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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1000 House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE CULTURE, MEDIA AND SPORT COMMITTEE
DCMS ANNUAL REPORT 2008 AND RESPONSIBILITIES OF THE sECRETARY OF STATE
RT HON ANDY BURNHAM MP and MR JONATHAN STEPHENS Evidence heard in Public Questions 1 - 82
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Culture, Media and Sport Committee on Members present Mr John Whittingdale, in the Chair Janet Anderson Paul Farrelly Alan Keen ________________ Memorandum submitted by the Department for Culture, Media and Sport
Examination of Witnesses
Witnesses: Rt Hon Andy Burnham MP, Secretary of State, Department for Culture, Media and Sport, and Mr Jonathan Stephens, Permanent Secretary, DCMS, gave evidence. Q1 Chairman: This is the Committee's annual session that looks at the annual report of the Department for Culture, Media and Sport. I begin by apologising for a few absences from the Committee. It is Thursday and I am afraid that as a result some Members must be elsewhere. I hope that we have a quality panel, if not a large one. I welcome Andy Burnham, Secretary of State, to what I believe is his first appearance before the Committee. Andy Burnham: It is. Q2 Chairman: I also welcome Jonathan Stephens, Permanent Secretary. You will be aware that last week the Committee produced a report on tourism which is Britain's fifth biggest industry, and it is probably the biggest for which you have departmental responsibility. As Secretary of State how much time per week do you spend on your tourism responsibilities? Andy Burnham: It is hard to give a precise percentage. On any given day I would have discussions within the department on nearly every element of my brief including tourism. I would say that every week there would be a couple of discussions related specifically to tourism. Q3 Chairman: You will be aware that in the industry there is a perception that tourism features pretty low in the list of priorities within the department. There have been seven departmental ministers with responsibility for tourism and quite often they have not even had that within their title; it has been tacked on to the end wherever it can be fitted in. Do you believe that is an unfair impression? Andy Burnham: I do. I read the Committee's report and I shall give it serious consideration. Although I began by saying that I felt the criticism was a little unfair, nevertheless if there is such a perception we need to work to demonstrate that is not he case and counter it. If it helps to say a little about my own background, 10 years ago or more I was the adviser in the department involved in the drafting of the government's first strategy for tourism called Tomorrow's Tourism. I hope I do not offend the esteemed Members of your Committee when I say that Janet Anderson who was the minister at the time was responsible for bringing forward that policy document. I do have some interest and background to this. Looking back at the ideas put forward in that document, I believe that a lot of what we talked about then has borne fruit. The visitor numbers back in the late 1990s were 25 million a year; in 2006 there were 32.2 million per year. I am sure the industry could make legitimate criticisms but those facts are pretty impressive. Coupled with a doubling of the direct budget for tourism in cash terms from central government and the role of the RDAs, which is often missed in this debate but is a very powerful force at regional level, I think that adds up to a pretty good story of backing tourism. I shall read the report and if there is a challenge there to meet I shall redouble my efforts in the coming Olympic period. I will pick that up and make sure this period is what all of us hope it will be for the industry, that is, a fantastic opportunity to lift tourism to a completely new level. Q4 Chairman: You talk about the amount of money that the government spends on promoting tourism, but perhaps one of the reasons for this perception is that you had a tight public spending settlement like most departments but instead of looking for economies across the whole range of areas where your department spends money you chose to focus all the reduction on tourism. There was a 20% cut in the budget of Visit Britain. Why was that? Andy Burnham: My predecessor, the Rt Hon Member for Stalybridge and Hyde, made that decision. I say that only in jest. I do not walk away from the commitment because I was Chief Secretary at the time and was involved in those discussions with him on the other side. James Purnell took a decision and it was one with which I agreed. It was in a spending round when we did our best for the department. I hope the Permanent Secretary will be able to confirm that we achieved a good settlement for the department in a tighter spending review. James Purnell took the decision that the right thing for DCMS was to concentrate the resource it had on the cultural life of this country, that is, the quality of our museums and galleries and the quality of our sporting offer. In a tighter spending round you invest on the ground in the tourism product and you invest in heritage. We managed to give a modest uplift to English Heritage. One can say that other areas can drive and boost the industry. We asked tourism to take a look at itself and conduct a review, which the Committee is aware is ongoing, and pose some difficult questions, but sometimes that is necessary when you are operating in a tighter spending round. Q5 Chairman: Is that decision one which will not be reversed? Andy Burnham: It will not be reversed. I note that it was not a unanimous report by this Committee. I am disappointed that the Member for Shipley is not here this morning; otherwise, I would have been able to have some succour and support from him as a dissenter to the Committee's views on funding. Clearly, it is a decision that is not lightly taken. The department must consider the right balance between its different priorities. In the coming period we shall receive a huge amount of attention that we do not have to go out and actively commission. The attention of the world's media will be on this country. We focus our efforts very much on emerging markets for tourism, which obviously is part of the review, but I believe that when Boris Johnson receives the Olympic flag in just over a month's time it will be a unique opportunity for all of the DCMS world but tourism in particular. We can make a further step change in terms of the image of this country overseas and the number of people who wish to come here before and after the games. I shall take a personal interest in following through or addressing the concerns that the Committee has tabled. I wish to reassure the industry that the facts show that over 10 years this government has put its money where its mouth is; it has doubled support for the industry in cash terms, but with a revised structure it wants a period when the industry can make some progress. Q6 Janet Anderson: I know only too well how you regard tourism; you understand its importance to the British economy. I well remember the time when you and I produced Tomorrow's Tourism, some of which I hope is still valid. The report we produced recently was critical but we tried to be fair. It reflected the evidence the Committee received. One of the issues raised with us was the cost of visas and how it was a disincentive to potential tourists from abroad. They looked at the cost of getting a visa to come here and often decided to go elsewhere. I was told yesterday that some other countries have now been added to the list of those where visas are required. Was DCMS consulted about that? You and I remember that this has always been a bit of a problem. Many government departments take decisions on things like visas, for example, that affect the industry. How much is DCMS consulted by other departments when those decisions are taken? Andy Burnham: It is an important question. I checked this point with officials before coming today. They told me that there had been good engagement with the Home Office on these issues. I was formerly minister at the Home Office with some responsibility for these matters. Speaking from that point of view I can clearly remember looking at the economic impact on the country and thinking hard about getting the balance right. We did consult other departments. In respect of the more recent changes there has been engagement and officials of the department tell me that they feel they have had the opportunity to express to the Home Office the views of the industry. Obviously, the Home Office balances those against a wider set of considerations to do with the necessary investment in visa integrity, biometrics and an immigration system that all of us as MPs know is under challenge from other quarters. It is a question of balance, but we do not believe it is hard for the voice of tourism to be heard. We are able to make that case, but clearly it is something on which we must keep an eye. The figures that I quoted to the Chairman not long ago cover the period when visa charges were introduced. While it is wrong to be complacent, it appears that it does not have a major detrimental effect in attracting people to the country. Q7 Janet Anderson: While on the subject of reasons why people might not come here, one matter we mentioned in our report was Heathrow. When we visited the States we were told quite forcefully that one of the biggest obstacles confronting people arriving from the US, which is obviously one of our most important markets for visitors to this country, was Heathrow. They were not talking just about Terminal 5 but about having to queue and there appeared to be some emphasis on the retail opportunities rather than the efficiency of getting people through. I know from my own experience at Heathrow when flying to Manchester on occasions just how difficult it can be. I wonder whether you have any input on issues of that kind. Andy Burnham: You are quite right that ports of entry are really important for first
impressions of the country. In some senses I believe that the criticism coming
from the States is a little harsh. Sometimes I have waited longer in queues to
