Examination of Witness (Question Numbers
60-79)
DR COLETTE
BOWE
13 JANUARY 2009
Q60 Mr Evans:— the fine would
go to the organisation, not to individuals or are you allowed
to fine individuals?
Dr Bowe: I am afraid I do not
know the answer to that question. I should do and I do not and
I apologise. All the cases I know about have been about organisations
being fined, but I am afraid I do not know about individuals.
[1]
Q61 Mr Evans: If the organisation is
fined, could you tell me, where does the money end up?
Dr Bowe: It ends up in a sort
of ring-fenced pot inside Ofcom and is taken into account in the
setting of Ofcom's budget. [2]
Q62 Mr Evans: So basically it is a stealth
tax on licence-payers?
Dr Bowe: Well, that is how it
has to happen with regulators because, otherwise, they are incentivised
in a very peculiar way.
Q63 Mr Evans: On the generality of
the licence fee, because clearly you cannot talk about the review
that is going to come out shortly, people have this poll tax on
their telly which they are forced to pay and mostly of course
for the BBC. When we have had Mark Thompson before us, I have
asked the question about accountability and transparency of the
money that is raised from, extorted from, the licence-payer—not
a loaded question—but the one thing on transparency is that
we have talked about your salary and everybody knows and people
will make their own judgments about that, but, when the leak came
out about how much one of the megastars in the BBC was getting
paid out of public funds, which was £6 million a year, as
you can imagine in your doughty fight for consumers, people were
a little taken aback about those enormous salaries and that was
only because it was leaked. Do you not believe that the licence-payer
has a right to know how much is paid to some of these so-called
superstars?
Dr Bowe: Well—
Q64 Mr Hoyle: I think that is a yes!
Dr Bowe: I am not sure that I
do actually, and again I could be exceedingly tedious and say
that is a matter for Mark Thompson and Sir Michael Lyons, but
you are asking me more as somebody who is just interested in consumer
issues. Do licence-fee-payers want to know all the details of
what the talent is paid? I am not totally sure that they necessarily
do. I think the issue that comes up, and now I am not talking
about Jonathan Ross or indeed Russell Brand, is that people have
a relationship of trust with organisations like the BBC and indeed
the other broadcasters, and I think it is interesting that these
issues about salaries only come up, or I think they only come
up, when people feel somehow uncomfortable about that relationship.
I am rambling here a bit because I am trying to think my way through
a sort of proper answer to your question. I am not sure that people
actually would welcome having immense detail of the salaries of
the talent. The BBC already produce an enormous amount of material
and of course what they are very transparent about is the salaries
of their management employees.
Q65 Mr Evans: We all know Mark Thompson
earns over £800,000 a year and people are a little taken
aback by that too, but, when somebody is being paid £6 million
a year out of licence-payers' money, actually the people that
I have spoken to genuinely want to know how much these people
get paid. They want to know how much Jeremy Paxman earns out of
public funds, and we do not care how much he earns from writing
articles or books, but out of public funds and then they can make
a judgment as to whether they are getting value for money from
public service television.
Dr Bowe: If I were to sort of
think about this point, and I am not supporting it, I am just
trying to think how you would give effect to it, supposing you
said, "Okay, there's a sort of raft of talent and people
actually want to know how much these guys or these ladies are
paid", what then? Who decides whether X is value for money
or not? Who decides, if so-and-so is getting paid more than so-and-so,
is that right? In the end, the management of the BBC or whatever
broadcasting organisation it is has got to be free to make these
decisions. I do not think you can have a kind of voting system
whereby people decide who gets paid; management has got to be
free to manage there.
Mr Evans: They can be free to manage
and they can be free to pay what they like as well, but, when
the public know how much, at least they can make a judgment as
to whether they like it or not. I have been on the receiving end
of letters from people who have said that actually they think
Jonathan Ross is worth £6 million a year, not many.
Q66 Mr Whittingdale: This is a fascinating
philosophical discussion, but unfortunately it is completely outside
the remit of Ofcom. Some of us think that perhaps it should be
within the remit of Ofcom, but it is not.
Dr Bowe: I think our Chairman
is suggesting that we pursue this in a different way on some other
occasion. I think it is interesting, Chairman, and I think there
is an issue somewhere lurking in this about public trust, but
we can talk about that maybe another time.
