The BBC World Service does a good job of highlighting that and I regret that the domestic BBC does not follow suit.
There have been suggestions that the licence fee could rise to £180 by 2013. Many vulnerable groups would struggle to pay that sort of fee. I applaud the Government for the action that they have taken to introduce free TV licences for those over 75. I hope that if the licence fee does go up to £180, the next Conservative Government—of course, we will have a Conservative Government by then—will ensure that other vulnerable groups are helped to pay that fee.
The impartiality of the BBC is critical to the future success of the corporation, and its impartiality has been debated on a number of occasions. I remember in 1986, as a passionate young Conservative, being furious about
the BBC coverage of the bombing of Tripoli in Libya. I believed at the time that the coverage was extremely biased. However, I was greatly encouraged by the way in which the BBC exposed the Labour Government over the weapons of mass destruction in Iraq and the way in which it stood by its guns over the issue. That has led me to believe that although there are times when political parties feel that the BBC is acting against their interests, overall it is impartial.
Mr. Vaizey: Does my hon. Friend share my concern that an independent report on the BBC’s coverage of the middle east showed that it tends to report the middle east in an extremely biased way and is very anti-Israeli? That report has been completely glossed over by the BBC governors.
Daniel Kawczynski: I do, and I thank my hon. Friend for that intervention. Although the BBC is impartial on domestic politics, there is a lot that it can do to counteract that bias against the Israeli authorities.
Chris Bryant: Will the hon. Gentleman comment on what a senior BBC executive said to me only a couple of weeks ago? He believes that the Welsh nationalist party was founded in the bowels of BBC Wales and is mostly sustained by BBC Wales.
Daniel Kawczynski: Well, as a Member of Parliament in England, albeit with a border with Wales, I try not to get involved too much in Welsh politics—I will leave that to my hon. Friends who represent Welsh seats. However, I take the hon. Gentleman’s point on board.
The BBC is impartial, but we need to safeguard its impartiality. We need a regulator with teeth to arbitrate and manage that impartiality. I was quite surprised by the way in which Greg Dyke behaved during the course of the controversy with the Government. Although he was a socialist and a supporter of the Government, he stood up to the Government—despite all the pressure that was being put on him. He went up in my estimation for the way in which he handled the situation. However, we cannot leave it to chance that we will always have somebody like Greg Dyke who will stand up for the best interests of impartiality and the BBC, no matter how much force is brought to bear on him or her. I will go as far as to say that I was appalled by the way in which members of the board of trustees left him out to dry. It is important that we have more professional people on that board and that they stand by their director-general and look after the interests of the BBC, rather than pander to the Government.
I want to give my hon. Friends the chance to speak, so I will conclude on a more light-hearted note. I wish that we could have more culture programmes on the BBC. My wife and I love to watch romantic costume dramas such as “Pride and Prejudice” and Charles Dickens programmes— [ Interruption. ] The hon. Member for Rhondda (Chris Bryant) and others might not be especially interested in culture and theatrics. Perhaps the hon. Gentleman does not realise that such programmes give young people tremendous benefits from the point of view of culture and a historical background.
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