Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 20-39)


25 OCTOBER 2007

  Q20  Chairman: VisitBritain said to you before the CSR that they needed an increase in that budget if they were to deliver that tourist potential. You have slapped them in the face. You have not even given them their existing budget.

  James Purnell: I think VisitBritain have done an extremely impressive job and they have modernised their service in an extremely impressive way over the last few years. What we are asking them to do with the rest of the sector is to lead a review about how that very significant amount of resource can be used in a more efficient way.

  Q21  Chairman: Are you confident that we can obtain the full tourism benefit from the 2012 Games although we are going to cut the budget each year?

  James Purnell: I am. If you look at the budget overall and you look at the efforts of RDAs, local authorities, the partners we have in Wales and Scotland, Northern Ireland and VisitBritain, we believe that is a significant investment and that it can be used in a more efficient way than it has heretofore.

  Chairman: As you know, we are in the middle of our tourism inquiry. We will be taking further evidence on this and I suspect we may return to the theme.

  Q22  Alan Keen: I always argued, and was proved right, when Gavyn Davies and Greg Dyke worked together as Chairman and a sort of Executive Chairman, that there was no backup. Now the BBC has been changed so there is the new Trust whose job it is to make sure things do not go wrong, or awry. Are we not in danger, with Ofcom saying they want to be involved in broadcasting policy, of taking away their effective regulation of broadcasting? If they are trying to do both jobs, will they not fall between the two?

  James Purnell: No. All Ofcom are doing, and I believe they have done so extremely successfully, is implementing what Parliament asked them to do in the Communications Act. Parliament asked them very clearly to have both a regulatory role and a strategic role and that is exactly what they are carrying out. That aspect of their responsibilities is clear. Creating the BBC Trust has been a good way of separating out the responsibilities within the BBC. The Governors arrangement was trying to do two things at the same time and separating those things out is a better model. If your question is going to where Ofcom and the Government relate to each other—

  Q23  Alan Keen: Yes.

  James Purnell: --- it is very clear. We are responsible for policy and legislation. They have a regulatory role and they also have a strategic role in terms of advising us what that policy role should be.

  Q24  Alan Keen: It works so that you talk with Ofcom constructively looking ahead.

  James Purnell: Yes. When I talk to people overseas about Ofcom's role, the most common remark is that people want to learn from what we have done here. They are extremely impressed by the way Ofcom has done its work. I was in America recently talking to politicians, regulators and broadcasters and a number of people asked me whether they could poach Ed Richards and Ofcom senior management. So that is a vote of confidence in the way that they are doing their job. I told them to keep their hands off.

  Q25  Alan Keen: I am in a slight difficulty because we are hopefully moving towards the end of putting a report together on public service broadcasting. I do not want to say too much about our conclusions, even if we had reached conclusions. How do you see the future of the BBC, personally and as Secretary of State? Obviously you cannot speak outside that role.

  James Purnell: I tried to set it out in my speech to the RTS. I am confident about the future of public service broadcasting. There are very clear cultural arguments which will continue to mean that it is relevant after digital switchover. What is clear is that digital switchover does raise some questions about the regime we have had and how it will continue in future and therefore what we have announced is a convergence think tank within Government to consider those issues and to have a series of debates over the next few months to start to think about that post-switchover world.

  Alan Keen: Because of our ongoing deliberations I had better not go any further.

  Q26  Rosemary McKenna: You will not be surprised if I want to return briefly on broadcasting to the issue regarding the report this Committee did into Quiz Call Television and the subsequent disclosures which came out on the premium rate phone-ins and the scandalous abuse of those and the rip-off that people experienced and the recent report from the BBC and from Deloitte Touche on the ITV situation. Are you happy with the way Ofcom and ICSTIS helped with the complaints that they received?