pass through Q8 Janet Anderson: I am pleased to know that you are thinking about that. We also mentioned in our report Double British Summer Time and asked the government to look at it again to achieve a consensus. What thinking is going on within the department about it? Yesterday evening the All-Party Tourism Group, of which I am secretary, had a presentation by BALPA. They believed that the introduction of Double British Summer Time would boost spending in the UK leisure sector by £2 billion a year. When we questioned them about where the £2 billion would come from they said that if we had Double British Summer Time more people would choose to holiday here in the UK rather than go abroad, so the money they might otherwise spend abroad would be spent here. What is the thinking of the department about that? Andy Burnham: It is certainly something to think about. That is not something on which I have come to a firm view. When I saw it in the Committee's report it was an interesting suggestion. I want to think what the implications would be elsewhere. What would it do for Rossendale and Darwen? When would it be dark? Q9 Janet Anderson: It would go dark later. An interesting aspect of this is road safety because it would mean darker mornings and lighter evenings. I believe that some years ago an experiment showed that the number of accidents in the afternoon and evening was reduced. During the day there were overall fewer road accidents than previously, so there is a road safety angle to this as well. Andy Burnham: If you say that it comes from the industry and there is support for it, it is certainly an interesting suggestion. I do not want to appear before the Committee and give the impression that it has been discussed within government. To be truthful, it has not been as far as I can aware, but if it is an issue that the Committee has tabled we should give it consideration. The issue of dark mornings would be important for people whose children go to school and there are other safety considerations, but I shall certainly look at it and come back to you. Chairman: Certainly, from the evidence we received the tourism industry attaches quite a lot of importance to it, but I realise it is controversial and in that regard I include the Committee Q10 Paul Farrelly: Perhaps I may put three quick questions to do with sport. There seems to be some uncertainty about the deal on the Olympic Village. Within the £9.3 billion budget there is a specified level of funding from the ODA to the Olympic Village. It is anticipated that the balance will be raised in a private sector deal. Does the £9.3 billion and the contingency element included in it cover the possibility of a greater public sector contribution through the ODA or otherwise for the cost of building the Olympic Village? Mr Stephens: Obviously, this is the responsibility for the Minister for the Olympics, but the short answer is yes. The report published on the basis of the contingency drawn up last November set out the range of risks that it was intended to cover and included among them were wider economic and financial risks which would have an impact on the project. The general economic situation is clearly one of those risks. Q11 Paul Farrelly: Were there to be a greater public sector contribution than anticipated, the amount of it would be fully allowed for by the contingency? Mr Stephens: It is one of the risks that the contingency was set aside to cover. Q12 Paul Farrelly: Can you explain to the Committee what contribution if any the department has made from its own budget to LOCOG in respect of its establishment and running costs? Mr Stephens: Fundamentally, none. LOCOG is self-financing but is underpinned by the government guarantee to the IOC. The only direct contribution over the lifetime of LOCOG will be the one committed to at the time of the bid to meet 50% of the Paralympic costs which, from memory, come to about £50 million from government. LOCOG is currently funded both from contributions it has received from sponsorship and elsewhere and loans backed by the government guarantee. While that is the case the spending of LOCOG is counted as part of the public sector and therefore appears as public spending within the various resource accounts. Q13 Paul Farrelly: Has the department made any loans to LOCOG which have then been paid back? Mr Stephens: No. Q14 Paul Farrelly: There has been no funding or calls on guarantees? Mr Stephens: No. Q15 Paul Farrelly: And no cash flow funding? Mr Stephens: There has been no cash funding and we expect to make none. Q16 Paul Farrelly: My final question is perhaps for the Secretary of State. We also published a report on ticket touting which dealt not only with the activities of traditional touting but also the secondary market. Can you tell us the department's thinking at the moment on this and what progress has been made to address the concerns raised in the report? Andy Burnham: It is a good report in some senses in that it identifies the issues
very well. I thought the Committee could have been stronger in some ways about
potential remedies. There is a lot of concern out there particularly among
sports governing bodies about the activities of touts and the impact they have
on distribution policies. It is very difficult to pursue a policy to keep
ticket prices low and distribute them widely through club networks and in other
ways when there is a large and thriving touting operation. We picked up a lot
of what the Committee said and agreed on a number of points, but I think there
is a case in relation to what might be called events of national significance. As
with the broadcast list, I think there is an argument which says that people's
ability to get into those events live and not just watch them on television is
important. If everybody is to have that opportunity it means preserving the
ability to make tickets affordable and accessible in a well-functioning primary
market that can really get them out to people who deserve to go. I am
interested to see whether or not I can work with the governing bodies or
organisers of the big events here to pilot arrangements for improving the
operation of the primary market and close down the activities of touts. I am
not talking at this stage about a legislative solution, but the thrust of our
reply is to ask: using new technology and the efforts of enforcement agencies,
can we create a situation where we have a much more successful primary market
and a reduced flow of tickets into the secondary market? I think that is
possible. I do not want to hold it up as a paragon but Q17 Paul Farrelly: I think the problem is that some of us would have liked more bias in the report. Whether or not the government would have taken that up is another matter, but the report was prepared on the basis of a consensus and it was a hard-fought process. One of the problems for us in the industry, be it sport or music, is that it sees the government blow hot and cold on this. There are warm words followed by not so warm words. I know that the sports minister is sympathetic, and yet the other week he gave a Parliamentary Answer to Questions in which he stated categorically that the government would do absolutely nothing and would not even move towards extending the so-called crown jewels, for example, to which you referred. Andy Burnham: It is a complex area, is it not? The worst thing to do is to say that we will come in. You need to work with the Society of Ticket Agencies and retailers to work on the code they have already put in place and with the industry. There is a good deal of concern in the music industry and in particular the sports world about whether we can do this better. My whole approach is to see whether or not we can run a couple of pilots perhaps in sport in particular. Can we, using the support of various agencies, put in place some really excellent arrangements in the primary market around events of national significance to see if that works better in getting tickets into the hands of genuine fans, keeping prices down and avoiding a secondary market which essentially is money made off the back of sport and music? If we can do that it will not require legislation, but given that we protect the broadcasting of these events I do not believe it is a massive leap of faith to say that we should in some way give people every chance to see these events live as well. Q18 Paul Farrelly: Yesterday, we all received pretty hard-hitting emails regarding the activities of traditional touts from the O2 Arena, the Dome - for which we were not responsible. Andy Burnham: I was not in the department at the time. Q19 Paul Farrelly: It was in 2001 and we had only just come in. A lot of these touts have convictions for other criminal activities. If you made a sweep of touts more proactively you might solve some wider problems. If we sent that to you would your department comment upon it? Andy Burnham: Of course. I do not want to go into specifics, but there is some
evidence, which at this stage is anecdotal, that a lot of the ticketing for a
major sports event in this country is being done via Q20 Chairman: To press you a little, it is very easy to talk about and condemn the really unpleasant end of ticket touting with its very dodgy characters. Paul Farrelly referred to the evidence. For instance, it was said that outside the 02 Arena there were 60 ticket touts. When checks were made by the police it was found that every single one had serious convictions including ones for deception, fraud, theft, burglary, violence and drugs. Another example they gave was of someone who was selling tickets for a U2 show which simply did not exist. Clearly, those are unacceptable activities. Andy Burnham: Yes. Q21 Chairman: But if you talk to sports organisers and music promoters they are not concerned just about those people but about the big legitimate secondary ticketing agencies, for example Seatwave and Viagogo. There is no suggestion that they have criminal records or that they are doing anything wrong, but the primary market wants to remove them. Andy Burnham: Chairman, I do not know whether someone of your vintage has heard of a band called Scouting for Girls. Q22 Chairman: Indeed! Andy Burnham: That is a dodgy thing for us to discuss in Parliament. My wife
bought tickets on the secondary market recently. I entirely take your point.
