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Lord Macdonald of Tradeston: My Lords, the coming year will be an important one for the future of public service broadcasting and therefore for our cultural affairs in Britain. I am sure that discussions in your Lordships' House will be much better informed, given the impressive contribution made earlier by my noble friend Lord Maxton in his maiden speech. As my noble friend said, early in 2005, the Department for Culture, Media and Sport will publish a Green Paper on the renewal of the BBC charter, followed later in the year by a White Paper. I hope that what I am about to say will complement my noble friend's cogent analysis.

The BBC and its governors are discussing radical restructuring of the corporation, with thousands of jobs transferred from London to the regions of England or to the nations of Scotland, Northern Ireland or Wales. Whole departments or even channels in television and radio will be rebased, along with their staff, beyond the M25.

Meanwhile, other areas of broadcasting also are in flux, as their regulator, Ofcom, advances its ongoing review of public service broadcasting in Britain. Ofcom is issuing new digital replacement licences for the ITV regions. Ofcom also proposes to cut the amount of ITV local programming that is made about regional matters. Channel 4, which does not have a regional broadcasting opt-out, has dropped plans to merge with Channel Five, but now warns that it might be hard pressed financially to sustain its public service commitments and its programme quality by the time digital switch-over looms at the end of the decade. Ofcom seems none too alarmed by Channel 4's potential plight and proposes instead that public money might better support quality and innovation through a new public service publisher—PSP—an intriguing, but, I think, deliberately undefined option.

It is in that changing context that I wish to comment on two aspects of public service broadcasting policy and their impact on cultural affairs: first, the important role of programme production in the nations and regions of the UK; and, secondly, the opportunities offered by Ofcom's PSP proposal to enhance cultural, educational and socially purposive programming in the digital age.
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On the first issue, the BBC must play the key role, devolving UK production to the regions. This will not be easy. Encouraged by Prime Minister Ted Heath in the early 1970s, the then BBC Chairman, Lord Swann, made real progress in building production capacity in Bristol, in Manchester and at Pebble Mill studios in Birmingham. In the 1980s, the devolutionary thrust weakened at the BBC, as it did elsewhere in political affairs, but in the 1990s, John Birt, as director-general, gave more support to the regions, and Greg Dyke, taking over in 2000, recommitted to the cause of devolution.

The new team leading the BBC now, Michael Grade as chairman and Mark Thompson as director-general, seems too to be committed to radical change, including the outsourcing of more BBC programming to independent producers. Michael Grade has of course unrivalled experience across the full range of television and film production, both here in the UK, with ITV, Channel 4 and now BBC, and in America. Mark Thompson also has led Channel 4, which commissions its programming from independent producers, allowing it to function with fewer than 1,000 core staff against the 27,000 currently employed at the BBC, with most based in London.

They can see that decentralising and outsourcing make sense politically and culturally as well as being good for viewers. I trust that both men, on past form, will ensure that the BBC is sensitive and supportive to the staff whose in-house roles in London and career prospects might be at risk. The only comfort that I can offer those London-based BBC staff comes from 30 years spent in ITV before joining government, having worked for Granada in Manchester and Scottish Television in Glasgow. I know that worthwhile programmes can be made very congenially outside the metropolis.

My concern is that such worthwhile programmes will not in future be made in such quantity and quality for the UK network schedules by the ITV regions. The old ITV federation of 15 separate companies was a unique system that saw London-produced programming outweighed by peak-time drama, entertainment, comedy and factual programming produced by Granada in Manchester, Yorkshire in Leeds and Central in Birmingham and Nottingham, with notable contributions also from Norwich, Southampton and Newcastle as well as from Scotland, Ulster and Wales.

That robust regional variety must now be reduced by the inexorable consolidation of the old ITV regional network into ITV plc, largely based in London. I welcome the goal that might be agreed by ITV and Ofcom that 50 per cent of ITV's domestic network production would still be sourced outside London. That said, it is still important that the proposed BBC plan for devolution is encouraged to compensate for what will be lost at ITV. It is important that life throughout our varied regions is represented and celebrated on UK screens.

Programme production centres can employ thousands of people and stimulate local economies and local cultural life when creative talent is
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encouraged to thrive outside London, challenging, as Granada in Manchester always did, the metropolitan mindset of London-based companies.

Those aspects are particularly important in the nations of Scotland, Wales and Northern Ireland. While viewers in those three countries make up about 17 per cent of audiences and licence payers, the volume of programming they produce for UK network schedules is much lower. Indeed, I would be surprised if more than 1 or 2 per cent of peak time UK programming was made in Scotland, Ireland or Wales. Surely, that cannot be right.

There are also more onerous local obligations on broadcasters in the national areas, as we would expect. Certainly they must make more local programming than any region of England, for obvious reasons. But I encourage Ofcom and the BBC to make a special effort to ensure that peak-time network schedules in the UK become a bit more British. I urge my noble friend the Minister to suggest ways in which that might be brought about in the forthcoming DCMS Green Paper.

