UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 522-iii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

FOREIGN AFFAIRS COMMITTEE

 

 

foreign and commonwealth office annual report 2004-2005

 

 

Wednesday 9 November 2005

MR NIGEL CHAPMAN and MS ALISON WOODHAMS

Evidence heard in Public Questions 171-268

 

 

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Oral Evidence

Taken before the Foreign Affairs Committee

on Wednesday 9 November 2005

Members present

Mike Gapes, in the Chair

Mr Fabian Hamilton

Mr John Horam

Mr Eric Illsley

Mr Paul Keetch

Mr Andrew Mackay

Andrew Mackinlay

Mr John Maples

Sandra Osborne

Mr Ken Purchase

Sir John Stanley

Ms Gisela Stuart

________________

Memorandum submitted by the BBC World Service

 

Examination of Witnesses

 

Witnesses: Mr Nigel Chapman, Director, and Ms Alison Woodhams, Chief Operating Officer and Director of Finance, BBC World Service, examined.

Q171 Chairman: Can I welcome our guests from the BBC World Service, Mr Chapman and Miss Woodhams. Thank you for coming today. We are delighted to have you with us. Obviously you are coming after a number of very important announcements about the future operation of the World Service. I would like to begin by asking you about the decisions that you have taken to change your services and to drop several central and eastern European vernacular services. Could you tell us what impact you think that will have, particularly with regard to balanced reporting and diversity of views within the countries concerned?

Mr Chapman: Chairman, if I might start by putting the context because obviously the savings that are arising from the closure of those ten language services are being reinvested in new services by the World Service-Arabic television, better distribution for radio, new media services, so it is part of a rounded strategy, if you like, for the World Service to take us to 2010. I am happy to focus on the "cuts" issue.

Q172 Chairman: What I would like to do is ask questions about the Arabic television service later so if you could at this point address the services that you are giving up.

Mr Chapman: We did a very thorough review lasting about 12 months of all the 42 vernacular language services in the World Service against three criteria really; first of all, what you could broadly describe as geo-political importance; secondly the extent to which there is a free and independent media available already in those societies and how far that has changed over the last ten years; and thirdly the level of impact that those services currently have. Those services at the moment in central Europe have an audience of below four million. Five years ago they had an audience of seven to eight million so they have declined significantly in terms of impact.

Q173 Chairman: Four million in how many countries in total?

Mr Chapman: In the eight central European countries-and if we put Thai and Kazakh to one side, I am just talking about the European language services here-obviously the audience has declined significantly and the evidence about the extent of alternative choices, which obviously has fuelled that decline, is strong. If you look at independent assessments, the Press Freedom Index, and other sorts of indices of that kind, they show a very steady position in central Europe about press freedom and choice. In fact, some of those countries have a press freedom level which is as good as the United Kingdom if not better. When you look at that overall context and you visit those places, as I have done, you see a mushrooming of media there and a mushrooming of choice. That must be one of the factors why in the end if you have got to make a decision about the relative importance of investment with a fixed budget you come to certain views that some parts of the world need extra investment in order for you to be competitive and continue to have your impact and other parts you can withdraw from. That was the basic tenet and the philosophy behind the decisions we took.

Q174 Chairman: If you had not had to shift these resources into the Arabic television service would you have cut these services?

Mr Chapman: Yes, I would have spent the money on something else in addition, would be my answer to that. The way the funding works is that in this £30 million investment package by 2007-08, of which Arabic television is £19 million, there are ways we could have found for funding a lot of that Arabic television through the Spending Review settlements we had in 2002 and 2004, but what we could not fund was all the other things we needed to do to make sure the World Service remains competitive, like improve its distribution for radio, improve its marketing, improve its new media services. If you came to me and said, "Okay, here is £10 million which you are going to save from those ten language services. You can have that money. Would you like to keep these services open or would you like to spend it on something else?" my answer would be that I would spend it on something else. There is a whole series of proposals in the strategy paper which sets the scene, if you like, for the Spending Review of 2007 which give an indication of where we would like to spend it. For instance, we would close the gap between 12 and 24 hours of Arabic television, we would look to fund a Persian television service, we would look to fund new multi media activities in Urdu and Hindi and Chinese. There are lots of parts of the world, frankly, where the case for investment is a lot stronger than retaining the services we had in central Europe.

Q175 Chairman: But presumably one of the consequences of these services being cut is that you lose a number of journalists with particular language skills and particular understanding of particular countries. Does that have a wider impact in your general news gathering?

Mr Chapman: It will have a marginal impact would be the way I would describe it. Clearly if you have got a team of ten, 12 or 14 journalists in somewhere like Prague that is a resource and they obviously understand the society extremely well. If you do not have it there you are going to lose something, so it would be wrong of me to say it has no impact, but you have got to remember that the BBC also have correspondents and a news-gathering capacity in a lot of these countries already. We have correspondents in Prague, in Budapest, we have them in other parts of Central Europe. It is not as if the BBC is not represented there when the language services no longer exist. The BBC is well represented there. We have got correspondents there and they will continue to file stories and analysis about those countries.

Q176 Chairman: Are there any people who are double-hatted and triple-hatted within the BBC who are doing something for you and at the same time working for another part of the organisation?

Mr Chapman: No, the language service teams are pretty separate. They are focusing on their language service output day-to-day, week-by-week so they are not filing lots of material for English output. A lot them would find that very difficult to do for linguistic reasons. Whilst there is a news-gathering intelligence, if you like, going on here and an understanding of the society (which is obviously shared with the wider BBC) the people who are filing pieces for The World Tonight or television or whatever, they will still be in place to do that. They are not part of the language service teams, if you like.

Q177 Chairman: But in that case then there are a number of individuals who will lose their jobs and will not be employable very easily elsewhere within the BBC, from what you have just said. What is going to happen to those people? What are you doing to help them? How many actual individuals are we talking about here?

Mr Chapman: Let's just distinguish if we could between those people who are based in the UK and those who are based overseas. Let us start with the people who are based overseas, of which about 50 per cent of the numbers affected by the language service closures fall into that category. One of the things I would say about that-and I have just been to Prague myself and looked at the situation there and met the staff only last week-is this burgeoning media scene I talked about is creating lots of opportunities both in radio and in television and in new media, so I think a lot of people who are based in country will find other jobs as a result of those opportunities. The BBC will compensate those people for loss of office in a way which is compatible with local law in those societies, and we have said in addition that in those cases we will honour the ACAS agreement which the BBC struck as a whole with the trade unions some six months ago, and that agreement guarantees that nobody can be made compulsorily redundant by the BBC until December 2006, so they will stay on the payroll until December 2006 and then receive the appropriate redundancy sum which will flow from having worked a number of years in the organisation. In terms of staying on the payroll, we will treat staff in the United Kingdom and staff in an office like Prague or Budapest or wherever in exactly the same way. We cannot do that in terms of redundancy payments because the local law precludes that. There are local redundancy laws in, say, the Czech Republic which are completely different from the ones here in London. In London if you are a member of, say, the Hungarian service and you are working in Bush House you will receive all the benefits from the ACAS agreement, which include staying on the payroll until December 2006, unless you want to go earlier and then there will be discussions about that. You may have other job offers and you do not want to stay on the payroll until 2006. Of course, you will get one month for every year you have been on the staff of the BBC in terms of redundancy, which is the standard BBC redundancy payment. In that sense I am doing everything I can to be as generous as I can within the rules which compensate people for loss of office. In addition, we are working very hard to try and find people alternative employment, and that is difficult because some of these skills are not easily transferable but some of them are transferable and there are people with radio skills and new media skills and we will be doing our best to find those people alternative employment in the BBC and outside. I do not underestimate the difficulty because you are talking about 125 people in the United Kingdom and it is not easy for them to find jobs in some of the new investment areas that we have agreed to do over the next five years.

Q178 Chairman: So 125 in the UK, how many in the other countries?

Mr Chapman: It is over 90 so the overall numbers we are talking about when you look at all the language service changes as a whole, including those which relate to Portuguese for Brazil and Hindi and so on, which are on the margins, around 230 posts will close, made up of around 120 or 130 from memory in the United Kingdom and almost 100 overseas.

Q179 Chairman: Can we have a note from you setting out in detail what the actual figures are because that would be very helpful?

Mr Chapman: Absolutely.[1]

Chairman: Thank you very much. Can I now move on to the Arabic television service and ask Fabian Hamilton to start on this, but I suspect all my colleagues will want to come in.

Q180 Mr Hamilton: Hello Mr Chapman, nice to see you again. Can I ask you how you think that the new BBC Arabic TV station would differ from existing stations like al-Jazeera and al-Arabiya?

