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Lord Inglewood: My Lords, I am sure the whole House will thank the noble Lord, Lord Thomson, for finding this ingenious way to ensure that we have had this interesting and useful debate on the future of the BBC and of the World Service in particular.

I suppose it must be admitted that these matters may be a trifle beyond the scope of the particular amendments we have been considering. Indeed, I think some of them are probably beyond the Government's ability to provide answers to the questions posed. But one thing I am sure of is that the points raised will have

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been heard by those who can, should, and no doubt will, be able to provide answers. Indeed, the noble Lord, Lord Cocks, in some respects is better placed than I to be able to respond to a number of the points made. Indeed, it is a kind of paradox that probably your Lordships are better placed to tell the BBC what it should or should not do than myself standing at the Dispatch Box. Nonetheless, I welcome the opportunity to contribute to this discussion and to respond to some of the points made about a matter which I believe is quite properly of general concern not only to your Lordships, but to the country as a whole.

Before moving on to the main body of my remarks, I wish at the outset to respond to one of the questions of the noble Lord, Lord Thomson, who sought assurance that the post-privatisation overseas capacity of transmitters to go on operating would be properly protected. In that respect, nothing should change after privatisation. Indeed, the agreements for sale have been designed to provide that services will be securely available for the BBC both at home and abroad. Clearly, in a foreign country there may be a risk of a revolution, for example, which may result in a transmitter being overwhelmed by force. However, that is beyond the scope of what we are focusing on in this Bill.

I move to the main body of my comments. I begin by emphasising that the debates recently held here and in another place on the future of the BBC and the draft Charter and Agreement have focused on the constitution and obligations of the corporation. These are at the core of those documents which are the corporation's foundations. I hope I may remind your Lordships that how the corporation is organised to meet its obligations is a matter for the governors of the BBC. Indeed, paragraph 2.1 of the Agreement makes it clear that the corporation will be independent in the management of its affairs.

It is only right, of course, that governors who have the responsibilities established by the Agreement also have the authority to organise the corporation's affairs as they believe necessary in order best to meet those responsibilities. Nonetheless, the Government's legitimate concern is the BBC's performance. Our primary interest in the way it functions relates to the extent that its modus operandi affects its output. I believe that was the point that the noble and right reverend Lord, Lord Habgood, made. It is one that we very much accept.

We have sought assurances from the BBC about the general implications of the restructuring for meeting the BBC's objectives as established under the Charter and the Agreement. It seems from what I have heard of the concerns that your Lordships have expressed this afternoon--and other comments I have read in newspapers--that they appear to be based on the premise that organisational changes are bound to have an inevitably adverse effect on the quality of the BBC's services, and in particular that there will be a loss of distinctiveness in radio output and in the World Service. Of course it is right to be vigilant about such matters,

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but are we right to believe that there is inevitability about that? Does the evidence indicate that that must occur?

Certainly I do not believe that the governors would wish to pursue changes which they believed threatened the special qualities of each of the BBC's services. After all, that would be a direct breach of their obligations in paragraph 7 of the Charter. The BBC has explained that it is proposing change because in its judgment those changes will put the corporation in a stronger position so that its best qualities and attributes can be preserved and built upon in a future which is increasingly uncertain and challenging.

The Bill establishes the framework for the continuing expansion of broadcasting services and for the coming of the digital broadcasting age. Competition is increasing and will continue to increase further. The resources available to the BBC's successful competitors grow faster than licence fee funding reasonably could. In order to maintain its position as the United Kingdom's main public service broadcaster the BBC must find the money to invest in digital technology and to continue to provide the high quality programming which licence fee payers rightly expect. To do that, it must ensure that it operates as efficiently as possible so that it gives back the most it can to licence payers and to the Foreign and Commonwealth Office for the money it receives from that department.

In 1993 the BBC put in place Producer Choice as a route to increased efficiency. It divided the functions of channel controllers who commission and schedule programmes, programme production heads who make the programmes, and support services who manage the BBC's facilities. That reflects industry best practice worldwide. In the past three years that focus on efficiency has produced savings of around £100 million a year. It is that which has enabled the corporation to make more original programmes, to reduce the number of repeats, and to launch new services such as Radio 5 Live, which is the "Sony station of the year".

The present reorganisation is based on that logic and carries it forward. The Director-General has made it clear to the Foreign Affairs Select Committee of another place this afternoon that the principles of producer/supplier relations are settled. It is how they are to be implemented that is under discussion--

Baroness Williams of Crosby: My Lords, does the noble Lord accept that the comments he has just made to the House imply some lack of understanding of the World Service? Digital systems would not apply to a large part of the world and therefore the pressure for digitalisation does not meet the question about how we address the large numbers of people for whom that is a distant dream.

