Select Committee on BBC Charter Review Minutes of Evidence


Examination of Witnesses (Questions 1100 - 1119)

TUESDAY 28 JUNE 2005

MRS THERESA MAY

  Q1100  Baroness Gibson of Market Rasen: You have mentioned regulation once or twice. Perhaps you would like to expand a little bit more on what you were just saying about the BBC Trust, and if you are not keen on a BBC Trust how would you go ahead and what would your proposals be?

  Mrs May: I am afraid, looking at the proposals for the BBC Trust, it seems to me almost just to be the BBC Governors in a different building. I really cannot see the distinctiveness about the BBC Trust as it is being proposed by Government. I was particularly concerned in the Green Paper, when Government was looking through a variety of proposals that could be looked at for this, to see a reference that they made, page 70, paragraph 519: "The effective oversight of the BBC at the highest level requires an understanding of and ability to influence the culture of the organisation". Yes, there needs to be an ability if change is to be made to influence the culture; but I am really not sure that the oversight at the highest level needs to understand the culture; because it may very well be the culture does need to be changed and being too close to that culture I think is a recipe for not making the change that may be necessary. I prefer to see an independent body and my own preference would be for a Public Services Broadcasting Commission—as indeed was proposed by the independent panel. Although I know there are those who feel that Ofcom may be a suitable body to take this role on-board, I think we need something that is clearly separate from the BBC; that is important in restoring trust so that people can feel if a complaint is made that it is not being investigated by the BBC themselves.

  Q1101  Lord Maxton: Given you have said that not all the BBC does is public service broadcasting—it is public broadcasting, it is providing programmes for people—would you suggest that your Public Service Broadcasting Commission would only cover those programmes which are public service, or would it cover all BBC programmes?

  Mrs May: It would cover the generality of programming by the BBC. I would also like it to be looking at some of the issues around the sort of commercial services the BBC would be providing as well to ensure that those are services that would be appropriate for the BBC; but once a decision is taken not then regulating the input of those commercial services.

  Q1102  Lord Maxton: Would it be a content regulator as well, or would it just be on the "who does what" if you like in the broadcasting field?

  Mrs May: I think it needs to be a body that can look at content as well to ensure that the BBC is meeting its remit. I see it as a body whose task essentially would be to ensure that the BBC, and any other body that was providing some element of Public Service Broadcasting, was clearly delivering against their remit as to what Public Service Broadcasting should be: so delivering on the impartiality, the integrity and the high quality and standards of the sort of programmes they were putting out.

  Q1103  Baroness Howe of Idlicote: Before we come on to my question particularly about content, I think the Green Paper, and indeed anything that Ofcom has said and done, is pretty light on regulation, and particularly as far as content is concerned. Does this concern you, not least because the whole relationship with the licence fee payer and, indeed, the BBC seems to be being highlighted as something important? Should they have very strong views about content? How would you look at that side of it?

  Mrs May: Yes, indeed, I think this is an element that could be within the remit (as I have just indicated to Lord Maxton) of the Commission that would be overseeing Public Service Broadcasting. Obviously at the moment the issue of decency is one that Ofcom technically is responsible for; although if you look at some recent cases obviously most people assume that it is just the BBC and the BBC Governors who are responsible for what happens at the BBC, and do not perhaps realise that there is in existence an external body that can look at this. To the extent that the BBC has a responsibility to be distinctive and different, we do not want to be over-shackling the BBC in terms of the sort of programmes that it can produce. Having said that, I think there is a need for them to be aware to a much greater extent, as long as they are being publicly funded, of the requirements of the public in what they are producing. There are so many channels now which will produce all sorts of programmes which cover all sorts of content that some members of the public may wish to see. I think the BBC does need to be very aware of the requirements that the public have.

  Q1104  Baroness Howe of Idlicote: On plurality of Public Service Broadcasting, you certainly seem to be in favour of Public Service Broadcasting as such from what you have said. There have been ideas floated of top-slicing the fee and giving it in appropriate levels to other public service broadcasters, and obviously one is thinking of Channel 4 as the major one. What are your views on that?

  Mrs May: I think there may be some merit in a certain percentage of the licence fee funding going to other public service broadcasters. I think the real question (looking ahead to the post-switchover age) in that digital era is, how do you provide for others to continue to produce Public Service Broadcasting? I think it is important that there is some variety in the arena of Public Service Broadcasting—things like news and current affairs. Indeed there are some very high quality programmes that are produced by other broadcasters under their Public Service Broadcasting remit. I think that plurality is important; but once you have moved away from having benefit of access to an analog spectrum then I think the whole question of how you fund that Public Service Broadcasting for other broadcasters comes into play. Although top-slicing the licence fee may seem perhaps attractive at the moment, of course if the whole funding arrangement has to change then that may not be available in due course. It is one of the reasons why looking into the funding should start sooner than the Government suggests.