Clearly, it helps at times to get tickets that would not otherwise be used into
the hands of people who can use them. Growing up in the Q23 Chairman: To be clear, it is not your intention to legislate in this area? Andy Burnham: I do not wish to say today that we rule that out for ever. As I said to Paul Farrelly, let us see if we can make these voluntary arrangements work better. There is a huge appetite within the sports world to explore these issues. Obviously, some would want legislation. I do not believe that I can credibly go before Parliament's business managers and everybody else to argue for legislation if we have not first tried everything to make the primary ticket market work through use of technology, better enforcement, sharing of information and, where necessary, the use of the police and organised crime agencies to deal with serious issues like the ones you raise. If you have done all that and developed codes of practice for the primary market with industry bodies and can demonstrate that it still does not work then you can look at other things, but it is not about closing down the legitimate exchange of tickets in the secondary market. Q24 Alan Keen: Before we leave ticket touting, I set off a fiery exchange when we had an assembly of people who sold on tickets. I told them that I would ask my constituents what word came closest to describing how they viewed ticket touts. The word used by quite a few people was "scum". Therefore, the public takes it very seriously. At least there is one group of people of whom the public think less than MPs. You mentioned the North East and my history. When I see these people outside Wembley and other football grounds my base instinct is to do something nasty to them. I am a fairly laid back individual, but it is something of which we need to take account because of the dangers. Physical violence is often seen outside grounds. The email from which Paul Farrelly and the Chairman quoted indicates that it is a matter which is regarded as being very serious. Have you set a time limit on giving the voluntary controls a chance to work? What happens if it has not been sorted out voluntarily in two years? Andy Burnham: I do not think we have set an explicit time limit, but rather than let it roll on in the coming period I am keen to do perhaps a couple of pilots at, say, some high-profile events in order to think through how we as government can support a high quality primary ticketing operation and then measure its impact on the secondary market. It is a complex area and we need to understand it better so we can gather that information to inform further consideration. I have not set a period, but I can assure you that I have in mind bringing forward not this year but possibly next some focus on whether we can gather some real information on this, working with a couple of sports governing bodies in particular. As to your general point about football, I recognise what you say. There is also an issue under the old Football Spectators Act 1989 about the prohibition on the reselling of football tickets outside grounds. I believe it is worth considering whether or not that is still valid. Obviously, it was done to ensure segregation inside grounds. There were good reasons for it at the time because one did not want to have a random situation where away fans popped up at the home end. Those concerns are less relevant today. There are still public order issues around tickets changing hands outside grounds. I have always felt there is a case for a match day returns scheme. Friends of mine have been left with tickets and given the prices it is completely understandable that they want to try to recover the value of them if, say, a mate has dropped out. Perhaps those issues are worth looking at so that any exchange is done in a more controlled way on a match day and people can get some money back, which is a completely legitimate and understandable desire. Q25 Alan Keen: Before I come to sport perhaps I may mention tourism. It is a very disparate industry, is it not? The effect of foot and mouth on tourism was brought home to me before Mr Whittingdale became Chairman. We visited the South West and realised that people who hired boats and canoes were probably ones who needed some help or that we needed to bring the industry together in a better way. Every time we do an inquiry that stands out. Recently, in Torbay there was quite a bit of dissatisfaction among the people involved in tourism, whether they were selling ice cream or operating machines on the pier. This is something that needs to be looked at carefully. We would all encourage concentration on that area. Andy Burnham: I am going to devote some attention to that. Christopher Rodriguez's
Visit Britain has been conducting a review. Margaret Hodge has been closely
involved in the thinking and discussions, but obviously it is Visit Britain's
review. They will come back to the department quite soon. We would want to put
in place a renewed structure that speaks to what the industry wants and feels
is a good advocate and marketer for them. To go back to the point I made in
response to the Chairman a few moments ago, you mention the South West. If you
take my region, for example, this year Mr Stephens: To reinforce the point, although it does not count as tourism funding the department funds eight out of the 10 most popular visitor attractions in England. That is exactly what the Secretary of State is talking about. Q26 Alan Keen: During the discussion on tourism just now it was clear that your department had an interest in other departments, and vice versa. There are many applications to join this Committee on which I have served for 11 years. We have to battle to get onto the Committee. We care deeply about sports, arts and culture and that is why we want to be on the Committee. The government had to give away a certain number of Select Committee chairs because of the change in the ratio of seats in the House in 2005. This was one such Committee. I am delighted that we have an excellent Chairman. That indicates that generally governments do not see this as anything more than a Cinderella Committee, but it is much more important than people tend to think. Andy Burnham: As an observation, when Janet Anderson and I were in the department
10 years ago the parliamentary and Q27 Alan Keen: Mention was made of Heathrow Airport. My constituency gets all the noise from that airport and it has the most jobs at Heathrow than any other constituency. My constituents care very much about Heathrow but they are not very proud of it at the moment. You said it was getting better. Someone visited Parliament last night for dinner but was wearing somebody else's clothes. Having arrived from the US yesterday the baggage disappeared. It has not yet been put right. My constituents who work at Heathrow are pretty dissatisfied. This is where your department has a really important part to play. You should not feel that it does not belong to you; Heathrow does belong to the department. We want quality and not quantity there. Massive efforts are being made to expand it supposedly to meet the needs of the economy, but what is important is quality, which is where your department comes in, to encourage people to come to Heathrow. It does not matter how many more runways there are or whether there is an end to runway alteration and how many more people can get into Heathrow. If the quality in the management and handling of passengers is not right tourism is affected. The reason why people go straight to Amsterdam and other places to fly is because of lack of quality, and that is where your department has a big part to play. I am very encouraged by the words you have used. You realise that you are not a Cinderella department and you need to drive forward other departments. To turn to sport, in June you released the paper Playing to Win: A New Era for Sport. How do you get the balance right between participation and competition? The other day I read that in some areas the FA had decided to move the ropes back further in young people's football to keep parents away from the pitches because they fight with each other or threaten other people's kids. Is this not going to make it worse? How do you get the balance right between participation and competition? Andy Burnham: I thought long and hard before we gave the document that title. To some that might be a controversial statement, but I think it is the right title. I have three young children, two of whom are beginning to play sport seriously. It has always been my view that the power of sport is greatest in the competitive context. The thrill and enjoyment of it comes out most when you are playing in a real situation against others and you want to better yourself. I do not apologise or shy away from that. That is the joy and beauty of sport. There has been too much apologising and shying away from that. That is not to promote an overly-macho or aggressive agenda. You are quite right that the FA has been saying some things about parents, but it has also been saying when it is right to introduce league tables for young players, which is an absolutely sensible thing to do. You can introduce children to competitive sport without going too quickly into league tables, cups and all of that. I have always believed that it is important to play sport competitively. For me, when I had a match after school I had my boots in my bag and that was the day I came to school with a slightly lighter heart. I just think that is where lots of young people derive massive enjoyment from sport. But it is not just competition. What we are saying is that it needs to be aligned with a serious and sustained effort to improve the quality of coaching at every age so that we equip young people properly and give them basic techniques in sport that they may not experience from family or friends. If one takes cricket or tennis, you need to be taught the basic techniques if you are to develop an enjoyment of and confidence in those sports. It is not really rocket science; essentially, sport is a simple thing. As government we need to empower the governing bodies to provide more coaching and better competitive structures. In that way you enthuse young people about sport and so expand the talent pool essentially. More people enjoy it and stay with it after school if they have been given that confidence. Nobody will go into a club if they do not feel confident. When you are a young person to go into a club is a hard step; a sports club can be a difficult environment when you first enter it. You are more likely to do that if you feel confident in your basic ability. That is why I believe the coaching side of this is absolutely vital. Q28 Alan Keen: Part of your strategy is to give more power to the sporting bodies. The position of DCMS has been pretty arm's length anyway, but you are to pass more decision-making down. Are you confident that all the bodies have the necessary expertise for them to do that? I am more a centralist than a devolver. Andy Burnham: The honest answer is that they are at different stages of
development, but part of the purpose of the process is to draw on their own
