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Lord Lipsey: My Lords, I first declare an interest as I chair a government consultancy of which the chairman of the BBC is the major shareholder. I hasten to add that what I say are in no way his views.

Like the noble Viscount, Lord Falkland, I have some sympathy with the amendment, but I do not support it. The position expressed by the former Secretary of State in another place may have been misunderstood. In the context in which the noble Baroness, Lady Anelay, mentioned him, it sounded as if he had come out as a supporter of full Ofcom regulation of the BBC. But that is not what I understand from his words which I read carefully. He wants a back-stop role for Ofcom in relation to regulation of the BBC, and I have much sympathy with that position.

Whatever view one takes of the ultimate correct responsibility of Ofcom, relative to the BBC, we are a long way short of the time when we need to make up our minds. I have sat through the debates on this Bill and note that the understanding in this House of the exact position of the BBC under the Government's proposals has moved forward greatly. When we debated the proposals with the noble Lord, Lord Gordon, back in February, there was a feeling that Ofcom should have no role relative to the BBC. I even thought that myself for a while until I was put right by reading the document produced by the noble Baroness's department.

We have moved forward in understanding, but not far enough in analysis. I take the point made by the noble Lord, Lord Thomson, that when dealing with an institution of such importance and with such a world-wide reputation one does not want to rush changes through without careful thought.

I believe that the right way forward is to continue to debate the matter. It should not be referred to in this Bill. The big Ofcom Bill—as one might call it—should enable the Government to take power to alter the role of Ofcom relative to the BBC, but it need not specify what those powers should be. In the meantime, the BBC should bring forward proposals, in particular proposals that will strengthen the independence of the governors. The way in which the governors are served by employees of the BBC who may go on to other roles within the BBC is problematic. That was the conclusion of the Davies panel on the future of the BBC licensing fee, of which I was proud to be a member.

Debates on the BBC's proposals and the final Bill with full powers should be followed by discussions on charter renewal, which is when we shall have the true debate on whether to move further towards ensuring the accountability of the BBC. That debate must take

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place and the matter must be resolved. If it means that there is a consensus in favour of full Ofcom regulation, that will be perfectly all right. But I stress that when dealing with an institution of such importance, we must not rush it. We must get it right, and the procedure that I have suggested would be a way of getting it right.

Lord Dubs: My Lords, first, I declare an interest as I am chairman of the Broadcasting Standards Commission. I have enormous respect for the BBC as an institution. It has done a tremendous job and has set an example to the rest of the world as to what broadcasting should be.

Having said that, I sympathise with the thrust of the amendments. I should not have spoken had we not been taken into a debate that will be more appropriate when we come to the full Ofcom Bill. We are merely testing the water rather than, I hope, pushing it all the way.

It is important that Ofcom is open and transparent so that everyone can see what the decisions are. Some will be commercially confidential but others should be open and transparent. I fear that the history of the BBC shows that the governors have not been open and transparent. I have certainly never known what goes on. I have friends who are governors who have hinted at what happens occasionally, but there is no openness or transparency. That is because of the conflict of the role of BBC governors. They seem to act partly as non-executive directors with responsibility for the good management of the BBC—if I am wrong, I am sure that I shall be interrupted—and, on the other hand, they are supposed to protect the interests of the public on the issues that we have been discussing. I do not believe that the same group of people can do both. It is unreasonable to expect that they could. That is why I am surprised that the Liberal Democrats have not said that the full Bill should provide for the BBC to be totally under Ofcom.

Perhaps I may say a word about public service broadcasting, without going through the tortuous process of trying to define it. Wherever there is intervention in a free market, as with ITV, Channel 4, Channel 5 and so on, one seeks to impose certain standards which represent public service broadcasting. It is not only the BBC that does it. The BBC has done it for longer and may believe that it does a little more of it, but we have accepted the concept of public service broadcasting and the use of the regulatory system to intervene in what would otherwise be a free market. It is, surely, that which makes clear that this is not just for the BBC but goes across the board. That is why there is an argument that similar standards should be applied. I happily give way to the noble Lord.

Lord Thomson of Monifieth: My Lords, I am obliged to the noble Lord, but he tempts me. Has he never sat in front of a television screen with his zapper and looked at the variety of channels that can be viewed on cable or satellite? Some channels are publicly regulated but not even by the greatest act of imagination can

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they be called public service broadcasting. The BBC is still the fount of standards in that regard, and I believe that we should be rather careful about that.

Lord Dubs: My Lords, the BBC produces world-class programmes and represents the best in the concept of public service broadcasting. But if some day the noble Lord cares to join me in front of a television set I can show him material broadcast by the BBC which is absolute rubbish and is as bad as anything that can be seen anywhere. This is not a matter of my own prejudices. The chairman of the BBC spoke to some of us a few weeks ago and said that the BBC was not just for the likes of politicians who view life in a certain way. Many people in this country are also entitled to high standards and to view programmes which are different from those that we would choose. We are a bit skewed in that we watch "Newsnight", listen to Radio 4 and so on. That does not necessarily mean that we represent overall public taste. I am sure the noble Lord agrees that there are times when the BBC produces rubbish. I shall be content to discuss that with him later and reach agreement on it.

