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Lord McNally: That is a very important point. People would find it extraordinary if a report by the Comptroller and Auditor General went to the DCMS committee, which, as my noble friend indicated, has some special characteristics all of its own, notably those in the field of accountancy and public spending—

Lord Lipsey: —and not of friendship towards the BBC over the years, I might also say. I am most grateful for that intervention.

My final point is that an agreement should make clear that everything is subject to charter renewal. This is a brave experiment in trying to do something better. I hope that it will evolve so that by the time of charter renewal, special provisions and so on will not be felt necessary and we will be able to proceed. I would like an assurance that primary legislation will not be required at that time to change the agreement so that we can move ahead as seems best in the light of the experiment.

If we can nail down those three points, I believe that we shall have a deal that will satisfy everyone, and, most importantly, one that will satisfy the needs of this Parliament.

Baroness Blackstone: I have listened carefully to the contributions to this debate. I understand that some Members of the Committee, such as my noble friend

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Lord Sheldon, wish to maintain the existing position, and that others, such as the noble Lord, Lord Maclennan, may still feel that full Audit Office access to the BBC is necessary. However, the Government see tremendous merit in the compromise proposal put forward by the noble Lord, Lord Sharman. Our initial reaction is that it would provide the assurances on BBC efficiency, effectiveness and economy that the promoters of these amendments are anxious to see, while preserving the BBC's editorial independence and the primacy of its audit committee.

In response to the noble Baroness, Lady Noakes, at this stage I cannot add much to what the noble Lord, Lord Sharman, set out in his letter to Edward Leigh. I am sure that she has seen a copy of the letter, but, if any Members have not, I will make sure that the letter is placed in the Library, if it is not there already.

I can give my noble friend Lord Lipsey categorical reassurance that primary legislation would not be required. It is important to make clear that what is being proposed would not preclude consideration of the case for wider National Audit Office access to the BBC in the context of the charter review. As I am sure the noble Baroness, Lady Hogg, is aware, the onus will be on the BBC to satisfy Parliament and licence fee payers that the proposed new arrangements have in practice ensured value-for-money and transparency in the BBC's management of its finances.

I conclude by reiterating the Government's willingness to take away the proposal, to study it, and to report back to noble Lords as quickly as possible. In the light of that, I very much hope that the noble Baroness, Lady Buscombe, will feel able to withdraw her amendment.

Baroness Buscombe: I thank the Minister for her response to the amendments. I also thank the noble Lord, Lord Lipsey, for his support of Amendment No. 151. I am grateful to my noble friend Lady Hogg, who has been extremely helpful to us in our attempt to develop—I do not want to call it a compromise—what I think is best described as a way forward. It is clear that those who do not want change are now very much in the minority, certainly in another place. I think that I can be absolutely sure when I say that, if we did not move forward, our honourable friends in another place would not let the matter rest.

The contribution of the noble Lord, Lord Maclennan, was extraordinarily helpful. The noble Lord referred to a tax that continued to be made on the BBC. I agree with the noble Lord that that is one of the key differences between the situation now and the world of the BBC to which the noble Lord, Lord Sheldon, refers, in 1982 and 1983, when we probably still had the home service. Much has changed, including the make-up and organisation of the BBC. That is no bad thing. But there is no question that there is a strong consensus in all parts of the Committee to support the BBC by trying to break down and deflect those attacks through proper scrutiny. I am very grateful to my noble friend Lady Noakes, who also has

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experience through her work with the National Audit Office, and has given us a practical perspective in assisting us in this somewhat delicate matter.

Members of the Committee may have noticed that I did not mention in my opening remarks the possible compromise suggested by the noble Lord, Lord Sharman. The suggestion that the noble Lord has made thus far is certainly an important step in the right direction. But I must make clear here and now that, in our view, the proposal does not go far enough.

I do not wish to delay Members of the Committee by repeating the contents of the letter to which reference has been made. The Minister has helpfully said that she will make a copy of it available in the Library of the House for all to see. However, one of the concerns of Her Majesty's Opposition is the suggestion that in order to discharge the responsibility the audit committee should, on the basis of a dialogue with the Comptroller and Auditor General, contract with him, or another agency if more suited, to carry out a programme of reviews over a period of years. The contracting party would then report to the audit committee. We believe that that contracting party should be the National Audit Office. However, that is not to say that there need not be other value-for-money reviews that the BBC may wish to carry out concurrently.