ability to manage and improve their own sports. Sport Q29 Alan Keen: As more organisations are devolved will you intervene and ask for statistics, for example on the percentage spent on administration? Will you get statistics that will enable comparisons to be made so that if action needs to be taken you will take it? Andy Burnham: We are definitely looking to Sport England to do that for us, so a challenge process is being set up. They want to bring in external voices. For example, Sue Tibbles of the Women's Sport Foundation has done some very good work on linking into the process and how girls' and women's sport can be given a lift through it. Therefore, Sport England has some external voices from disability sport and girls' and women's sport which feed into the challenge process with the governing body. We want it to be a rigorous process of examination and scrutiny which at the end comes up with a plan that takes the sport forward again with monitoring by Sport England. We will set the main direction. We have been through a long process with Sport England; it has been a challenging road in some ways. We have said that there should be clearer separation between sport on the one hand and physical activity on the other. To some that is controversial but for me Sport England is about sport development. In my view Sport England and Jennie Price have produced a first-class strategy document for the development of sport over the Olympic period. I now want to see Sport England get on and drive the agenda rather than the department intervening and nit-picking in conversations with governing bodies. Q30 Alan Keen: When waiting to vote last night before seven o'clock I was tackled by one of the doormen who presumably was a Luton supporter. I was also tackled last night at the Bobby Robson dinner at the Dorchester about Luton Town being severely punished. What do you think about that decision, which I know is not yours? Do you have a reaction to it? Andy Burnham: You and I have spoken many times on these topics. Q31 Alan Keen: It punishes supporters. We need to punish the owners of the clubs who do things that they should not do, but how do you balance that so that supporters are not punished too severely? Andy Burnham: Both of us like to think that perhaps we understand football
supporters very well. It must be very hard to be a Q32 Alan Keen: I should like to make just two points on the Olympics: one is absolutely crucial to the future of the Olympics and one is of less importance but expensive. To take the second one first, I thought that with a tight budget it was crackers to spend millions of pounds to get someone to go round asking for people to come and learn how to play sports that we have never heard of in this country. How many millions of pounds were spent in going round trying to involve people in playing softball and all soft sports? Presumably, it is too late to reverse it. Mr Stephens: That is a new one on me and I am not sure to what you are referring. Alan Keen: Perhaps you would let us know. Someone was supposed to be going round the country recruiting people who had to be taller than six feet. Q33 Janet Anderson: Perhaps I may inform my colleague that the UK headquarters of the British Handball Association is in Rawtenstall in Rossendale which is in my constituency and it is very important to us. Andy Burnham: Softball may not be very big in the North East. Q34 Alan Keen: The other point is absolutely crucial to the future of the Olympic movement. We have now won the bid and we do not need to be as polite as we were before. A long time ago this Committee conducted at least three or four inquiries and spent hours of Members' and witnesses' time looking at whether the new Wembley stadium could include athletics. I believe that we gave an extra £20 million in order that athletics could be fitted in, like the arrangements at Stade de France where bleachers are provided. Then we learned that the Olympics would be in East London, not West London. The IOC insists on a half-hour journey time from the village to the stadium in every city that bids for the Olympics. Can we not press the IOC to look at it more sensibly in future? Otherwise, how can developing nations ever host the Olympics if they must build a whole infrastructure and new stadia instead of it being done on a nationwide basis? Even South Africa has stadia spread around the country. One city must provide all of that. Consider the money that it is costing London, never mind barring South Africa from ever being able to bid for the Olympics, where there is one village and one city. Exceptions have been made for yachting and shooting. Will you undertake to look at it seriously and press the IOC to change from city Olympics to national Olympics? Stadia must have a capacity of at least 80,000 for the opening ceremony and 80,000 for presentations. Billions of people see it on television compared with a handful who watch it live. The criteria set might be fine for traditionalists but it bars developing nations from ever bidding for the games. When we were competing no city in any developing nation bid because it could not do it. Do you undertake to press the IOC on those principles? Andy Burnham: I take your point generally about the Olympics. I am sure the
Permanent Secretary will say that because it is such a big undertaking and because
of the world's media interest and everything that comes with it by definition that
alone precludes certain countries in their current stage of development from
hosting it. We would lay some claim perhaps to reinventing the games which,
like the arms race, have built up so people do it better and better. I believe Tessa
Jowell got it absolutely right when she said that our stadium design and lots
of the environmental goals set for the Olympic Park, not going for the big
signature, iconic approach, probably marks a necessary break from the way the
Olympics have been developing. I think that is part of the attraction of the Mr Stephens: That is reinforced by the fact that 75p in every £1 spent by the
ODA is essentially being spent on regeneration and infrastructure that will be
the permanent legacy of the games primarily in Q35 Alan Keen: I am sure you have been making efforts but the public relations aspect of this has not been addressed. The press love to twist it and say it is costing £9.3 billion, but we really need to get it home to the public in some way that that is not the cost of producing two weeks' games. A massive part of that is spent on infrastructure and housing projects. So far we have failed to get that message across. Everybody thinks that £9.3 billion will be spent in those two weeks and it will all be lost. Andy Burnham: The cynics have been having a field day, have they not? I believe that they will be wrong-footed. When the mayor takes the flag and the spotlight falls on this country in a month's time at the closing ceremony of the Beijing Games I believe there will be a surge of excitement particularly among young people in this country. In my view the Olympic period starts then. It will not be four more years of negative publicity and then a period of two weeks when everybody decides at the last minute that it is a good thing. Because we cannot imagine what it will be like I think there will be a different feeling about the Olympics once we are in the hot seat. Cynics will always be there. There will be those who legitimately hold the government to account about getting the country ready for the Olympics, but there will be others who in my view are unduly and unnecessarily whingeing about the whole thing. I think they will find themselves slightly wrong-footed when young people start to feel the real excitement about this country being the host for the Olympic Games. This is a moment we will not experience again in the foreseeable future. I have to strain every sinew to make sure we get the maximum lift for sport, culture, tourism and the whole life of our department so that the Olympics breathe energy into it and takes them up to a level that they could not have achieved by any other means. I am determined to do that. There may be lots of bad publicity, but in part that was why we proposed free swimming. We are today making a statement in the House and providing detailed arrangements about how local authorities can participate in our free swimming initiative for the over 60s and then for younger people. The idea is that in this Olympic era everybody should feel there is something for them and they can become active and involved in sport and feel that it is something that unites the country. Q36 Chairman: I should like to move on to the creative industries which you have
rightly said are of increasing importance both to the department and the
country. In terms of what the government can do to support those industries, I
have heard you say that at the heart of it is copyright and the protection of
copyright. Obviously, as the sponsoring department for the music, film,
television and games industry DCMS has a very important role to play, but the
Minister for Intellectual Property is Baroness Morgan of DIUSS. However, as far
as I am aware all of the discussions that take place about how to tackle online
piracy have been conducted by Baroness Vadera in the Department for Business,
Enterprise and Regulatory Andy Burnham: Three departments have an interest in this: ourselves, DIUSS and BERR. Each of us comes to it with a slightly different perspective, but this tripartite system, if you like, works incredibly well. You are right that Baroness Vadera has particular responsibilities and also covers the communications industry. An important side of this debate is also the BERR interest. They have a stake in the success of our industries but also the British telecommunications industry, and obviously Baroness Morgan is responsible for intellectual property overall. In my view, it necessarily must involve those different departments because these issues are wide-ranging but also very important not just to the creative industries but also what might be called the knowledge-based economy. Q37 Chairman: It appears that whilst Baroness Morgan has the title the work is being done by Baroness Vadera. Andy Burnham: We are in close discussion with BERR and DIUSS at the moment about the question of illegal downloading. As Janet Anderson will remember, we have developed very good relations with the establishment of Ofcom and over the past few years the way we work as sponsor of Ofcom jointly has been a success. In a similar way, we are working together to address these issues. Obviously, it was our document Creative Britain produced earlier this year which made a commitment to bring forward options for legislation if acceptable voluntary agreements could not be reached. That was an agreement reached jointly with BERR and ultimately government collectively must reach a view across the piece understanding the different perspectives involved. When I began this job I was immediately struck by the fact that this was a priority for my department. If we are the department for creative talent we must find durable solutions that reward that activity in the new media age. If we do not do that in my view we are seriously failing the creative industries in the long term. I have focused