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Lord Thomson of Monifieth: My Lords, so far as the broadcasting aspects of the Bill are concerned, we have to make a judgment about how best to preserve the essential character and quality of public service broadcasting in this country. I am bound to say that I continue with the belief that it is a safeguard of that unique feature of British achievement that one should have two regulatory centres. There is something to be said for having Ofcom regulating more directly the commercially funded sector, while continuing regulatory arrangements with the BBC.
I disagree with the noble Lord, Lord Gordon of Strathblane, in believing that there is such a great difference between the two methods of regulating the quality and character of public service broadcasting. It is true that the BBC has a problem with its board of governors being close and proud about their programme-makers. Therefore, there is a closeness between governors and management. I am glad to see that the BBC is taking steps to produce more of an arm's-length relationship there, which is important.
I am bound to say that equally, in the days when I was chairman of the Independent Broadcasting Authority, I was sometimes accused of being rather proud of the unique British achievements—as unique as the BBC—of having a commercially funded public service broadcasting system. I was sometimes accused
of what I think was called, in the jargon, regulatory capture. There are problems for regulators in such situations, and the distinction between the BBC regulatory arrangements and those of Ofcom is not so vast. There is public advantage in having, in a sense, a bit of constructive tension between them.From a purely pragmatic point of view, I shall repeat what I said in Committee and what others have said today: there is much to be said for letting Ofcom settle in, and for us to look at the future of the BBC when the charter comes up for renewal. I think that it was Mark Twain who once mentioned that the most difficult thing about prophecy was to prophesy the future. I do not feel so sure that, when that happens, we shall all end up with a great single regulator of all such matters in this country. I rather suspect that, in one way or another, the duality of broadcasting regulation trying to preserve quality and character in public service broadcasting will be maintained at that stage.
Lord McIntosh of Haringey: My Lords, this debate, which began with a clash between my noble friends Lord Gordon and Lord Sheldon, seems to have settled into a degree of consensus. I find that rather encouraging.
First, perhaps I may introduce—I nearly said "very briefly" again; when I hear those words I reach for my stop-watch. That is a warning to anyone who wants to use the phrase in future.
Amendment No. 101, coupled with a new definition of the BBC Charter and agreement in Amendment No. 219, enables the BBC charter to be capable of conferring functions on Ofcom to the same extent as the BBC agreement. The remaining amendments are consequential and ensure that the policy is applied consistently throughout the Bill. These amendments respond to an Opposition amendment moved in Committee by the noble Baronesses, Lady Buscombe and Lady Wilcox, which was accepted in principle by my noble friend Lady Blackstone.
I have listened carefully to the arguments put forward by the Opposition on this issue, and we felt able to accept the principle that it would be right to keep open the possibility of Ofcom's regulatory functions in respect of the BBC, other than those contained in the Bill, being placed in the BBC Charter and not solely in the BBC agreement as the Bill currently provides.
Before leaving this point, let me reassure the noble Lord, Lord Crickhowell, and the noble Baroness, Lady Buscombe, that, as we come up to consideration of the BBC charter, there will be full consultation and a full opportunity for parliamentary debate. I cannot be so encouraging about the BBC agreement. For some reason that I have never understood but which goes back a very long way, approval of the BBC
agreement is after debate in the House of Commons and not in this House. Anyone who wants to explore that is welcome to do so.
Viscount Astor: My Lords, I may be able to help the Minister. It is because there is an element in the agreement relating to wireless which necessarily requires a Motion to be passed in another place.
Lord McIntosh of Haringey: My Lords, it sounds like a Ways and Means Motion or something of that kind. I am glad to have that explanation.
I turn now to the other amendments in the group. Amendment No. 100 in the name of my noble friend Lord Gordon replaces the general facilitative function for Ofcom to be given functions by the BBC agreement with a list of specific powers relating to statements of programme policy and others. I seem to have a page missing from my briefing; I may have to return to Amendment No. 100 when I have a fuller speaking note—no, I am being handed the notes; now I have three of them. This is overkill.