Lord Inglewood: My Lords, the noble Baroness is of course correct in that in the immediate future digital technology will not be directly relevant to their concerns. Simply to drop the guillotine like that does not take account of the interconnectivity of the

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corporation and the fact that it has to work as a collective whole. However, I accept the point that the noble Baroness makes.

I believe it was the noble Lord, Lord Thomson, who referred to redundancies and costs. I understand that the details have yet to be worked out. Therefore the level of redundancies, if any, cannot be explained at this point. That is a proper matter for further consultation which will, of course, take place.

Another fear that has been expressed both implicitly and expressly in the remarks this afternoon is that radio will inevitably be subordinated to television. Is that the case? Certainly in his speech to the Radio Society on Monday--to which reference has been made--Sir Christopher Bland, the chairman of the BBC, reminded his audience that similar fears had been expressed when the bi-media news and current affairs directorate was established nine years ago. But programmes like "Today" have retained their distinctiveness. At this year's Sony Awards the BBC achieved 26 out of the 33 awards that were given, and that is a record achievement.

I should like to turn specifically to the World Service. A number of views have been strongly expressed by noble Lords such as the noble Lord, Lord Chalfont, the noble and right reverend Lord, Lord Runcie, my noble friend Lord Pilkington, the noble Baroness, Lady Williams, and my noble friend Lady Park. Standing at this Dispatch Box I cannot answer their concerns directly. It is to the BBC, through your Lordships' Chamber, that the concerns are directed.

The output of the World Service is at record levels. This Government recognise the high value and quality of the World Service. Indeed, that is why we pay for it. Neither we nor, I believe, the governors of the BBC have the slightest wish to threaten the very qualities that have led to its success. After all, it is a service which reaches a record audience of at least 140 million people--more than twice the size of its nearest competitor--and provides a trusted source of objective news even in some of the darker corners of the world. It is a great ambassador and advertisement for this country; a great service to the whole world and the ideals we all share in this country and which underpin our democracy.

This Government always have been and are now a strong supporter of the World Service. After all, despite living in an era of stringency in public sector expenditure, in real terms the funding that the World Service receives has increased by 50 per cent. since 1979. Of course, we have a more direct responsibility for the objectives and funding of the World Service than for the Home Service. The Foreign and Commonwealth Office was understandably anxious when it was told of the organisational changes for the World Service. It is because of that that we sought assurances from the BBC, as my noble friend Lady Chalker confirmed in this House on 2nd July.

Assurances have been given that the quality and character of the service will not be diminished. The clear separation between the grant-in-aid funded World Service and the BBC's other activities will be

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maintained. We shall be fully consulted on the implementation of the reorganisation so that we can be confident, as we are fully entitled to be, that the World Service will go on meeting its obligations under the agreement and continue to maintain that quality which is its distinctive hallmark. I can confirm that my right honourable friend the Foreign Secretary will be meeting Sir Christopher Bland to discuss those matters.

I must emphasise that the Government insist that the unique character of the World Service output must be preserved and that the service will not be subsumed into an homogenous BBC. As the noble Lord, Lord Cocks, pointed out, it will continue to be a separate entity complete with its own managing director. It will have complete editorial independence, with absolute control over the commissioning and scheduling of programmes from inside or outside the BBC. It will retain responsibility for the production of services in 43 languages.

A dedicated World Service news team within the news directorate--I understand that the World Service news team is to remain at Bush House in the immediate future--will be able to draw on the resources of the whole organisation to provide news tailored to the World Service's specifications. The World Service and the main news operations of the BBC already work closely together. A considerable number of World Service reports come from BBC news and current affairs correspondents. The proposals will produce further economies, not least enabling the World Service to make a greater contribution to the work of the BBC as a whole than it does at present. That in turn will reduce unit costs.

As my noble friend Lady James emphasised, the World Service already has a good record for producing cost-effective programmes. Those economies and the more effective use of staff resources should further benefit the World Service and increase and improve the work it does. In addition, the World Service broadcasts material other than news, and there is considerable scope for avoiding duplication in, to give two examples, sports coverage and drama. At present there is duplication which, by definition, costs money and that is something that could be eliminated.

In short, while your Lordships are right to be cautious about changes in the way the World Service is arranged and to question critically what is happening, are we right in supposing inevitably that the fears expressed are well founded, either on the basis of the facts as they are or upon the inherent logic of what is being proposed? The BBC governors' duty is to ensure that the BBC meets the obligations laid upon it under the Charter and Agreement. They must ensure that programme standards and the distinctiveness of the BBC services are safeguarded and that the way in which the BBC is organised contributes to rather than detracts from those obligations.

I conclude with the World Service. The Chairman and the Governors of the BBC are committed by the Charter to uphold the distinctive quality and characteristics of

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the service. The Government pay for the World Service. This Government are adamant that it shall not be transmuted from gold into base metal.

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