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Lord McIntosh of Haringey: My Lords, I certainly agree that this amendment amends very reasonably the one moved in Committee and that it avoids some of the difficulties which arose from that amendment. The paradox is that this is about the commissioning of independent radio productions, and despite the fears of noble Lords, which lead them to wish to impose terms of trade or for Ofcom to oversee terms of trade between independent radio producers and the BBC, the BBC is virtually the only commissioner of independent radio productions. That does not mean that it is a monopsonist; rather it is an oligopsonist in the sense that there are many bodies within the BBC that commission radio productions.

However, they are bound together by a commissioning code of practice for independent producers which is produced by BBC network radio, and of which I have a copy. I would like to send a copy of this very extensive code to the noble Baroness. It goes far beyond the issue of quotas and into the detail of the commercial relationship between independent radio producers and the BBC. I have scanned it rapidly, and it seems a very fair portrayal of a good commercial, intellectual and creative relationship between the BBC and its suppliers.

I do not know whether I can persuade BBC network radio to guarantee that this will continue, as the noble Lord, Lord Alli, suggested. However, the code has been agreed with the Office of Fair Trading; it has been in operation for the past six years; it has recently been updated to extend to all BBC radio services; and I have no reason to believe that the BBC intends to depart from it. With the combination of the BBC's code of conduct and the arguments that UK and EU competition law apply to the BBC as to other broadcasting organisations, and that Ofcom will have the power to apply UK competition law to broadcasting and related activities if the BBC acts anti-competitively, I hope that the amendment will not be pressed.

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7.15 p.m.

Viscount Astor: My Lords, I am grateful for the Minister's response and for the support of the noble Lord, Lord Alli.

The Minister has gone some way to satisfy my concern. There is a code which governs the terms of trade between independent television producers, and its advantage is that if an independent television producer feels for some reason that they have been done down or have not had an opportunity to do what they like, they can read the code and appeal through it. The BBC has kept that, and it works well.

In Committee, the noble Baroness, Lady Blackstone, said as a response to the code governing the terms of trade with independent television producers:


    "The code was developed in response to concerns raised by the Joint Scrutiny Committee and the ITC in its programme supply review report. We are not persuaded that there is a case for applying a similar requirement, and one which applies only to the BBC in the radio context".—[Official Report, 22/5/03; col.957.]

It would be helpful if the Minister could explain the difference. Is he saying that there is a code? Previously, he said that the code did not apply.

I hope the Minister will consider this issue. If he cannot answer me now about the difference between the two replies, I would be happy to discuss this between now and Third Reading to come to a satisfactory conclusion.

Lord McIntosh of Haringey: My Lords, my door is always open.

Viscount Astor: My Lords, I am grateful to the Minister, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Buscombe moved Amendment No. 108:


    After Clause 195, insert the following new clause—


"INVESTIGATION OF THE BBC BY THE NATIONAL AUDIT OFFICE
In Part 2 of Schedule 4 to the National Audit Act 1983 (c. 44) (nationalised industries and other public authorities) "the British Broadcasting Corporation" is omitted."

The noble Baroness said: My Lords, with this I shall speak to Amendment No. 111. We reach now the important issue of the National Audit Office.

I believe that we have come a long way since Second Reading when I set out a case, supported by other noble Lords, for the need to enable the Comptroller and Auditor-General to have full value-for-money access rights to the BBC, thus opening it up to the same scrutiny on Parliament's behalf as all other bodies that are funded by tax. On Second Reading and in Committee I made the point that there is total consensus on the issue among members of the Commons Public Accounts Committee. In our view, this scrutiny would not impinge in any way on the editorial independence of the BBC but would give some measure of accountability and transparency. We believe that what we seek is in the best interests of the BBC.

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I am pleased to report that I believe that we have now reached a happy agreement. We have moved on from the debate in Committee which addressed what we referred to as the Sharman compromise. Sadly, the noble Lord, Lord Sharman, has had to leave. I had wished to pay tribute to the noble Lord for his assistance in bringing together the Government, the BBC and the National Audit Office through his suggested arrangement. In Committee I stated that I was uncomfortable with some aspects of the noble Lord's proposal. It did not go quite far enough and lacked some clarity and certainty, in particular with regard to the important imperative if agreement were to be reached that any review carried out by the National Audit Office should be laid before Parliament and then reviewed by the Public Accounts Committee.

Since that debate, I have been in discussion with the Comptroller and Auditor-General and the Minister. I am grateful to the Minister for those discussions. I have also been in discussion with my honourable friend in another place, Mr Edward Leigh, chairman of the Public Accounts Committee, and the BBC through my noble friend Lady Hogg, who is a very able governor of the BBC. I am extremely pleased to be able to say that I believe that an agreement has been reached. The Minister wrote a letter to me on 19th June—it was placed in the Library—entitled, Ensuring the efficiency, effectiveness and economy of the BBC's operations. I do not intend to repeat it verbatim. However, one or two aspects worried me and the Shadow Secretary of State, my honourable friend in another place, John Whittingdale, MP. We have talked to the Comptroller and Auditor-General and others involved in the agreement and we are now comfortable with withdrawing the amendment tabled. We would have liked the Government to have accepted the amendments. However, we appreciate that we have come a long way and that the BBC has been extremely helpful, as has the Comptroller and Auditor-General, in reaching this consensus.

I have given prior notice to the Minister that I wish to seek his assurance on a matter. I know that it is difficult because the Minister is not the governors of the BBC so, in a sense, I am making these points for the benefit of Hansard and for the benefit of all beyond your Lordships' House so that they can understand where we are. I wish to seek his assurance that the governors of the BBC understand the unspoken framework within which the agreement is intended to work. We seek to achieve greater accountability and greater transparency. The expectation of your Lordships' House is, we believe, set upon the agreement facilitating a number of reviews and the National Audit Office would be conducting some of those.

We want assurance, which I believe is reasonable, that the audit committee of the BBC is committed to holding dialogue with the Comptroller and Auditor General. We also want to ensure that the audit committee will be both committed and supportive of providing the Comptroller and Auditor General with sufficient access to the BBC to enable the Comptroller and Auditor General to do a good job and to have the requisite understanding of the BBC's business. That is extremely important. The audit committee of the BBC

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will decide which programme of review it wishes to undertake, in consultation with the Comptroller and Auditor General, but that would be in the expectation that some of those reviews would be carried out by the Comptroller and Auditor General. So I am saying that the audit committee will decide which reviews it undertakes, but it is expected that some of those reviews will be carried out by the Comptroller and Auditor General.

Once reports are produced by the Comptroller and Auditor General, they will be laid, in their entirety, in a timely manner, before Parliament. The publication of the BBC's annual report will act as a backstop date, we suggest, when the Comptroller and Auditor General will lay the reports before Parliament, before the House of Commons. Then it will be open to Parliament to decide how to review those reports and how they will be taken, discussed and considered within the House of Commons.

It is reasonable to suggest and to encourage the Comptroller and Auditor General to report on behalf of the National Audit Office within, I suggest, a period of two years from now, to Parliament to inform Parliament as to how the arrangement is proceeding. I believe that it is accepted by all those party to this three-way agreement between the BBC, the National Audit Office and the Government, that this will be a trial process. It is important that we accept that the parties, in particular the National Audit Office and the Comptroller and Auditor General, should be left to pursue that arrangement. Of course, on Her Majesty's Opposition Benches we see it as a process that will continue pending charter renewal. We are extremely grateful to all the parties concerned.


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