Examination of Witnesses (Questions 40-59)
DEPARTMENT FOR
CULTURE, MEDIA
AND SPORT,
DIGITAL SWITCHOVER
HELP SCHEME
& DEPARTMENT FOR
BUSINESS, ENTERPRISE
AND REGULATORY
REFORM
MONDAY 10 MARCH
2008
Q40 Mr Mitchell: It has exceeded
expectations, because you have this complex structure and meanwhile,
Murdoch and Branson are doing the work for you. They have 75%
with digital, either on cable or on satellite, and I see from
the Report that 85% have digital sets in the house, so the work
is actually being done for you. It is therefore going to be less
expensive and more effective than your laborious long timetable.
Mr Stephens: Far from it, if I
may say so. The evidence is that actually digital terrestrial
television, the existing Freeview service, has overtaken provision
of satellite digital services. Of course, switchover itself is
intended and is delivered as a platform neutral change, but the
satellite broadcasters, if anything, regard it as increased potential
competition.
Q41 Mr Mitchell: If the BBC carries
this out, and it has £600 million for the help scheme and
£200 million for publicity and all that, if it does it more
cheaply than that, does it get to keep the money?
Mr Stephens: The money is ringfenced
in the licence fee.
Q42 Mr Mitchell: So the BBC cannot
have it?
Mr Stephens: The BBC does not
have access to it automatically. Ministers have reserved their
decision on what happens --
Q43 Mr Mitchell: In doing it this
way, of course, you have now prepared the way for a nice dogfight
over topslicing, because you have various bodies, Channel 4 is
one, but ITV is another, who want their fingers in this licence
fee pie for supported public service broadcasting, and they are
going to need some financial help after digital switchover, so
you have now prepared the ground for a dogfight over what happens
to the money.
Mr Stephens: That raises a wide
range of policy issues.
Q44 Mr Mitchell: Yes or no?
Mr Stephens: The objective here
was to ensure widened access to digital terrestrial television,
to ensure universal access to high quality digital public broadcast
services, that is rightly funded out of the licence fee, Ministers
decided. They ensured that the BBC's programmes were not at risk
by ringfencing the amount in the licence fee, and they have reserved
their options—
Q45 Mr Mitchell: Hang on, the BBC
is now trying to make large numbers of staff redundant because
it did not get enough money, but we will move on from that. We
have a situation now in which the help scheme is being undersubscribed,
perhaps because, as the Chairman suggested, of the £40 charge.
In my view, since it goes to people who are blind and cannot see
television anyway, or people over 75 like myself, who are too
old to watch television, it goes to a very limited market, does
it not? It would have been more sensible, given the expense for
old people in particular, I remember how long the switch from
black and white to colour was, to have provided a more generous
scheme, because at the end of the day, people are going to say,
"Government is going to flog off these channels, make an
enormous amount of money for itself, and it is forcing us to stump
up money we cannot afford to get this digital system they have
decreed for us".
Mr Stephens: The evidence that
the Departments assembled in advance of switchover was clearly
that the main barrier to switchover, among the elderly, vulnerable
groups and others, was not cost, it was practical assistance,
so the scheme was designed to deliver that practical assistance.
There is no reason to think it is being undersubscribed, there
is not an objective as to the level. If friends and relatives
assist people to achieve switchover, well and good. The objective
here is to achieve switchover with no loss of service to the consumer.
Q46 Mr Mitchell: I just want to ask
one further question, and that is in the course of research I
was doing over the last few weeks for a lecture I was giving on
digital switchover at Sunderland University, I watched, just for
the purposes of research, the pornography and sex channels which
are available certainly on my satellite dish. Now these are horrible
actually, they should be banned, I cannot see why we are allowing
them, but my question is, if people convert to digital via the
Freeview, are they going to have access to those as well?
Mr Stephens: You would have to
tell me which particular channels. The entitlement is to around
20 public service channels which will not be broadcasting that
sort of material. Beyond that, for those who can receive them,
there will be a wider range of commercially broadcast channels.
This is not the same as what is available on satellite.
