Examination of Witnesses (Questions 60-79)
SIR MICHAEL
LYONS, MR
MARK THOMPSON
AND MS
ZARIN PATEL
8 JULY 2008
Q60 Mr Evans: Mark, how much did
the BBC pay Jonathan Ross last year?
Mr Thompson: As you know from
our exchange a year ago, we do not release the details of any
of our contracted on-air presenters.
Q61 Mr Evans: Being the BBC I thought
you would enjoy a repeat!
Mr Thompson: There are less now
on BBC One than ever before, you will be pleased to hear!
Q62 Mr Evans: I am just wondering
why it is that people think that if MPs' pay is known and their
expenses are known it keeps a lid on it, but the BBC think that
if they keep a lid on their stars' salaries and expenses that
somehow that keeps a lid on it. I do not understand why there
is such a big difference.
Mr Thompson: What I accept and
other members of the Executive Board of the BBC and of the Trust
would accept is that as public officers of the BBC it is absolutely
appropriate that our emoluments and our expenses should be subject
to any amount of scrutiny and, believe me, mine are! I am just
that, I am a public officer of the BBC. When we contract someone
to present a television programme or a radio programme it is a
very different relationship. Our belief, common in our industry,
nobody else does this, is that the interests of confidentiality
apply as they do throughout most of British public life.
Q63 Mr Evans: It is public money.
You accept that the licence fees are taxed. The Freedom of Information
Act has changed everything. Are you sitting on many Freedom of
Information Act requests at the moment about some of the stars
that you employ on their salaries and expenses?
Mr Thompson: You will recall that
within the Act there is a derogation relating to the editorial
content of the BBC and indeed Channel 4. A large part of our editorial
and creative operations lie outside the Freedom of Information
Act. More generally, of course, the BBC is constantly receiving
requests for freedom of information. We are a big user of the
FOI as a journalistic organisation and a broadcaster as well.
There are extensive numbers of FOI requests on everything under
the sun.
Q64 Mr Evans: I notice from p59 of
the accounts that you now have this wonderful senior managers'
headcount by salary band, although I think you originally did
manage to miss off the four people earning more than a quarter
of a million and you have put a little sticky erratum over
that. Is it possible that in the future we could see a salary
band as far as some of the stars that you employ? You are not
compromising the fact that Jonathan Ross is on £18 million
over three years or whatever it is, but at least we would start
to know exactly how many people are receiving huge chunks of money.
Sir Michael Lyons: I want to come
back to the Trust's work this year in part as a response to the
concerns that we heard from this Committee and other places about
big salaries based on leaked information. We asked Oliver &
Ohlbaum to take a very close look at the way the BBC goes about
recruiting and retaining top talent. A particular strand I want
to draw from that report was their message that the BBC was not
a market maker certainly as far as television was concerned and
indeed in places was paying less than the market rate. It is that
second finding that I want to focus on for a moment. The proper
test as far as the Trust is concerned is whether the publication
of top talent salaries in detail lead to better value or worse
value for the BBC. I have to tell you, our view is that it will
almost certainly lead to worse value. You see that illustrated
in a current case, which I do not want to get into, where information
has entered the public arena about one member of a team and how
much they are rewarded and starts to bid up. In a highly competitive
area that cannot offer the way forward for better value for the
BBC despite our commitment to openness fully reflected in the
fact that we published that report minus the salaries.
Q65 Mr Evans: Perhaps you could look
at the bands for the future, although I think you will have to
extend it way above a quarter of a million to be able to get a
proper—
Sir Michael Lyons: I will take
that away to consider as a proposition but without leaving any
suggestion that I think it might be in the licence fee payer's
interest for us to move in that direction.
Q66 Mr Evans: I was staggered when
I read in the newspapers that Jenny Abramsky will be drawing an
annual pension in excess of £190,000, which is a staggering
figure of money when you consider the Prime Minister does not
even earn that now. How come we have got ourselves into a position
whereby one of your directors has got a pension pot of over £4
million and is going to be picking up more than the Prime Minister?
Mr Thompson: It is not normally
our policy to talk in detail about an individual's remuneration.
It is worth saying that Jenny has had a truly distinguished and
exceptional career as the leader of BBC Radio for many years now
and many other great achievements in her career. Jenny's story
is a fairly simple one. The BBC has had an unexceptional final
salary scheme. She joined the scheme and has stayed in the scheme
and is now taking retirement. The scheme itself is unexceptional.
Q67 Mr Evans: The pension is not
unexceptional, though, Mark.
Mr Thompson: What is exceptional
about Jenny Abramsky is she spent 39 years working for the BBC.
The only reason that the sums are as they are is because she spent
39 years in continuous service, ultimately service to the British
public, in various roles inside the BBC. It is a highly unusual
circumstance. Most people in broadcasting move around. I left
the BBC to go to Channel 4 and I have come back again. My pension
pot will be a lot smaller than Jenny Abramsky's as a result. There
is no special favouritism here. All that simply happened is that
she joined what I would describe as a pretty bog-standard, final
salary scheme, but, if you pay into a pension pot for 39 continuous
years and, in particular, you join the scheme before, to get techy
about it, the 1989 Inland Revenue cap, it builds up over time,
and it is no more, no less than that. Although I recognise that
it will be considered by many people to be a considerable pension,
nothing exceptional has happened; the only exceptional thing is
four decades of public service.