  James Purnell: Yes, that has been done in an effective way and it has been treated with real seriousness. You can see that from the way the Ayre report was commissioned. The Ayre report clearly did find some issues which needed to be addressed in terms of the way that ICSTIS—now PhonePayPlus—and Ofcom relate to each other. Ofcom are consulting on that, but that shows the serious and proactive way in which they have dealt with that. My role in that is not double guessing the way that they carry out their investigation, but it is to ensure that the policy and regulatory framework is effective enough. I am therefore writing to Ed Richards today to ask him, in the light of the investigation, to give us advice on whether the powers at their disposal are sufficient, whether there are implications for the policy framework from what has happened and whether the current enforcement regime is suitable. The reason I am doing that is that our priority has to be viewers. Clearly it is unacceptable for millions of phone calls to have been made, for people to have paid for those phone calls and for them not to have had a chance of winning. Given the seriousness of that, I do not want to get into saying this should happen or that should happen on the individual case. I want to make sure that the policy framework is robust enough to make sure that it does not happen again and that is why I have asked Ofcom to advise us on that.

  Q27  Rosemary McKenna: I am very pleased to hear that. That was my next question. Are you content that the regulation they had was right? Do you think there is a possibility that Parliament may have to revisit that? The technology which was used is very new so: will that have to be improved; will that legislation have to be improved; will that have to come back to Parliament?

  James Purnell: We have to be very clear that any steps which need to be taken to strengthen the regulatory regime would have to be a priority. I want to make any decisions on that on the basis of evidence and advice and that is why I have asked Ofcom to do that. It is worth saying that actually this Committee played a very significant role in highlighting this in the first place and therefore it is a legitimate issue for Parliament to continue to have a strong interest in.

  Q28  Chairman: Do you not feel that actually what has been revealed has been regular abuses, regular breaches of the broadcasting code going back really over quite a long period and that the regulators woke up to this pretty late in the day? Did the regulatory system not fail in not detecting this and acting against it earlier?

  James Purnell: The regulatory system, which is based on a complaints-based approach, is the one we gave to them and, given the framework they are operating in, they have done that in a robust and proactive way. What I want Ofcom to advise us on, and obviously we would be very happy to provide copies of that to the Committee, is whether that system is robust enough. [1]That is something we need to take very seriously. Our priority has to be viewers. Millions of phone calls were made, people were cheated and we need to make sure that it does not happen again.

  Q29 Paul Farrelly: Last year when we saw both the regulators and the broadcasters it was fair to say there was an unwarranted air of complacency which has certainly not been borne out and justified by events since. One of the anomalies was where you have ICSTIS able to levy a maximum fine of £2 million, which was dwarfed by the scale of the estimated fraudulent revenue derived by GMTV. Is that not an anomaly which needs to be looked at? Otherwise we rely on the charitable good will of the companies committing the offences in the first place either to donate the money to charity or to try to identify who has lost out.

  James Purnell: It was Parliament who put in place the possibility of this co-regulatory arrangement with ICSTIS and if there are conclusions from this work from Ofcom which say that the enforcement regime is not sufficient, then we would need to look at that very seriously.

  Q30  Mr Evans: You have announced two reviews, one of which is the wider distribution of public funding for public service broadcasting and the other one is the additional resources for the BBC. You brought the first one forward to about 2009 and the other one has been kicked into the long grass a bit. Would it not be more intelligent to bring them both forward and do them both at the same time?

  James Purnell: Do you mean: should we start reviewing the licence fee now?

  Q31  Mr Evans: The impact that it will have on the BBC. Anyway, in light of recent announcements from Mark Thompson, there clearly is a crisis in the BBC.

  James Purnell: If we start getting into reviewing the BBC's licence fee every year, we start to have far too much parliamentary or political interference in the BBC. One of the things we have in this country, very well established over many decades, is a tradition of free speech and of the BBC being independent from us. So I would not favour that. What I do favour is us thinking in a serious way about the implications of convergence and that is why we are working with the Department for Business, Enterprise and Regulatory Reform on doing that and that is why we shall be bringing in a wide range of experts to allow us to do that thinking. It is important to think about it in that context rather than trying to respond to any individual thing which may be happening now.

  Q32  Mr Evans: But there is a crisis there though. The BBC have announced now that they are going to cut back maybe £2 billion of money, over 2,000 people could lose their jobs and it seems to me that the services which are being cut are actually the public service broadcasting bits which deal with news and current affairs. They are the important bits, are they not?

