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20 May 2008 : Column 47WH—continued

However, BBC World News, in comparison with the World Service, has not been examined sufficiently in the House. The World Service is often praised. World leaders
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such as President Gorbachev and President Mandela have said how much they were influenced by the World Service. However, BBC World News is now becoming a symbol of modernity, and I shall recount two stories of my own to illustrate that. Once when I was in Syria on parliamentary business, I went to a local bar, and two things were noticeable about that bar. One was that people were playing snooker in the corner. The second was that on the television was BBC World News. Just as in Britain a bar would have Sky Sports News on the TV to show how fashionable it was, there was BBC World News on a TV in the middle of Damascus. With that and the snooker, the pub was clearly making a statement that it was looking outwards to the world.

Equally, I was in Belgrade and went to see representatives of the one political party that accepts the independence of Kosovo, which is called the Liberal Democrats. Again, to show how modern they were, they had a picture of our former Prime Minister, Tony Blair, on the wall, and in the corner, very ostentatiously, was BBC World News on the TV. That was an unspoken statement on their part of modernity and contact with the world outside.

BBC World News competes in a fierce market, and its financial model is successful. It shows that a public service can be enterprising, make money and act in a very entrepreneurial way, because BBC World News, unlike the World Service, is not subsidised by one penny of taxpayers’ money. It started in 1991 as BBC World Service Television. In 1995, the right hon. Member for Charnwood (Mr. Dorrell), when he was Secretary of State for National Heritage, gave it permission to operate under the name BBC World, which has recently been changed to BBC World News. However, the financial model whereby no licence fee payers’ money goes towards it has continued throughout that period.

We can compare BBC World News with the French news channel, France 24, which was launched in 2006. The Independent reported at the time that France 24 was to take on “‘le rosbif’ TV”, which was BBC World News. The French channel has a very heavy taxpayers’ subsidy. The French Government allocated €100 million for the launch of the project, and its annual budget is €80 million, most of which comes, I understand, from the French state.

Another competitor of BBC World News, al-Jazeera, received a start-up grant of $150 million from the Emir of Qatar. He aimed to make it self-sufficient through advertising by 2001. When that failed to occur, the Emir agreed to continue subsidising it on a year-to-year basis, with $30 million having been given in the last recorded year. Equally, NHK in Japan is launching an international news service that is heavily subsidised.

It is therefore a success story that BBC World News is on target to break even in 2010-11. That would be a remarkable achievement. Advertising sales are up by 20 per cent. per annum over the past six years. Over the past five years, BBC World News has doubled its total revenue and halved the deficit. To cover the deficit, BBC World News takes out loans, but it is now within sight of being able to break even. It is worthy of note and some celebration that that has been achieved.

The quality of programming has significantly increased in recent years. BBC World News produces 26-minute bulletins on the hour, pretty well every hour. It has more magazine programmes, such as “World News Today”, transmitted three times during the day. It has big-name
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BBC presenters such as George Alagiah and Zeinab Badawi, and its popularity is spreading in America. In the aftermath of the Iraq war, it is possible that people in America are increasingly looking for more balanced news, and that has given the BBC its first chance to get a foothold, with BBC America and BBC World News, in the States. Matt Frei presents BBC World News America, which is available on BBC News 24 as well. That has been a big breakthrough. There are programmes such as “Have Your Say”, a weekly programme that allows viewers to share their thoughts and questions with guests. That is also on BBC World Service radio. Other programmes such as the “Doha Debates” come from the middle east. The “Doha Debates” are done in Doha in Qatar; the Emir’s Qatar Foundation provides some of the money, but the programmes maintain the BBC’s news values of unbiased coverage. Those debates, broadcast on BBC World News, cover many controversial issues in a format that would not normally occur in the middle east. For example, the subject of a recent debate was “This House believes that the Sunni Shi’a conflict is damaging Islam’s reputation as a religion of peace”. The subject was fiercely debated, and the programme was transmitted around the world.

