Examination of Witnesses (Questions 600
THURSDAY 20 JUNE 2002
600. You argued very strongly, like the BBC,
that you should not be subject to tier three. Is that not true
of Channel 4 and some other public service broadcasting companies?
Will OFCOM not look way beyond that anyway and get involved and
you will end up having this argument with them?
(Mr Jones) I think there are some very particular
reasons in respect of S4C. First of all, we are the only Welsh
language television service. OFCOM's remit in respect of Channel
3 and Channel 5 clearly has to do with ensuring that the overall
public service requirements are delivered across a range of organisations
which have a number of different impulses driving their actions.
We have a simple impulse, which is to deliver a public service
in the Welsh language, and we are the only channel delivering
that. It is, of course, in a different language to the one in
which OFCOM will be concentrating its activities and, therefore,
it needs a regulatory authority which has full competence to take
account not only of the language of the service itself but the
cultural and linguistic context of the audience at which that
service is primarily directed.
601. Would it help or hinder you if there was
a representative of the Principality on the OFCOM Board?
(Ms Lewis Jones) That is a tricky one and perhaps
we can all chip in on this. One point to be made is if you look
at the broad sweep of OFCOM's powers, they are very largely to
do with competition in the wider communications industries. We
are not, alas, a dominant media player which might otherwise compete
unfairly, so a lot of the broad sweep powers where OFCOM needs
to take an overview of what is going on are actually irrelevant
to us as a broadcaster without an effective competitor at the
moment. The argument for having a presence on OFCOM for that reason
falls away. The view we take is we are the regulator under the
third tier, we are the regulator and the broadcaster. There is
another example of that with the BBC. Our concern is not so much
to be involved with OFCOM as a regulator as to ensure that OFCOM
as a regulator has an appropriate relationship with us as a fellow
regulator. I am not sure that seeking representation on OFCOM
by itself goes anywhere towards helping that given our very particular
602. Brian's question is a very legitimate one.
There has been quite a flurry of interest on our online forum
of people contacting us saying that there is insufficient representation
and there ought to be significantly more. We should make available
to you the evidence that is coming in to us.
(Ms Lewis Jones) I am sorry, I interrupted my colleague.
(Mr Jones) Could you repeat the last sentence, please?
603. All I was really saying was Brian's question
is legitimate and is of very real interest in our online forum
in that regional representation, not just Welsh but the Scots
and English regions as well. It is possibly an issue that you
could take a look at.
(Mr Howells) It seems to us that the really important
pointwhich is only partly about membershipthat the
regulatory framework should be sufficiently sensitive to reflect
regional interests, be they national regional interests or the
interests of the regions of England. The difficult question for
this Committee to examine, and for Parliament after that, is whether
that balance is struck. Our view is that the provisions overall
strike a quite good balance at the moment.
604. I was well aware before being appointed
to this illustrious body that you were crying out for more money,
particularly given the digital revolution. In your evidence you
are concerned that the legislation does not give the Secretary
of State elbow room to give you more money beyond the current
RPI formula and that we should take some opportunity to give her
that more space. Have you got any evidence at all that the Government's
wish to give you more money has been constrained by legislation?
(Mr Jones) There are two issues here. The reason we
are raising it here is that, unlike other broadcasters, the way
by which we can deliver our remit is that resources are made available
according to a formula set out in primary legislation, and therefore
primary legislation is the opportunity to look at the funding
level. The Government has made mechanisms available to other broadcasters
to incentivise paying the costs of digital transmission and the
introduction of digital services. I refer to the increase in the
BBC's licence fee and to the dividend which has been allocated
to ITV for each home becoming digital. Those monies have certainly
helped those organisations to go into digital with confidence.
If anything, the digital solution was even more important for
us because on analogue, as you will be aware, we share the channel
with Channel 4. We have dual responsibility for not only providing
Welsh language service in peak but trying to squash in all the
Channel 4 services as best we can at other times. This leads to
situations such as last Monday, when the Test Match was running
on Channel 4. We were running it, it overran, and we were forced
to make a decision between broadcasting our daily Welsh language
soap opera at 7 o'clock or the end of the Test Match. That is
a particularly acute example to illustrate why a digital channel
of our own was an opportunity to be seized. But an extended digital
service needs to be funded. We believe that the Government recognises
the strength of our case, is constrained probably by the revenues
available to the Department, but if those revenues were made available
by statute they would, presumably, have no such constraints.
605. Which did you show?
(Mr Jones) On Monday we showed the Test Match.
Chairman: Good answer!
606. Presumably for your own protection you
would like to keep this anomalous situation where money is provided
by primary statute, but you would like it to be RPI plus a bit
of elbow room. Or would you like to get rid of the protection
(Mr Jones) There are swings and roundabouts. There
is benefit to stability but that stability should also relate
to current need.