Trying to set out Ofcom's relationship with the BBC in the Bill rather than in the agreement conflicts with our basic approach to the BBC. I think that our basic approach has received a good deal of assent during the course of this debate. The Government's aim is for the BBC to be regulated by Ofcom on a basis that takes account of the corporation's distinctive role and constitution, particularly its special relationship with Parliament. The BBC's obligations are to be set out primarily in its agreement with the Secretary of State rather than in the Bill in order to maintain the BBC's accountability to Parliament. Here, it is clear that I part company from my noble friend Lord Gordon, who seems to think that the opposite is the case.
Amendment No. 112 would give Ofcom responsibility for monitoring compliance with any guidelines published by the BBC for BBC companies undertaking any commercial activities in the United Kingdom. This would only be in relation to the making, acquisition or selling of programmes. This would effectively give Ofcom the function of enforcing aspects of the BBC's fair trading commitment. UK and European competition law applies to the BBC as it does to any other broadcasting organisation. Ofcom will have powers to apply UK competition law to broadcasting and related activities if the BBC acts anti-competitively.
I turn now to the amendment of the noble Lord, Lord Sheldon. I will start with Amendment No. 104A, which removes the express power for the BBC agreement to provide for penalties to be imposed on the BBC for breaches of the agreement or the Bill. It was the Joint Scrutiny Committee, as we have been reminded, which came down in favour of giving Ofcom the power to fine the BBC, and the Government accepted the committee's view.
It is true that a fine can reduce funding for programmes and penalise the licence fee payer. Equally, it can be argued, as the Joint Scrutiny Committee did, that a fine imposed on a commercial
broadcaster will ultimately work to the disadvantage of viewers or listeners. The important part is for the BBC to ensure that it does not incur fines. There is no reason to exclude the BBC from the fining procedure.The ability to fine the BBC ensures that it is treated in the same way as other broadcasters, and this completes the level playing field between the BBC and other public service broadcasters. Ofcom must be able to impose sanctions as the ultimate deterrent to the BBC's breaching its obligations. The Government recognised that the issue of fines was not straightforward, and they specifically invited comments on this issue during the draft Bill consultation. On balance, given the principle of parity of treatment between the BBC and other broadcasters, whenever appropriate we think that it is right that Ofcom should be able to fine the BBC.
Amendment No. 112 would give Ofcom responsibility for monitoring compliance with any guidelines published by the BBC for BBC companies undertaking any commercial activities in the UK. This would only be in relation to the making, acquisition or selling of programmes. This would effectively give Ofcom the function of enforcing the BBC's fair trading commitment. UK and EU competition law applies to the BBC as it does to other broadcasting organisations. As I said, Ofcom will have powers to apply UK competition law to broadcasting and related activities if the BBC acts anti-competitively.
I was asked about Ofcom's competition powers; they are strong competition powers. The powers of investigation in terms of their concurrent powers are the same for the BBC as they are for other broadcasters. The BBC Fair Trading Commitment and Commercial Policy Guidelines are published internal documents—such as those used by many large companies—which go over and above the requirements of competition law. They have been drawn up by the BBC governors and are enforced by them.
The guidelines are designed to ensure that the BBC complies with competition law in carrying out its activities, and that all those activities are consistent with, and supportive of, the BBC's core purpose as a public service broadcaster. The guidelines underpin compliance with the law, but are not a substitute for it. The BBC's fair trading framework is also subject to annual audit by independent auditors, and their opinion is published in the BBC's annual report and accounts. It seems right and proper that the enforcement of these guidelines should continue to be a matter primarily for the BBC's board of governors rather than for an external regulator.
7 p.m.
Lord Lipsey: My Lords, I am grateful for what the Minister said and has confirmed about Ofcom's powers. In view of the great concern out there in the real world about whether the BBC is following its internal guidelines and in view of the fact that the Whish Report looked at the actual rules and said that they were right, would the Minister consider asking Professor Whish to follow up his report by looking at how the guidelines are applied in practice, or some
other method of achieving the same objective? That might help to get us out of the difficulty in which we find ourselves.
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