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Viscount Astor: My Lords, the report of the Select Committee, chaired by my noble friend Lord Fowler, is an impressive piece of work. His committee will go on to look at the role of the BBC with regard to the nations, the regions, the World Service and the broadcasting of religion and sport. We all look forward to its next report.

We can all agree with the remarks of the Secretary of State, Tessa Jowell, in her foreword to the Green Paper:

She could have added that that contribution has been due to successive governments' generous funding.

I start from the premise that the BBC has never been properly accountable to Parliament. It should be accountable to Parliament rather than just to the Government. We have debates in this House on the charter and the agreement every time renewal comes up. The government of the day listen carefully and then equally carefully ignore all the views expressed in this House. The Commons have a debate and a vote—not on the charter, but on a minor broadcasting order
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required to implement the agreement. Although the BBC believes in accountability in theory, in practice it prefers to get as close to government as possible, believing that that is its best chance of a good outcome for the licence fee or for charter renewal.

However, under this Government the BBC has finally seen the light and now realises that getting too close to government can be dangerous. The fallout from the Iraq war clearly demonstrated the importance of political independence. As my noble friend's Select Committee report noted:

I have always believed that the BBC should come fully, rather than partially, under Ofcom. It has much to gain and nothing to lose by being subject to proper regulation by a professional regulator, rather than relying on the whims of a particular Secretary of State. There is a view in the BBC that it is impossible to be independent unless the BBC is solely responsible to its governors. That shows a stunning lack of understanding about what happens in the real world. Public companies are subject to the Stock Exchange, fund managers to the Financial Services Authority, and there is an "of-something" for almost everything. The list is endless, but that does not make any of them less independent. The BBC should also remember that it is not the only public service broadcaster. Channel 4 and ITV also have a public service remit and are independent and accountable to Ofcom.

I want to make the BBC truly accountable to Parliament, independent of government and accountable to licence fee payers. So there is a case to be argued that the Royal Charter and agreement are outmoded and that the BBC should be set up by an Act of Parliament. Establishing the BBC by Royal Charter through the Privy Council gives ultimate power to the Government as they decide what goes into the charter and the agreement. As the Select Committee report notes, an Act of Parliament would be more democratic, independent and transparent, with all-party involvement rather than that of just one party. I issue just one caveat: an Act of Parliament should not be used to go beyond setting up the overall public service remit. Parliament would have to resist the temptation to be overprescriptive, otherwise we might find that we had encouraged censorship by the back door.

I agree with all noble Lords who spoke today that the licence fee is the best way to fund the BBC; it provides a stable and secure base. We should review the concept of the licence fee in the future but, as none of us knows how broadcasting will develop, it is pointless to speculate on that now. The fundamental reason is that none of us knows how we will receive in the future the multitude of programming out there. I am not sure now how I know what I want to watch; it comes through the ether. I might read about a programme or hear about it on the television or radio, and I am not terribly conscious whether what I want to watch is on the BBC, ITV or a satellite channel. I just tune in to or record the programme that I want to watch.
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Developments in broadcasting, whether terrestrial television, cable, satellite, Internet or telephone, have taken away the power of the schedulers and given it to us, the viewers. A recent essay on broadcasting, The Shape of Things to Come, summed up well how the future will be:

The Government have given the BBC the role of leading the introduction of digital television with the goal of analogue switch-off, which is right. I am less clear about the cost and effect on the licence fee. What is the Government's estimate of the costs of digital switchover? I am interested to know that. Does the Minister agree with the BBC's estimate of £1.2 billion for the cost of developing new digital services? We should consider the effect on other broadcasters and their viability after switch-off, particularly Channel 4. Does Channel 4 need to be given additional terrestrial digital capacity? It has a strong case. What is the Minister's estimate of the costs of developing digital services for Channel 4, Five and ITV? That is important. Ofcom has pointed out that it is important that the BBC does not become the only public service broadcaster.

I share the concerns that analogue switch-off should be funded solely by the licence fee. That requires more thought. I would like to hear from the Minister what the Government expect to make from the sale of the spectrum following its release once analogue broadcasting ceases. Is it the £1 billion or £2 billion referred to by my noble friend? What is the Government's justification of the Chancellor's proposed spectrum tax? Does this not just add to the cost of the licence fee? This is an important issue. Nearly 10 million homes do not have digital television and 2 million will need new aerials. Some households will not be able to receive terrestrial digital services and are not allowed to put up a satellite dish. What will be done to help them? What will they do? Many—pensioners, for example—will need help. Who will be responsible for seeing that they get it? Will the Minister give us an assurance that his department will take full responsibility for that policy?

