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Having been tutored by you on many occasions, Madam Deputy Speaker, it is important to emphasise that this is essentially a debate about the mechanism for funding the BBC, although it wandered slightly, but effectively, during the remarks of my hon. Friend and
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those of the hon. Member for Selby, on to other aspects of public service broadcasting and the merits of the BBC.

Let me focus on some of the proposed alternative methods of funding the BBC. I say to my hon. Friend—in all humility because he is an extremely experienced parliamentarian and former Minister—that his arguments against the licence fee might have been strengthened if he had put forward a clear and cogent alternative. I echo the hon. Member for Selby in saying that although the licence fee has some imperfections, it is probably the least worst mechanism for funding the BBC.

I must confess that I was horrified to hear my hon. Friend propose what amounted to an arts council of the airwaves. Knowing as much as I do about his firm principles and views, I was appalled by the idea of setting up a terrible quango of the great and the good to distribute public money to make programmes that, if I could put it this way, people like us would like to watch. I can confidently predict that were he to get his way and have that arts council established, he would be back in this Chamber within a year or two proposing its immediate abolition having seen some of its output. To be fair to Ofcom, which has been criticised for proposing an arts council of the airwaves, that is no longer being seriously considered as an option. What is being seriously considered, however, is the idea of top-slicing, which in effect shares the BBC’s licence fee with some of the other main public service broadcasters.

On the other proposed alternative arrangements for funding the BBC, first, there is the obvious method of subscription. Intellectually speaking, particularly in a digital age, there might be no problem with a subscription service. However, the trouble would be that it would immediately narrow the BBC’s audience base. It would also betray a fundamental misunderstanding of the BBC’s purpose in terms of its role as a public service broadcaster and its place in the ecology of public service broadcasting and broadcasting as a whole, because its audience would be segmented and severely diminished.

Similarly, some public service broadcasters are supported by advertising—Channel 4 is the most obvious example, but that also applies to ITV and Channel 5, if we want to include them in the family of public service broadcasters. Indeed, to some extent, the BBC plays fast and loose with advertising. For example, there is advertising on BBC Worldwide, and the BBC adopts forms of sponsorship, which, in my book, come close to advertising. However, in the current climate, the idea of the BBC suddenly entering the marketplace to compete for advertising is unrealistic. Again, the BBC’s ecology and the public’s wishes favour a BBC that is free from advertising and directly funded. That is the way forward.

Lembit Öpik: What is the hon. Gentleman’s perspective on the fact that the independent sector is concerned about the prospect of the BBC’s having to resort to advertising? It feels that the pot is already under great pressure, so although we may argue about the best way in which to fund the BBC, there is no appetite in any part of broadcasting to require the BBC to make its domestic output dependent on advertising revenue.

Mr. Vaizey: The hon. Gentleman’s point is spot on—I should have made it myself. If the BBC competes for advertising, that would inadvertently cause severe damage
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to commercial broadcasters. It is the last thing that those broadcasters want. Most do not want direct funding from Government, either—ITV and Sky adamantly oppose top-slicing and receiving a subsidy from the Government to produce what is known as public service broadcasting.

We are essentially debating whether the BBC should be funded by a licence fee, which individual households pay, or general taxation. Before concentrating on that argument, let me accept the challenge from the hon. Member for Selby to say something nice about the BBC. Given that he quoted the Leader of the Opposition saying something nice about the BBC, it would obviously be in my interest, too, to say something nice. However, I can happily cast self-interest aside and speak genuinely of my love and adoration for the BBC. I believe that it is fantastic and that most people in this country regard it as a great organisation and as family. The family analogy is important: we give the BBC the nickname “Auntie”, and, by and large, we like the BBC, but we also feel free to criticise and have rows with it. Sometimes, those rows are incoherent—rows for the sake of having a row, as most of us have in our own families.

