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3.11 pm

Mr. Michael Wills (North Swindon) (Lab): I will take heed of what you have said, Madam Deputy Speaker.

I start by declaring an interest. In my previous profession as an independent television producer, I benefited from BBC commissions and suffered from its management.

There has been agreement on many things across the Floor of the House in this debate. Of course the BBC must be efficient; of course any increase in the licence fee must be justified; of course the management of the BBC must be transparent; and of course the BBC must not crowd out competition in a very fast-moving industry. There is general agreement, too, that the BBC is an excellent national institution of which we can all be proud—but I am concerned that there has been relatively little discussion this afternoon about the source of that excellence: the people who work in the BBC. It is no accident that the BBC is so excellent. Good broadcasting and communications are the product of training and experience in a centre of excellence, and the BBC is the major source of that for the entire industry in this country.

Any efficient market must operate within an infrastructure that is often not provided by that market. That is the case in broadcasting and other communications industries, and in this country the BBC is the major source of that infrastructure. For generations it has acted as a centre of excellence, training some of the brightest young people in this country and giving them the experience of making programmes—letting the talent flourish in a secure environment. That is largely as a result of the existence of the licence fee. We would be very foolish indeed to do anything that jeopardised that centre of excellence, because it fertilises the entire industry.

When we talk about crowding out, unfair competition and everything else, I hope that Members will remember that it is the BBC that enables the market to work so well by providing the talent and training the talent that everybody needs. When we consider the public value test and the market impact assessment, I hope that we will also remember the role of the BBC in providing the infrastructure. When we look at the independent sector—not much has been said today about its role; I speak as a former independent television producer—I hope people will not be deceived by any belief that it can provide the breadth of training and expertise that the BBC can provide.

Of course the independent sector has a role to play—I was grateful in my previous life when that role was extended, as I benefited from it—but we should not go too far. It is an ephemeral and polarising industry, which is highly segmented and driven by very short-term considerations. It cannot take the long-term perspective or train people and give them experience in programme making as the BBC does across the piece. Many hon. Members have today rightly characterised the industry as fast moving, and we cannot preclude
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the BBC expanding into such areas in order to provide the experience and expertise necessary to fertilise the industry as a whole.

I hope that when we consider the motion we will reflect carefully on how the Government have tried to balance all those different perspectives. It is a very difficult job. My hon. Friend the Minister made a cogent and compelling argument for why the Government have taken the approach that they have. They have the balance right; their approach will enable the BBC to continue to flourish as that centre of excellence and as an organisation that will give the country the talent that it needs for the creative industries to flourish. I therefore hope that the House will vote against the Opposition motion.

3.15 pm

Mr. Edward Vaizey (Wantage) (Con): I am grateful for the opportunity to participate in the debate, and to follow the hon. Member for North Swindon (Mr. Wills), who, as he said, benefited very much from the largesse of the BBC—and also did his bit to support the career of my hon. Friend the Member for Surrey Heath (Michael Gove) when he was a journalist.

I share the hon. Gentleman’s point—indeed, I was going to make it myself—about the cross-fertilisation of the BBC and the private sector, but with the greatest respect to him, his experience is based on broadcasting and programme making, and the problem that I want to address in my remarks is the enormous expansion of the BBC into areas where hitherto it has not had a role. That expansion has been driven by new technology. There are those who advocate that the BBC should certainly be playing a role in those new areas, but the House must be aware of the hugely damaging impact that the BBC’s expansion might be having on creative industries in those new areas. I certainly take on board the point that, as Salford media city gets under way, the BBC will act begin to as a pump primer for many new technology industries, but I want to put the other side of the case, about how it could inadvertently undermine some successful private companies in this country.

In the debate in the other place on the House of Lords Select Committee report on the media, the Government spokesman said that the BBC had to operate in a market without strangling or unduly compromising the competition, and I agree with every word. It is welcome that the Government recognise the importance of scrutinising the BBC in that area. However, the power of the BBC has increased, is increasing and ought to be diminished. In some areas, the BBC is becoming the Roman Abramovich of the content-broadcasting digital world. It has a huge amount of financial muscle and can quite easily outspend its competitors.