Mr Chapman: Again, it is quite interesting, Mr Hamilton, that audiences already perceive a likely difference between the BBC and stations like al-Arabiya and al-Jazeera. Al-Jazeera is perceived to be (and is) a regionally based Arabic news station concentrating pretty heavily upon Middle East news and affairs. It is not, I would argue, a genuine international station. It definitely does not bring an international perspective to the world's news. The BBC Arabic service will not be a regionally based station. It will be based here in London and it is going to draw on all the strengths of the BBC, in terms of its news-gathering capacity, so I would expect a wider range of stories, a more international feel, and an absolute determination to observe the BBC's position on impartiality and independence. And it is interesting, again, that when you look at what the audience thinks they are going to get from the BBC, that is what they want from the BBC; they want an independent, impartial service which will sit within a portfolio of services which people will consume. They will not just consume the BBC, they will not just consume al-Jazeera, they will consume a mixture, but it will be the high ground as they perceive it and we perceive it of international television journalism that we will be offering in this market.

Q181 Mr Hamilton: Which is very laudable provided you can ensure that it is genuinely going to be balanced, which I am sure you will because it will be along the lines of the BBC's own very high standards. Can I ask you, though, in the light of the general suspicion of Great Britain as one of the allies that invaded Iraq, is that going to influence the way that people see this new Arabic TV station? Are they going to think that this is going to broadcast the western view of why Iraq was invaded?

Mr Chapman: I am sure there will be some people in the Middle East who take that view. It would be naive of me to assume that everybody would follow the argument I just put earlier on. However, I can take some succour from a number of things. First of all, BBC services in Arabic are seen as independent of government. If you look at all the audience research about that, particularly in relation to radio, even in a society like Iraq where you would expect people to be very concerned about the point of view you have just expressed, they compartmentalise, if you like, the BBC's services in radio and television and new media from the World Service and other people in a different box from British foreign policy. They see British foreign policy as one thing and the BBC's activities as another. When we ask them do you trust the BBC, do you think it is independent, do you think it is independent of government, they give it very high marks repeatedly throughout the Arab world for this. Even in a society like Iraq, we get the highest ratings for independence and for trustworthiness against any other international competitor, despite the fact that British forces are involved in action every day in Iraq. I think that says something about the subtle understanding of Arab audiences, that they historically have been able to differentiate between foreign policy on the one hand by the British Government and an independent broadcasting force on the other. Long may they continue to see it that way because I think one of the great strengths the World Service has is independence of government and editorial independence, and we have to keep that whether it is radio, new media, and obviously increasingly now television.

Q182 Mr Hamilton: Can I ask you this about the funding of it: you are going to save about £12 million from the language services that you are ceasing to provide on the World Service, but you reckon it is going to cost about £19 million in its first year to set up the Arab TV station. How are you going to make up the shortfall and is that £12 million going to be ring-fenced?

Mr Chapman: The £19 million figure that we are talking about in relation to the costs of Arabic television is an on-going revenue cost. There is then a start-up cost in addition which I think will be between £5 million and £6 million which will be largely capital expenditure which we have the funds to do. You have to see these figures as part of an overall package of a £30 million investment, so £19 million to Arabic television, but that is only two-thirds of the overall investment package. There is a further £11 million on other investments to do with new media, FM distribution and marketing. That balance is being made up of some of the money which was given to us in the Spending Review settlements of 2002 and 2004 where we carefully husbanded those reserves, if you like, in the expectation that we would need to make an investment of this kind. Clearly if we were relying purely on the savings from the language services we would not be able to fund a £30 million investment plan, but we can do so because of the other resources we got from the Spending Review settlements and general efficiencies but particularly the Spending Review settlements which were reasonably generous particularly in 2002, arguably less so in 2004.

Q183 Mr Hamilton: Sorry, those £12 million savings are going to be ring-fenced so that you can use them for this service; is that correct?

Mr Chapman: Absolutely, there is no sense of any of the funds being saved here returning to the Foreign Office or anybody else. They are staying fully squarely inside the World Service budget, and I hope in perpetuity.

Q184 Mr Mackay: Mr Chapman, certainly due to no fault of yours, is this not all too little too late?

Mr Chapman: No, I do not accept that. Many people have put that point to me, but again we would not have gone down this road if we had not done some very thorough research about audience demand, and audience demand makes clear a number of things. We did this research both in 2003 and then we followed it up with the same research in 2005 because I was concerned that time had gone on and if we had not done it again in 2005 the story may have changed. The story was equally as emphatic in 2005 as it was in 2003 that people who have access to satellite television, or who are likely to get it, and who are interested in international news would be very keen to use the BBC, so there is clearly a demand there for the services. The second thing I would say is that the attributes associated with those services are fairly and squarely BBC attributes. People want to see an independent and impartial service. They see that there is a gap in the market. They do not see it as too little too late; they welcome it. If you look at the Arab press in particular in the last two weeks, and read the editorials, it has been almost universally well accepted and acclaimed that the BBC is doing this. If it was too little too late, a lot of people would be writing that, they would be saying it and they would be criticising us for doing it. We have hardly had any criticism whatsoever for doing it.

Q185 Mr Mackay: Have you not just conceded in an earlier answer that it would have been much better for it to have been sooner and before the controversial invasion of Iraq?

Mr Chapman: I do not think I did concede anything to do with the invasion of Iraq. Obviously the BBC did go down this road briefly in the 1990s and then withdrew. It would have been better, I accept, to have started it earlier but we have to live in the real world of what is practicable and what is practicable is we can afford to do it now. I know there is demand for it, I know people will value it, and I look at the question from the other end of the telescope, if you like, what will happen to the BBC's impact in the Arab world if we do not have an Arabic television service? Imagine trying to have an audience of any scale and size in the Middle East when the preferred medium of consumption of news is increasingly television if we carry on with a radio and an on-line service alone. Imagine in two or three years' time what I would be being asked about why has the BBC got such a poor performance in the Arab world. That is where we would be heading. We would be struggling to maintain the levels of impact we have now very seriously because in some markets radio, however good the programmes are, cannot do the job. You cannot do the job if you do not get the sort of distribution you need. In many Arab societies the World Service cannot get the sort of distribution it needs for FM partnerships and FM distribution. It is very difficult. We have been knocking on the door many times, we have had some successes but without free-to-air satellite television in countries where 80 or 90 per cent of the society have access to satellite television, your chances of having an audience in 2010 are very low indeed. So in that sense you do not have much choice, you really need to do this in order to maintain an impact.

Q186 Mr Mackay: Perhaps you would concede that despite offering a slightly different service, one of your big competitors is obviously al-Jazeera and al-Jazeera is available, I think, 24 hours a day while your service is only going to be offered 12 hours a day. That must be very disappointing for you?

Mr Chapman: I would obviously like it to be 24 hours a day. You know we put forward a bid to government in the 2004 Spending Review so that we could have some extra funds for it to be 24 hours a day and we continue to talk to government about that. Again, I take some reassurance from the fact that we asked people about the 12 hours a day issue and they said, "Of course we tend to consume television more in the evening and so if you are going to be there in the evenings when it is peak viewing time, and you are going to be there from the afternoon through the evenings early into the night, that is fine." We still have a very strong radio service, which people tend to listen to in the mornings, so if you put the overall package of what the BBC is doing together, plus its new media service in Arabic, you have got a pretty comprehensive tri-media offer for this market which nobody else has got. Al-Jazeera is a strong television channel, I accept that, in terms of audience impact, but it does not have a radio service and it does not have a particularly good web presence. The BBC will be in a position as a result of these investments to have a tri-media approach which I think will be very, very powerful under a single brand which is well respected and trusted in the Middle East. That is a pretty good platform on which to build. The programmes still need to be very good and have to be well done to succeed, I do not doubt that, but you are starting off from a strong base in terms of both audience expectation and previous historical record.

Q187 Andrew Mackinlay: What concerns me is that there is a chemistry here for a big bust-up with HMG and your journalists and to some extent cynicism by your customer audience, if, for instance-and can I put the scenario to you-you get a tape from al-Qaeda, at the present time in our domestic television it is reported that al-Jazeera has shown footage of an al-Qaeda spokesperson but we do not show the whole footage. It is a news item that al-Jazeera has shown. If you are doing an Arabic service, surely you are going to get occasions when some of your people-one can understand this professionally as journalists-say we need to show the tape. Your paymasters HMG or the Foreign and Commonwealth Office say, "Hang on a minute, we are not paying you this money to broadcast the propaganda of al-Qaeda." It seems to me that this is something we are rushing into. This is something where almost as sure as night turns into day is going to come this dilemma and it might come fairly frequently. What say you on that?