607. At the time you prepared your case for
the last broadcasting Bill so effectivelyand I watched
with total admiration the effectiveness with which it was put
overyou were making exactly these points. It was the start
of the whole digital changeover and therefore you were funded
at the time in a way that some of us thought was very generous
precisely in order to put yourself in a position to meet this
changing world. Now you want to go through the whole process all
(Mr Jones) I beg to differ. That was a point on which
our lobbying exercise failed. We sought to persuade the Government
we needed adequate resources and not to be capped at RPI, which
was the change brought in in 1996. We made the case about the
need for digital and the concession we were given was to be allowed
to exploit commercial freedoms to try and make more money. We
have done our best to do that and we have implemented efficiency
gains on our producers to such an extent that we really fear that
their ability to develop ideas and be creative for the future
is being endangered. That is why we have returned to this subject
with equal vigour this time around.
(Ms Lewis Jones) The existence of a statutory funding
formula is immensely valuable in the sense that it retains the
arm's length relationship between the channel and the funding
department. The amount paid under that formula turns out to be
inadequate in ways which we have explained. What was added on
the face of the statute to that statutory funding formula was
a one-off discretion for the Secretary of State to give us additional
funds to meet digital costs. That was a narrow area of discretion
with which we were not unhappy, but it has not yet been exercised
in our favour and that is part of the problem.
608. You were suggesting there is a bit of a
potential friction between the annual report mechanism that you
have at the moment and the machinery of statements of programme
policy, and you are keen to see that these do not duplicate or
rub up against each other. Are we not in danger of having a surfeit
of public information about what you are doing? We would not want
there to be a lack of information but what is the solution to
the problem that you identified?
(Mr Howells) We think it comes down to an issue of
clarity. We have heard earlier today about battling regulators.
There are very detailed provisions set out in the Bill with regard
to the preparation of statements of programme policy and their
publication. S4C believes that its annual report is the opportunity
to be held to account for its programme service on an annual basis
and is slightly concerned that the Bill gives the impression that
it will be the statement submitted to OFCOM which will be the
means by which this will happen in the future, given that both
are about programmes at the end of the day. Without making this
into a major issue, it seemed to us that there would be room for
clarification around that issue and that there should be no need
609. Your preference is to stick with your annual
(Mr Howells) We believe it underlines the responsibility
of the Authority for the regulation of S4C.
610. But you would then be the only broadcaster
not following this mechanism.
(Mr Howells) No, if you read the proposed amendment
to the BBC agreement, it suggests that they will publish their
statement on performance against their programme statement in
their annual report. What we want is wording along the same lines.
611. There seems to be some disagreement about
the handling of complaints. The Government is going to allow complaints
to go direct to the regulator. This is on the basis, apparently,
of discussions with broadcasters and regulators, but your evidence
is against that.
(Mr Howells) We felt that the emphasis placed on self-regulation
in the original White Paper got it right. It stressed that complaints
should go to the broadcaster in the first instance. S4C finds
it quite useful to have that feedback from its viewers. I hasten
to add that praise as well as complaints come through our viewers'
hotline. But once you provide an alternative avenue for complaints,
people will tend to choose the alternative avenue. I am not sure
it adds very much to the sum of human understanding to grant the
right to complain about a matter of taste to an independent organisation
immediately. The broadcaster loses something if it loses that
feedback from its viewers. That was the thinking behind our suggestionthat
the original policy should be reflected on the face of the Bill;
at the moment it is not.
612. I hear the rumble of tummies but can I
just ask one last question. All of us have been heavily lobbied
by Gaelic broadcasters who will not be given your opportunity
to appear directly before us although they have given us written
evidence. What lessons has S4C learned or would you urge on the
Committee about dealing with languages within the United Kingdom?
What are the benefits to the language of having a designated channel?
(Mr Jones) I have no doubt that without the existence
of the channel, and of course the parallel provision of Radio
Cymru by the BBC, that the language would be in a much more parlous
condition today. We are currently going through a period of flux
with respect to the language. But there has been a growth in the
number of young people who are speaking it and there is extensive
confidence that the language has a future. I am absolutely certain
that unless you have mass media which allows people to be creative
in modern ways in that language that the language has not got
much hope for the future. I think it is to the great credit of
the United Kingdom Government and Parliament that it can sustain
and support indigenous languages in these ways in the modern media
and it should take greater pride in so doing in the international
Chairman: Does the Bill team have any questions?
All I would say is there is no provision in the Bill for you to
be subject to foreign ownershipand I congratulate you.
Thank you very much indeed.