  Q1105  Baroness Howe of Idlicote: Just thinking about ITV—with the consent, some would say, of Ofcom—it seems to have been prepared to pretty well opt out of its Public Service Broadcasting remit in the immediate future: how would you deal with that situation if you wanted to encourage them back? Are you saying there might be a need to review this whole situation (and I think this is what you have said but perhaps you can confirm it) at an earlier stage than the 10 years, and perhaps even before digital is in?

  Mrs May: Yes, I think it is necessary to look at it earlier than the 10 years. I say that because, although there is a set date for final digital switchover, people are moving to digital at an increasing rate, and the BBC has had a role in that; and Freeview has encouraged far more people to move to digital. We have a situation now where 60-odd per cent of people have access to digital services, so that the market is changing faster than the timetable set by the Government recognises and that is why we need to look at this somewhat earlier.

  Q1106  Lord Peston: I am rather lost about the logic of what you are saying. What one does is one sets up a body called the BBC, which is a public broadcaster and a public service broadcaster, and gives them a remit. Then I assume, which we have done, you appoint people there to do that and achieve those aims which, although the BBC is less than perfect, is regarded worldwide as the nearest to doing the job properly. I then do not see the logic of why you want to set up an outside body that then does the job you set the BBC up for in the first place. I am completely lost as to why you would assume these outside people would do a better job of setting the standards than the BBC in the first place, given that the world recognises that the BBC is the one place that does achieve these standards?

  Mrs May: The reason you set up an outside body, I believe if you have a structure where the BBC is effectively regulating itself, is that body (indeed, almost by definition the Government is suggesting it should) can become part of the culture of the organisation. I think it is important for somebody to be set back from that and to be able to take a more independent and external view of what the BBC is doing. I think that would be to the BBC's benefit in terms of the impression given to the public. I think there are many people who do feel when complaints are made that those should be looked at by a body that is different from the BBC. They believe the BBC Governors (and I believe in due course the Trust will get into this position) are simply seen as part of the BBC and not as separate and independent.

  Q1107  Lord Peston: I did not have complaints in mind because I assume Ofcom deals with that. If the BBC has got the right culture in the first place, which many people believe it has, why would you think an outside body could improve on that? This is separate from the complaint question.

  Mrs May: I think the important thing is to have a structure so that people can see there is proper external monitoring of what is being undertaken by the BBC; and that includes that culture and the remit against Public Service Broadcasting. The situation we have had in recent years is that there have been a number of questions raised in Parliament, and elsewhere of course, about the extent to which the BBC has been continuing to fulfil its Public Service Broadcasting remit. The argument about the dumbing-down of programmes is the obvious example. The BBC has responded in some areas on that, but I think there is a greater confidence if you have an external body that is able to look at the BBC and say, "We believe you are or are not in this area meeting your Public Service Broadcasting remit", and the BBC then reacts to that; rather than simply there being a feeling that sometimes the message does not get through because the body governing the BBC and regulating it is, of itself, part of the BBC.

  Q1108  Baroness Bonham-Carter of Yarnbury: You suggested that you would consider top-slicing. I would be interested in what your response is to the concern that this breaks the immediate link between the public and the BBC and, conversely, the fact that it may be that would undermine Channel 4's independence, in that it would be getting money from Government?

  Mrs May: You are right, of course, that there is a unique link between the public and the BBC through the licence fee. I suspect there are many members of the public who do not realise there have been Public Service Broadcasting obligations on other channels. I think it would be useful to highlight that in a ay, to show that there are other channels which are, in a different way, (because it is only specific programming), providing Public Service Broadcasting in its proper definition. Therefore, I see no problem with saying that some of the money that is provided by the public should be covering that. As I say, there has to be some way of providing for that in an environment where a channel like ITV no longer has the opportunity of a reduced premium in relation to the analog spectrum because the analog spectrum is not there and is of no value to it because of digital switchover.

  Q1109  Lord Armstrong of Ilminster: We have talked about Public Service Broadcasting, and both times you have used the phrase you have qualified it, given its proper definition. I wondered what you thought a proper definition was?

  Mrs May: As I tried to set out earlier, I think it is broadcasting that does inform and educate; I think it can entertain at the same time; but it is broadcasting that is of very high quality and high standard, and a high degree of integrity and clear impartiality. I think those are the key aspects of Public Service Broadcasting.

  Q1110  Bishop of Manchester: Reference was made earlier about the fact that Ofcom has released ITV from some of its public service obligations. I wonder if you have got any comment about that; and whether you feel that this is a pattern that could continue into the future and, therefore, whether or not that really is going to be helpful or otherwise to your concept of the BBC and its role in the PSB?