Mr. Wills: The hon. Gentleman is generous in giving way. I accept his point, but he characterised me wrongly. I accept that the BBC can crowd out new industries. Indeed, as an Education Minister I fought unsuccessfully to try to prevent it from doing just that in one sector. Does he agree, however, that it is important that the BBC is in such areas, partly to provide the pool of talented people who can if necessary leave the organisation to set up creative industries in this fast-changing world?

Mr. Vaizey: I certainly agree with the hon. Gentleman, although I would add that the BBC is now
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drawing on a pool of talented people who gained their experience in the private sector. There is cross-fertilisation—and the BBC’s role in education is precisely what I want to talk about.

Earlier in the debate, the hon. Member for Cannock Chase (Dr. Wright) said that the BBC was crowding out the private sector because it was driving out mediocre and bad firms. I am very much looking forward to writing to the chief executives and employees of the two firms to which I am about to refer, which are being crowded out, to let them know that a senior Labour Back Bencher considers them to be mediocre and bad people.

The two companies that I am thinking of are RM plc in my constituency—a classic British success story, which was started 30 years ago by two graduates and now employs 2,000 people—and Harcourt Education, part of the Reed Elsevier group, which is based just outside my constituency and employs many people. Both of them, as the hon. Member for North Swindon is aware, are successful providers of educational software, but they face a significant threat from BBC jam. We could have a separate debate on BBC jargon and names, but BBC jam—formerly the BBC Digital Curriculum—provides a broadband learning service for five to 16-year-olds. It was launched in January 2006, after extensive consultation and approval by the DCMS in January 2003.

At the time the industry warned that BBC jam would be anti-competitive, and would threaten the existing commercial market and drive out innovation and diversity. To their credit, the Government accepted that argument, because the DCMS said that

To mitigate that impact, the Government set out 18 conditions, the fourth of which stated:

Hon. Members will not be surprised to learn that people who know the service well do not think that the BBC has exploited its extensive archives, or provided a complementary service.

In summer 2005, the content advisory board wrote to the BBC expressing concern about the development of BBC jam, and questioned whether the service complied with the fourth condition. That board was set up by the Government, and its members include officials from the Department for Education and Skills, the Department for Culture, Media and Sport and the Department of Trade and Industry. DCMS approval for BBC jam included a requirement that

In summer 2005, the board recommended that BBC jam be subject to immediate review to address the question of whether it had complied with the fourth condition. In February 2006, however, Lord Adonis, a Minister in the Department for Education and Skills, rejected that recommendation. On 7 March, in a written
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answer to a question that I had tabled, he confirmed that it was “too soon” to review the service.

BBC jam will be launched in full in September 2006. Industry sources estimate that its advertising budget is £3.5 million—three and a half times the advertising budget of its nearest private sector competitor. That figure does not, as far as I am aware, include the promotion and cross-fertilisation of programmes in the BBC family—a practice that has become all too prevalent. Should we be worried that a big beast has moved into the sector? On the surface, the BBC is about to offer primary schools free broadband digital content. That sounds fantastic, but in fact that content is not free, because it costs the taxpayer £150 million a year. If the service is successful, it will be at the expense of jobs, opportunities and innovation in the private sector, and it will damage leading global businesses in the UK.

The provision of educational software to schools is not simply a matter of sending a pack to schools, because the companies that I have mentioned have enormous experience in the field, and work extremely closely with schools and other organisations to provide technical support, know-how and training for teachers. The BBC, however, is in danger of creating a monopoly. It has blundered into the area without careful thought, simply because it has the money and resources to do so. That small example, which is close to home as it affects my constituency, is symptomatic of the new BBC. People who worked for the BBC used to be prepared to accept lower pay in return for greater job security and a better pension. Now, however, people who work for the BBC earn as much as people in the private sector, if not an astonishing amount more. The salaries received by Jeremy Paxman and Jonathan Ross are not simply a matter of tabloid tittle-tattle, because they go to the heart of what is happening in the new BBC. As a matter or urgency, the Government should make the BBC publish a list of salaries, as they are another example of BBC largesse distorting the market.