Mr Chapman: I understand the scenario you are putting to me. All I would say about that is that the Arabic television service has to follow the same editorial guidelines as the rest of the BBC. When al-Qaeda tapes are used in the rest of the BBC they are used on news merit and they are usually used briefly to report in the way, Mr Mackinlay, you have said. I expect the Arabic television service to behave in exactly the same way. If the Arabic television service strays across the line, which is what your scenario presupposes, and uses these tapes in an inappropriate way, then that would be wrong and it would actually be completely counter to what audiences tell us they want from the service. They do not want a repeat of al-Jazeera from the BBC. What they want from the BBC is a trustworthy, independent, impartial service and judging how you use material like this is part of being a trustworthy, independent service and I will make sure, and my team will make sure that we do not use that material ill-advisedly.

Q188 Andrew Mackinlay: The other question is what about your capacity to criticise totalitarian regimes in the region, for instance-and you might disagree it is a totalitarian regime-Saudi Arabia? Are you going to be constrained in criticising implicitly or explicitly in your news these governments?

Mr Chapman: No, we are not going to be constrained in criticising them. Again, this channel has to operate in exactly the same way as the rest of the BBC on the merits of the case and if it is justified to "criticise" or report developments in Saudi Arabia which the authorities do not like then we will be reporting them. There is not a special editorial charter for the Arabic television service which is different from the rest of the BBC, and it would, frankly, be a disaster if there was a separate editorial charter for them because it would undercut and undermine the very values that I think should lie at the heart of what this service is and which audiences tell us they want from us. So while I accept there are risks and dangers those are risks and dangers that we will be fighting very hard to avoid.

Q189 Mr Maples: What do we spend on the Arabic radio service?

Mr Chapman: From memory, approximately £16 million.

Ms Woodhams: Yes.

Q190 Mr Maples: Because it seems to me that the budget for the television service, I will try and put it neutrally, is not very much, £19 million a year, to run a television service when the radio service is already costing £16 million. I do not know what it costs to run BBC Two but I think it is £200 or £300 million.

Mr Chapman: Yes but remember this is not a 24-hour service for a start and that makes quite a difference.

Q191 Mr Maples: Nor is BBC Two.

Mr Chapman: But also the nature of news services is that you gather in a lot of material for the start of the day's output, and although you obviously need update that, we are not expecting people to sit and watch 12 hours of uninterrupted Arabic TV. This is going to be on a rolling format where once a fair amount of material is already gathered it is going to have to be repeated across the day, and most people will tune in for half an hour to an hour to get the day's news.

Q192 Mr Maples: Like CNN?

Mr Chapman: Yes, so the BBC Two comparison is not quite right because there you are talking about built programmes of a distinct 30-minute or 40-minute or one hour's duration and each one is a special programme. This will be much more like CNN or BBC World, which is a better analogy, in terms of bringing you news round the clock and I think it will also be focusing very heavily on debate and discussion along with its radio colleagues because I think one of the things that people are really asking for from the BBC is a forum and a great chance to debate the issues that affect both the Middle East and the wider world.

Q193 Mr Maples: So there will be studio discussions?

Mr Chapman: There will be studio discussions, live link-ups with bureaux in the Middle East, there will be a lot of reporting on the ground, not just reporting on the ground from the Middle East-and this is very, very important-but reporting on the ground from the world as a whole. The BBC has a tremendous amount of material coming into London every day from those places, as I am sure you are aware, so you have got a good base on which to build.

Q194 Mr Maples: Will you take any of the current BBC output of news and current affairs and dub it or translate it into Arabic and use it or not?

Mr Chapman: I think what we will do in terms of news coverage is use some of the individual pieces and packages. We will have a look at that but, again, I am quite wary about the extent to which dubbing is the answer here. You have got to remember that you are going into a market where there is already, as we have discussed earlier, a lot of competition, so a lot of translated programmes which are made for a UK audience, it feels to me instinctively anyway, does not have that much competitive edge.

Q195 Mr Maples: You will not have the budget to make those sort of things for yourselves?

Mr Chapman: We will have to pick and mix a bit. Let me give an example. There is a very good series going out on BBC Two at the moment about the history of the Middle East and the peace discussions and about Clinton and Arafat and so on. If we were on the air now I would be making a very strong case that we should be putting that out on the Arabic television service because that is beautifully made and also of fascination to that particular audience. So I think there will be some material like that but a lot of it will have to be generated as live news and current affairs coverage.

Q196 Mr Maples: Can you give us some idea, back to this global budget figure of £19 or £20 million --- what is the American station called al-Hurra or something?

Mr Chapman: Al-Hurra, yes.

Q197 Mr Maples: What are they spending and what is al-Jazeera's budget?

Mr Chapman: It is very difficult to know the answers to those questions because they are not very forthcoming about it. Al-Hurra has talked about a $45 million start-up cost but that includes all the costs to do with setting up the station in the first place because they had nothing there at all, it was an empty shell and they had to build all the studios, all the technical equipment and everything, so I would guess the running costs of al-Hurra would be in the region of $30 or $35 million a year so not unadjacent to this. Al-Jazeera (and remember they are 24 hours and we are starting up with 12 under our proposal) is really impossible to know what they are spending. It is not a transparent process, if you put it like that.

Q198 Mr Maples: You really think you can do it for this budget? I am just amazed that it is so small.

Mr Chapman: It is going to employ 150 people, which is a fair amount of people to run the 12-hour service. It is going to have a presence in key bureaux. Remember, we have already got a substantial presence in Cairo, we have not got the television facilities but we have got the staff there, we have got staff who do reporting for us and file for us (provided they get the right training) in a number of Arab countries. We are going to have to expand our bureaux and expand our presence in Washington, Moscow and places like that which are really critical to the international agenda if you like, but if you draw upon the BBC's resources and you draw upon all that news reporting that is going on already, if you put the new investment alongside that, then I think we can do it.

Q199 Mr Keetch: I wish you well and I am sure we all do in this venture. I think it is vitally important that the BBC has a strong voice in this region, not least because the region has demonstrated that it is receptive to satellite broadcasts and we see that by al-Jazeera. I have two questions for you. Firstly, you mention 150 staff, purely on a technical basis, is it going to be easy to find those people? Are there sufficient Arabic speakers out there? Are we going to find these people to run this service in a professional way? My second and perhaps more difficult question is we all know there is one Arab street but it has lots of alleyways and side roads veering off it and some of the more interesting stories you are going to be reporting on will be internal stories, pressures in Saudi Arabia for example for more reform, pressures in other parts for less reform. Are you going to be able to get into those countries in a sufficient way to do justice to those internal stories in a way that al-Jazeera, frankly, sometimes does not?

Mr Chapman: On the issue of finding staff, I accept it is a challenge. This is a large number of staff and we cannot just take all the staff from the radio service and put them across to television service and then have no radio service. So I have got to find a net increase of 150 staff as a result of this. The early indications are that many people who left the BBC in the 1990s to go and work for other organisations, not least al-Jazeera but others as well, whom we trained incidentally in the beginning (this is one of the ironies of this whole story), would be keen to return to us because they have some reservations about where they are working at the moment and they have some issues about editorial freedom and independence which they would have some difficulty with. I am pretty confident that we can attract a high calibre of staff and the numbers we need but we want to do it in a phased way. One of the reasons we cannot get this service on air in the middle of next year is we need to recruit quite steadily and having recruited we then need to retrain. Even though people may have worked for us in the past and they may be working for television services now, it is not the same thing. I am absolutely determined that we will have a proper training programme, particularly on editorial values, as well as on the technology of television and all these issues, to make sure that people will comply and understand the BBC's editorial standards. The second question is about what you call the alleyways and byways of the Arab world. I think that is a challenge and I think it is an important part of the mix of the output. Whether it will be easier to report affairs in Saudi I would be surprised because the BBC generally does not report affairs in Saudi. It has had difficulty in getting access in recent times, as you know I am sure. In other parts of the Arab world it is a mixed story. Again one of the issues they will be watching us for is do we do that and do we do it in a fair, impartial and even handed way. That is another reason why it is so important that wherever our journalists come from (and it is important also to get a mix of people, we do not just want Egyptians or Lebanese staff or whatever working on this, we have got to have a mix) that we go about that in a proper way. Provided we do that, then I think we will be able to bring insight and new perspectives, if you like, which is what the audience want from us. I will say one final thing about the audience. The audience in this part of the world is at home a) with the range of services but b) also the complexity of them, it sees where the BBC sits in it and judges us against other people and looks for certain values and ideas and attributes there. Provided we can bring those then they do not want us to water those down in order to curry favour with them. That is not what they want from the BBC. They do not want us to be partial to particular groups. That is not what they are coming for. Plenty of other services already do that in the Middle East. They are coming to us for a different thing. That is why we have got to hold fast to the values I talked about so passionately earlier on in my answers.