BBC World News also broadcasts a series of world debates. Last weekend, it considered the role of business and how accountable it is. Again, the debate confronted key issues such as the future of the planet, and well-known guests gave their views. Because of the BBC’s power and reputation, it attracted guests who would possibly not be attracted by other formats.

The programming has definitely improved. The eternal dilemma of BBC World News is that it is a world news channel; the question is how much should it reflect what is happening in Britain? The big criticism of CNN is that it is biased and focuses too much on America. However, there have been some developments in recent months on BBC World News. For example, “Football Focus” can now be seen on BBC World News, as can “Final Score”, which means that people who are travelling abroad can at least see the latest football scores; and a compendium of “Newsnight” is broadcast for half an hour each week.

Looking ahead, the managers of BBC World News will have to get that balance right. There is probably a debate, particularly among British citizens who travel around the world, as to whether more should be broadcast about what is happening in Britain, but on the other hand the channel has to keep its reputation as a world news channel to the forefront.

Access to the channel is a key issue. All MPs can watch BBC World News in their offices. If the Minister travels on the Heathrow Express tomorrow en route to the European final in Moscow, he will be able to see a shortened version of BBC World News. If you, Mr. Martlew, find it difficult to sleep tonight, you will be able to watch it because BBC News 24 and BBC World News merge in the early hours—between about 1 am and 4 o’clock. If you watch BBC 4 at about 7 o'clock tonight, you will see exactly the same news for half an hour as can be seen on BBC World News.

BBC World News is about in the United Kingdom, and it can be seen from time to time. However, under the original document that allowed BBC World News to be broadcast, it is not officially available in the UK. One can direct a satellite at the Astra 1, Hotbird or
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Astra 4 satellites and pick it up. It is not illegal and it can be done, but the BBC is constrained from advertising the service.

Will the Minister say whether, under the new charter, it will be a decision for the Department for Culture, Media and Sport, as it was in the past; or can the BBC Trust decide to allow a wider audience in the UK to have sight of BBC World News? My understanding is that if the BBC management wanted to put a proposal to the BBC Trust it could do so; however, the proposal would have to be judged on whether it would have an adverse commercial impact on other broadcasters of world news broadcasting in the UK, and various other factors. Is it a decision for Government or for the BBC Trust?

One of the principal reasons for this debate was my wish to clarify the matter. There was a time when the BBC World Service radio service was not available in the United Kingdom. It then became available in the middle of the night, when Radio 4 was not broadcasting, and insomniacs could listen to it. Then, very sensibly, a couple of years ago came the expansion of digital TV and so on, and one can now listen happily to the World Service.

My central contention is that if one can listen to the World Service, is there a substantive reason why one should not be able to view BBC World News? Why should it not be available on platforms like Freesat? After all, it is part of the BBC; it is something of which we should be proud. It gives a more international flavour to the news. Its wider availability in Britain would not seriously damage other international broadcasters such as al-Jazeera, Sky News and so on. It would provide a little more competition in the market, and a little more choice for viewers.

12.45 pm

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Gerry Sutcliffe): Good afternoon, Mr. Martlew. I start by congratulating my hon. Friend the Member for Selby (Mr. Grogan) on securing this debate. I confirm that I shall be travelling on the Heathrow Express tomorrow morning, and I shall watch BBC World News, as I regularly do. I shall be going to Moscow to support Manchester United; I hope that the game is without incident and that everyone enjoys a successful time in Moscow watching British football.

My hon. Friend is a hero. Not only is he a renowned Bradford City supporter and a hero in Selby, but he is a hero in Mongolia. He has visited Mongolia on a number of occasions, and I know that he is held in high esteem there. He is also a champion of other causes about which people care passionately—not least as chairman of the all-party beer group. Indeed, his interest in broadcasting is well known—not only on such issues as BBC World News but television issues in general, not least the listing of sporting events on terrestrial TV.

I am grateful to my hon. Friend for taking such a positive outlook about BBC World News. I confirm much of what he said about the channel, which was known as BBC World until last month. It is a commercial channel, funded through subscription and advertising. It broadcasts international news, sport, weather, business, current affairs and documentary programmes in English to more than 20 countries and territories. It has a total
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distribution of 276 million households worldwide, including some who watch the channel part-time—for example, some bulletins are available on public service broadcast stations in the United States.

