Examination of Witnesses (Questions 437
- 439)
WEDNESDAY 13 JUNE 2007
MR HUGO
SWIRE
Q437 Chairman:
Hugo Swire, thank you very much for coming. Could I start by asking
you does the existence of this new Trust give you more confidence
that the interests of the licence fee payer will be maintained?
Mr Swire: May I start by thanking you for inviting
me to your Committee? It is the first Committee I have attended,
and I was intrigued to catch some of it on television in my own
office and to hear what the Director-General was saying. The one
point with which I would completely agree is that it is very early
days for the Trust. What I would also remind the Committee, My
Lord Chairman, is that we, as a party, were very much against
the concept of the new Trust settlement. The phrase we used was,
"It's the same people in a different room". I think
that there are still some teething problems. Of great interest
were the Director-General's last remarks about the relationship
between the Trust and the Executive Board and the chairmanship
of that Executive Board by the Director-General. Any of us who
have a business background or continue to have business connections
will realise the trend to get away from having a chairman and
chief executive. I think that is something which needs looking
at. The decisions that the Trust has made, be it on the iPlayer
or be it on Jam—which you were talking about a little earlier—have
been interesting. It was a pity that some of these decisions were
made by Chitra Bharucha before Sir Michael Lyons became the Chairman.
I would say that I am a happier person today than I was even yesterday,
given the news that the Trust has decided to look at the remuneration
it pays to some of the BBC presenters. This has been a thorny
issue for some time. I notice in the previous evidence given to
the Committee by Michael Grade that this was something he came
out very strongly against. Given the fact that we have always
believed that there should be more transparency from the BBC and
that the National Audit Office should have a greater role within
the BBC, this is an initiative which I very much welcome. I would
conclude by saying that I think all these tests of the Trust to
date, and I concede that it is in its infancy, have been economic
tests. They have involved market impact assessments and public
value tests. There has been no political test of the new structure
yet. There has been no crisis; there has been no Hutton. In a
sense, we will only see whether or not the new structure is a
good structure, a workable structure, indeed a desirable structure,
when it does face a political challenge.
Q438 Bishop of Manchester:
One of the things that we have been probing is the effect that
the sudden departure of Michael Grade had on the BBC. The impression
that I have received up to now, from the response to the questions
that have been asked, is possibly the equivalent of saying that
it really had no effect whatsoever. I am not sure that I wholly
believe that and I wondered if you could be of any help in clarifying
the situation from your point of view.
Mr Swire: I have always been brought up to agree
with bishops, and I certainly agree with you on this. I think
that it did have an effect, certainly from the people in the BBC
I spoke to at the time—for a couple of reasons. The first
is this. We need to cast our mind back to the BBC post-Hutton.
We saw the resignations within hours of the Director-General and
the Chairman, and so on, and BBC morale was extremely low at that
point. Then Michael Grade did wonderful things for the BBC. He
has a real passion for broadcasting; he is a broadcaster's broadcaster;
and I think that he did great things to restore the morale of
the BBC. Also, there was this extraordinary divorce, this disconnect,
which we criticised at the time, between the protracted Charter
renewal process and the agreement on that, and this agreement
on the new licence fee which kept being delayed again and again
right through the summer. We were told that it was coming in the
summer, and then it was delayed again. We all know that was largely
due to infighting between the Department of Culture, Media and
Sport and the Treasury. It was important that Michael Grade was
there at that point. We know that originally the BBC were after
something like 2.3 per cent of RPI; they got about 0.5 per cent
below. These were sensitive negotiations, therefore. Although
the Charter had been agreed at the time that Michael Grade left,
of course the licence fee had not been. I also think that a more
fundamental question is the effect of Michael Grade leaving on
the establishment of the BBC Trust. Michael Grade was to a large
extent the architect of the Trust, and an awful lot of what people
took on trust, as it were, was because Michael Grade told them
that it would work and he was going to make it work. I think that
those who were supportive of the new corporate structure were
in part supportive of it because of Michael Grade's assurance;
but then he disappeared off before the Trust had been established.
Nature abhors a vacuum. There certainly was a vacuum. I am not
casting aspersions on Chitra Bharucha, who did a very good job,
no doubt. However, I wrote at the time—when we knew Michael
Grade was going, on Tuesday 28 November—to the secretary
of state, calling it " ... a crucial juncture—licence
fee negotiations, digital switchover, and the new corporate governance
due to come into effect"; asking her about the many personal
assurances she was given by Michael Grade, and to respond to this
hiatus. That was on 28 November. It was a very urgent thing—which
is possibly why I received a reply from her on 22 February, although
she did have the decency to apologise for the lateness. I think
that the BBC was at a vulnerable time during these negotiations;
they were on the back foot, and the Government had them pretty
much where they wanted. The champion of the BBC at that point
was Michael Grade, and Michael Grade then went.
Q439 Bishop of Manchester:
Why do you think he went? Do you think that he was beginning to
feel that it was not going to work? Was it because he was attracted
by a better financial offer? Were you concerned by the fact that
he has gone over to a competitor?
Mr Swire: There are several different questions
there. I have read the transcripts of his evidence to the Committee,
and it is quite clear that he felt that he had come in and set
the BBC on the road to recovery. He wanted to move on; that is
what he likes to do. At the time, I thought that it might be something
to do with the fact that the licence fee settlement was not the
licence fee settlement that he wanted and he was displeased about
that, although he maintains that is not the case. It is worth
pointing out that his argument is a perfectly good argument: that
being Chairman of the Trust is a different job to having been
Chairman of the governors. I think that, frankly, there were opportunities
in independent television, not least the salary package, and that
he could get his hands dirty in scheduling and programme-making,
in a way that he could not if he had been Chairman of the Trust.
However, I think that it was quite strange, because it was most
people's assumption that Michael Grade had, as it were, given
birth to the Trust and that he was going to nurture it in its
infancy—neither of which he actually did in the end.
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