Q200 Mr Illsley: Forgive me if you have covered this already, Mr Chapman, just quickly, you have mentioned two or three times, the trustworthy, independent impartial nature of the services of the BBC. Are you absolutely convinced that the target audience you were just speaking about are going to look at the TV service as being just that or, as a counterweight to al-Jazeera which has become popular over the last three years in relation to the Iraq war, is that audience going to look at you a little more cynically and say this is the British Government's way of trying to get a counterweight against al-Jazeera?

Mr Chapman: I think we did cover this earlier on but I am happy to answer that and I repeat what I said, which is that audiences do look to the BBC for that. They look to the BBC as part of a mix or portfolio of services they are going to consume. I am not saying they are going to give up all their other viewing and just turn to the BBC. They are not going to do that. What they do do because we know that from the radio and new media research we do is that they see the BBC as the gold standard against which they judge other services. So being there does a number of things. It a) draws them to us because of that but b) raises the overall standard of journalism in the Middle East from the television satellite operations that presently exist there, in the sense that people can see the deficiencies of other people. I think for all those reasons I am confident we will be able to provide a distinctive offer in the market and people will use it.

Q201 Chairman: Can I ask you about the memorandum you sent us. You said you hoped to achieve a market of 25 million viewers by 2010. On what basis do you get that figure? Is this just an aspiration or do you have any real data that can back that up?

Mr Chapman: We looked at the extent to which there was a likely satellite take-up by the year 2010 in all the key markets that we would expect to have impact with and then we took a proportion of that and said that is the likely impact we expect to have, based on the fact that something like 70 or 80 per cent of people said they were either "likely" or "very likely" to use the service once it was established. We know there is a high appetite from people who have satellite television now or who are likely to get it in the future. That is how we worked out that figure. It is an ambition and it is a tough one but given the growth of the satellite Arab television market in the next five years then that would be a realistic ambition.

Q202 Chairman: And these would not be viewers that you had, in effect, stolen from al-Jazeera? They might well watch al-Jazeera as well?

Mr Chapman: Yes, indeed.

Q203 Chairman: But you would hope to be, in effect, the second player in the Arab world for viewers by then?

Mr Chapman: For some people we would be the first player, for other people we would be the second player. I think for the majority we may well be the second player but that is the way people consume media in that part of the world. They are quite varied in their usage. They do not lock themselves on to one channel and say, "Right, I am just going to stay with that and believe whatever it says." They move around the market in quite a subtle and sophisticated way, often cross-referencing and checking one story against others to see whether the channel they often watch is actually doing it properly. In that sense we would add something really strong because I know they will trust us.

Q204 Ms Stuart: We certainly have had fairly strong support for the Arabic services from other witnesses we have had so far but I want to take you on to different territory now. Last year as part of the Spending Review the Foreign Office set up the Carter Review on public diplomacy. I gather you are on the Public Diplomacy Strategy Board with observer status?

Mr Chapman: That is right, I have observer status on that board.

Q205 Ms Stuart: We are hoping to get your take on a number of issues because we expected to see the Carter review at the end of September and of course it still has not seen the light of day, which is usually an indication that a rewriting is going on. From your position as the BBC World Service what kind of things would you hope the Carter review will be recommending?

Mr Chapman: I am not sure that it is my job to put the recommendations of the Carter review; it is the Carter review's job to come up with that. What I hope it will say-and I do not know precisely what it is going to say-is that the strategy that the World Service is pursuing of a multi-media range of services fit for this century, fit for the 2010 period, is the right one -because it is the right one. In the evidence I gave to Patrick Carter and his colleagues I was very strong about all that and said the World Service did need to change, it did need to prioritise, there were difficult choices here but if it were to stay the same it would not be able to compete properly in the top priority markets it has because it needs to compete in a multi-media way and it needs to shift resources in a way that can enable it to do that. That is what has ensued if you like and what we announced on 25 October was that sort of strategy.

Q206 Ms Stuart: Let me slightly rephrase the question then if you do not want to give recommendations. When you gave evidence to Patrick Carter what were the three key points in the evidence session which you hoped he really got and understood as a result of your evidence?

Mr Chapman: I hope he got that the World Service is the world's pre-eminent international broadcaster, that it is a great asset to Britain because it reflects well on Britain because it is about the values it evinces in the way it covers journalism and therefore it is very important that it remains a strong force, and that the strength of that force comes from its editorial independence. Nothing must be allowed to happen in any public diplomacy strategy or anything of that kind which undermines the editorial independence of the World Service. Also that it is an efficient place, that it is thinking very hard about its priorities, that it will need new funds frankly to do some of the things it would like to do up to 2010, and I would hope that he would broadly take those messages on board.

Q207 Ms Stuart: Was there any indication of areas where you thought the Carter review was going or some hints you got of the approaches they were taking which you thought were misguided and therefore were there any points which you hoped you dissuaded him from?

Mr Chapman: There were one or two areas where we had robust conversations. One of those areas was the value of services in a language like Hindi to the rural poor of India, where I spoke very passionately about that because I think there is a risk with the World Service that you only see it as targeting opinion formers and decision makers. There are many parts of the world where while you could argue in terms of geo-political importance to Britain these are not the highest priority countries, the World Service has a unique role there, in parts of Africa and parts of Asia, and it is really important that we continue to be there. If you judge the World Service only about targeting opinion-formers and decision-makers, then you would find it hard to justify that, and I do not think we should have to justify it because I think it is important that people have access to a free and independent media wherever they live whether they live in Rwanda or they live in Russia or they live in China or they live in richer parts of the world too, we should do our best to enable that to happen where appropriate. I think we had a good discussion about that and I think he understood what I was saying.

Q208 Ms Stuart: When do you expect the Carter review to see the light of day?

Mr Chapman: I think that is again a matter for him not for me. I would expect but could not be sure about this that it would be published in the next couple of weeks.

Chairman: We were expecting it around the start of October so we will wait and see but that may be not to do with the World Service, it may be to do with other factors. John Maples wanted to come back briefly.

Q209 Mr Maples: It is pretty obvious to all of us why the Government has decided it wants to fund an Arabic television service with the political issues that are at stake in that region. But of course Arabic is the language of less than half the people, if you consider Pakistan and Iran and to a lesser extent Afghanistan as important Muslim countries, where some sort of exposure to independent media and perhaps a slightly British take on things would be useful, too. Can you just tell us what you are doing particularly in Pakistan and Iran?

Mr Chapman: At the moment in terms of Iran we have a radio service in Persian which is pretty well broadcasting around the clock now, available on short wave and medium wave and having a significant audience of over two million listeners. We also have a substantial on-line presence BBCPersian.com, which has got one of the highest levels of traffic for any of our language sites. It is growing very fast and most of that traffic is coming from within Iran, so we are reaching the target audience we want to reach. In terms of Pakistan, we have the Urdu service. The Urdu services broadcasts for a number of hours a day. It is not as extensive as the Persian service. It is well liked and respected but there are issues of distribution to cope with. I think the market is getting more competitive in Pakistan. We have been talking to the authorities there about improving distribution and getting the right sort of radio partnerships with commercial partners who will retransmit the World Service Urdu programmes. At the moment we have a partner there but there are regulatory issues about his being allowed to do that and we are continuing to have those discussions with him and there is a legal case pending which has been before the Supreme Court for a number of months now which will try to clarify whether he has the right to rebroadcast the World Service or not. We would like him to do so, we think he is a suitable partner, and he has done so in the past. I think that is a quite an important test case in Pakistan because if we do not get on FM through a partnership (because the chances of getting on FM through our own relays is low) then we will have a battle to maintain a reasonable audience for our Urdu services in Pakistan.

Q210 Mr Maples: For FM do you need a local partner or can you do it from satellite transponders?

Mr Chapman: We either need a government to give us a frequency in say a capital city and let us set up our own transmitter there on that frequency, or we need a partner to be allowed, if you like....

Q211 Mr Maples: But the Arabic television service are not asking for anybody's permission?

Mr Chapman: No; that is one of the extra values of the Arabic television service, because provided you have got a satellite dish it is a free-to-air service, providing you are pointing it in the right direction.

Q212 Mr Maples: But you cannot do that with a radio signal?

Mr Chapman: No. I have got to get a partner who will retransmit, live-the programmes are live, they are not delayed or anything-who will take the programmes live and put them out. In Pakistan the regulation is opaque about this and the partner is trying to get in to sort out exactly what he can do, and we are supporting him in that and we have had conversations with the regulators there who are also, I think, feeling their way round this particular complexity because they have never done it before.

Q213 Chairman: Is this a political issue between the British and Pakistani governments or is it just a technical question?