Q68 Mr Evans: Yes, but you will recognise
as well that there will be a lot of people who also would work
continuously for an organisation who will be on pensions of less
than £25,000 a year, so, when they see somebody working for
an organisation which is in the public service sector and they
are going to be ending up with £190,000, which is more than
the Prime Minister's salary now, then the public themselves will
be rather startled.
Sir Michael Lyons: Inevitably.
Inevitably, there are many members of the public who are startled
by the modest remuneration that Members of Parliament receive.
Q69 Adam Price: Sorry, I have never
heard that on the news! It is lovely! Can you just say that again,
Sir Michael! I have never heard that before!
Sir Michael Lyons: Of course you
know there is a very firm editorial divide here, so I will have
to leave Mark to reflect on whether that is appropriate! Just
coming back to this, big salaries, big remuneration inevitably
draws public attention. The two points that I would make is to
underline that the BBC cannot be compared simply with the public
sector as a whole. There are a whole series of tasks, activities
and posts where it has to recruit in competition with the private
sector and very clearly, and you know this, but we could certainly
provide you with further information, where the remuneration packages
in competing private organisations are of a completely different
order. Jenny Abramsky has stayed loyal to the BBC through a revolution
in radio where, at any point, she could have gone out and joined
an industry where there were very substantial equity rewards for
sometimes not very great professional risk. She chose not to do
that. She, as a result, finishes her career as a good public servant,
yes, with a very generous pension, nobody could detract from that
at all, but without the wealth that she could have accumulated
if, like some others, she had moved backwards and forwards between
different companies during that radio revolution, so I do not
think it would be at all appropriate either to question the BBC's
remuneration policy on this point, although we are here to be
accounted for on that and other matters, or to hold Jenny as having
done anything other than work faithfully for an organisation and
be paid accordingly.
Q70 Mr Hall: If we look at the BBC
and scrutiny, on the first part we have got the list of the 12
trustees, four of whom are regionally based and there are six
of them not. I tried to get information from the BBC as to whether
there was any regionalism in the appointments of the remaining
six trustees and the BBC have refused to answer that question.
Is there anything you can tell me that tells me that the trustees,
apart from the four nationally based trustees, are not just London-centric?
Sir Michael Lyons: Well, let me
speak in very personal terms, with the prospect of another week
living in the same hotel before I go back to my home in Birmingham.
The Trust is not only made up of Londoners plus the four people
who are specifically recruited because of their responsibilities
for the four nations. The question is really more properly asked
of DCMS because all of the trustees are appointed through the
DCMS through the normal public appointments process, although
in the end of course the appointments are approved by the Privy
Council.
Q71 Mr Hall: So how many of the six
trustees live in London?
Sir Michael Lyons: I would be
very happy to give you the answer to that.
Q72 Mr Hall: Why do you not do it
now then?
Sir Michael Lyons: Well, because
I want to go back and just check, but certainly I do, the Deputy
Chairman does, so I am already, if I put the four national trustees
together, up to half of the Trust, so I do not think the concern
that the Trust is made up only of Londoners is actually likely
to stand up, but let me reply to you in writing and show you where
people's homes are.[3]
Q73 Mr Hall: Can I then refer you to
page 39 and this talks about the remuneration policy for members
of the Trust. It goes on in the final paragraph, the middle column,
"The trustees are additionally reimbursed for expenses incurred
on BBC business, for example, travel and accommodation, in line
with the Trust's Code of Practice. Some of these are expenses,
together with some support services which are booked centrally,
classified as taxable benefits and are paid for by the BBC".
If you turn over the page and we look at the table there, when
we look at the trustees, there is very little that is down as
taxable benefits, so does this table include everything that is
paid to trustees or are there other expenses that are paid that
are not listed?
Sir Michael Lyons: This shows
taxable benefits. As that text that you have just read out shows,
there are out-of-pocket expenses which are not taxable expenses,
and in exactly the same way as you would find in any organisation,
I think, including Members of Parliament, there is a distinction—
Q74 Mr Hall: Well, we do not have
any problem with ours being made public.
Sir Michael Lyons:— you
do not have any problem here with us making public those taxable
benefits.
Q75 Mr Hall: So there are benefits
that are paid that are not actually listed in this table?
Sir Michael Lyons: No, there are
expenses which are reimbursed. There are no benefits that are
paid that are not listed in this table.
Q76 Mr Hall: So there are other payments
that are made?
Sir Michael Lyons: There are expenses
which are reimbursed.
Q77 Mr Hall: Reimbursed, fine, but
they are not in this table?
Sir Michael Lyons: No, but they
are included in the total figures at the end.
Q78 Mr Hall: In the total figures?
Sir Michael Lyons: In the total
figures for the Trust expenditure.
Q79 Mr Hall: So that is in the £642,000,
yes?
Sir Michael Lyons: No, no, not
this. This is a simple sum of the money paid to trustees in fees
and in taxable benefits, but, if you go to the figures on page
38 which show the total running costs of the Trust, they are included
in these other operating costs, but can I just get the spirit
of your question, that we will be publishing all of the details
of the expenses received by individual trustees. They are not
in the Report, but it is our policy to publish those and they
will be on our website later in the year.
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