on this issue. I am encouraged by the progress that is being made, but jointly with our colleagues in BERR and DIUSS we shall bring forward those options for legislation quite soon so we an ensure that this issue moves towards a solution acceptable to the creative industries, the ISPs but also UK Plc. Q38 Chairman: I think the Committee would fully agree with you about the importance of the issue to the industries you sponsor. Perhaps I may explore a little further where we have got. You said this morning that you wanted the industry to reach an agreement for a self‑regulatory approach. My understanding is that the discussions taking place with Baroness Vadera have been along the lines that while memoranda of understanding will be drawn up between rights holders and ISPs nevertheless in parallel with them legislation is proposed to create a backstop so that Ofcom can become involved if necessary. Do you foresee there being a legislative element in this or not? Andy Burnham: As you hint, these negotiations are live at the moment. I think it would be wrong for me to intervene at this stage and make public people's different perspectives and negotiating positions. The situation you describe is one of those options. From my point of view whatever is agreed must have rigour and must be a real step forward for the music industry, for instance, that it can work with and helps. I consider that the music industry has done very well out of people of my age, that is, the 30-something and older. My son aged eight is already experimenting with lots of music online; he obtains it via iTunes. But the idea that people can easily access lots of music is a great thing for our department in terms of introducing young people to music, film or whatever it might be. The principle of that should not be lost. You do not want to criminalise a whole generation of young people and start to take away what they have realised, but it is possible to come up with models that allow that kind of exploration and enjoyment and at the same time gives the music industry a fair reward. I am utterly seized of this issue. It will be good for everybody if we can strike these deals. Ultimately, I think it is good for the ISPs because it can also be a source of revenue for them. Q39 Chairman: But your preferred option is that an agreement should be reached between the rights holders and the ISPs without the need for any back-up legislation? Andy Burnham: My preferred option is for a solution to be signed up to
voluntarily by all parties so we do not end up in a situation where government
is perceived to be taking one side or the other. We want to reach a situation
where the parties come together and agree a sensible solution. Because the
negotiations are not concluded I cannot go into detail, but it is important
that there is back-up and rigour in whatever agreement is reached via a
memorandum of understanding or however you describe it. The level of that
back-up and what it means is a matter for debate and negotiation between the
parties involved. Having gone through the process I think we should come up
with a durable solution and not revisit this issue in a year or 18 months' time
because voluntary agreements have fallen apart in our hands and the music
industry is another year down the line with loss of further revenue and faces
more difficulty. Q40 Chairman: Partially. We will wait and see. I move to another aspect. You talked about the way in which young people enjoy music and the various methods of accessing it. Obviously, one of the things of which you will be aware is the recommendation of a private copying exemption which was part of Gowers. The music industry has made the point that while it welcomes recognition that that is how people access music in many other countries the creators ought to benefit from it through some sort or licence which could then be used to reward those creators. Do you have sympathy with that argument? Andy Burnham: I can understand why they make that argument. I believe that the UK IPO has been conducting a consultation on that recommendation by Gowers which finished in April. We are now looking at 200-plus representations that have been received. We are considering British music rights and music industry representations. I welcome the consensus reached within the industry. That is a very positive, big step forward for the music industry as Fergal Starkey described it. Obviously, issues would arise from any such scheme. There would be representations from manufacturers of MP3s and iPods who would see it slightly differently. There will be a second stage of consultation. Again, it is an issue that we must bring to a conclusion. Q41 Chairman: There is an EU dimension to this. It has been suggested that it is a requirement of EU law that creators receive some compensation. Is that something of which you are aware or believe will be appropriate in this case? Andy Burnham: The European Union is also looking at this issue. There are lots of live issues at the moment, for example the copyright term on which it pronounced yesterday. Q42 Chairman: I am coming to that. Andy Burnham: There are also issues to do with format shifting, private copying and illegal downloading. A whole basket of issues comes into the mix. Not wanting to criminalise what lots of people may regard as a perfectly normal activity is problematic. For instance, the film industry did not support Gowers' exemption for private copying, and I think I am right in saying it felt that that would be a step too far. Q43 Chairman: The film industry makes the distinction that unlike music which can be accessed through an iPod or a variety of different ways essentially there is not the same demand for format shifting for video content? Andy Burnham: I am not sure that is entirely true. I see more and more people watching films on their laptops as I go home on Thursday evening on the west coast main line. Q44 Chairman: But generally those people would be watching DVDs they had bought and would be using their laptops as DVD players, so that is not format shifting? Andy Burnham: That is true. In truth, these are complicated issues. I believe that Gowers' proposal has clear merit but we must look at the whole range of consultations and replies received. We have to bring the issue to a conclusion because on all of the fronts I have outlined I am determined to get a fair and good result for the creative industries. Therefore, if we say that they are to be a big part of the economy long term we cannot let these issues run on and on because the damage may be done and we will find ourselves repenting at leisure. I want to get answers to all of these issues, but they are complicated and there is a balance to be struck. That is really part of the reason we are consulting so carefully. Q45 Chairman: You will be aware that this Committee unanimously supported an extension of copyright term for performers. We were agreeably surprised when Commissioner McCreevy also suggested that should happen. At the time I had an answer from the minister in DIUSS that the department was open-minded but waited to see any proposal that emerged from the Commission. You have pointed out that we have a proposal from the Commission which suggests there should be an extension to 95 years. What is the government's attitude to that now? Andy Burnham: I think it will take a little while to digest all of the detail of
what was put forward yesterday, because obviously it emerged only yesterday. I
was interested that the Committee had reached a unanimous view on that topic
and that in itself is a notable fact. I can understand both sides of the
argument. On the one hand, I understand the argument that very often, not
always, the most productive, active period of performers - musicians or session
musicians - is their late teens or twenties and for some of their best work the
tap is turned off in their seventies at the time they need that extra income to
help them along. Clearly, there is a case to be made for an extension to give
them longer, if not lifetime, cover. Some may say that that relates only to those
who are not too "rock and roll" in their youth and maybe most rock stars have
lived it up too much, but perhaps that is not the case and that is a situation
that increasingly lots of them will face. On the other hand, there is the
consideration that it may not help the bringing in of new talent and it will
tie up money in payment for old work, but that is an argument to which I need
to give more consideration. Gowers' recommendation was that he could not see
the economic benefit overall of extending terms. Gowers' recommendation is
quite clear on the subject, although it did say we should wait to see what Q46 Chairman: Do you not think that it would be utterly bizarre that the British Government which represents the most musically creative nation in Europe - the nation that will benefit far and away the most from an extension of copyright term - should argue against this proposal? Andy Burnham: The review conducted by Andrew Gowers looked at these issues in some detail. He came to the conclusion that it was not justified to extend term in the way that had been proposed. Q47 Chairman: But you will be aware that the music industry has presented evidence that Gowers' analysis was flawed and in any case the arguments advanced, supported by McCreevy, are not necessarily about economic benefit but the moral right of somebody who creates work to continue to profit from the performance of it. Andy Burnham: I began by saying I understood that argument. Whether that leads you to say that it should be 95 years is a point worth discussing, is it not? Even if your objective was the moral one of helping people benefit from their creative output throughout their lives then 95 years might be too long. Q48 Chairman: Therefore, you might be more sympathetic to 70 years, for instance? Andy Burnham: We shall engage in this debate constructively both here with
colleagues in government and in Q49 Chairman: Perhaps I can leave you with the thought that you sponsor and represent the music industry in government. This is an issue that unites the industry. It is not just the BPI but PPL, the Musicians Union - I talked to John Smith about it last week - and British Music Rights. The music industry may argue about a lot but it does not argue about this. When you see thousands of session musicians and performers who have signed public advertisements saying that this will really help them you must take notice of it, must you not? Andy Burnham: Of course you do, but I am afraid that these discussions are bigger
than DCMS. The way we conduct things here is that there will be a government
position that is obviously a bigger consideration than just ours. Since I began
this job I have been determined to get solutions for music. I have made it a
personal priority. People must make their own judgments about whether I am a
sufficiently strong champion in discussions on protecting the interests of the
music industry, but I want tangible progress for the industry in the near
future. In some sense these issues overlay one another and are complementary. I
believe that we must look at copyright, illegal downloading and format shifting.