  Mrs May: As I indicated earlier, I think it is useful to have a plurality of Public Service Broadcasting and, therefore, I think it is of concern that we have seen this being pulled back in relation to ITV. The problem (and this is why I was saying earlier I believe we need to look at this whole area rather earlier than the Government has suggested) is that the marketplace is changing so significantly, so quickly, that other channels are having to adapt to an entirely different marketplace in terms of advertising, funding and market share obviously with a multiplicity of channels; and it is against that background I think this reduction in Public Service Broadcasting has taken place and hence the need to look at these whole issues of licence fee funding of Public Service Broadcasting and how you support Public Service Broadcasting as a whole.

  Q1111  Chairman: Just one point on the licence fee—as I understand what you are saying, you do not set your mind against top-slicing the licence fee for the use of other public service broadcasters, but does that mean a licence fee at its current level or do you envisage an increased licence fee so that money can be taken in that way?

  Mrs May: I was certainly not intending to sit here and suggest that we should put the licence fee up in order to do that; but that that would take place against an environment where further decisions—I am not suggesting it happens immediately, I think this is part of the debate but it may be that the licence fee had changed in any case and that in any review of the licence fee (if it was going to be the case that top-slicing would take place) obviously that would have to be considered within what was being done. What I also think is important, when the licence fee is being set, is there is a very clear assessment of the BBC's costs against the remit of Public Service Broadcasting. I think there have been many questions in the past about the BBC's cost-efficiency and cost-effectiveness against the licence fee requirements that are being made on members of the public. The licence fee is not ideal, if I may just say that. I suspect there are many people who do not feel it is an ideal way of funding but at the moment, looking ahead to the broadcasting arena that there will be in a few years' time, it is difficult to see exactly what the best way of replacing it is, if that is the case.

  Q1112  Lord King of Bridgwater: This is a point about access by the NAO, in which, I think, John Whittingdale thought it was a good idea if they had full access.

  Mrs May: I continue to believe what John did, which is I think there should be full access. This is public money and I think it is important that the National Audit Office has that opportunity to be able to investigate and consider what is being done by the BBC with that public money.

  Q1113  Lord Maxton: I want to go back a little bit to the concept of broadcasting. You have defined what we mean by "public service broadcast"; can you tell us what we mean by "public service broadcaster"?

  Mrs May: Yes. This is indeed, in my mind, linked to the question of the digital revolution because there is an argument that the question, I think, is whether a public service broadcaster is one that simply provides, develops and produces programmes which have that public service content or whether, in addition to that, it actually has channels identified through which it delivers those programmes. I think that it should have channels through which it delivers that programming, and I think there are a number of reasons for that. First of all, I think, if we believe public service broadcasting is a public good then we want to make sure that it is available to people, and if you do not have a public service broadcaster delivering it through a specific or a number of specific channels then there are all sorts of questions about how you then ensure that those programmes are provided through other channels and other broadcasters.

  Q1114  Lord Maxton: This is linking into the digital revolution, in that once we have the digital switchover, however that might be achieved, then there will be large numbers of what one might term public service channels on that digital platform, whatever that might be—whether it be Discovery, Performance Channel, providing arts channel—and they will develop and grow over the next few years. So would you see, when you top-sliced, some of that money available for those? If we then move to the next stage, which of course will be internet broadcasting, would you then allow internet broadcasters to apply for some of this money? If we start doing that it seems to me we are stretching the licence fee so far that it becomes impossible. What right have we to say, "Only ITV or Channel 4 or Five, should have it"?

  Mrs May: What I envisage is more an environment where there is a remit set for a certain amount of public service broadcasting which is outside that which the BBC provides, so that one is not saying simply that any channel that provides something which could be classified in some way as public service broadcasting can apply to have a slice of the licence fee. The public service broadcaster who will continue to provide the vast majority of public service broadcasting is the BBC but I think there is scope for, as we have had in certain areas, other broadcasters being able to offer public service broadcasting within a very clearly set remit as to what that should be. It is through that means that they might have access to the licence fee, or some other funding arrangement should that be the case in the digital world.

  Q1115  Lord Maxton: Something like the History channel, parts of which are available on Freeview (and that will be the first to access on digital switchover), is entirely public service broadcasting; it is not like ITV where it has some programmes—the whole of its programmes over the whole of the day is, basically, public service broadcasting, because it is educational; it is providing people with knowledge and information which otherwise they would not have. Why should not something like the History channel have money out of the public service licence fee?

