Examination of Witnesses (Questions 20-39)
RT HON
JAMES PURNELL
MP AND MR
JONATHAN STEPHENS
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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