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I remind the hon. Gentleman that, as other contributors to the debate have pointed out, the BBC has often followed behind and copied the private sector. For example, it was not until ITN started news bulletins that the BBC decided to have them. It was not until Radio Caroline came on to the airwaves that the BBC got round to creating Radio 1 and Radio 2. Similarly, it was not until Sky News started broadcasting 24-hour British news that the BBC
created BBC News 24. There is, therefore, a serious point to be made about the crowding out of the commercial sector by the BBC. It does not just come in to clear up the clutter and make everything right: it often drives innovative commercial broadcasters out of business or reduces their ability to invest. Sky News stopped making a profit the minute that BBC News 24 was started with taxpayers’ money.
The Minister will recall that in last month’s debate on the BBC I pointed out that two major private employers in my constituency, Harcourt Education and RM Ltd, are both suffering from the BBC’s decision to encroach into educational publishing—not an area in which it has been involved before and in which those two companies have built up much expertise and introduced much innovation. I am further appalled to hear the news that the BBC is thinking of starting a current affairs magazine. There could be no sector in which the BBC was less wanted.
The fundamental point is that the creative landscape is tentative at the moment. As many hon. Members have said, we do not know where we will be in six months’ time, a year’s time, two years’ time or five years’ time. There are many minnows out there trying to gain a foothold in the market, trying to grow, trying to attract investment and experimenting as much as the BBC has ever experimented. If we are to allow a thousand flowers to bloom in this new digital landscape, we cannot simply give the keys to the lawnmower to the BBC and ask it to set off. It would chop down many hundreds of companies, many doing innovative work, seeking to establish a foothold.
Last month, I mentioned the black broadcaster, Henry Bonsu, who has started a black digital radio station because, he told me, the BBC thinks that the black community only wants to listen to music and hear from celebrities. He took a different view and set up a private sector radio station for the black community. That is an extremely important point, because it shows that as much innovation can be found in the private sector as in the BBC.
My hon. Friend the Member for Shrewsbury and Atcham wondered whether people in the BBC listened to what he said. Well, this very morning I was delighted to receive a note from the director-general about BBC jam and its effect on the private sector.
The other point on which I strongly disagree with the hon. Member for Cannock Chase is his ridiculous parody that everyone on the Conservative Benches is against the BBC and has a secret plot to do it down while everyone on the Labour Benches believes that the BBC is the best thing since sliced bread and cannot be touched—although I admit that I have just parodied the hon. Gentleman’s speech in exactly that fashion. I have taken the trouble over the past few weeks to communicate with my constituents on the web, using a private service—HearFromYourMP.com—to find out what they thought about the BBC. To a man and woman, there was of course strong support for the BBC.
I agree with every Member who has said that the BBC is a much-valued cultural institution in this country. It is probably—dare I use the language of the market?—one of the most powerful brands the UK has to offer, both to the nation and worldwide. There is no doubt about that. Equally, there is no doubt at all that
in the complex constitution of broadcasting and the media the BBC plays an utterly vital part; it is the House of Lords of broadcasting and we meddle with it at our peril. However, that should not stop any Member from offering a candid critique of the future of the BBC.
There have certainly been some valuable contributions about BBC governance, which is extremely important. The division between the BBC Trust and the BBC executive board is clearly a dog’s breakfast; it has achieved the unique feat of uniting almost the entire broadcasting world against it. How can one trust a trust appointed by the Department for Culture, Media and Sport and the director-general, both of whom will be on the panel that appoints members of the trust? It would be rather like asking the chairman of Thames Water to appoint the chief executive of Ofwat—there would not be much independence.
The process will be circular: if the trust is to appoint the director-general and the chairman of the executive board, how can it hold to account a director-general in whose success it would clearly have a vested interest? It is vital that a truly independent panel is set up to appoint the members of the trust. When I raised that point last month with the Under-Secretary, the hon. Member for St. Helens, South (Mr. Woodward), he said it was important that people who knew about the industry were appointed, but the whole point of the trust is that it does not have a management role, but a regulatory and overseeing role. There are plenty of people who know about ethics and economics who would make good members of the trust; they would not need to have been programme makers.