  Mrs May: You can push it to a point, obviously, as you were indicating in your initial question, where you could say there is a whole variety of channels who suddenly will say: "We are only producing this sort of programme"—the Biography channel or National Geographic, or whatever it is—"these are plainly in the public good because they are educational, therefore suddenly we should have access to all this licence fee money." I do not think that that is the case. I think a public service (and this is back to the issue of public service broadcasting and public service broadcaster) broadcaster, like the BBC, is a broadcaster who is producing a variety of public service broadcasting which meets the remit of public service broadcasting but does so in a number of different ways. Because it is doing a number of things and producing, also, the popular programmes (as I said in answer to the Chairman's earlier question) then it is providing that public service broadcasting to people who otherwise might actually not be watching those sorts of programmes—the person who will not switch on the History channel, because actually they do not think they are interested in history, but when they see Simon Schama on BBC, will watch it. Therefore, there is a public good that comes about, providing that through a public service broadcaster.

  Q1116  Baroness Bonham-Carter of Yarnbury: I wanted to ask about the BBC's proposals for a Window of Creative Competition. The Conservative Party, in a policy statement, "Action on Arts and Heritage", has said that you would require the BBC to source at least 50 per cent of programmes from outside the BBC. Do you think, what is now known as, the WOCC responds to this request of yours?

  Mrs May: I think it is a step forward but, of course, it could be the case that the WOCC would either meet the requirement that we set out in that action paper of 50 per cent or it might actually only produce 25.2 per cent because, obviously, 25 per cent of programme is going to be up for this competition, and therefore it will be competition between in-house and external production. I think we welcome the fact that the BBC has come up with a proposal that takes us forward but I am not sure it is going to necessarily meet the requirements that we have set. I would simply comment that, of course, although in the last year the BBC will have hit its current target of 25 per cent, it has significantly failed to do so in other years.

  Q1117  Baroness Bonham-Carter of Yarnbury: What is your response to the argument that for the BBC to retain its position as a trainer of talent and producer of programmes of merit there needs to be a critical mass? I think some would argue that 50 per cent of in-house production is necessary for that.

  Mrs May: Yes, I accept the argument that if you are going to be able to provide that training ground then you have to have critical mass, and I think 50 per cent would be the limit that I would set on that. If I may say, I think there is some merit in looking at a requirement in terms of the percentage of out-of-London production and regional production, as well, in order to try and stimulate independent producers in other parts of the country. I think sometimes people feel the BBC's use of external production is very London-centric and that actually there could be more done, not only for the BBC itself to be producing in-house in other parts of the country but, actually, for other independent producers to be stimulated and encouraged in the regions.

  Q1118  Lord Kalms: I wonder if you could clear up some points about competition. Mr Whittingdale suggested, some time back in the House of Commons, that the BBC should go on further in disposing of its commercial operations. I am not quite sure that he means further; you either believe it should have commercial operations or it should not. If you believe one or the other then you do it completely, not partly. I wonder whether you have thought about it sufficiently, because is it right that the BBC should be stopped? If you tell them to dispose of everything they will not start anything, and they are the most creative of all the broadcasting institutions. Some of their work is pioneering and is quite unique; in fact, this week they sold a big chunk of it to Australia—it is really pioneering work. So I think there is a slight ambivalence in your point of view. I would suggest that they should be allowed to develop and use state-of-the-art techniques. If you are telling them they have to sell it as soon as they do it, they will not start. Perhaps we can have some clarity on competition, as you see it, with these commercial operations.

  Mrs May: I hope I will be able to persuade you, my Lord, that the approach, I believe, is a balanced approach, which is not perhaps as absolutist as you are suggesting the two positions can be. You are absolutely right, of course, that we want to encourage the BBC to be pioneering, to be innovative, to be producing state-of-the-art programmes, to be using new techniques and pushing broadcasting forward in that sense. I believe it is right that they should be able to have some commercial operations—selling rights to programmes, for example—but I think there is a point beyond which the commercial operations cease to be part of what one can describe as within the remit of a public service broadcaster. I am not convinced, for example, that the large number of magazines that the BBC produces are necessarily part of its role as a public service broadcaster, and it is in those sorts of areas that I think there are still some commercial activities that could be disposed of. I think there has been a natural tendency, perhaps, to constantly expand what the BBC is doing and, almost, a belief that by definition if the BBC is doing it therefore it is right that it is expanding in that way. I think that actually there are times when we have to say, "No, let us make absolutely clear what the remit is and what should be done within that remit."

  Q1119  Lord Kalms: You would make it clear?

  Mrs May: Yes; I would not say, "No commercial operations", as I indicated, because obviously there are some aspects that the BBC should be able to do, particularly if they are going to be encouraged to innovate, as you suggest.


 
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