Mr Mitchell: It is a terrible thought
if we are actually equipping the country to watch this kind of
degrading rubbish. Anyway, I will stop there, I have overrun.
Q47 Chairman: Just to complete one
point of Mr Mitchell, Sir Brian, these 1.8 million people who
bought analogue TVs in the first seven months of 2007, many of
them presumably of lesser means, because they could not afford
digital maybe, were they all told that their television would
be useless after 2012 unless they bought this box for £20
or £30? They were not, were they?
Sir Brian Bender: I cannot answer
that.
Q48 Chairman: I know you cannot,
because one third of shops did not even have this digital tick
system, and one third of the staff apparently did not —so
we know they were not told. Can you imagine any other walk of
life where 1.8 million people, particularly people of lesser means,
are buying something which will be useless in five years' time,
they are not told about it, unless they pay extra money? That
is unbelievable.
Sir Brian Bender: At the time,
I suspect the analogue sets were cheaper, so an analogue plus
a set-top box might not have been more expensive.
Q49 Chairman: But were they told?
Sir Brian Bender: The answer must
be they were not all told. I cannot answer your question.
Q50 Chairman: Huge numbers were not
told that they were effectively buying something which was a consumer
product which would be useless within five years, less, probably,
unless they paid extra money. I think this is quite worrying,
is it not? Are you not worried about this?
Sir Brian Bender: It plainly is
not satisfactory, and that is why the digital tick system and
the training of retailers—
Q51 Chairman: Surely you had the
power to insist that television retailers at least tell people,
at least warn them, do you not think that would have been quite
an important thing to do?
Sir Brian Bender: This is part
of the work that Digital UK are doing on their consumer protection
strategy, but exactly what happened—
Q52 Chairman: It is not working,
is it?
Sir Brian Bender: They are tightening
it up so it does work looking forward.
Chairman: Tightening it up, 1.8 million—you
know the point I am making. Richard Bacon?
Q53 Mr Bacon: Chairman, thank you
very much. Can I just start by checking something with the NAO,
please? The Report says that if the take-up was the same as in
the Copeland experience, then there could be £250 million
unspent, as I understand it, at the end of the process. Can you
just clarify for me, that £250 million that would be unspent,
how much of that comes out of the ringfenced £600 million
for the help scheme, and how much out of the publicity, the £200
million?
Mr Prideaux: That all relates
to the help scheme.
Q54 Mr Bacon: It all relates to the
help scheme. Right, good, thank you very much. Mr White, you are
in charge of the £603 million that the Government has given
you to help people watch more telly, and make sure they do not
miss out on anything and they switch over, and you could be sitting
on £250 million that does not get spent. What do you think
is going to happen? What are you going to suggest is done with
this money?
Mr White: I still agree with the
NAO that it is too early to tell. What I am pleased about though
is that when we contracted with eaga, we have managed to get a
contract which means if take-up is low, there will be the saving
in money.
Q55 Mr Bacon: Say that again.
Mr White: If take-up is low, then
we will make the saving in money.
Q56 Mr Bacon: You mean you do not
have to pay them regardless?
Mr White: So what I am pleased
to say is that actually if take-up is low, there will genuinely
be that—
Q57 Mr Bacon: There will be genuinely
be a saving; well, at least that is something.
Mr White: -- somebody running
the scheme. I do not have a view on what that money should be
used for. My job is to make sure that the scheme is available
and offered to everybody who is eligible, and I help everybody
who wants help within the parameters of the scheme. If that means
money is saved, that is a good thing.
Q58 Mr Bacon: Absolutely, and you
will know presumably by 2012 whether you have the £250 million?
Mr White: It is interesting the
way switchover goes, there are two peaks, so by the time we go
into Granada, we should begin to have a pretty good idea of the
pattern of take-up, which means we will be able to start predicting
any shortfall or what the increased need for fund might be, because
it can go either way, although at the moment it is not pointing
to be higher than £603 million, but we still will not be
absolute until much nearer the end.
Q59 Mr Bacon: It is likely then that
as we get closer and have more accurate information, that by 2012,
you will know whether you have £250 million to spare or not.
Mr White: Or whatever the sum
is.
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