Mr Chapman: I do not think it is either, Chairman. I think it is a regulatory question actually. I think the regulation is unclear in Pakistan about the rights of a station to do this. They have never been tested in the courts, there is not a sort of charter or a rubric that everybody can turn to and say, "Right, well, that is quite clear. You can do this and you cannot do that", and so the company, which is called "Mast FM", which has a number of radio stations in all the large cities, is going to effectively test the water, if you like, in a legal case about it, and obviously we want them to win that legal case because it will enable the World Service to be heard on FM quality sound in the major cities in Pakistan.

Q214 Sir John Stanley: Can I come to the BBC Monitoring Service, not a very well‑known feature of the BBC but the most certainly very highly valued by its users. Could you tell us whether the World Service is going to be adversely affected by the change in funding of the BBC Monitoring Service and the change in sponsorship from the FCO to the Cabinet Office and by what we understand are going to be quite a considerable number of redundancies at the monitoring service. If you are going to be adversely affected, could you spell out in what way?

Mr Chapman: I think the impact on the World Service's news-gathering capacity and understanding of what is going on in those society's will be marginal-it will not be nothing-because, obviously, if you are going to reduce the monitoring staff by 50 to 60 posts out of a staff of 500, then that is a significant proportion of the staff by 2007. Therefore there will be material information, if you like, analysis and understanding, which will not be as freely available as it would have been in the past. In terms of the lead sponsor, I do not see any issues around the fact that the Cabinet Office is going to take on this role. I think the Cabinet Office will do it well, I think they instigated a very thorough review of BBC Monitoring made by Sir Quentin Thomas last year, which was a very big job, and actually, for the first time, put BBC Monitoring on a stable footing in relation to its financial position, because it guaranteed BBC Monitoring's funding until the year 2010/11. BBC Monitoring is a service that has been reviewed to death, in my view. It needed to be put on a stable footing and it has been put on a stable footing now, and I think under its management it can, if you like, now start to run its business and can change and adapt to the needs of its customers, which will include the World Service. We will still be putting between six and seven million pounds of investment every year into BBC Monitoring, along with contributions from the Cabinet Office, the Ministry of Defence and the Foreign Office.

Q215 Sir John Stanley: What form does that expenditure take, that six to seven million a year?

Mr Chapman: It is an annual Revenue contribution.

Q216 Sir John Stanley: It is a Revenue contribution?

Mr Chapman: Yes, a Revenue contribution. The way the new funding arrangements will work is that all the stakeholders' contributions will effectively be ring-fenced now into a central pot which will guarantee Monitoring financial stability up until 2010/11. It does not mean that Monitoring has not got challenges ahead; it definitely has in terms of the scale and scope of it services, dealing with this issue about potentially 50 to 60 redundancies by 2007. The settlement it got put it on a stable footing. It wanted more money than it got, but it managed to recover and claw back from a position which would have been very difficult for it, I think, if it had been the situation where we were a year ago. In that sense the last year has been a good year for Monitoring, and I think the stakeholders have also realised the value to Britain of its services, and that allowing it to wither on the vine, which was a fear many of us had, would have been a very bad thing to have allowed to happen, and it is not now going to happen.

Sir John Stanley: It was a fear that was shared by this Committee about a year ago. Thank you.

Q217 Mr Horam: Coming to your purely television output, what sort of viewership does the World Service television put out now?

Mr Chapman: You are referring to BBC World television in English?

Q218 Mr Horam: Yes?

Mr Chapman: It has an audience of around 60 million viewers per week across the world.

Q219 Mr Horam: That is outside the UK, is it?

Mr Chapman: That is outside the UK. It is available in 270 million households. In half of those it is available, I think, for more than 12 hours, from memory, but again this not an area of my direct responsibility.

Q220 Mr Horam: Is it not?

Mr Chapman: No. While I am a member of the Global News team and understand the broad picture of BBC World, it is not a specialist area for me, but if the Committee would like more information on BBC World, its viewership-where it is doing well, what its challenges are-I am sure we would be happy to provide it.[2]

Q221 Mr Horam: We do. That would be useful. Could I ask you how it fits in. You say this is not your direct responsibility. What relationship do you have to this side of things?

Mr Chapman: It is a commercial channel, so it is not funded by grant-in-aid, but where it is really important, I think, is that you increasingly have to see the BBC's offer as a tri‑media offer (i.e. a television offer, a radio offer and a new media offer in some markets). Clearly there are some parts of the world where BBC World will have to do more of a job as time goes on, and radio and perhaps new media.

Q222 Mr Horam: You were saying that the future lies with free‑to-air satellite television?

Mr Chapman: Yes, it does in many markets. One of the factors we took into account when we came to a judgment about the validity of closing the central European services, which we talked about earlier, was the extent to which BBC World was now being viewed in those societies, so I see that you have to see our performance, if you like, in the round. It is not just about our performance.

Q223 Mr Horam: When you say "our performance"?

Mr Chapman: The BBC's performance in the round. It is not right just to look at it from a radio perspective, or a new media perspective, or a television perspective, you have to look at what is the sum total of the impact the BBC is making. In some societies BBC World is making an increasing impact. It is, if you like, taking up the slack left by the fact that radio is making less impact and, therefore, the BBC is still retaining a very strong position. That is why BBC World is so important in the mix of services that the BBC offers, in my view. It is really the central pillar of a multi-media strategy in this century. Without BBC World the BBC and Britain would be fighting for influence and impact in societies without the right weapons, if you like, because the BBC World is so important in that mix.

Q224 Mr Horam: Your responsibilities are purely for the vernacular services, like the proposed Arabic service?

Mr Chapman: Also for the English language services in radio.

Q225 Mr Horam: Yes, but I am talking about television now?

Mr Chapman: Yes; indeed.

Q226 Mr Horam: As of today, you do not have responsibility for any television as such?

Mr Chapman: That is correct.

Q227 Mr Horam: It would be useful if we could have a note about the BBC's television services by comparison. For example, you said you thought it had 60 million viewership?

Mr Chapman: I know for a fact that is what the recorded viewership of BBC World is.

Mr Horam: By comparison, for example, with CNN and Sky News, that would be very useful. Obviously we cannot talk to you about them, but that would be very useful.

Q228 Chairman: You are going to move into an Arabic television service, which is going to be funded through grant-in-aid?

Mr Chapman: Yes.

Q229 Chairman: I think in your memo you refer to a possible Persian television service?

Mr Chapman: That is correct.

Q230 Chairman: How much would it cost?

Mr Chapman: We have not costed it yet. In the memo there is a mixture of a hard-costed proposal, which is going to become fact, if you like, as a result of the 30 million investment plan I talked about earlier on, and then aspirations, gleams in the eye, which need to be part of the discussions with Government in the 2007 spending round, and Persian television is in the latter category, not the former.

Q231 Chairman: Presumably, given recent events in Iran, you would hope that the Foreign Office would look favourably upon this?

Mr Chapman: Looking not so much in the context of British foreign policy but as a broadcaster, if we believe that it is really important that people have access to free and independent media in societies, then, looking at it objectively, the position of Iran at the moment, you make out a very strong case for Britain improving what it can offer in that regard. You also then have to look at the role of radio and new media, and, as I explained earlier on, one of the difficulties about Iran is that the access the BBC can get, both in news-gathering terms but also in terms of transmitting its radio properly to Iran, is extremely difficult. The notion that I can get an FM transmitter for the BBC Persian service into Iran is a non-starter at the moment. One of the ways you would be able to reach into that society would be through satellite television, because many people in Iran, increasing numbers, have access to satellite television. It would be one of the ways of making sure they were able to access the BBC's material and services. That is the broadcasting logic. I must stress this. The proposals I put forward for 2010 are based on a broadcasting logic. People try and paint them as a foreign policy initiative. I am a broadcaster. I understand broadcasting. I know what we need to do to have impact in markets. I know what the mix should be between television, radio and new media. That is where I come from. Therefore, when I decide to close a service or open a new one that is the logic on which I am basing the argument, if you like, because I know how people consume and use information in modern times.

Q232 Chairman: But such a service could not happen at least for two or three years in any case.

Mr Chapman: No, it would not. It would have to be funded by new funds during a spending review outcome. There is a limit to how far the World Service can go in reprioritising its existing budget in order to meet new ambitious challenges which it has to face if it is going to be effective. I think we have come a long way. The 2010 proposals are a 20 per cent reprioritisation of the budget to cover both the investment plan of £30 million and also rising costs over this two to three year period. For any organisation that is a challenge, that is a tough call. We can do it, but I cannot keep on doing it. I cannot keep on doing 20 per cent, 20 per cent, 20 percent. You will end up then with no services left over, and that would not be appropriate.

Q233 Mr Horam: One of the original reasons, as I understand it, why the first attempt to establish an Arabic service failed was that it was in partnership.

Mr Chapman: That is right, with Orbit, the Saudi based distributor, between 1994 and 1996.