As my hon. Friend said, 159 million households are able to view the channel 24/7; that figure increased by 14 per cent. over the last two years and by 50 per cent. over the last five years. The channel is available in nearly 1.6 million hotels rooms worldwide—an increase of 25 per cent. over the last two years. A major growth area is China. BBC World News is available in nearly 250,000 hotel rooms there, an increase of more than 40 per cent. over the last two years. As my hon. Friend said, the channel is available also on 57 cruise ships, 42 airlines and 34 mobile phone platforms.

BBC World News has a weekly audience of 78 million people. It is the BBC’s most watched television channel. Its weekly audience has grown by 20 per cent. over the last two years. Based on research surveys regularly conducted in the key European and Asia-Pacific markets, its weekly audience has grown over the last five years by 50 per cent. in Europe and by 25 per cent. in the Asia-Pacific market. As my hon. Friend said, a media brand value survey published in April and conducted on three continents revealed that it had high trust and influence among some of the world’s most influential business professionals. Respondents placed BBC World News ahead of competitors Bloomberg, CNBC Europe and CNN in the brand value categories of trust and influence. That is clearly impressive.

As my hon. Friend said, BBC World News is a loss-making organisation, but its financial position is improving. Over the last four years it has halved its losses, and over the last five years it has tripled its advertising revenues and doubled its total revenue. As my hon. Friend said, it receives no public funding or subsidy from the licence fee.

The House will doubtless be aware that the BBC has for many years been allowed to operate commercial services, which generate income and return value to licence fee payers, thereby reducing pressure on the licence fee. The firm conclusion of the BBC charter review, backed up by consultation and research, was that it is right to maintain that principle. The BBC should seek to maximise commercial revenue in appropriate areas and reinvest it in programming and talent to the benefit of licence fee payers. BBC commercial activity must be based on four principles. First, the activity must fit the BBC’s public purposes and, secondly, display commercial efficiency—in the case of BBC World, that assessment must be made against the financial targets set in the business plan that was agreed by previous BBC governors. Thirdly, the BBC brand must be protected and, fourthly, market distortion must be avoided.

BBC World News is owned and operated by BBC World Ltd, which is a member of the BBC’s commercial group of companies. Under the terms of the BBC royal charter and its agreement with the Government, the BBC executive board is responsible for overseeing the activities of the BBC’s commercial arm. The BBC Trust is responsible for setting the rules that relate to the approval of changes to the BBC’s commercial services
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and it must hold the executive board to account for ensuring that commercial services comply with those rules.

The trust is responsible for holding the executive to account for complying with the criteria for commercial services. Parts of the assessment may well go against the individual criteria objectively and quantifiably, but the overall decision is inevitably a matter of judgment. The trust needs to assure itself that systems are in place to cover the interpretation and application of the criteria. For example, when assessing whether individual magazine titles fit the BBC’s public purposes, the trust might consider the extent to which editorial content aligns with a programme’s output. In assessing whether an activity displays commercial efficiency, the trust will need to consider whether better value for money could be obtained by selling individual commercial services or by closing them down.

The trust requires the executive to demonstrate how a particular service delivers the best possible return for the licence fee payer with reference to comparable operators in the individual market. It is the trust’s responsibility to challenge the targets set by the executive. The latter is required to submit a full and open assessment of the performance of the commercial services, including a statement of compliance to the four criteria.

It is a fundamental principle—it is written into the agreement—that there should be no cross-subsidy from the BBC’s public services to its commercial activities. In other words, commercial services must not be underwritten by the licence fee payer. The trust is responsible for ensuring that appropriate safeguards are in place, including fully separate accounts and clear terms on which transactions are conducted between public services and commercial activities.

