Joint Committee on The Draft Communications Bill Appendices to the Minutes of Evidence


Memorandum submitted by the Lord Lipsey


  The issue of whether the BBC should "come under OFCOM" on the same basis as other broadcasters are important. It is not however all-important.

  That has not stopped it dominating the debate in both Houses of Parliament on the OFCOM paving bill. It is a subject which everyone can understand, on which everyone can have a view—and on which everyone can park their strong emotions, pro and anti, on the BBC. I submit this brief memorandum of evidence in the hope that the compromise on the matter it proposes might prove acceptable to all sides, and therefore clear the way for the Committee to concentrate on even bigger issues.

  Broadly, the Government proposes that all broadcasters with public service broadcasting responsibilities should take on more responsibility for regulating themselves. This is the "light touch" regulation, which is its watchword, though the Committee will doubtless ask itself whether it is reflected in the terms of the Bill. It also proposes that all such broadcasters should come "under OFCOM" for their tier one and tier two obligations, for example on taste and decency and for quantifiable benchmarks, such as regional content and its adherence to independent production quotas. The BBC is treated differently only in regard to its tier three obligations, that is to say, its regulation for quality, which in its case is to remain the responsibility of its governors.

  Two arguments are advanced for bringing the BBC into the purview of OFCOM. The first is that this would create a level playing field with the commercial broadcasters.

  The level playing field is a hackneyed phrase at the best of times, but it may make some sense applied to competition between commercial companies. However, it makes no sense at all when we are talking about fundamentally different kinds of activity. There cannot be a level playing field between a commercial broadcaster in the market-place and a public service licence-fee supported broadcaster. It is as if one put huge effort into levelling a playing field for a match in, which one team was playing soccer and the other rugby.

  However, there is a more powerful argument for bringing the BBC fully under OFCOM's purview. It is the argument of accountability. Once upon a time, we lived under the benign rule of the good and the great, the goodest and greatest of whom served as governors of the BBC. Their authority was then regarded as a more than adequate substitute for accountability. Now, they are seen as creatures of flesh like all others.

  It is true that they are more able to act as an independent source of accountability as a result of the changes made by the present chairman, to provide more fully for them to get advice which is independent of the management of the BBC. However, the ambiguities in the role and duties of the governors remain as they were described in the final chapter of the Davies Panel on the Funding of the BBC of which I was a member. As that report said "In regulation . . . a certain tension between regulators and those they regulate is regarded as desirable since their interests can diverge. It is not clear whether in the case of the BBC such a divergence of interests can become transparent and effective." Three years later, the governors still hunt with the hounds and run with the fox.

  The BBC used to argue that the governors were its protection against political interference. However, this argument has now changed. It now argues that, given its reliance on statute and on public finance through the licence fee, its ultimate accountability should be to parliament, through the Secretary of State.

  It is of course tempting for parliamentarians to endorse such an action, which appears to offer them power to do with the Corporation what they will. But such a definition of the correct line of accountability to me opens the way to turning the BBC into a state broadcasters, something that would destroy its pre-eminent virtues.

  Should the committee therefore recommend that the BBC come "under OFCOM" for tier three as well as tier two? There are some powerful counter-arguments. One is that it would cause a long-running guerilla war with the Corporation, that could absorb energies better deployed elsewhere. The Committee will remember the much-quoted remark of an unnamed BBC executive that the Beeb always gets its way in the end. Another is that OFCOM has a lot on its plate. To have to absorb another new responsibility might lead to indigestion. Another is that, generally, we do not know whether OFCOM will work. The BBC, warts and all, is one of our great national institutions. Though we may think it would be even greater "under OFCOM" we cannot know it would be even greater under OFCOM. It might be unwise to hazard the nation's crown jewel in an unproven casino.

  This brings me to favour a middle way. It is to postpone the final resolution of this issue, and tackle it when in a couple of years, the debate on the renewal of the BBC's charter takes place. This would place it rightly in a broader context, that of a review of the Corporation's governance as a whole. It would give time for OFCOM to prove itself, or not. It would enable the Corporation to get over its attack of the vapours over this issue, and to approach it in a more rational frame of mind.

  I do not however conclude from this that the Bill should be silent on this issue. Rather, I would like it to give the Secretary of State powers by positive resolution of both Houses to extend OFCOM's powers over the BBC to tier three. This might take place following review by OFCOM, and the charter renewal consultation process.

  At worst, this would mean that the status quo will abide for two or three more years than would otherwise be the case. That is a price well worth paying to get right the governance of a major national institution to preserve its virtues, and mend its vices.

May 2002

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