Dr. Wright: I am grateful to the hon. Gentleman for giving way again, because I should like to find one item on which we can agree. Last night, viewers of BBC 1 were invited to vote for celebrities riding horses and jumping over fences. If such votes can be held regularly, why on earth could not the viewers—the licence fee payers—vote directly for one or two members of the trust? The BBC could use all its imaginative resources to run such an election.
Mr. Vaizey: It is a tempting idea and I am glad that at last we are hearing some radical—if barmy—ideas from the Labour Benches, but that way lies madness; we should end up with Ken Livingstone on the trust, which none of us wants.
That leads me to salaries. There is clearly a consensus in the House; I have never seen it more united than on the subject of salaries in the BBC. I talked to one very senior broadcaster from the private sector who said that even in that close-knit world, he and his contemporaries were astonished to hear about the salary currently being received by Jeremy Paxman, who squires a programme watched by 900,000 people—and we now learn hated by the Scots. Salaries in the BBC seem to be completely out of control. There simply cannot be justification for the sort of salaries that have been talked about, particularly in relation to Jonathan Ross.
I agree wholeheartedly with the right hon. Member for Rotherham (Mr. MacShane). I thought that my idea—I was keeping quiet about it—that all salaries should be published and, even more importantly, that there should be a register of interests for all broadcasters so that we know whether they are speaking to a pension fund dinner here or taking a non-executive directorship there, was daft. I thought that I was alone in having that idea. Then I learned that the right hon. Gentleman shared the idea. That does not necessarily prove that it is not daft, but it does at least prove that support for the idea has grown by 100 per cent. in the course of one debate. No doubt it will grow some more.
While we are discussing salaries, I should mention the salaries paid at Ofcom, which, from what I can gather, are more closely guarded than some of the secrets during the cold war. The argument comes forward again and again that those people in the BBC and Ofcom have to be paid those salaries because otherwise they would go and work in the private sector. In response, I would borrow a phrase from the bishop mentioned by the hon. Member for Cannock Chase and tell them to—and go and work in the private sector. There is a concept called public service. Many of the people on the Conservative Benches, at least, could earn two, three or four times more than they earn as Members of Parliament, but they choose not to because they believe in the concept of public service. If one works for the BBC, one has the job security and all the other benefits that come with that.
Mr. Henry Bellingham (North-West Norfolk) (Con): Is my hon. Friend aware that, last year, Stephen Carter was paid £370,769 and had a 48 per cent. increase in his salary on the previous year?
Mr. Vaizey: I was aware of that figure. Loth as I am to praise the Prime Minister—I will praise the office of the Prime Minister—it seems astonishing that the chief executive of a regulatory body is earning double what the Prime Minister earns.
We have talked about the licence fee and the amount of money that the BBC is asking for. Again, there is consensus in the House that the amount of money that it is asking for is simply excessive. It has already said that it is making efficiency savings of 4 per cent. It is asking for an increase in its licence fee of RPI plus 2.3 per cent. In effect, therefore, it is asking for an increase of about 6.5 per cent. in the licence fee. We also know that many of the figures that the BBC comes up with are literally written on the back of an envelope. For example, the move to Salford was meant to cost £600 million, but has now been downgraded to £400 million. There is no scrutiny of those figures by the National Audit Office. They are just broad-brush ones. The Government and the House should be extremely sceptical about the amount of money being asked for.
I agree with the sentiment, which I think is shared by most people who have contributed to the debate, that digital switchover should be funded as a separate item—not only because it is clearly a matter of public policy, but for tactical reasons. We all know that the reason the BBC wants the money for digital switchover is that once switchover has switched over, the BBC can
keep the money. It is a fantastic way of increasing one’s budget. My hon. Friend the Member for Shipley (Philip Davies), who used to be a bookmaker, is not in the Chamber, but I would take bets that, once digital switchover has happened, the BBC will not turn up at the Department for Culture, Media and Sport and say, “Here’s a cheque back for next year because we have done digital switchover.”
In conclusion, as they say, there have been many wonderful contributions to the debate. There have also been some shocking moments from the hon. Member for Cannock Chase and a shocking moment from my hon. Friend the Member for Worthing, West (Peter Bottomley), who has spawned the “Save Jonathan Dimbleby” society on the Conservative Benches. We will be going to a small flat in Hammersmith this evening to begin to photocopy the leaflets. A consensus has emerged that the BBC is a well-loved institution with support on both sides, that it makes a very valuable, clearly defined, but also indefinable, contribution both to our public life and to broadcasting and the media, but that its power continues to increase.