Q234 Mr Horam: You would not go down that route again?

Mr Chapman: No. The Arabic television service is a publicly funded free-to-air service. The operation the BBC ran between 1994 and 1996 was a commercial partnership backed with Saudi funds via the Orbit company. A very different set of circumstances. I think we learned some lessons from what happened between 1994 and 1996 (the questions many of your colleagues were driving at earlier on) which was about editorial independence and making sure we could cover the sort of stories you want us to cover.

Q235 Mr Horam: That was a serious problem?

Mr Chapman: It was a very serious problem. The reason why the short-lived Arabic television experiment died in 1996 was because of a disagreement about the coverage of Saudi Arabia, and, as a result of that, the Orbit company decided to no longer fund the production/distribution costs of this service. The BBC had no alternative then but to close it. We have all learned lessons from history. One of the lessons I think we have all learned is that that is not an appropriate way to fund an Arabic television service for anybody, but particularly not the BBC, and therefore the way you do fund it is through public money. You distribute using a range of satellite services where you pay for your carriage and people have free-to-air access to it if they have a satellite dish, and then you start with the right building blocks to maintain a service over a long period of time; and that is the very fundamental difference between what happened between 1994 and 1996.

Q236 Mr Horam: That does, of course, constrain your expansion. You failed in 1996?

Mr Chapman: We did not fail in one sense in 1996. We actually had quite a significant audience arising from the services in 1994 to 1996. We failed in 1994 to 1996, if you want to call it failure, because we defended our editorial principles and values. I think that was the right thing to do, and I think if we had carried on with a television service whereby we put out programmes which were not true to the BBC's editorial values, we would have failed in the long-term because people would not have trusted it.

Q237 Mr Horam: You can only maintain your editorial principles through grant-in-aid. Is that what you are saying?

Mr Chapman: Yes, that is my view, because we have looked at alternatives, we have thought about whether we could have done a commercially funded Arabic television service, but we came to the conclusion that was not an appropriate way to go, for the reasons you are alluding to, which is that if you want editorial independence, if you want the sorts of stories that we feel we ought to do without fear or favour, if you have commercial partners you cannot do that because they then threaten you with pulling the plug on your funds and say that is not what you want us to cover, and that then undermines the whole basis of your operation.

Chairman: I think none of us would want a BBC television service that was like the Fox News.

Q238 Andrew Mackinlay: Can I come back, Chairman, because I am still not comfortable with the reply you gave me earlier. It seems to me that whereas, quite rightly, our domestic services are covered by the Charter and independence and so on, there is a different relationship when it comes to tax-payers' money running this proposed organisation. I have some attraction for this, but it does seem to me that very early on you are going to run up against a situation where you have two legitimate but conflicting positions: one is the journalists, the editorial independents, who say, "We must report this", and that action being not consistent with the interests of the United Kingdom politically, and so the relationship is different. This is where it is the United Kingdom politically providing the funds for this service, and it seems to me you are going to immediately run into conflict inevitably, but one can see both positions. You do pump out what your journalists say because they are professionals and professionals of that region. They say, "This is news. This is what we should, from the point of view of our professional journalism and transparency, push out." The Foreign Office says, or the British tax-payer says, "What the devil. Am I paying for this?"

Mr Chapman: Mr Mackinlay, all I can say about that is that the World Service has managed to ride that particular tide.

Q239 Andrew Mackinlay: Yes, but for television.

Mr Chapman: Yes, but this service falls under the broadcasting agreement that the World Service has with the Foreign Office, and in the first few paragraphs of that it is absolutely clear that the editorial independence of the output is treasured and guaranteed. This service falls fairly and squarely within that and, therefore, it will have to subscribe to our relationship with the Foreign Office in exactly the same way as the radio services do now. There is no different set of relationships here. That is why I have confidence that the Foreign Office, our funders, will respect that editorial independence, as they have done in relation to radio for many years, and new media as well.

Q240 Sir John Stanley: Can I come to Nepal. I have a non-pecuniary interest as Chairman of the Nepal Parliamentary Group. First of all, can I thank you very much for your letter, which will be circulated to all members of the Committee, clarifying the exchange I had with Sir Michael Jay, when he came before the Committee, as to the extent to which the Nepali language services were not being cut in Nepal.

Mr Chapman: That is right.

Q241 Sir John Stanley: Since then you probably will have seen the written answer which I had from Dr Howells on 31 October, which is in front of the Committee now. I am sure you would agree that Nepal, perhaps above almost all countries in the world at the moment, is vitally in need of independent access to news, given the huge extent of Maoist control over a large part of the country and given, in the non-Maoist areas, the action that has been taken by the king and his government since 1 February this year to jam, most regrettably, a number of Nepali language services, and we now have the new media ordinance, which has just been promulgated. The question I would like to put to you is this. Is the Committee correct in assuming that all the cuts so far in Nepali language news services in Nepal are attributable to actions by the government and that there have been no actions by the BBC World Service to reduce their output?

Mr Chapman: Absolutely correct.

Q242 Sir John Stanley: Can I ask you almost the reciprocal question: given the huge needs in Nepal, is there anything further that you can do to increase access to BBC World Service news in Nepali in particular but also possibly also in the English language in that country?

Mr Chapman: We did mount some extra programmes earlier this year when all the FM distribution in Nepali was curtailed by the king. We put forward extra short wave programmes in the morning to supplement those which we put out normally in the evening which are carried by the FM transmitters in Kathmandu and other parts of the country. We then stopped doing them because the situation eased and we got back to the status quo, if you like, whereby our partners in Nepal were able to carry the traditional durations, if you like: the evening programmes of our Nepali service. The Nepali service is a very small service. It has four people. It is a tiny service. It works extremely hard and effectively and I would pay tribute to them; I think they have done a fantastic job. The last thing on my mind is to cut them back-if anything, I want to strengthen them-and I am watching the situation very closely. If the situation turns to one where no FM rebroadcasting is possible of a Nepali service, either by Nepal radio or by our partners in other parts of the country, I will look very hard at reinstigating the extra programme that we put on earlier this year. It is a flexing position, we need to be variable about it, but the changes in the 2010 proposals are nothing to do with the Nepali service. The Nepali service-I absolutely take your central tenet-is a very important service for the people of Nepal in a society which is deprived of free and independent information, it is close to my heart and I am going to make sure it remains a strong service.

Q243 Sir John Stanley: Could you tell us what assessment you have made as to the impact on the BBC World Service both in the English language and in the Nepali language of the Government's media ordinance that was promulgated last month?

Mr Chapman: It is hard to provide precise figures about that. I take some comfort from the fact that something like 700,000 of the 800,000 audience for Nepali came through short wave, so that short wave was not interrupted by the ordinance, but I suspect that there was a growing audience coming through the FM distribution which has been strangled, if you like, because people cannot hear those programmes on FM at the moment. We have made representations about this. The English output is audible for the main in Kathmandu on FM, although there are times when bulletins are interrupted because there are certain items, particularly, I suspect, reporting on Nepal, that the authorities do not like people to listen to. The Nepali service, unfortunately, is not as widely available on FM as I would like it to be at the moment. It is available on some stations, but not on others. We carry on the fight to make sure that it is audible, and I very much hope that our partners will win their battle to make sure the BBC World Service can be heard on FM right across the country.

Sir John Stanley: If you have any further information you want to give to the Committee as to the impacts of the media ordinance on the incidence of jamming that is continuing to take place, we would be grateful to have a note on it.[3]

Q244 Mr Mackay: Mr Chapman, clearly you have got a very serious responsibility to protect your staff wherever they are stationed. Nevertheless, it was obviously deeply disappointing and regrettable that, due to harassment (and worse) of staff in Tashkent, you have had to suspend your operation in Uzbekistan. I wonder if you could tell us a little bit more about what happened and also give us an indication of when you might hope to resume service in Tashkent?