My second concern is for the future of public service broadcasting in education, the arts, and minority and social action programming. As I mentioned earlier, the Ofcom proposal for a public service publisher with a budget of £300 million to fund good works is left largely undefined. Is it a centre for commissioning, scattering its PSB programmes across a multitude of digital channels? Would the PSP support its own channels? Will it be used simply to plug the gaps created by commercial competition and declining revenues in the old linear schedules? Or will the PSB anticipate the convergence of broadcasting, telecoms and IT; and the advances of interactivity and of personal video recorders, video on demand, electronic archive retrieval and electronic programme guides?

That is where I sense the future lies, but the options change with bewildering rapidity. Could the PSP with its notional annual budget of £300 million—still only a proposal out for consultation, I stress—be made to add up to something more than the sum of its programme parts? Could the PSB be a coherent, future-proofed, more purposive entity, working with other interested parties, potential customers and audiences in the communities of education, of arts, of industry and the voluntary and social action organisations—allied, of course, with that dominant supplier of public service programming, the BBC?

I conclude by again inviting my noble friend the Minister to consider constructing a few paragraphs in his Green Paper which might support a more detailed exploration of the prospects for a public service publisher.

Baroness Bonham-Carter of Yarnbury: My Lords, as has been said, the gracious Speech contains no proposals for legislation directly relating to broadcasting. Nevertheless, as the noble Lord, Lord Maxton, in his excellent maiden speech, and the
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noble Lord, Lord Macdonald of Tradeston, in his equally excellent speech, have demonstrated, there are major challenges for Her Majesty's Government over the next 12 months.

In highlighting my concerns, I should declare an interest as an independent television producer. Broadcasting is changing, and changing rapidly. The advance of the digital age means that there will soon be a multi-channel landscape very different from the one we inhabit today. This will pose particular challenges to the role of public service broadcasting of which this country, as the noble Lord, Lord Maxton, said, has a unique system that is the envy of the world.

So I welcome the setting up of Ofcom and its excellent report, both phases 1 and 2, on the present and future state of public service broadcasting. Its rigorous and detailed contribution to this very important debate is, I believe, invaluable. Its warnings about the effects of the digital TV age on this area of broadcasting should be heeded. Its strong endorsement of the BBC and its assertion that the BBC should continue to be funded by the licence fee should be applauded, as well as its affirmation of the need for a not-for-profit Channel 4.

Some of Ofcom's conclusions awaken in me cause for concern, however. Like the noble Lord, Lord Macdonald, I am concerned about regional programming. ITV is to be allowed to reduce its off-peak regional output. This, it is argued, is eminently sensible because nobody watches those programmes. I am reminded of the tactics employed by British Rail when it wished to close down local railway stations. The timetable would become more and more impractical; passengers, used to catching trains to get to work, to go shopping and to pick up their children, would find that they no longer existed. And what a surprise—they would stop patronising the station, leading to its closure as unused and uneconomic. In the same way, ITV regional programmes have been shunted to graveyard slots, as well as being severely underfunded.

That brings me to another concern—that of content. There is much talk about quantity, but not enough about quality. When there were only three or four channels, there was fierce competition to make striking programmes that achieved critical acclaim and wide audiences. With the explosion in the number of channels, the pressure on broadcasters is increasingly to make money and minimise investment in unprofitable areas such as news and current affairs. It is essential that an eye is kept on quality of content.

As the noble Lord, Lord Macdonald, said, Ofcom has a big idea: the setting-up of a public service publisher, a channel devoted to public service broadcasting, created to maintain plurality. That is intriguing—indeed, thought-provoking, as the speech given by the noble Lord, Lord Macdonald, proves. But again, I have concerns. Where will the £300 million a year come from, which Ofcom suggests the channel will need? One suggestion—a tax on commercial broadcasters—seems odd, as the multiplication of channels squeezes revenues. Another, an enhanced licence fee, risks damaging the unique relationship between the BBC and the public. And where does it leave Channel 4? I am alarmed at the
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plight of Channel 4, whose nightly news is public service broadcasting at its very best. Would not the existence of a second publicly funded competitor undermine Channel 4 as the public service alternative to the BBC, pushing Channel 4 even further away from its original remit?

Finally, what of the BBC itself? As we have heard, the process of charter renewal will be a big factor in the forthcoming year—this against the background of unprecedented internal upheaval. As my colleague in another place, Don Foster, put it, the war led to regime change not only in Iraq but in the BBC. It also exposed a crucial problem in the area of governance. It cannot be right that BBC governors are both champions and regulators of the corporation. In a changing world, the BBC must change, too—and I believe that it recognises that.

In a recently published favourable independent review of its digital radio services, the BBC is described by the distinguished former TV executive, Tim Gardam, thus:

I wish I had written that. The image is taken from Walt Disney's "The Jungle Book".

The task is to ensure that that force for good is ready to meet the challenges of the future, that it learns where to place its enormous feet and to pick its way through the jungle—as I believe that elephants can—rather than stomp. As the noble Lord, Lord Maxton, said, a well run, independent and securely funded BBC has to be the cornerstone of high-quality public broadcasting in the digital age.

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