Q67 Philip Davies: Can I just draw
you back to where we ended our previous discussion when you were
indicating to me that I was wrong in the view that Ofcom was supposed
to be reducing regulations. If I could invite you to look at the
last two annual reports of Ofcom, in the Chief Executive's report
in 2006-07, he wrote, "Ofcom is committed to reducing its
regulatory burdens on its stakeholders. A desire to remove unnecessary
and out-of-date regulation underpins all of our work", and
in 2007-08, he wrote, "As well as being committed to reducing
our financial burdens on our stakeholders, we are also committed
to reducing our regulatory ones. We always seek to take opportunities
to reduce, or simplify, regulation". Do you understand why
somebody might think that Ofcom, given that this is in the Chief
Executive's report, was actually committed to reducing the amount
of regulation it served on people? Would I be wrong to take that
from what the Chief Executive was saying in his report?
Dr Bowe: I think you would be
putting an inference on it which is not borne out by Ofcom's regulatory
principles, and one of Ofcom's key regulatory principles is to
say that Ofcom has a bias against intervention, except when it
is needed, at which point it will intervene promptly and proportionately.
Q68 Philip Davies: This is specifically
talking about, directly and specifically talking about, reducing,
so is this just sort of hubris? Is this sort of guff that we are
being given or, under your chairmanship, can we expect these sentences
to be removed from the Chief Executive's annual report?
Dr Bowe: If you really were going
to analyse very closely and textually those words of the Chief
Executive, what he is talking about is reducing outmoded regulation
and he is talking about reducing regulatory burdens. He is not
saying, "and we're going to stop doing regulation".
Frankly, any chief executive of an organisation that presides
over major regulatory interventions, for example, the whole framework
around public service broadcasting which we just touched on, of
course is not going to assume that the organisation is going to
simply fade away. I think what Ed Richards is saying there is
something quite important which is that, as a regulator, you have
to make sure that you do not just kind of accrete regulation and
you do not just keep on doing something because that is what we
have always done and you do not say, "Well, yes, we've got
all those regulations there and let's add some more over here".
You have to be constantly challenging yourself and saying, "Hang
on, why are we doing that? Could we possibly deregulate? Could
we have a look at this marketplace and see if there are places
where we could withdraw?" That is what he is saying. He is
not saying, and nor will I be saying, "By the way, we just
stop regulating now, thank you, and we're going to switch out
the lights".
Mr Whittingdale: I think we are going
to have to move on because we are slightly going backwards.
Philip Davies: One thing which follows
on from that, which is my favourite subject, is something which
has affected commercial broadcasters and their ability perhaps
to do public service broadcasting which is the nanny-state ban
on so-called junk food advertising that Ofcom introduced. All
the figures show, as was entirely predicted when we have had these
committee meetings before, that there has been absolutely no reduction
in the levels of childhood obesity as a result of this move, so
will we, under your chairmanship, see a sort of return to evidence-based
regulation rather than there being what you might call a `government
patsy and a gesture-politics regulator'?
Q69 Peter Luff: Chairman, can I just
add to my earlier question, that this is not a classic example
of policy decisions which should be made by ministers and not
by Ofcom?
Dr Bowe: Can I just say on the
junk food point, that there it is and there are no plans, as far
as I am aware, to extend that. If you want my personal view, as
you have indicated, it is very early to tell whether this is having
actually any effect on the underlying problem and, as Stephen
Carter said to your Committee, I think, a few weeks ago, he sees
no impetus coming forward for any further action on that either.
Q70 Helen Southworth: Many people
see a very uncertain future for the creation of children's television
programmes within the UK. Can you give us an outline of what your
vision is for children's television and how Ofcom is going to
drive that?
Dr Bowe: Helen, I am afraid this
takes us into that rather difficult area of public service broadcasting—
Q71 Helen Southworth: Well, as a
general principle, the future of children's television is a crucial
issue.
Dr Bowe: If you do not mind my
talking about it in general, I am very happy to do that. Good-quality
children's programming is absolutely crucial to what our television
system has to be able to deliver and there is no question or debate
on that. People value it, people value it rightly, and it is an
absolutely fundamental part of what we all want to see delivered.
I feel extremely interested in that. I have many domestic and
family reasons to be passionately interested in children's television
and I very much want whatever system of funding emerges from the
current debate on public service broadcasting to be one that can
sustain really good-quality children's television. I think it
is at our peril that we let that excellent strand in British broadcasting
be diminished.