We constantly talk about public service broadcasting, but one of the frustrating aspects of those discussions is that we always end up talking about an individual programme. I can be more specific: we always seem to end up talking about “Blue Planet”. At some point in the debate, somebody will mention “Blue Planet” as the justification for £3.5 billion of taxpayers’ money.

Mr. Dismore: You have just done it.

Mr. Vaizey: Indeed—I win the bingo prize for mentioning “Blue Planet”. However, the BBC as a public service broadcaster is much more than “Blue Planet”. The BBC, like all publicly funded organisations, is always desperate to prove its economic worth, so it publishes worthy papers—probably wasting licence fee payers’ money in the process—to show that it contributes more to the economy than it takes from it. The latest report—from Coopers & Lybrand, or some other such auditor that probably failed to audit a commercial bank—pointed out that, for the £3.5 billion we give the BBC, we get back approximately between £5 billion and £6 billion. I have no doubt that those figures reflect to some extent the fact that BBC puts back more than it takes from the licence fee payer.

I keep using the rather amorphous term “ecology”, but I believe that the BBC is embedded in our culture. It gives the arts tremendous support, for example, through the Proms. It helps numerous other arts organisations, but one barely hears about that. A few weeks ago, because I did not think that the BBC had made enough of a point about it, I flagged up the fact that it was giving singing bursaries to young singers. People may argue that that is beyond the BBC’s remit, but I want to emphasise that the BBC is involved in so much more of the public realm than simply switching on BBC 1 or BBC 2 or listening to Radio 4, Radio 5—or, indeed, Radio 1, to which I occasionally listen—suggests.

As a public sector organisation, the BBC is surprisingly innovative. The hon. Member for Selby mentioned Freeview, freesat and the iPlayer, which are important innovations. The great thing about Freeview is that the BBC got stuck in and created a platform that is open and available
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to all, and ensures that there is no monopoly of platforms provided by subscription service television. That was an extremely important innovation—I am not going to say that it is as important an innovation as the invention of television, but I suspect that we will look back on it as incredibly important.

The hon. Member for Selby mentioned the recent speech by Jana Bennett, the director of BBC Vision, which was a welcome statement by the BBC on the redoubling of its efforts to ensure that it has a presence in the regions. “Crimewatch” is moving to Cardiff—don’t have nightmares—although I could not quite understand the row about “Question Time” moving to Glasgow, because as far as I am aware it is produced by an independent television company based in Hammersmith. I do not think that anyone is going to make David Dimbleby live in Glasgow, but anyway, that is beside the point.

I hear what my hon. Friend the Member for Christchurch said about the need for the BBC to provide value for money. Many executives in the BBC are extremely well paid. The director general of the BBC, who went to my college at Oxford—incidentally, Merton college also produced Jeremy Isaacs and the right hon. Member for Rotherham (Mr. MacShane), who is relevant to this debate because he is a Labour Member who wants to abolish the licence fee, which he sees as a regressive tax—forwent his bonus. However, it was a wake-up call to learn that the bonus that he forwent was equivalent to my annual salary, so he is pretty well paid.

The Deputy Leader of the House of Commons (Chris Bryant): He’s worth it.

Mr. Vaizey: So the hon. Gentleman says, implying that I am not worth it. That just goes to show hon. Members that sending somebody a letter of congratulation on their elevation to the Front Bench will not earn them any quarter at all in the Chamber.

We should be careful about saying that the BBC should cut costs and introduce value for money, because it is a standing joke in the BBC that the part that produces the least value for money is the BBC Parliament channel. In terms of viewers per buck, as it were, the Parliament channel is the least economic channel that the BBC provides. I was told yesterday—this may be entirely wrong; if so, I will come back to the House and correct it—that BBC engineers are constantly trying desperately to reduce the picture size of the Parliament channel, because apparently it will then take up less spectrum.