The noble Lord, Lord Lipsey, made it clear that consultation will take place. It would make sense, therefore, to have strong consultation between the BBC and the Comptroller and Auditor General as to the matters that should perhaps be reviewed. However, we believe—as, we believe, does the Comptroller and Auditor General—that the final veto as regards the subject for review should rest with the C&AG. That is fundamental; otherwise, the Comptroller and Auditor General would merely be acting as an extension of the executive management of the BBC. His position must be maintained as being entirely independent—an independent auditor.

The noble Baroness, Lady Jay, quite rightly followed on from the quote that I gave from Mr Gavyn Davies with regard to making it clear that the BBC is a creative, risk-taking organisation. I know that one of the concerns of the governors—one that I entirely accept—is that those who would be involved in auditing the BBC on behalf of the NAO should have the right kind of expertise: they should be the right people with the relevant experience to carry out such reviews; otherwise, it would make a nonsense of the job at hand. I believe that the Comptroller and Auditor General will accept that concern, given the fact that, as I understand it, he takes such considerations into account in terms of other reviews that are undertaken by the NAO.

It is worth noting that the NAO is charged with reviewing organisations responsible collectively for 400 billion of expenditure each year. Therefore, in practice, we are probably talking about one value-for-money audit each year. There need be no involvement—nor, in our view, should there be—by or

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with the Department for Culture, Media and Sport. That is a matter for clarification between now and the Report stage.

The remarks made by the noble Lord, Lord Lipsey, with regard to the accounting officer were most helpful. I give way.

Lord Sheldon: I am obliged. The noble Baroness has mentioned "one value-for-money audit" a year. But there is hardly one government department, or any body, audited by the NAO that has to succumb to audits of that frequency.

Baroness Buscombe: I hear what the noble Lord says. Perhaps I exaggerate; perhaps it would be fewer than one review each year.

Lord Sheldon: I find that absurd.

Baroness Buscombe: It seems that the noble Lord has misunderstood why we are asking for this amendment. We are seeking to protect the interests of the BBC. Whether it is one review a year, or one every five years, a most important principle is at stake: we are talking about 2.5 billion of taxpayers' money. It would be a helpful exercise for all Members of the Committee to read in the Official Report the contribution made earlier by the noble Lord, Lord, Maclennan, in which he made that point most eloquently. That is why we are debating these amendments.

We are most grateful to the Minister for what we see as a move in the right direction with regard to our wishes, as set out in our amendments. We very much hope that we can reach an agreement between now and the Report stage. If we cannot do so, I am certain that my colleagues in another place will not let this matter rest. It would be a great achievement on the part of all noble Lords if we could achieve such an agreement in this Chamber. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 151 to 153D not moved.]

Clause 196 agreed to.

Schedule 9 agreed to.

Clauses 197 and 198 agreed to.

1.30 p.m.

Clause 199 [Borrowing limit for C4C]:

Lord Evans of Temple Guiting moved Amendment No. 154:

    Page 177, line 20, after "may" insert "by order".

The noble Lord said: The amendments now before the Committee are all drafting amendments. Clause 199 gives power to set a borrowing limit for the Channel 4 Corporation (C4C). Although the intention is fairly clear from the remainder of the clause, subsection (1) does not expressly state that the power

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is exercisable by order. Amendment No. 155 simply puts the matter beyond doubt by adding the words "by order" to subsection (1) of the clause.

I should add at this point that C4C has been fully consulted in determining the limit of its borrowing, which will be 200 million. That limit is well above C4C's existing level of borrowing.

Amendments Nos. 155 and 156 relate to Clause 202, which gives the Welsh Authority powers to provide certain additional services including, among other things, television programme services. Any additional television programme services must be approved by the Secretary of State and must comply with the other conditions set out in the clause. These include the condition at subsection (4) that any new services must broaden the range of such,

    "services available for reception by members of the public in Wales".

However, subsection (4) of Clause 202 twice inadvertently uses the expression "television broadcasting service", which is out of step with the reference to "television programme services" throughout the rest of the clause, and Clause 201. This mismatch could make the limitation less effective than we intend. The two amendments proposed would substitute the word "programme" for "broadcasting" in each place where it is used in subsection (4), thus aligning this subsection with the remaining provisions in Clauses 201 and 202. I beg to move.

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