Mr Chapman: We continue to provide services in Uzbek to the people of Uzbekistan through short wave, and medium wave distribution, so if you are a listener there, you are getting a basic service from us still, but, obviously, the degree to which we can report events inside that country is severely restricted at the moment. I could not have confidence, in the light of conversations going on at the moment, that the situation is going to get much better quickly. The BBC has a correspondent from London based in Tashkent at the moment on a temporary visa, and he is going about his business and reporting events there, but that is not a long-term relationship necessarily. It could be, but it may not be, depending on the authority's attitude. They may decide that they do not want him to stay or they do not want to give a replacement visa to somebody else, and then, of course, we would have nobody there reporting for the English output. In terms of the Uzbek staff, there were in the region of 12-15 Uzbek staff at various times based in the country. As a result of the harassment, which is exactly the right word, and the intimidation they have suffered for their reporting, we are in the position now where there will be effectively no Uzbek staff based there who can report for the BBC. They will either have to leave for their own safety, or they have resigned, or whatever. They just do not feel able to carry on, and they are having to keep an extremely low profile at the moment. Some of the things that have been said about the way our staff have behaved are a disgrace, in my view. The notion that we sent staff into Uzbekistan to ferment discord, or, that we had some prior knowledge of the events that were going to take place in other parts of the country when the protests took place against the government is nonsense. They were people based there going about their legitimate business. They were training staff. The reason there were slightly more people there than normal is that they were training and recruiting staff, and the authorities have added two and two and made 16, and the 16 is that they were there to ferment discord and report matters unfairly. What the state prosecutor said about the BBC Uzbek service is completely untrue and extremely unfair, and it is very damaging in the sense that it is personally damaging to both the people who came from London to report on events there and have had to come home, and, more importantly, the Uzbek staff who are based there, whom I have a great deal of concern for their own personal safety; and one of the reasons why we cannot carry on with them doing that reporting is because it exposes them to attack, harassment and intimidation which would not be a fair thing to ask them to do. However much I believe in the principles of freedom of journalism, there come a point where you cannot allow people to be in that position, and, despite having raised it with the President-I have raised it with the ambassador here in written correspondence-the answer I get back is that there is not a problem with this. Well, I am sorry, there is a very serious problem with this and it has meant that we are unable to carry out the extent of reporting that I would like to see the World Service do in Uzbekistan.

Q245 Mr Mackay: That was an extremely helpful response, and I hope it goes without saying that this Committee is hugely sympathetic to your plight in Uzbekistan and I think we would appreciate, if it was possible, you keeping us informed of developments in writing. Meanwhile, as this increasingly vile regime continues, a regime of which many of us have a great deal of concern, I would be interested finally to hear from you what pressure the Foreign Office and ministers and the Foreign Secretary are putting on their opposite numbers in Tashkent to ensure that matters are righted as quickly as possible?

Mr Chapman: I would have to offer you a note on that, because while they are clearly aware of the position, I am not precisely aware of how many meetings they have had with whom about it in recent times, but I am confident they share our concern about it, and the matter has been raised by the BBC and by other people. The difficulty I have is that the authorities there do not really recognise it as an issue.

Mr Mackay: I think we feel that the relationship between our government and the vile regime in Tashkent is not entirely satisfactory, and I do not mean to draw you on that and you do not need to comment, but, in that context, it is very important that we do have a note on that, as you have just promised, so that we can put further pressure on ministers to act in your interests in Tashkent. Thank you.

Q246 Ms Stuart: Could I take you back to the English language output of the World Service and some of the recent changes you have made to that where some of the non-news items were removed? Two things would be interesting. One is how did you arrive at the decision and, with that, how you answer the accusation that it is just becoming a rolling news service and neglecting transmitting the cultural aspects of that English service? The second one is what has been the feedback in terms of listeners? When you answer that could I urge you to ignore the voices of people like me, who are UK based insomniacs who like listening to the World Service at three o'clock in the morning, because there other kinds of users out there for whom it was intended?

Mr Chapman: Can I say that the death of the variety of the content of the World Service has been much exaggerated. That is the first thing I would say. We have obviously been listening to what audiences have been telling us and we are re-organising the schedule so that on week-days there will be a greater emphasis on news and information, as there has been in the past. At weekends there will still be a wide mix of cultural programming, both in terms of concerts, drama, activities of that kind, but on week days we need to focus the English radio schedule around a broad mix of news and information. This is not a rolling news service. This is not CNN on the radio. What we are talking about here is a wide range of speech-based programming of news and information which covers arts, culture, sport, business, religion, science, history. Those are all part of the mix. The way that some people have written about this, rather mischievously, I might say, is to exaggerate the extent of the changes and to typify this as some sort of philistinic dumbing down by the World Service, which I do not accept for a minute. It is listening to audiences who are telling us outside the United Kingdom that they come to the World Service for news and information and they want to always feel that that material is close by when they tune in. That does not mean they want it every second of the day, but they want a speech-based radio service that provides that sort of output. Some of the things we have been putting out, including soap-operas like Westway and things of that kind, just do not fit within that overall mix of what audiences now want. That is the reality. It is a very short-sighted director of the World Service facing that research who ignores it and ploughs on as if nothing is happening. Our English scheduler, Phil Harding, who is the director of English news and networks, has taken it and has reacted accordingly and in a sensible way, in a measured, sensible, incremental way, in a way that you need to do when you evolve radio changes. Radio is very much a service, I believe, of evolution not revolution, broadly, and you need to do this in an incremental manner.

Q247 Chairman: You have already touched on this, but with regard to the relationship between your on-line and new digital interactive services and your radio and television services, how do you see this balance changing over the next few years? You referred to three aspects linked together, but is it not the reality that radio is going to be less and less important to you and you are going to be moving more and more to the new technologies?

Mr Chapman: I would say a number of things about that. First of all, it will depend market by market on the relative importance of radio, new media, television. In many markets, for as long as I am director of the World Service, radio is going to be the main means of reaching out to people. It would be a silly thing to do to invest lots of money in television or in new media services because people would not be able to access them. I think in large parts of Africa, large parts of Asia, somewhere like Nepal, which we were talking about earlier on, it would be not a clever and strategic move to start off with multi-media services in that environment. Even at the end of this budget process, if you like, taking us to 2007/8, the World Service will still be spending 75 per cent of its grant-in-aid income on radio and related distribution; so radio is still going to be the vast majority of the expenditure. Twenty-five per cent will be spent on television, new media and other activities, but that gives you a sense of the balance, Chairman, of how radio sits in the overall budget verses the other services, which are increasing their spend proportionally because they are new services and they need to be invested in, but radio is not being given up on or losing its sense of place in the World Service activities.

Q248 Chairman: You have made quite a lot of investment in on-line services. Are you satisfied with the usage that you have got from that?

Mr Chapman: It depends on which markets you mean. I think, broadly, yes, because I think our investment, particularly in the English on-line services, the news on-line services, has borne huge fruit. In fact, we are able to offer an international addition, if you like, of the BBC news service for international use. This is a tremendous boon and a very worthwhile investment. You are talking about 20 million users a month, six and a half million users a week, who use all these services, so this is a significant take-up. The language service investment it is a different mix story. I think we have done extremely well with Persian. Persian has confounded my expectations about the level of take-up and is galloping away in terms of audience impact. Other services have found it more difficult to make an impact, sometimes because of blocking, in the case of the Chinese, similarly in the case of Hindi, because a lot of people in India want material from the BBC in English, they are not particularly bothered about material in Hindi. It is horses for courses, if you like, in terms of the impact, but, broadly speaking, I am very pleased about it, and I think we are now at that tipping point, if you like, in some societies where we need to offer a richer offer if we are going to remain competitive. We had a first mover advantage in the late, I suppose, 1998, 1999 into the 2000 period when my predecessors came before you-we saw the openings; we went for it; we established ourselves-but now in a broadband age and an age when people are increasingly accessing the BBC media services through broadband, you need to offer a richer mix, and that includes video, it includes audio and it includes interactivity and global discussion and debate properly presented on the screen, and that is part of the investment plan that I talked about earlier on; so it is a very important part of the mix.

Q249 Chairman: You referred in that answer to "blocking in China"?

Mr Chapman: Yes.

Q250 Chairman: I personally had experience of this at Shanghai Airport where I could not get onto the BBC but I could, bizarrely, get onto the Guardian website. I would be interested to know, is there systematic blocking by the Chinese authorities of your on-line services?

Mr Chapman: Of our news on-line services, yes. I think it is less systematic in relation to other parts of the BBC website. Once you want to access as a page which has its origins, if you like, in the news server infrastructure of the BBC, the Chinese authorities have a system whereby it recognises you want to do that and they very comprehensive block access to those sites. Again, representations have been made, discussions have been had, many of us have had them first-hand ourselves, and I know Foreign Office ministers have had them, and the answer we get back is there are technical issues and it is difficult, but the reality is I am convinced that there is a systematic blocking going on by the authorities of the on-line sites and also actually of short wave frequencies for the Mandarin radio services, but, less interruption for access to English output in terms of radio and on-line but not necessarily the news on-line part of it. It is a mixed story, but definitely the Chinese, particularly Mandarin, it is extremely difficult to access either in radio terms or in on-line terms in China.

Q251 Chairman: Is there any comparator with any other website? For example, would CNN have the same problem or is this, as far as you are aware, directed mainly at the BBC?

Mr Chapman: It is a patchy and mixed story, I think is the answer to that. I think there are occasions where other news websites from Western companies are blocked, but they are not always blocked all the time; it is intermittent. With the BBC the blocking is more comprehensive and the sensitivities if you run certain sorts of stories-you can imagine what they might be-which have those sorts of words on them or those sorts of phrases really the blanket comes down very tightly against people being allowed access to that sort of material.