The BBC cannot win because, as has been pointed out, when it is not doing well, we criticise it for not being able to compete with the private sector, and when it is doing well, we criticise it for crowding out that sector. However, in a flourishing and vibrant digital age, the BBC is in danger of squashing a lot of minnows that could well grow into impressive companies. The increase to the licence fee must be kept to a minimum, and the Government should perhaps examine again the slightly half-baked governance procedures that have been put in place.
9.25 pm
Mr. Malcolm Moss (North-East Cambridgeshire) (Con): It is a great pleasure to follow my hon. Friend the Member for Wantage (Mr. Vaizey), who made a powerful and telling speech. I commend him for his patience and long suffering, because in our last such debate, he was also the last Member to be called before the wind-ups. It was all the better for waiting for such an excellent contribution. This is our third such debate in as many weeks. I welcome the Under-Secretary, the hon. Member for St. Helens, South (Mr. Woodward), across the Dispatch Box. He will wind up the debate, and I hope, for the first time, we will get some answers to the questions that have been posed.
We are essentially debating the future governance of the BBC in the form of the new agreement between the Department for Culture, Media and Sport and the BBC that will complement the charter for the next 10 years. It was helpful that the BBC’s annual report was to hand during the debate, so we are grateful that its publication was brought forward.
The report is impressive and it underscores the fact that we are indeed fortunate, as my hon. Friend the Member for East Devon (Mr. Swire) said, to have such an internationally acclaimed public service broadcaster. We welcome the decision to renew its charter. However, the report highlights problems relating to audience share and reach, and it shows that cost-effectiveness in the BBC is going in completely the wrong direction.
Given such difficulties, it is more than ever necessary to get the structure and regulatory framework absolutely right. Concern has been expressed by hon. Members on both sides of the House that the charter renewal on the table is less than perfect. The trust will not be radically different enough from the old BBC board of governors. Several hon. Members, including my hon. Friends the Members for Maldon and East Chelmsford (Mr. Whittingdale) and for Wantage, and the right hon. Member for Rotherham (Mr. MacShane), pointed out that the BBC will be both judge and jury under the proposed structure.
There has been a missed opportunity to give Ofcom increased regulatory powers over and above those already given to it, and that point was supported by my hon. Friends the Members for Daventry (Mr. Boswell), for East Devon and for Shrewsbury and Atcham (Daniel Kawczynski). Such increased powers would have meant that the BBC would be seen to have a totally independent, impartial and rigorous regulator. Given that some members of the trust have been appointed and the trust is already in place before the beginning of the new charter period, it is vital that that group of people demonstrates a clear commitment to transparent independence from management and acts objectively in the interest of licence fee payers and, as many hon. Members have pointed out, competition in public service broadcasting. My hon. Friend the Member for East Devon and the hon. Member for Chesterfield (Paul Holmes) highlighted the fact that there is no adequate appeal process against a decision of the trust, save going to judicial review, which is of course both a costly and protracted process.
It would be churlish not to recognise that positive progress has been made in the new agreement to make the BBC more accountable and transparent. Such progress includes the introduction of service licences, the duty on the trust to have regard to competition and the introduction of the concept of a public value test, including a new role for Ofcom on the joint steering group to measure the market impact assessment. However, as my hon. Friend the Member for Maldon and East Chelmsford pointed out, the composition of that group will be 50 per cent. from the trust and 50 per cent. from Ofcom, with alternating chairmen. To many hon. Members that does not look like the BBC is giving up its control-freak tendencies. Contrary to what was said by the hon. Members for Feltham and Heston (Alan Keen), and for Selby (Mr. Grogan), there will not be two separate chairs for the BBC and for the trust. Indeed, paragraph 10 on page 9 of the revised draft royal charter states:
“The Chairman of the Trust may also be known as the Chairman of the BBC.”
As I pointed out earlier, the BBC has proposed the idea of a service licence for all its services as a major new way of improving governance and setting a standard against which a particular service can be measured, but although such service licences will apply to all TV and radio services, they will not, at this stage, apply to the BBC’s ever-expanding web-based services. The BBC believes that a single service licence will suffice to cover all its internet and mobile services, but it ignores the way in which those services could affect—often detrimentally—the development of similar services in the private sector; my hon. Friend
the Member for Wantage pointed in particular to BBC jam. For example, the BBC’s mobile services will bring its digital news output into direct competition with newspaper and magazine publishers in what is, for the BBC, an entry into an entirely new market.