Lots of these things need to be seen together to come up with a deal that is
fair to the industry but also the individual performers. I think that Charlie
McCreevy is very clear about the needs of the session musician who is often the
one who does not benefit and is overlooked. He makes a strong case in that
respect, but it would not be right for me this morning to leave you with the
impression that the government has changed its position. The Commission has
produced its proposals and we now need an internal discussion about them and
our response and a debate within Q50 Janet Anderson: I want to move on to the McMaster review. You will be aware that one of its recommendations was that all subsidised theatres and concert halls should open their doors free of charge for one week a year. What is your current thinking on that? I believe you said in Arts Industry earlier this year that "there isn't a firm agreement about how, when, what cost and who, I'll be honest, but I am resolved to do something." Andy Burnham: Otherwise, it is completely clear! In my first week of the job I took home Brian McMaster's report and read it cover to cover. Very refreshingly, it is quite a short and beautifully written, concise and lucid report. You will know that cannot always be said of government reports. I think it makes an unanswerable case and reconciles issue that you, I and Chris Smith used to debate about access on the one hand and excellence on the other. The strength of the report is that you do not have to set these things as opposites, that is, arts organisations doing stuff that puts bums on seats because it is popular and makes it easy to hit access targets and, on the other hand, not pursuing what might be seen to be an overly-elitist agenda that does not hit access targets because no one wants to come and see the more challenging, difficult stuff. He cut through that in a clearer way than anybody had managed before. The proposal that really caught my imagination was his suggestion of free weeks and the idea that you have to come up with something to deal with the "it's not for me" tendency. The department has just carried out the latest version of the Taking Part Survey. It is not hugely significant in a statistical sense, but there is some evidence - Mr Stephens will correct me if I am wrong - that adult participation in the arts has dipped a little and there is an argument for us to do much more. The idea of free weeks - we are talking of free access to the performing arts - is something to which I am hugely attracted. The Permanent Secretary will become nervous because it has spending implications, but I think it goes entirely with the grain of what we have been doing in DCMS. Chris Smith made national museums and galleries free. Look at its effect well beyond the museums sector. I am talking about working with councils to make swimming free where we can. I think it is a great that people can enjoy sport and culture for free. The new frontier is the performing arts. Whether we can devise a scheme which is affordable and gives people free access for a specified week or day at certain intervals is something that I find hugely attractive, but have we not yet developed a clear plan as to what it will be and when we will do it. We are not yet at that stage, but I hope to say more in the autumn. Q51 Janet Anderson: We look forward to that. Obviously, it will be very costly. For example, the National Theatre claims that it will cost between £300,000 and £1/2 million to provide free shows for a week. The Royal Opera House already does a lot to make its productions accessible. One of my constituents who recently saw a production there managed to gain entry and get a seat for £11. A lot of that does go on, but we recognise the spending implications. We look forward to hearing more about that. One of the other recommendations of Sir Brian was a self-assessment system for subsidised arts organisations. Do you have any plans to extend that to other grant-making bodies such as the Museums, Libraries and Archives Council or perhaps Support England? Andy Burnham: It is interesting that we are a little more developed in terms of the peer review system with national museums and galleries. We have a set of pilot arrangements coming forward in the autumn for national museums and galleries and a peer review of them. This system has been devised based on our work with the museums and galleries sector, so in some senses we are slightly more advanced in that area than with the Arts Council. The new chief executive Alan Davey - I do not know whether the Committee has met him recently - is absolutely focused on the implementation of a peer review system that commands support. To my mind he is right to take time to ensure that it does what it says on the tin, that it is a new way to move from measurement to judgment and is perceived as a different way to appraise and reward the work people do. We are taking our time. We have looked at other systems. The Dutch system was one that Brian McMaster recommended we look at. In general terms its attraction is that the arts world is more critical of its own work than anybody else and I think that it will produce a really good dynamic in terms of exploring what is good and bad and hold out the hope of producing a really good culture in the way we hand out public money to the arts. We just need to get it right. Q52 Alan Keen: There was great controversy about the latest settlement for the Arts Council for England. My local arts centre, Watermans in Brentford, is still contesting it legally. Sir Brian made the suggestion that there should be funding of those arts organisations which are the most innovative for the next 10 years. Have you had time to look at that in any detail? Do you support those suggestions? Andy Burnham: I was at the Treasury at the time and had just concluded the spending review with James Purnell. I remember that he called me to ask for 10-year funding allocations for some of our leading cultural institutions. At the time that was a difficult idea to sell within the Treasury. However, it is a very interesting suggestion. In my view it would have to be done very carefully in order not to engender a sense of complacency. It is right that there should be an ability to challenge and refresh. I would want to be satisfied that we were not taking away some of the helpful and constructive challenge process that is provided in a funding round. On the other hand, there is a persuasive argument that some of our finest arts organisations really could get on and do more if they were not wrapped up in the uncertainty of the three-year cycle. I see the case both ways. We are very attracted to the idea, but we are working with the Treasury and others to see if we can make it a reality. Q53 Alan Keen: With no offence to Mr Stephens, some civil servants are still recovering from the requirement followed for centuries to project three instead of one year ahead. Ten years seems a bit much. Having spent the whole of my life in the private sector I am quite used to the need to plan ahead a long way, but 10 years is a bit of a shock to civil servants. What do you think of it, Mr Stephens? Mr Stephens: As ever, there is a balance to be struck here. Clearly, for anyone engaged in planning the more certainty there is over long-term funding the more it allows credible planning for the future. That is particularly true when one is thinking of undertaking some innovative work which consciously requires risks to be taken on which one expects to see returns in the medium to long term. Equally, any government must also be conscious that a wide range of circumstances changes significantly over that period and it must retain the flexibility to respond to that. That is the balance to be struck. Q54 Alan Keen: Although this is nothing to do with the present inquiry, when I worked in the private sector there was always a gold mine at the end of March. Authorities spent all of their budget in the last month and they would buy anything you put before them so they did not have a reduced budget next year. Are you able to comment on the effect in the Civil Service of going over to three-year settlements? Mr Stephens: It has certainly produced a better planning framework; people can consciously plan for the long term. My knowledge is perhaps a little out of date from when I was in the Treasury, but interestingly there was not as great an effect as one might have hoped in terms of smoothing out the end-of-year surge to which you referred and is very familiar. It suggests that although centrally there has been more certainty and long-term planning as the money is devolved downward that effect is often retained by the various intermediary organisations. Andy Burnham: I believe the McMaster approach mirrors where the government has got to in its thinking on reform of public services. That is evident from what Jacqui Smith says today about the Police Service which is moving in a different way when the centre articulates to the front line. I believe that the government has been on a journey on some of the issues to do with top down targets. They were necessary for their time and they were right for our world in order to get better access to all the things about which we care very passionately. For example, in the NHS there is a greater shift where trust and ownership are passed to local level and we stand back much more to let people lead change and bring forward new ideas at local level. I see McMaster as being absolutely consistent with that approach. Mr Stephens is saying that with funding security in our world we really can do some tremendously exciting things. If arts organisations have a freer hand and security of funding they can take an outward-looking approach and are not just operating from hand to mouth and thinking about how they can keep the lights on in the theatre. You create bolder and more confident organisations that can do the kind of work you want them to do with Find Your Talent and the work in schools; they can take out what they do to a much wider audience. I think that if you look at the McMaster analysis overall the case is quite compelling. Q55 Chairman: I turn to the gambling industry. You will be aware that it has been very strongly argued by those who operate adult gaming centres and amusement arcades that the Gambling Act has had unintended consequences and essentially such things as the reduction in the number of machines allowed and the stakes and prizes are driving those businesses to the wall and the arcade business cannot continue unless changes are made. The Minister for Sport has listened to similar arguments from the bingo industry but has appeared to ignore those arguments made by the arcade business. It is also pointed out that one of the consequences is that people who wish to gamble are being driven into places like betting shops where they are able to gamble on machines that present a greater danger of gambling addiction. Why have you not given any help to the arcades? Andy Burnham: As you say, Gerry Sutcliffe has been leading this work. I believe that he is handling these issues with great skill and is listening very carefully to the industry, as is shown by some of the things he has done recently. That applies also to his excellent work in sport. Why? Clearly, another voice in this debate is public concern about gambling, problem gambling and the need to strike the right balance in all places. Context is important. I look at my own constituency. I think that the context in which people gamble in a bingo hall is different from an adult gaming centre. To begin with, there is a different age profile. Obviously, there are concerns about younger people and problem gambling. It is a different environment from an adult gaming centre and a seaside arcade. Gerry Sutcliffe's statement about a month ago showed that we were listening to the concerns of the bingo industry which had been voiced by members of this Committee and many Members in the House which in my view allowed a sensible relaxation in terms of the number of machines in bingo halls. I say again that the social context is different. I believe I am correct in saying that he also announced the bringing forward of a review of stakes and prizes in what might be called more traditional arcades. That is something which the Gambling Commission is to pursue. It