When we admonish the BBC for its excessive salaries and expenditure, we should remember that the easiest way for it to save money would be to close down the Parliament channel. But then, I gather that Parliament itself is being closed and that we are moving to the Lords quite soon so that the hot water can be fixed, and this in a week when we have given the banks something like ten times the BBC’s annual budget.

I also agree with my hon. Friend the Member for Christchurch that it is extremely important that the BBC should be audited by the National Audit Office. It is extraordinary that the BBC would seek to dictate terms. In the new climate of transparency that is sweeping across all public sector organisations, including Parliament, the BBC would do well to open up its books and allow
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the public to see how much it costs. This is a personal statement, albeit from the Front Bench, but I would like the BBC to publish the salaries of everyone whom it employs. The BBC will not tell us, for example, how much Jonathan Ross is paid, citing commercial confidentiality.

The implication is that the BBC is in competition with the commercial broadcasters and therefore cannot possibly publish the salaries of its top talent. My answer to that argument is that if the BBC is indeed in competition with commercial broadcasters, it is already fighting with one leg up, because it is guaranteed an income of £3.5 billion a year that the commercial broadcasters are not and which would slightly level the playing field.

One aspect of the wider debate is how we secure public service broadcasting. Those issues are for another debate, but we look forward to the Minister’s boss, the Secretary of State, bringing forward proposals in January about the future of public sector broadcasting. As everyone knows, the options on the table are pretty clear cut, including top-slicing, changes to the regulations that constrain Channel 4, and increasing the commercial exploitation of intellectual property and programmes provided by the public service broadcasters. To be fair to the BBC, BBC Worldwide has done an incredibly effective job in that regard, and it is bringing money back into the BBC.

When we talk about the licence fee, it is also important to acknowledge that it might be time limited. That is a dangerous thing to say; I said it at a fringe meeting recently and got myself tied up in knots. However, it is important to acknowledge that technology is changing at an enormously rapid pace. The prerequisite for paying the licence fee is that someone has a box sitting in a room, and the BBC and the collection agencies can check to see if they have such a box. In a time scale that I would hesitate to predict, however, that box might no longer sit in the corner of a room. It could be inside a jacket pocket, on a mobile phone, on a computer on a table, or on many other kinds of device, some of which we have not yet imagined. In the spirit of musing, I suggest that that might well provide a challenge to the licence fee. As far as I am aware, students are charged a licence fee on their laptops, as a way of getting round the fact that many students now watch television—or the iPlayer—on the internet on their laptops without having a television in their rooms.

These changes will provide a challenge to the licence fee, but at the moment, the Conservatives are certainly committed to the licence fee as a way of funding the BBC. Ultimately, this will come down to a choice between direct funding by the Government—the money has to come from somewhere, and, in theory, that would involve a rise in general taxation—and funding through the licence fee.

Greg Dyke has a lot of experience to bring to the table. He can hardly be blamed for saying that the licence fee does not necessarily give the BBC the independence for which it is vaunted. He was director general when the Labour party came knocking, sent in its attack dog, Alastair Campbell, and succeeded in ousting him. I would recommend that Members read Greg Dyke’s excellent autobiography. While it does not give us general principles about the BBC, it does show
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that there are valuable lessons to be learned about how an organisation should learn to stick together, stand by its principles and stick to its guns when one of its leaders is under attack.

There is some merit in the argument that the licence fee gives the BBC independence. It is set for a number of years, and is therefore not subject to the vagaries of public expenditure that we might well see in the next few months or a year because of the credit crunch. It does not necessarily give the BBC a fixed income, because its income is based on its ability to collect the licence fee. Indeed, the BBC’s income has gone up as more households have been created in this country.

To echo the comparison with the Arts Council—which I have rejected as a way of funding public service broadcasting—the licence fee establishes the important principle of the BBC operating at arm’s length from the Government. There is a big difference between sitting down with the Chief Secretary or the Secretary of State to debate a grant from the Government and sitting down with them to debate the level of the licence fee, which it is down to the organisation to collect and use efficiently.