My hon. Friend asked why BBC World News does not broadcast in the UK in areas other than those he mentioned. The reason arises from the terms of the original approval for the services granted in 1994, as he said, by the previous Government. Under those terms, the BBC was required to operate the service on the basis that it was for reception in mainland Europe and not the UK. As I understand it, that was to alleviate concerns about the competitive effects of a commercial channel on domestic channels. As I said, under the BBC charter and agreement, responsibility for approval of, and changes to, the service now rests ultimately with the BBC Trust. I understand that when it approved the service, the trust wanted to preserve the terms of the original approval, meaning that the service cannot be broadcast in the UK. I hope that that answers his question.

Broadcasting a service to the UK would now amount to a change to the BBC’s commercial services. That would require approval because it would be a change to the strategy for the commercial services set by BBC Commercial Holdings Ltd and the executive board. Any change would also be subject to approval by the trust under the requirements of the commercial services protocol, which requires trust approval for changes that fall outside the strategy for commercial services approved by the trust. I understand that the BBC has no plans to propose that the service is broadcast in the UK and, under the terms of the charter and agreement, there is no provision for the Government to intervene. However, my hon. Friend has raised the matter in the debate and I am sure that the BBC will hear of his remarks. I am sure
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that he will continue to press for changes in his usual combative manner to ensure that his voice is heard.

I was interested to hear my hon. Friend talk about the many visits that he rightly makes on behalf of his constituents and the many bodies in the House to which he belongs. However, he is perhaps limited if all he does is look at the TV screens when he stays in hotels or, indeed, visits the bars of the world. I know that he will continue to put forward the positive aspects of the BBC. He has made some good points in the debate and I hope that it listens to what he has to say.

20 May 2008 : Column 54WH

Strategic Framework (FCO)

12.55 pm

Mr. Greg Hands (Hammersmith and Fulham) (Con): I am delighted to have secured this debate and to serve under your chairmanship for what I believe is the first time, Mr. Martlew.

I do not intend to do the Minister’s job, but I thought it would be helpful to outline exactly what we are talking about, because I imagine that various documents are called “Strategic Framework for the Foreign and Commonwealth Office”. I wish to talk about the framework launched by the Foreign Secretary in a written ministerial statement on 23 January. It has since been published on the Foreign and Commonwealth Office website and informs its departmental report. I believe that it took effect on 1 April.

The written statement is of great interest—it is right that the Foreign Office reviews its overall strategic direction, priorities and so on from time to time. I strongly applaud various aspects of the framework, including counter-terrorism, counter-proliferation, climate change and conflict zones such as Afghanistan. To digress slightly, the Foreign Office has done particularly well on counter-terrorism in the past six years—in many ways, it sets global standards. I saw for myself in Kano, Nigeria, some of the helpful work that it does to match British Muslims with Muslims in other countries to exchange best practice on community cohesion and the softer counter-terrorism work.

On the set of goals in the strategic framework, I regret that the promotion of democracy has been transferred to the Department for International Development. I think that it more properly belongs with the FCO, but adding goals and objectives to the strategic framework is not the main purpose of my remarks; rather, they are less about what is in the document than what is not, and the resources that the Foreign Office has or does not have to meet the objectives of the framework—the issue is more the Foreign Office’s capacity and infrastructure to deliver the framework.

The FCO’s overall budget is projected to be £1.7 billion by 2010-11, which is not an awful lot. It is significant, but compared with the £2.7 billion of extra borrowing announced last week, it is not that great an amount. We can also compare it with the newly-nationalised Northern Rock bank, which has more than £100 billion in assets. Overall, we get good value for money from the £1.7 billion given to the FCO, but it represents a reduction in the budget. The Foreign Affairs Committee calls it

It also says in its annual report published on 19 November 2007 that the amount

that it

and that

I have some doubts about whether the strategic framework document is deliverable on such a budget. Doubtless the FCO will manage—it always has—but overall
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Government expenditure is riddled with waste and there is not much on the FCO’s bones to take off, as it were, if we wish to achieve the overall goals.

I want shortly to compare our budget with the budgets of some of our European allies, but the contrast with what the United States is doing with its State Department budget is particularly striking. Having perhaps learned from the period 2001-04, the US is beefing up its soft diplomatic power quite considerably. On 26 November 2007, the US Defence Secretary, Robert Gates said:

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