is not the case that there is a failure to engage or to listen, but you will appreciate that in the past two years there has been a fairly robust debate about gambling and its place in society, and screams from industry will not be met immediately with the response that it will be given whatever it wants. Q56 Chairman: But the robust debate has focused primarily on casinos. I do not want to go down that road again. The review which the minister has announced focused on category C and D machines which are the low stake machines and the arcade business. There is no serious concern that arcades are leading to gambling addiction. They will not be helped by that review; they want a review of the B3 machines. You have helped the bingo halls but essentially done nothing to help the arcades. When we undertook our inquiry into tourism we visited seaside arcades in Torbay. It was argued very strongly that those arcades could not survive and amusement machine manufacturers are now going out of business. Is the department willing to do any more to help them? Andy Burnham: We have brought forward a review of stakes and prizes and I believe that is an opportunity for the industry to make those representations. It is not the case that there is no opportunity to engage in it. It is a question of balance at all times. I want to be satisfied that we are getting these things right. You say that seaside arcades do not encourage gambling. I am not too sure about that. I think that when children and young adults are around it needs to be done in an appropriate way. When I made the statement on casinos in the House I said that I would always proceed with great caution in this area. That is my instinct. Gerry Sutcliffe was right to propose what he did in the case of bingo because there was a case there based on the other pressures on that industry and the social context of bingo halls, but to go further I would have to be absolutely satisfied that the economic case would not lead to social costs. Q57 Janet Anderson: I want to move to the creative industries. In your department's annual report you very proudly trumpet Creative Britain: New Talents for the New Economy which was produced earlier this year. You will recall that when I was in the department 10 years ago Chris Smith produced the first mapping exercise of the creative industries. What has happened to the creative industries in those 10 years? How do you believe that the 5,000 apprenticeships you have announced will address some of the problems? Andy Burnham: I think that you and Chris Smith need to take enormous credit for the progress made in the past 10 years. That document is still spoken about today as the big moment when the creative industries believed they had a voice as a group in its own right. I believe that to bring forward that mapping document showed great foresight. What has happened in the past 10 years? The creative industries have grown at approximately double the rate of the rest of the economy. Lots more people work within those industries than hitherto. We have seen the emergence of creative clusters in parts of the country, for example in the South West. Q58 Janet Anderson: Bristol? Andy Burnham: I refer to the powerful engine of natural history, children's
programming and animation. Look also at Q59 Janet Anderson: Are you certain that Media City will be a success? For example, how committed is the BBC? Andy Burnham: As a back-bench MP for the Q60 Janet Anderson: I am really pleased to hear that. You are quite right that initiatives like Media City will mean jobs for your constituents and mine. Maybe you can put in a word to the Secretary of State for Transport that we desperately need improved transport links from East Lancashire to places like Media City. Andy Burnham: That takes me to apprenticeships. For your constituents and mine
the idea of working in the media has been remote for far too long. I graduated
from university and went back to the Q61 Janet Anderson: When will we see the first apprenticeships under that scheme? Andy Burnham: There is already an apprenticeship scheme at Q62 Janet Anderson: When the Committee visited the States recently it met some games industry people. They made the point that they needed highly skilled workers. Do you envisage the apprenticeship scheme helping in areas like that? Even if young people have to start from a very low base they will be able to develop the skilled needed for things like the games industry? Andy Burnham: Certainly. We have to devise something that is sensitive to the needs of the creative industries. I believe that the DIUSS which is in the lead on apprenticeships understands that and we are working with that department on it. The creative industries often want graduates. There is a big demand for graduates, perhaps more so than for other industries. Equally, there are other jobs that do not require things like honours degrees. The creative industries are a different sector; they comprise smaller and perhaps more fragile companies that do not have the critical mass to undertake an apprenticeship scheme. It is a matter of creating those kinds of umbrella organisations to put the schemes in place. I am hopeful that we can put together a credible scheme in quite a short time, but it all began with that document which the industry recognises as a seminal moment. Q63 Chairman: When you say that you want industries to move out of London presumably you do not want them to move to Canada. You will be aware that we were in third place in the league table of games developers but lost it to Canada. The games industry argues very strongly that it faces unfair competition through tax breaks offered in that country. There is also a shortage of skilled workers. They say they want graduates but that out of 81 computer games courses in British universities only four are accredited by Skillset and most of the rest do not produce the skills they need. What can you do to address those two problems? Andy Burnham: I agree that we do not want them to go to Q64 Chairman: I turn finally to the broadcasting sector. Recently, the Committee heard from the BBC. They recognised that the way people accessed television was changing. At the moment if you watch live television you are required to have a television licence but people who download material are not covered by the licensing requirements. Clearly, there is a huge change in people's behaviour in terms of accessing visual media. Do you believe that the licence fee will continue? I have heard you say that you regard it as being at the core of public service broadcasting, but will it continue in perpetuity? Andy Burnham: Are you calling for protection of the licence fee? Q65 Chairman: I am asking for your view. Andy Burnham: I thought you had a different view on those matters. Q66 Chairman: I have not expressed my view. Andy Burnham: It is a very important point and one which I have raised with our Convergence Think Tank and the panel of wise and distinguished experts who are advising us. This is an issue on which they will properly want to express a view. As I understand it, the licence fee covers any live or almost live broadcast but not stuff that is accessed with a more significant delay. The Convergence Think Tank will need to address whether that is a sufficient legal defence for the licence fee going forward, but I look forward to standing with you in the trenches rigorously defending the licence fee and its legal underpinning. Q67 Chairman: I am afraid that you may find I am absent. Obviously, it may be possible to amend the law to incorporate different ways in which people access video material, but in principle you would like a system to finance public service broadcasting which is based on a licence fee? Andy Burnham: When we look at the pressure on commercial and public service broadcasting today and in future - we have discussed some of the uncertainties and the way the old media world is now colliding in a spectacular way with the new media world - in that context my judgment is that the stability of the licence fee is very important. I believe that what British viewers want, which is what I have to secure ultimately in my humble way, is the same quality of impartial news, regional productions and so on that is sustainable in the new media age. They do not want to get to the point of digital switchover to find on their screens a whole host of rubbish, not the quality to which they have all become accustomed. In that context the constant of the licence fee is tremendously important. Obviously, the basis on which we have regulated commercial television will change when we get to switchover. That is the context in which I view it. Q68 Chairman: You are committed to carrying out a review of the licence fee at the end of the next period. Are you open-minded or do you have a preference to see it continue? Andy Burnham: I have a preference to see it continue because I cannot see other options that will provide that solid support for public service broadcasting that most of us want to see and care about. I care passionately about the BBC. In the past perhaps we - I include myself - have been too negative about it, but I believe it delivers incredible quality to every person in this country on a daily or weekly basis and it remains incredibly good value. There is a hard argument to be won, but I shall be out there making it. I said in a recent speech to the Convergence Think Tank that in this country we had certain broadcasting standards around impartial news and the integrity of programme-making. The future cannot be about washing away those standards; if it is people will not thank us for it but regard it as a big mistake. The British creative industries' offer will be stronger. We will have more to sell overseas if we maintain that reputation for quality and integrity in programme-making. I believe that we have it though it has been damaged by some of the stories about fakery in the past couple of years. However, it has not been fatally damaged. We have to uphold its reputation for quality and standards and, whichever way you look at it, the licence fee has a very important part to play in that. However, as with charter renewal there will have to be a process of debate about that option. Q69 Chairman: You will be aware that the BBC has mounted a very strong campaign that it should continue to be the single beneficiary of the licence fee against suggestions from this Committee and elsewhere that that money might be used to support public service broadcasting on other channels. What is your view of that argument? Andy Burnham: Top-slicing as it is called can acquire the sense that it is the only show in town in terms of how public service broadcasting is sustained in future. I do not believe that it needs to be seen in that context, but it must be seen as an option for sustaining public service broadcasting beyond the BBC in the post-switchover world. It must be an option which is in the mix. To be frank, it gives rise to two issues. One is that you have people like Michael Grade saying that he just does not want to be in the kind of relationship where he takes subsidy in that way, which is a perfectly respectable position to take. I understand that that may not fit with the broader vision of a commercial broadcaster. The other is the legal difficulty and the question whether or not any system of that kind is a state aid. There is a process of challenge under way with regard to the £14 million that has been carved out for Channel 4 to help with the costs of switchover in this period. These are complicated matters. Ofcom will produce its second stage public service broadcasting review probably before Parliament comes back. It is important for the Committee to know that because it is a very significant piece of work. That will look at the immediate future and the sustainability of the licences in the next two or three years, but it will also start to flag up, if this is the way that Ed Richards' and Ofcom's thinking is still proceeding, the broader options for sustaining public service broadcasting over a longer period. I am pretty certain that top-slicing will be in that mix but, like all the options, it is not easy. All of the options come with pros and cons. I have also floated the idea of more collaboration and whether the BBC can be more of a backbone of the system in