The Select Committee was right to suggest that any increase in the licence fee should be assessed by the National Audit Office. Indeed, the BBC should come under the remit of the National Audit Office. In the past, the sponsoring department, DCMS, has had that role. Having been there on a previous occasion, I know that it does not have the experience, knowledge or resources to do that.

The Government's plan to have two chairmen for the BBC is totally muddled. There must be a clear separation between management and governance, but whatever the outcome the result must be simple so that it is understandable by all of us who pay the licence fee. I find those proposals not clear at all. Ofcom should
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have final responsibility for adjudicating on appeals arising from complaints, but it must be the job of the BBC to respond to all complaints in the first instance. That must be the sensible way to go forward. Ofcom's role would strengthen, not weaken, independence from the Government. It does not take away any of the BBC's responsibility for content.

If I have sounded critical of the BBC, I am not. I am a great supporter. But, as my noble friend Lord King noted, that should not prevent me or anyone else advocating change. I give one example, which is important but perhaps not the most important issue facing the BBC. The new head of BBC sport wants test cricket back on the restricted list. I find that bizarre. The BBC gave up broadcasting test cricket. It was taken on by Channel 4 and Sky, which enabled a very large sum of money to go into cricket in this country. The England and Wales Cricket Board was able to build its training centre at Loughborough. Those are the reasons why we did so well and reclaimed the Ashes—money and training. Now Channel 4 has dropped out and Sky continues. Suddenly cricket is popular and the BBC wants it back, but it is not prepared to pay the money. The English cricket board and other sporting bodies must have the freedom to decide how they want their sport to be broadcast—whether pay-to-view or free-to-air. The BBC did nothing to help English cricket and has no claim on its future.

Having said that and got that off my chest, I turn to what is really great and wonderful about the BBC. It is British broadcasting at its best—whether that is drama, news or current affairs. The World Service is renowned worldwide for its impartiality. The BBC should continue to offer the widest selection of programmes. I am glad that the concept of audience "reach" is now at least on an equal par as audience "share". The BBC develops the talent that enriches our cultural life. It is ours, and it cannot be owned by anybody else, as many noble Lords who have spoken in this debate have pointed out.

However, the arrival of digital services for television and radio and the arrival of broadband have opened up a whole new world. Content is, and will be, king; delivery mechanisms will become less important. Not only can we watch almost anything we want, but anybody else in the world can watch our television. It is not just the World Service that can be seen round the world from Timbuktu to Turkmenistan, but anybody in this country or abroad can now download a BBC news programme. One effect of this is that the BBC is now going to compete on the Internet with newspapers as well as other broadcasters. As my noble friend Lady Buscombe said, we need to consider the market impact and consider whether this remains a part of the core of the BBC or is just part of a commercial venture. The BBC's unregulated expansion of new online services has already affected commercial operators. Equally, we must ensure that the BBC has access to the broadcast platforms and to the electronic programme guides that it needs.
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The Government still have to answer a crucial question about the future regulation of the BBC: as commercial broadcasting does more and produces more content, all made available to consumers in more ways, what should the BBC do? Should it do more or less? Today, almost every time that the commercial sector produces a new service, the BBC wants to be part of that new development. Earlier this year, the director-general was quoted as saying that digital media are erasing simple distinctions such as public service and commercial boundaries. He went on to advocate a new, online music download service on the BBC. So we should ask whether, as technological and programming possibilities become virtually limitless, it is right for the BBC's ambitions to be matching them. If the answer is yes, and the Government and the BBC seem to think so, what impact will it have on the commercial sector?

At some point, it may become a brake on investment. In other areas of capital-intensive businesses—for example, telecoms or airlines—as the commercial sector has expanded to meet the needs of consumers, and as more sophisticated on-demand services have become possible, the state-funded sector has gladly accepted the need to do less. This seems to be a fundamental question that the Government have yet to address: what do they want the BBC to do, and how far do they want the BBC to go? I shall be interested in the Minister's answer.

This has been an interesting debate. There are other recommendations in the Select Committee report that I have not had time to mention. We have many notable and interesting contributions. I was amused by what I think must have been a joke by the noble Lord, Lord McNally, when he said that he did not have an axe to grind about Rupert Murdoch. I note from the smiles on the Benches behind him that that was his joke of the day. Equally, I was amused by the noble Lord, Lord Peston, who said that, after 50 years, he finally recognised that competition in broadcasting improved it and did not make it worse.

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