It is unfortunate that the debate on charter renewal is taking place separately from the debate on the licence fee negotiation, as the BBC’s future role is inextricably linked to the question of funding. The fact that the announcement on the licence fee has been delayed until the end of the year suggests that agreement is a long way off. It is in the interests of licence fee payers and the creative media industries for the funding settlement to be made in the context of both the charter of renewal and the potential impact on the country’s public service broadcasting ecology. As my hon. Friend the Member for East Devon said, it is ludicrous for us to order from the menu without knowing whether we can afford to settle up when the bill arrives.
It is clear from what the Secretary of State said herself that the BBC’s bid for a licence fee increase of 2.3 per cent. above RPI each year does not meet with the Government’s approval—a point made strongly by my hon. Friend the Member for Maldon and East Chelmsford. The case is not helped by the conclusions of two separate reports—one commissioned by the Department for Culture, Media and Sport from Panel, Kerr and Foster, and the other by ITV from Indepen—that the BBC could meet its objectives while offering licence fee payers better value for money. The BBC’s figures were seriously challenged, and confidence was not shored up when it backed off from some of its own calculations. One particular example springs to mind—the cut in the costs of moving to Manchester.
The BBC’s bid for £6 billion extra funding over the period of the next licence fee would result in the fee rising to about £180 by 2013. Many speakers, particularly the right hon. Member for Rotherham, emphasised the problem of the affordability of that form of regressive revenue collection for many of their less affluent constituents. Many people find the TV licence fee too high already, and the prospect of £180 for a licence fee fills them with concern, if not dread. That sum, of course, does not take into account the assistance package for digital switchover, which will be completed by 2012. The cost for that, as the director-general, Mark Thompson, has said, could be
“on the far side of a billion”.
While we are on the subject of analogue switch-off and digital switchover, figures on what the Treasury will charge for spectrum have been bandied about. My hon. Friend the Member for Maldon and East Chelmsford tonight confirmed that a Treasury spokesman says that there is no intention whatever to charge for the new spectrum that will be released. The BBC has factored £300 million into its calculation to cover the cost, and it is important that when the Minister responds, he clears up the matter so that we know whether the Treasury will charge for the service or whether the £300 million can immediately be taken out of the BBC’s calculations, thereby reducing the proposed increase in licence fee.
With digital switchover, the Government have embarked on what was described as one of the biggest engineering projects that the country has ever undertaken. It goes without saying that the decision was taken by Government without consultation with many other parties. The BBC was very keen on it, until it was told by the Government that it would be collecting the money through the licence fee and running the assistance package. It could add, as we have said, a huge amount of money to the licence fee requirement. It will be interesting to see what calculations the Government have done on what the licence fee will be in 2012 if, as has been stated, the extra cost of the assistance package is over £1 billion.
That is such a huge potential financial burden that no final agreement can be reached on the licence fee until that figure has been accurately calculated. As my hon. Friend the Member for East Devon asked, can the Minister give the House a figure, estimated or otherwise, for the projected targeted assistance? If he cannot give us that figure tonight, may we have a guarantee that the figure will be made available and the calculations behind the figure made transparent before any licence fee settlement is announced?
We have already noted substantial confusion in the licence fee debate on both sides of the argument. That is why several hon. Members suggested a key role for the National Audit Office in scrutinising both the finances of the BBC and the setting of the licence fee. The halfway house agreed to date with respect to the involvement of the NAO is unacceptable. Licence fee payers will never be satisfied that they are getting value for money, particularly in a scenario of rapidly rising licence fees, unless they get the independent and rigorous scrutiny that only the NAO can provide.
It is Parliament’s responsibility to ensure that the BBC is independent, well regulated, transparent and funded to an appropriate level. The charter, unfortunately, fails to give Parliament, as the House of Lords Committee recommended, a greater role in debating and voting on vital matters, such as funding and the charter renewal. The Opposition support the BBC, but we have made many constructive suggestions to ensure that the licence fee does not get out of control and that the BBC continues to give an outstanding public service.
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