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Lord Pearson of Rannoch: My Lords, I support my noble friend Lady Anelay in her prayer.

I start by reminding noble Lords of a debate in your Lordships' House on 11th March 2002, at cols. 653 to 676 of the Official Report, when I accused the chairman and governors of the BBC of failing in their duty to produce political programmes which are impartial, wide ranging and fair and which reflect significant strands of British public thought. I imagine that it is common ground that those duties and the public service remit generally form an important justification for the licence fee and indeed for the BBC itself. The example that I gave your Lordships was of the BBC's biased treatment in favour of the United Kingdom's membership of the European Union, into which the noble Lords, Lord Harris of High Cross and Lord Stoddart of Swindon, and I—through the medium of our Global Britain research unit—had commissioned no fewer than six substantial independent surveys.

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I shall not repeat any of that debate now except to recall that the Minister did not accept our case or our principal complaint that those analyses had been given to the BBC's management, who naturally dismissed them, and not to the governors, whose duty it was to consider them. However, the Minister was good enough to reveal that the BBC was addressing what she called the "perception" that the BBC's governors were too close to the BBC's management to regulate it properly.

This initiative was clarified the next day, 12th March, when the BBC's chairman revealed to a major broadcasting conference that he was setting up a new governance and accountability department to provide independent advice to the governors in fulfilling their public service priorities. Of course, by setting up such a new department and by rearranging the responsibilities and reporting lines of the existing Programme Complaints Unit and the existing Governors' Programme Complaints Unit, the chairman was in effect admitting that the governors had not been able to discharge their duties satisfactorily beforehand. That is the point that I had been trying to make; otherwise, why the change?

A few days later, an internal memorandum from the chairman fell into my hands, entitled a "Summary of changes to BBC governance arrangements", which sets out the chairman's proposed changes in greater detail. I do not know if the Minister has seen it, but I shall be happy to give her a copy after the debate and to put a copy in the Library of the House in case any other noble Lord is interested to read it. Nor do I know whether the BBC governors and management have agreed it. However, even if they have, it contains one fatal flaw which means that the changes it proposes, although welcome, will not be radical enough to make the governors sufficiently independent of management to allow them to fulfil their public service remit, at least in the areas of which I and others complain, and thus to justify even the present licence fee let alone the proposed increase.

The problem is that those employed in the new department and in the existing complaint units will merely be existing staff who continue to owe their prospects to the BBC's management. They are therefore most unlikely to be adequately critical of that management although the governors and the public service remit require them to be so. No man can serve two masters, and certainly not when one of them controls his salary, career and pension.

With that problem in mind, I had the temerity to write to the chairman of the BBC and to the Secretary of State on 23rd March with the suggestion that those who work in the new department should be employed by a separate trust funded by the licence fee but with impeccable trustees who would be entirely independent of management, which the governors are not. Such an arrangement would cost little because the salaries of those who are to work in the new department are already paid by the BBC. In the same letters I also suggested that the latest of our commissioned reports into the BBC's coverage of the "European issue" should not be passed yet again by

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the chairman to the BBC's management for judgment, but to an independent arbiter. I have yet to hear from either the chairman or the Secretary of State as to what they think about those two suggestions and would be grateful to hear any views the Minister might have.

Finally, perhaps I may say a brief word about "dumbing down". I had the misfortune last week to put my back out and so decided to spend a good deal of time watching television on many of the channels which are now available and which I do not usually watch. I found it a deeply depressing experience as so much of the output seems to rely on sex and violence and so little on the nobler aspects of our existence. No doubt many of the new channels which are to become available will continue that regrettable and probably destructive trend. As far as I can see, there was as much of that stuff on the BBC as on any other channel.

If there is to be a BBC at all, and if there is to be a licence fee at all, I really cannot see why the BBC has to compete with that rubbish in the name of "ratings" or any other excuse. Surely the main point of the BBC's licence fee is precisely so that it does not have to peddle such ghastliness, so that it is free to educate and to lift our eyes and minds to higher things.

So, for once I agree with Mr Greg Dyke, the BBC's Director-General, if your Lordships will forgive me for repeating some of his language, that it is time for the BBC to "cut the crap". If it did that, it would not need anything like its present budget of some £2,500 million and would avoid becoming an expensive irrelevance. If it did that, it would also return to its former and rightful place in the affections of the British people.

8.15 p.m.

Lord Gordon of Strathblane: My Lords, apart from expressing gratitude to the noble Baroness, Lady Anelay, for raising the subject, and wishing that we had more time to debate it, as we shall in the not too distant future, I have three brief points to make. First, I endorse the comments of the noble Lord, Lord Hussey, from his vast experience at the BBC. Of the sources of finance available, the licence fee is by far the most preferable for the BBC. A grant by the Government would increase dependence on government and increase the risk of political interference. Advertising would, frankly, reduce the available income to both the BBC and ITV to a point at which neither could do the job properly. I believe that the licence fee is the best solution.

My next point is that the present level being proposed is about right. Like the noble Lord, Lord Lipsey, I was a member of the committee which considered that, so I would say that, wouldn't I? I disagree with my noble friend, as I did at the time, because the alternative was a separate digital licence fee which I felt would have inhibited the growth of digital television. I thought that it was more important to expand the number of people able to take up digital television and so have a licence fee which would be a little higher than it was. However, let us get that into

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perspective. It is a quarter of what we pay Sky. Let us analyse also the contents. People talk about 200 or 300 channels as though they were all BBC1s, BBC2s or, indeed, ITVs. At least half of those are film channels, which is convenience video broadcasting. Some of the best channels are also re-runs. UK Gold is the BBC as we wish it still was. There is not a great deal of programme origination.

The proposed licence fee is about right. I do not think that it is coming bereft of the need for reform. Some of the reforms were put forward by the Davies committee and have already been adopted. Still others are in train. When the draft Bill on communications is before us I shall continue to argue that it will be much better for the BBC and for broadcasting as a whole if, like every other public service broadcaster, the BBC were regulated by Ofcom. But that issue is for another day.

The issue I want to single out tonight is that of the digital terrestrial platform. The noble Baroness was tragically accurate in her timing for this debate, with the announcement to which she alluded about ITV Digital. I have no sympathy for football clubs that pay their players too much money, or for ITV companies that pay too much money for sporting rights. From what I have heard, I believe that the Government are entirely right to say, "That is your problem. Do not expect us to intervene". However, I am concerned about the future of the digital terrestrial platform. It is important to remember that until about 10 years ago, the BBC and the IBA, the Independent Broadcasting Authority, owned the transmitters because we felt that they were too important to be left in the hands of private individuals, even television companies. Through them co-operating with each other we achieved 99.4 per cent coverage of the UK, including parts of the country which I come from which have beautiful scenery but are an engineering nightmare from the point of view of digital transmission.

Regrettably, in the early days of digital terrestrial, the BBC was not as co-operative as it might have been in helping to build the digital terrestrial network. It is important to recognise that the BBC was allowed to keep the proceeds of the sale by privatisation of its transmission network. It is entirely appropriate, particularly in the current, dare one say, crisis, that the BBC invests that money not in programming but in the platform. It is imperative that we have a digital terrestrial platform in this country. Unless we are careful, we may not.

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