any region while developing a relationship with other broadcasters to help reduce the costs of television production perhaps by shared use of studios and other means. That implies lots of culture changes and different ways of working and it is only a proposal at this stage, but I think we shall all have to think very hard to preserve the things we all care about. Q70 Alan Keen: Perhaps I may put my simple view about the BBC. There are certain differences on the Committee. There is a good deal of confusion. We keep referring to public service broadcasting. The BBC does masses of things which would not fall within the definition of public service broadcasting. Can we forget the term "public service broadcasting"? Never mind the funding of other so-called public service broadcasters; the BBC is just financed in a different way. There is no difference between the BBC, Sky, ITV and Channel 4. The BBC is funded by a licence fee. Let it do whatever it likes within those bounds. Obviously, the government is frightened of getting the blame for increasing the licence see, so the BBC does not have an ever-expanding income; it is controlled in that way. Let the other broadcasters including Channel 4 do whatever they like with the money they can raise through advertising. One body, the BBC, is funded by the licence fee; let the rest fight it out and do whatever they like. Do not put restrictions on them which force them to broadcast two news programmes between six and 11 o'clock. Let them do whatever they like and stop talking about public service broadcasting. Just say that the BBC is funded by a licence fee. As long as governments allow that to continue do not worry about other people being subject to restrictions. I think that would be much simpler. You then get away from all the confusion we have had. Sky now tends not to attack the BBC but they used to do so. I have asked them what in their view public service broadcasting is. Is the weather forecast public service broadcasting? They say it is. Is Sky News or sport news public service broadcasting? They say it is. In the end a mass of Sky's output is public service broadcasting. It confuses the issue. Let us have separate funding which will stop all of these arguments. What do you think about that? Andy Burnham: As to Sky, today The Times has let out of the bag that I am the guest presenter on the Andy Burnham Night on Sky Arts. Q71 Chairman: It boosts the ratings? Andy Burnham: They make exactly the same point. Q72 Chairman: Scouting for Girls? Andy Burnham: It will be the diehards, that is, Billy Bragg and the cheerful, fantastic film "Distant Voices, Still Lives". Interestingly, Sky is doing some stuff that is without any restriction and is recognisably what might be called public service broadcasting. To address Alan Keen's main point, I cannot agree. It is very important to me that the BBC is a broadcaster that is truly national and reaches out to, reflects and stimulates the creative economy in all parts of the country and sustains and supports our democracy by providing impartial news and from the regions and nations of the country. That is a set of requirements, regulations and targets. Q73 Alan Keen: There is a misunderstanding. I agree with you 100%. I am just saying that we should free the other broadcasters. I am a fan of Sky and ITV. I am saying that we should forget the definition of public service broadcasting. The BBC should be subject to conditions that mean it stays the same as it is now, but if the others are struggling to survive because we forced them to broadcast certain items let them do whatever they want. The proof is that, as you say, Sky broadcasts wonderful arts programmes which I watch all the time and it does so because it is commercially attractive. Andy Burnham: Sky News has set lots of standards in terms of rolling news coverage which have helped to improve the standard of news reporting generally in this country. I understand the point you make, but there is still value in the commercial public service broadcasting television licences. Production in the regions and, crucially, regional news are valued and appreciated by the public. I think it is right that we as politicians who represent them public specify the value represented by the ability of a broadcaster, not a monopoly, to broadcast to the country on a scarce spectrum. It is right that we get things back that the public want and care about. The level of support and trust in regional news is still incredibly high and it is a valued service. You are in part correct in anticipating the future because there will come a point when the value of the commercial licences has gone and the public sector cannot require all of those things any more. My aim is to see what we can sustain in the post-switchover era. That is a discussion to be had about which we should be pragmatic. Let us help the television industry to put itself into a position where it can continue to provide the quality to which we have all become very accustomed. We must have a pragmatic discussion within government and Parliament about explaining to the public the future path in the next few months and years. It is a debate that needs some careful guidance, and I am sure the Committee will help us in that. Q74 Chairman: With different views. Andy Burnham: No doubt with different views. Q75 Janet Anderson: I very much agree with you about the BBC, albeit you will be aware of a good deal of public concern about what the BBC should and should not do not only as to how much it pays Jonathan Ross but the pension pots of some of its people and so on. For example, BBC Worldwide publishes Hello! magazine in India and last week it announced that it was to acquire full ownership of a paid television service in Australia. You mentioned earlier collaboration between broadcasters. I want to ask you specifically about the BBC's proposals for BBC Local. I believe that it intends to spend £68 million to set it up and its running costs will be £23 million a year. This service is already provided by ITV, so does it make sense for the BBC to provide a competing service like this? ITV is very worried about it, as are other forms of media in the regions. Andy Burnham: That is a good question and it is precisely one that is before the BBC Trust which as regulator is assessing the proposals for BBC Local right now. Obviously, it applies the broad public value test: where does maximum public value and interest lie? What effect does it have on the wider creative economy and generally? The BBC is putting forward a very interesting idea. It is already localising some of its services in a helpful way. You can type in your postcode on the website and receive a local weather forecast. Because of the BBC's ability to reach out it can provide some very high quality services which will help to shore up confidence in the licence fee in the future, but the question you pose is rightly one for the trust to examine when it has seen the detail of the BBC's proposals. Q76 Janet Anderson: To return to tourism, you will know that people in the industry often complain that they do not have a cabinet minister, but they do: it is you. I know what a great supporter you are of the industry. I just wonder whether you might consider renaming your department the department for culture, media, tourism and sport. Andy Burnham: There are no twitches from the Permanent Secretary. DCMS works as a name, but I do not rule it out entirely. We may find that someone will want to reinsert heritage and we end up with a long title. If the general point is whether we are also about tourism and heritage then in this job I must demonstrate to them unequivocally that we are. Q77 Chairman: This Committee warmly welcomed the initiative of the Prime Minister to strengthen the role of Select Committees in public appointments and to allow pre‑appointment hearings. It was however the strong view of this Committee and the whole Liaison Committee that one position for which a very strong case could be made for pre-appointment hearings to be held was the chairmanship of the BBC Trust. The government have however appeared not to include that position on the list. Can you say why and whether or not you are willing to reconsider that? Andy Burnham: It is my view that we should not go down that path and I will say why. I believe that this Committee will be involved in the pre-appointment discussion for the chair of Ofcom later this year. As a preamble, I think that it is less complicated for the reasons that I am about to explain. Let us see how the process goes and have a dialogue with you about how satisfactory or otherwise this process is. Obviously, it is new territory for the Committee. As to the BBC this takes us back to its historical relationship with Parliament. What is the right relationship and what is an undue infringement that may take us into areas of editorial judgment and the question whether pressure is being put on the BBC to do certain things. I believe that the question of editorial independence from government and Parliament is an incredibly important cornerstone of the BBC. Q78 Chairman: But the chief editor of the BBC is the director general and the BBC Trust does not become involved in editorial decisions. Andy Burnham: Inevitably, there is an involvement when the chair of the trust engages with BBC executives and management. There is a grey line between what are matters for the trust and matters of editorial independence. I was struck by the view that emerged from the charter renewal process that the public want the BBC to have absolute editorial independence from government and Parliament. Obviously, these matters were live not long ago in relation to the Hutton report and the issues that that considered. Q79 Chairman: But you as Secretary of State, a politician, appoint the chairman of the trust. Would there not be greater public confidence in the independence of the chairman if he could be subjected to public scrutiny by a Select Committee? Andy Burnham: I have a view on the process which at this moment I believe is the right one, not knowing yet how the new process will work and the effect it will have. That is why I say we should see how it works for Ofcom. I do not have a completely closed mind on the issue, but so far I have taken the view that the BBC is unlike other organisations that you scrutinise in that it makes programmes and news reports about all of us here, so we do not come to it in a completely disinterested way. Q80 Chairman: So, perhaps you should not appoint him either. Andy Burnham: That is a certain line of argument that you can begin to develop. My instinct is to proceed with caution. The editorial independence of the BBC is something that is hard won and important to it; it gives it the trust that it enjoys in the country. Let us not take a step that may compromise that in any way and lead us to a position where we lose something that is quite precious. I do not have a closed mind to it. If having gone through the Ofcom process the Committee's strong view is that it should be allowed to develop in this way then I would be prepared to hear again the arguments and the experience of the Ofcom appointment process. Q81 Chairman: You will be aware that it is not just this Committee but the Liaison Committee that has strongly argued for this? Andy Burnham: I am aware of that and it is something I cannot ignore. Clearly, it was an initiative by the Prime Minister. I do not know whether Mr Stephens wants to add to this. The BBC is of a different category in that it makes programmes about what we do in Parliament and what government does. It is different from the Rural Payments Agency, Environment Agency or NICE and all of us have a vested interest in what we want it to do in terms of political ambitions and the prospects of our parties. Mr Stephens: It is unlikely that a new appointment will arise until 2011. Q82 Chairman: I think you could have said that about the past two chairmen of the BBC both of whom left somewhat prematurely. Mr Stephens: Unexpected things may happen, but it is unlikely to arise before 2011 and it may well not even arise for another four years after that, so there is plenty of time for the debate to continue. Chairman: Secretary of State, we would like to continue but we have kept you a long time this morning. We thank you and the Permanent Secretary. |