Mr. Chope: My hon. Friend will have seen from Greg Dyke’s article that he is concerned that, unless something is done, 90 per cent. of all public service programming will be on the BBC. As the Conservative party promotes competition and choice, does my hon. Friend think that we should be supporting such an outcome?

Mr. Vaizey: Absolutely not. My hon. Friend has slipped under the Deputy Speaker’s radar and mentioned the issue of the future of public service broadcasting, which is not the same as the future of the licence fee. I should like to put it on record, however, that we believe in plurality in public service broadcasting. We are looking as keenly as are the Government at Ofcom’s proposals to support public service broadcasting in the new media age. I would also recommend a supremely good consultation document that we published on, called “Plurality in a new media”—

Madam Deputy Speaker: Order. I have allowed the hon. Gentleman some leniency, but he must now return to his brief.

Mr. Vaizey: I put that on the record. What I was saying was important, but it is not the same as arguing whether the licence fee or direct Government funding is the best way to fund the BBC. As I was saying before the intervention of my hon. Friend the Member for Christchurch, the licence fee is a different issue, as it applies the necessary arm’s length principle to the BBC and to a certain extent supports its critical ability to be sceptical of the Government and politics and to provide an objective viewpoint.

Lembit Öpik: Does the hon. Gentleman agree that there is a direct relationship between the licence fee and public service broadcasting because it gives the BBC the opportunity to consider the primary requirements for PSB? The BBC has acted to some extent as a beacon for the entire sector in respect of how the news and topical programming, for example, are covered. In that sense, perhaps ironically in view of the interventions of the
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hon. Member for Christchurch (Mr. Chope), it provides the BBC with the latitude to define what public service broadcasting should actually be—not just for itself, but for the independent broadcasters, too.

Mr. Vaizey: That is right. The licence fee gives the BBC the freedom to innovate, which is an extremely important point. If the BBC were to sit down and negotiate a direct grant, strings would be attached—something for which I often criticise the Government. Those strings may not necessarily be sinister, as it were—that may not be the Government’s intention—but the Arts Council analogy comes into play again. Although the Arts Council is meant to be an arm’s length body, it receives a direct grant from the Government. What happens then is that the Government, perhaps perfectly laudably, say: “If you are receiving money from us, you had better ensure that you increase access and that you do this, that and the other”. The Arts Council thus appears not to have the freedom to innovate and plough its own furrow.

Although my hon. Friend the Member for Christchurch may object to the phrase, the fact that the BBC can, as it were, “see the licence fee and licence payers’ money as its own”, gives it the freedom to innovate. As I suggested earlier, among public sector organisations, the BBC is, uniquely, a very innovative body. I thank the hon. Member for Montgomeryshire (Lembit Öpik) for helping me to make that point with greater clarity.

In conclusion, however, freedom to innovate is not confined to the BBC. I do not believe that the BBC can ever rest on its laurels—nor should it seek to. The hon. Member for Selby mentioned BBC Sport and others have mentioned BBC News. I think that the BBC has improved its broadcasts in those spheres because of the fierce competition from Sky, which, as a private company with no subsidy from the taxpayer, has been fantastically innovative in sport, as well as through its introduction of 24-hour news—now a loss-making element provided effectively as a public service—which has completely revolutionised how news is presented on television.

As I said in my opening remarks, it is entirely appropriate for my hon. Friend the Member for Christchurch to bring this Bill forward. It is entirely right, as he said in his opening remarks, for this debate to be conducted in the spirit—not too often seen—of debating a matter of principle. To countenance the abolition of the licence fee is not the same as to countenance the abolition of the BBC. Those who support the licence fee do so with an element of humility when we say that it is the least worst option. I think that our debate has teased out some of the specific reasons why the licence fee is so important, the most central of which are the maintenance of an arm’s length between the Government and the BBC, the maintenance of the BBC’s independence and the means of conferring on the BBC the freedom to innovate and create.

12.9 pm

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