Q72 Helen Southworth: So you have
given us your personal opinion, but you believe that it is a fundamental
responsibility of Ofcom to deliver that?
Dr Bowe: It is one of the many
aspects of public service broadcasting on which Ofcom will be
giving its views next week, but, as I have said, I am afraid I
am constrained.
Q73 Helen Southworth: And you expect
to see a robust future for children's television? I am putting
words in your mouth.
Dr Bowe: You are. I am afraid
you are slightly putting words in my mouth.
Q74 Helen Southworth: Well, either
you want to see a robust future or you do not. It is quite simple.
Dr Bowe: I hope my response to
you has been as robust as you would expect it to be about the
values that I espouse.
Q75 Mr Hoyle: So Blue Peter
will be on the BBC for ever and a day!
Dr Bowe: But rechristened Red
Peter!
Q76 Adam Price: I understand that
you do not want to say anything in detail about public service
broadcasting, but just in general terms, one of the key themes
that has emerged in the recent discussion has been this whole
issue of `Londoncentricity', particularly in the context of the
concern about the regional news on ITV, but also the criticism
of the BBC's news coverage, for example, and its failure to take
into account the post-devolution reality of the UK today. If you
do not mind my saying, it is a very impressive CV, but also quite
London-centred in terms of your professional employment.
Dr Bowe: You know, that is a terrible
thing to say to somebody from Liverpool!
Q77 Adam Price: Not in terms of your
football allegiance, but in terms of your professional background
it has been quite London-centred. Are you, nevertheless, alive
to the very, very real concerns that the rest of the UK feels
that it is being badly served at the moment both by the institutions
and also by the content that they are producing?
Dr Bowe: I am very, very alive
to that. Once I am appointed to this post and take it up, my first
visits are going to be to Wales, Scotland and Northern Ireland
to meet with people in those different communities to hear at
first hand their concerns. These are massively important issues
and they are top of my visit list. I think that is an answer to
you. I think you are saying am I aware of it and I am saying I
am going to get out there and make myself seen.
Q78 Adam Price: Just in terms of
Ofcom itself, like the BBC, Ofcom does not have a dedicated member
on the Board for each of the devolved nations. Do you think you
do a better job than them at representing the diversity of the
nations without dedicated people on the Board?
Dr Bowe: I cannot really speak
for the quality of their job, but you will know, Adam, that for
each of the nations we have an advisory committee which is led
by a distinguished person from the local community and which has
on it representatives from all the different kind of interests
in that community. The advisory committees for Wales, Scotland,
Northern Ireland and indeed England have a great deal of contact
with Ofcom. The Ofcom Board goes and meets with those committees
at least once a year, so there is a huge amount of contact, and
that is the way that Ofcom, recognising the issue you are raising
about `Londonitis', chooses to do it, not with a single individual
on the Board, but with an actual range of people who are the advisory
committee for that place.
Q79 Adam Price: Well, are you going
to meet them or would it be better for the chairs of those advisory
committees to be at the top table on the Board itself?
Dr Bowe: I am not sure what you
would gain additionally from that actually.
1 Footnote by witness: Ofcom has the power to
impose sanctions on broadcasters (not individuals) under provisions
contained in the Broadcasting Acts and the Communications Act
2003. "Broadcasters" includes "broadcasting bodies"
regulated by Ofcom (the BBC and S4C) and licence holders providing
an Ofcom licensed service (commercial TV and radio operators). Back
2
Footnote by witness: All financial penalties imposed by
Ofcom are held in our account with the Office of HM Paymaster
General (OPG) for the benefit of the Exchequer. Funds are transferred
to the Bank of England account at agreed times for direct use
by the Exchequer. Neither OPG nor Ofcom benefit from or have use
of any monies made available to Ofcom.
OPG provides banking transaction services
through various banks with balances held securely at the Bank
of England for a range of public bodies and all central Government
Departments. These balances are made available at the end of each
working day to the National Loans Fund to help minimise the overall
cost of Government borrowing.
OPG has been part of HM Revenue and
Customs since April 2006, when ownership was transferred from
HM Treasury. In May 2008, OPG became part of the Government Banking
Service, which is the new banking service provider to the public
sector. Back
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