That is a digression from where we should be at the moment. All I say is that public service broadcasting as a concept goes across the board at least to all the terrestrial channels, if not further; it is not simply the prerogative of the BBC. Unfortunately, if the governors have the sole regulatory responsibilities for those aspects that do not fall under Ofcom, that will also lead to the BBC becoming involved in arguments with the Government. In the end, it is likely that for the BBC the Secretary of State may be the regulator of last resort. That is not a happy position for the BBC to be in. I hope that in arguing for the independence of the BBC—a view that we all share—when the day comes I can persuade the noble Lord that it may be right to move amendments to the main Bill to bring the BBC fully under Ofcom.

Baroness Blackstone: My Lords, in responding to the debate I shall not comment on the technical effects of the individual amendments in this group which have been clearly set out by the noble Baroness, Lady Anelay. I do not believe that the amendments relating to the BBC and Ofcom tabled at Committee stage were significantly different from those tabled today. I explained then that although I understood the reasons for debating the relationship between the BBC and Ofcom this was not the right time for such debate, as the noble Viscount, Lord Falkland, rightly said. Other noble Lords have conceded that point, including the noble Baroness herself.

The communications Bill will provide a very much more appropriate opportunity to debate fully the exact relationship. The paving Bill is there to set up Ofcom and its initial functions—no more and no less—but it will allow Ofcom and the BBC to make preparations to implement the new regulatory regime, whatever Parliament may decide. I should reinforce the point made by the noble Viscount that there is nothing here to prevent the BBC from making the preparations that it needs to make for the new regime.

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I do not want to be drawn into an extensive debate about the BBC; for example, about the quality of its programmes in public service broadcasting. I do not rise to the bait dangled by my noble friend Lord Dubs, except to say that I accept entirely that Ofcom should be open and transparent in how it operates.

The noble Lord, Lord Crickhowell, referred to the commercial activities of the BBC in which it has been involved for many years. That was so when I was chairman of the General Advisory Council a long time ago. As I said in Committee, the BBC will continue to be subject to economic regulation in future, principally by Ofcom instead of by the OFT. Like other broadcasters, it will be subject to the normal competition rules. That is a matter on which the noble Lord, Lord Thomson of Monifieth, touched. The commercial broadcasting of the BBC is already fully regulated by the Independent Television Commission.

In Committee I set out in detail the relationship as envisaged by the Government between the BBC and Ofcom. That was outlined in the White Paper. There will be a new three-tier structure of regulation which will generally be deregulatory and will apply to all broadcasters. The BBC will be subject largely to the same degree of standard-setting and monitoring as all other public service broadcasters for each of the three tiers regulated by Ofcom. The third tier is about the content of broadcasting. The aim is to give other public service broadcasters a freedom similar to that already enjoyed by the BBC.

I shall not respond to the point raised by the noble Lord, Lord Pilkington. My noble friend Lord McIntosh of Haringey will deal with that in responding to the debate on the next amendment. As stated in the White Paper, equally the BBC governors must demonstrate that they are regulating the BBC effectively. Although the governors have a regulatory role in relation to the BBC, I do not agree that this means that they must be mentioned in the Bill. I must disappoint my noble friend Lord Gordon of Strathblane. I do not believe that it would be appropriate to accept his amendment for the reasons given by my noble friend Lord Lipsey. Let us suppose for a moment that the BBC was fully subject to regulation by Ofcom. What would that imply by way of preparing for transferring powers and staff? The existing regulators will need to transfer every piece of their property to Ofcom. However, that does not apply to the BBC.

The BBC is a broadcaster and the governors act only as regulators for the BBC alone. Unlike regulators such as the ITC, the BBC's functions will not all be subsumed into Ofcom. Almost all the things that it does now will continue. The BBC will still need a board and staff to service it. There would be no property to transfer because the board would still need a room in which to meet. Most importantly, the BBC would also still need staff to deal with such matters as complaints.

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Clearly, it would be unacceptable for the BBC to abrogate entirely responsibility for considering matters such as complaints.

It is difficult to see what can be transferred to Ofcom other than the regulatory powers themselves, which I believe all noble Lords agree—my noble friend Lord Lipsey put it very well—are not for debate at this time in relation to this Bill. We are jumping the gun in attempting to consider those questions.

Ofcom has the power to prepare for the transfer of powers. The power of the BBC to co-operate with Ofcom is sufficient for what is proposed but, as I explained previously, it is our intention to bring forward draft amendments to the agreement between the Secretary of State and the BBC when the main Bill is published. At that point, plenty of time will be made available for noble Lords to consider all those issues.

Finally, perhaps I may say to the noble Baroness, Lady Anelay, that the Government do have confidence in Ofcom. This legislation is being brought forward so that we can get on with the job of setting up the organisation and working with the existing regulators. In the light of those words, I hope very much that the noble Baroness will agree to withdraw her amendment.

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