There has been extensive discussion of the BBC’s coverage of the World cup. That, too, is an example of its largesse, as it has three times as many technicians and reporters in Germany as ITV. The BBC has therefore not made the case for an enormous increase in the licence fee.

In conclusion, we should look at the role of the private sector in public service broadcasting. There is false consensus that the BBC alone can undertake public service broadcasting; if it does not operate in a particular field, it is thought, a public service is not available. I bumped into the broadcaster Henry Bonsu two days ago. He left the BBC to set up a radio station for a black audience, because the BBC thought that a black audience wanted only music and entertainment, when in fact it wanted talk, politics, debate and discussion. He has set up a digital station—Colourful on the Sky platform—thus providing public sector broadcasting that does not cost a penny of taxpayers’ money. I hope for his sake that he is not too successful; otherwise in a year’s time the BBC will set up a rival and drive him out of business.

3.26 pm

Laura Moffatt (Crawley) (Lab): I am delighted to participate in our debate and intend to be brief so that another Member can contribute.

21 Jun 2006 : Column 1369

I congratulate commercial broadcasting organisations throughout the United Kingdom, and not just Scotland. In the spirit of the contributions from the hon. Member for Wantage (Mr. Vaizey) and my hon. Friend the Member for North Swindon (Mr. Wills), I shall consider whether the BBC contributes to the well-being of broadcasting and whether there is cross-pollination. We have excellent commercial broadcasting, simply because of the existence of the BBC, which drives up standards. In our debates, we must focus on transparency and the cost to licence fee payers while supporting the BBC and the innovations that it hopes to achieve.

The White Paper on the BBC outlined clear pathways in respect of what the BBC is about, which is high-quality programmes that are challenging, original, innovative and engaging. Those are qualities that we can all sign up to, and they offer a clear opportunity for the BBC’s future. In the few years preceding the White Paper, we began to wonder about that future, but I firmly believe that this debate will demonstrate that it is very safe.

I well remember that a constituent of mine, Mr. Wheeler, launched a one-man campaign to get himself on to the BBC board of governors, because he was very concerned about its lack of openness and transparency. He had an absolute hatred of the irritating little logo that appears in the corner of the screen from time to time—many Members present probably share that view—often in the middle of an important programme. Mr. Wheeler will greatly welcome the new plans for the BBC, because they very much involve what he was looking for: a champion and a proper voice for licence fee payers, to ensure that there is no muddling of their views.

We may not be actually pleased to pay the licence fee, but, as with most of the bills that we receive, we know that we have to. However, we have to make sure that it is worth paying, and this debate is about ensuring that we understand that point. We must keep a careful eye on the most vulnerable groups, who may have difficulty paying their fees. Although this point does not relate strictly to the BBC, I sincerely hope that we will look carefully at the criminalisation of licence fee payers. I do not believe that people should not pay the licence fee simply because they cannot be bothered, or because they do not think that they need to, but we should take a genuine look at those for whom paying is a major problem.

The problem with today’s debate is that the biggest issue in broadcasting has not been raised: the demise of “Top of the Pops”, which is a very serious matter. Looking around the Chamber now, I see quite a few Members who must have watched the show at a particular time. However, although its demise is sad, I completely understand the reason for it. This is an opportune moment to reflect on its demise and to realise the difficulties that the BBC faces. For many of us who grew up in the 40 years since it was first broadcast, “Top of the Pops” was the only way to get to know exactly the sort of music to listen to, and who was fashionable and what they were wearing. Young people today have a very different panoply of media to go to, which demonstrates the challenges facing the BBC.

I have noticed that there is a growing interest in podcasting. It is now possible to get John Humphrys on tap; to be frank, that would not be heaven for me, but it is a different way of using our media. We need to
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respect and understand why the BBC has to change, and why Members of Parliament need to take a close interest in these issues on our constituents’ behalf. I hope that the Minister will say a little more about the question of Members consulting constituents on these issues, because we are interested in their views and want to put them forward. We also want the BBC to thrive and flourish.