  James Purnell: Here you go again. You say they are cutting back £2 billion. We have actually given them a settlement, which I believe is a fair settlement, which allows them, if they realise their efficiencies and if they get the household growth which has been predicted, to have an extra £1.2 billion to spend. If you are saying you want us to give them another £2 billion, I was not aware that was the place in the political spectrum that you were coming from.

  Q33  Mr Evans: No, it is not. Are you therefore surprised by the announcement Mark Thompson made then? Do you think that they should have been able to achieve everything that they did without making savage cuts to the staff levels, without attacking news and current affairs, that they should have been able to have done that within the settlement which was announced by Tessa Jowell?

  James Purnell: I think it is a fair settlement and it is for the BBC to decide how to achieve the efficiencies that they have to achieve to reassure licence fee payers that their money is being used effectively.

  Q34  Mr Evans: You do not have a view then that news and current affairs seem to be at the top of their list for axing.

  James Purnell: No, I have a clear view that it would be wrong for me to have a view about exactly where the BBC should be spending its money because then you start to undermine that very tradition of independence of the BBC. Sometimes good examples can make very bad laws and start to set very bad precedents.

  Q35  Mr Sanders: You are telling them how to spend their money on the digital switchover, in fact they are having to allocate a sum of money to help vulnerable people with the switchover, a job which most people and this Committee concluded ought to have been out of general government funds and not from the licence fee.

  James Purnell: It has always been part of the BBC's role to support the spread of new broadcasting technology and doing that with switchover is right for the country and it is also right for the BBC. It will mean that millions of households who at the moment are paying for but cannot receive digital services will be able to do so. What I am saying is that it would be wrong for me as Secretary of State for broadcasting to start telling them what programmes they should make or where they should spend their money. What we should do is set them overall purposes—and that is what we have done—give them stability and funding and then it is for them to have a relationship with their audiences and with the Trust to make sure they achieve those purposes in an effective way.

  Q36  Mr Evans: There may be 2,000 people who currently work for the BBC who this Christmas will be getting their P45s who may think that you have not delivered them stability whatsoever. They will be rather anxious about the fact that they are losing their jobs. You are abdicating your responsibility by saying you had no view whatsoever on how those efficiency gains are going to be made when it is the public service remit that is being attacked.

  James Purnell: It is obviously a tragedy for anybody who loses their job and I am not saying anything of the kind you just said. What I am saying is that there is a very clear separation of roles. It is for them to decide how to run the BBC, where to spend that money, where to have particular decisions. What we set them is a framework which I believe includes a fair settlement and which includes very clear public purposes and it is for them to realise that.

  Q37  Philip Davies: Rosemary mentioned the scandal in TV of customers being ripped off with the phone lines and that kind of thing. However, there was another scandal over the summer time as well about TV programmes where things were faked, such as the Queen and a series of others as well. Do you think things like that undermine trust in public service broadcasters?

  James Purnell: I said in Cambridge that I thought there were two conclusions to be drawn from that. Clearly there are issues there for broadcasters to look at, but that is the right conclusion and editorial issues are a responsibility for them. The wrong conclusion would be to say that the comment and criticism which came from that is a sign that people are losing trust in public service broadcasting overall. What it shows is that people value public service broadcasting, they rely on it for accurate information and that is a sign of the importance of public service broadcasting and one of the reasons why I believe it will continue to have that role over the period which will follow switchover.

  Q38  Philip Davies: Do you think the incident over your photograph at your local hospital has slightly undermined your ability to have a go at public service broadcasters when they are caught out faking programmes? Do you feel that has constrained you somehow?

  James Purnell: Of course I did not have a go at broadcasters and I recognise that it is a very funny photograph. It is a very funny blog which has me in all sorts of places: going to the moon, winning the World Cup. I even understand that Nigel took me on a night out at the Conservative Party Conference, which is enough punishment for anyone frankly; it was my cut-out though I know it is hard to tell the difference between the two.

  Q39  Philip Davies: I am actually trying to make a serious point here about whether you feel, because that would be quite serious, that because of that unhappy incident you had been constrained from making criticisms of broadcasters when they do clearly get things wrong and it does undermine trust in them?

  James Purnell: My role is the policy role and I have always said very clearly that it is not for us to get into editorial decisions of the BBC or indeed anybody else. I do not accept the premise that we should be going around criticising individual editorial decisions.

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