Q252 Chairman: It would be interesting to know what coverage is going on at the moment in China and what is getting through?

Mr Chapman: We are doing a very comprehensive job, Chairman, of the coverage of the President's visit, but I am not sure how much people are accessing it at the moment.

Q253 Mr Hamilton: Just to follow up what the Chairman has just said, the blocking on the website, is the website in Mandarin, or is it in the Chinese language, is it in English or is it in both?

Mr Chapman: The news website in Mandarin is comprehensively blocked. The English website, the news website that the Chairman was trying to access from Shanghai Airport, is blocked on occasions and certain sorts of stories are comprehensively blocked from my reading. It is a fluent situation. It is not the same every week. It depends on circumstances and all sorts of internal Chinese political issues, I suspect, which maybe allow liberality at some times and less at others.

Q254 Mr Hamilton: I want to come back to the issue of finance. You mentioned earlier that 75 per cent of your grant-in-aid was still spent on radio broadcasting?

Mr Chapman: And distribution for it.

Q255 Mr Hamilton: And distribution. That leaves about £60 million in the current year of your grant-in-aid spent on TV and new media. It is £239.1 million grant-in-aid this coming year.

Mr Chapman: Yes, but you have to remember that of that £239 million, £31 million is capital.

Ms Woodhams: Thirty-one million is capital and 75 per cent on radio is at the end of 2007-08. We are not spending anything on television at the moment.

Q256 Mr Hamilton: Anything at all?

Ms Woodhams: Nothing at all.

Q257 Mr Hamilton: Thirty million is on capital?

Ms Woodhams: Yes.

Q258 Mr Hamilton: So that still leaves £30 million or so, if my mathematics is right?

Mr Chapman: I think it is between £30 and 40 million on television and new media activities by the end of '07/'08.

Q259 Mr Hamilton: So at the moment you spend most of that on new media presumably?

Mr Chapman: Yes, we are. We are spending, I think, between ten and £20 million on new media.

Q260 Mr Hamilton: Can you tell us what your efficiency savings target was for the last financial year and whether you achieved it?

Mr Chapman: We did achieve it. The target formally-I am sure my colleague would like to talk more about this-is two and a half per cent, but the BBC's real inflation pressures lead you to need a bigger saving than that.

Ms Woodhams: The target was £4.4 million last year and, yes, we did hit it.

Q261 Mr Hamilton: Is there any other form of income that you receive? You do not get any advertising?

Ms Woodhams: No. We get a small amount of external income. Some of our rebroadcasters actually pay us for our programmes, but that is in the minority. We get about three-quarters of a million pounds a year from rebroadcasters. With the majority of rebroadcasters we have to pay them to take our programmes, or there is some kind of bartering arrangement sometimes, but, aside of that, we do not have any substantial external income.

Q262 Chairman: We have talked about the Pakistan's Urdu service and you have talked about various other services. Can you tell us what you are doing in Russia and what you are doing to increase your audience share there? I understand from what you have told us that you only reach 0.8 per cent of the Russian adult population at the moment, which is very low.

Mr Chapman: It is low, and it is a cause of concern to me. One of the reasons why it has been low is because Russia is now a very competitive market place in terms of radio. There are plenty of FM stations established there now and the World Service has struggled to get distribution on FM in any of the major cities in Russia, most notably St Petersburg and Moscow. Since last year we have made progress. We are finding suitable partners in St Petersburg, and to some extent in Moscow, which will enable us to be heard on FM for the first time in those two cities. Obviously we will measure our audience performance in the next six months and I will get a better idea of whether that strategy is working. We are also trying to strengthen our medium wave distribution, but that figure of 0.8 per cent is not that dissimilar from the performance of other international radio services in Russia. It seems to me that one of the issues here is that the Russian audience is not at this moment demonstrating a great appetite for international radio from external sources. My feeling, having been there and talked to people, is that it is a society that in a way in media terms is turning in on itself to some extent. It has got more national television and radio services than it used to have, it is consuming them in a greater way and its appetite for services like the BBC is not as great as it used to be when you compare with the Cold War years and a very different sort of political climate. I think one of the ironies about this you could argue now about the way media has been restricted in Russia increasingly under Putin is that the case for having the BBC there is greater than it was perhaps five years ago and, therefore, we do want to make sure that we get an audience for our services.

Q263 Chairman: You are not going to use the same argument as you have done in Poland and the Czech services and elsewhere, "The audience so is small that therefore we might as well close it down and concentrate on somewhere else"?

Mr Chapman: I do not think they are comparable cases, Chairman. I think one of the issues that does arise is what is the appropriate medium to reach out to people in Russia? If at the end of the day you persevere with radio but you do not get an audience for radio, would you be better off having another sort of service? That gets us into a whole new territory, but I see a distinction between the case of closing a Polish service or a Hungarian service on the one hand and a very strong case to maintain a strong BBC presence in Russia, and I just think they are not comparable situations.

Q264 Ms Stuart: What are you doing in Belarus?

Mr Chapman: We do not have any specific special services for Belarus. The Russian service is audible in Belarus through short wave. There is no means of distribution inside Belarus other than through old short wave.

Q265 Ms Stuart: Do you have any idea whether that has been picked up at all? I tell you why I am asking. I have just come back from a security conference in Moscow and I was struck by the Russian colleagues telling us that Belarus is not as bad as you think it is. It has got higher GDP than the Ukraine. I thought, "Hold on, what is going on here?

Mr Chapman: In broadcasting terms one of the difficulties we would have (and we have considered whether we should do special services for Belarus) is that the only way we could get those services into Belarus would be on short wave, and what people are telling us about the radio market in Belarus is that, because of the economic indicators you have just talked about, that is not the right way to deliver a radio service to Belarus. You would have to be able to he heard on FM, and, there is no way the authorities there are going to give the World Service access to an FM frequency or partnership in a country like Belarus at the moment. In a way we would be wasting our money, if you think about it, by putting out a service that nobody can actually hear.

Q266 Chairman: One final question. Could you give us an update on your plan to join BBC news and radio at Broadcasting House? When is that going to happen and what does it mean for your staff? Are you going to lose jobs as a result and how much is it going to cost?

Ms Woodhams: It is three questions really. The current plan is to move there by the end of 2010, which is slightly later than we had previously said because of some slight delays on the project and the building of what is called "phase one", which is the rebuilding of Egdon House and the refurbishment of the old grade one listed part of Broadcasting House. We should be in by the end of 2010. The only honest answer is we do not know how much it is going to cost at the moment. It is still five years until we go. We do not know what kind of technology we are going to put in there, and that is one of the big debates at the moment. We do not know how much floor space we are going to occupy. We are looking at plans to see how much floor space we would need and how that would affect our costs. I think it would be fair to say it will cost us more than what we are currently having to pay in Bush, but you have to bear in mind that if we stayed in Bush House we would have to pay more, because Bush House, if we stayed there, would be in need of some serious refurbishment, and you have to take that as a comparator. We are obviously working on the cost, and that will be part of our discussion in the 2007 Spending Review, because we will start to incur costs towards the end of that spending review period. In terms of people, we are expecting to give them a better working environment, more flexible, more designed for the kind of multi-media environment that we are working in now, but we are not expecting to say we are going to move less people there. Our current plans are to move everybody who will be in Bush House over to Broadcasting House.

Chairman: Thank you very much. Mr Hamilton wants to come in very briefly.

Q267 Mr Hamilton: Do you do any digital audio broadcasting (DAB) outside the UK?

Mr Chapman: We do digital radio Mondial (i.e. digital short wave) to parts of Europe at the moment as an experiment. That is the equivalent of DAB. We do not have the equivalent of DAB; we have DRM. The issue there will be, rather like it was here until recently, to what extent are people going to buy sets that have access to those sorts of frequencies? At the moment they are expensive, they are not widespread. We would need to have a break-through in terms of customer take-up, audience take-up, to make it worthwhile investing any more funds in that. We have got our bets on various horses here. DRM is one of them, but the bet is modest, and we have to wait and see what happens.

Q268 Chairman: Mr Chapman, Ms Woodhams, thank you very much for coming. We look forward to seeing you at Bush House at least for the next five years or wherever else in future. I think we have covered a very wide area. We may have to write to you on a couple of areas to get further information. We are very grateful to you.

Mr Chapman: You are always welcome to come for a visit to Bush House. We will be happy to entertain you.

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[1] Please refer to the supplementary note provided by the BBC World Service

[2] Please refer to the supplementary note provided by the BBC World Service

[3] Please refer to the supplementary note provided by the BBC World Service