3.32 pm

Mr. Philip Dunne (Ludlow) (Con): It is a pleasure to follow the hon. Member for Crawley (Laura Moffatt), and I congratulate her on bringing the passing of “Top of the Pops” into this debate. She is right say that that illustrates that programming has to change and evolve regularly. It is extremely rare to find a BBC programme that has endured as long as “Top of the Pops”, and personally, I see its passing as a sad reflection of my advancing middle age, as much as anything else.

In the time available to me, I should like to touch on a few points, the first of which is the size of the licence fee. The Minister said that the Government were going to take time to get it right and that the proposed increase would not be excessive. I regret to say that he did not tell us the criteria by which that increase will be judged, or the methodology that the Secretary of State intends to use in arriving at the eventual figure. The Minister did claim that the licence fee had declined as a percentage of household income in recent years—I think that that was the comparison he made; I fail to recall exactly what period he was referring to—but that is not a very spectacular claim when the cost of media hardware and software has been falling around the world. It is because costs have been coming down, thanks to technological advances, that there is such a proliferation of alternative outlets for media use, so there is no great argument over whether the licence fee, as a proportion of household income, should be coming down. By definition, it should be, so such a decline is no justification for the above-inflation increases that the BBC is proposing.

Why should the BBC get the generous settlement that it seeks for the next seven years? It is looking for twice inflation, guaranteed for seven years. In the context of any other economic endeavour, that would be extraordinary. Across the commercial sector, any sector would be delighted to have a guaranteed source of income of twice inflation during an era of rapid price deflation in most of the markets in which it operates.

Let us compare another sector, the water industry, which is subject to regulatory oversight by a regulator, Ofwat. Water bills are affected by the K factor. In the first years after the water industry was privatised, that meant inflation minus a K factor. Subsequently that has changed to a positive K factor, but not to the level sought by the BBC. All that took place when the water industry had an enormous capital expenditure obligation to fulfil each year to renew its decaying pipe infrastructure, which had been in significant decline. Can the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Tottenham (Mr. Lammy) tell us what comparators the Government will use when they come to set the licence fee?

In an intervention on the Under-Secretary of State for Culture, Media and Sport, the hon. Member for St. Helens, South (Mr. Woodward), I raised the issue
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of transparency. I very much welcome the pledge given by my hon. Friend the Member for East Devon (Mr. Swire) to bring the BBC within the remit of the National Audit Office under the next Conservative Government and to allow the Public Accounts Committee to scrutinise all spending of the licence fee, and not just by permission. I was disappointed by the Minister’s reaction. He was signally unable to give a single example to support his contention that that would mean some undermining of editorial integrity. I will take up his generous offer and write to him, to give him an opportunity to explain what he has in mind.

There is no doubt that as technology constantly evolves and the outlets for BBC output expand, there is a need for regulatory oversight of this increasingly substantial amount of what is effectively a tax, as we have heard today. That in itself justifies the full scrutiny powers of the National Audit Office.

I shall touch briefly on two aspects of what the licence fee should cover. The Minister spoke about digital switchover. It is appropriate for the BBC to have a responsibility to secure coverage for those who are paying for the service. I raise the matter with an eye on my constituency and my own household. At present, analogue access is poor on both sides of the Welsh border, including in my constituency in Shropshire, where many households, including my own, do not receive a clear signal through an aerial. [Interruption.] From a sedentary position, my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) includes Shrewsbury in that category. I am sure he is right. In my home it is not possible to receive BBC Radio Shropshire either, because of the topography.

At present, I understand, there are no plans for the digital signal to expand its coverage when the analogue signal is switched off. It is entirely reasonable that part of the increase in licence fee should be used to bring TV coverage to people who are paying their licence fees, so that we achieve 100 per cent. coverage. It is extraordinary in the 21st century that we are proposing a new system of technology that does not allow for universal coverage.

Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP) rose—

Mr. Dunne: If the hon. Gentleman will excuse me, I have very little time.

On the second service aspect, Labour Members referred to the pilot local TV service that has been introduced in the west midlands, covering six counties, including Shropshire. For hon. Members who are not familiar with it, the service provides a 10-minute per hour magazine-style feature of four to six packages. It is a high-quality service, as one would expect from the BBC. It is welcome to those of us who occasionally feature on it and, I assume, to those who are able to view it.

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