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6.35 pm

Paul Holmes (Chesterfield) (LD): Almost every Member of the House would agree that the BBC has led the field over the past 80 years. It is the best public sector broadcaster in the world, with a record of quality and innovation and an unassailable record of public trust, both here and abroad. That public trust, for example, makes the new BBC middle east television service so important. Regrettably, however, that service will only be on for 12 hours a day because of the lack of £6 million a year. That is in the context of BBC income of between £3 billion and £4 billion, and of a BBC presenter such as Jonathan Ross being paid £6 million a year for three years, as part of his contract.
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I say that as an admirer of Jonathan Ross, his Radio 2 programme and his wit and humour. He may have gone a little too far on a chat show with some politician recently, but in general, he is an excellent presenter. None the less, I wonder whether at least part of a £6 million a year salary might be better spent on other things, such as the BBC’s middle east television service.

The respect felt for the BBC across the world is the reason why even the independent sector’s recent lobbying of us, in advance of this debate, started by saying how much it, too, values the BBC, before expressing concerns about its spending power getting out of hand. That admiration for the BBC and its track record is the reason we must never go down the USA route of an almost purely commercial market, with a grossly underfunded public sector broadcast element. That almost exclusively advertiser-driven market is the reason Bruce Springsteen can justifiably sing that there are 57 channels but nothing is on—that is on the “Human Touch” album, should hon. Members wish to follow up the reference—and a satirical comic genius like Bill Hicks was censored off the David Letterman show more than once because the advertisers and sponsors would not have approved.

Things change, and the new charter and licence fee settlement are about managing the next decade of change. Things have changed in the past. I can just remember, as a young boy, the pirate radio battle led by Radio Caroline, from which Radio 1 developed, then the independents, and then the network of localised stations such as the excellent Peak 107 or Peak FM based in Chesterfield. Some now argue that the BBC should not still deliver Radio 1 and 2, in competition with the popular music-based commercial sector, while the BBC argues in return that those two stations carry more live and recorded interview and concert time for new and old bands than any rival. Sky argued that the BBC should not develop 24-hour news. Others oppose internet provision. However, can a trusted brand such as the BBC really be excluded from such major developments in media platforms? I would say that it cannot; otherwise it will become a completely irrelevant and outdated fossil.

The trick in shaping the BBC’s new charter, its funding for the next 10 years and its purpose as a pre-eminent public sector broadcaster is to allow it to continue to innovate and provide quality—as it has done in its famed documentary series, in the cutting-edge “Doctor Who” episodes that concluded last Saturday, or even in its more controversial 1 million free Beethoven downloads—but without making it so cash-rich that it monopolises any market that it chooses, stifling all its rivals in the process. Providing BBC computers to schools in the 1980s, when I was teaching in the classroom, was not really appropriate for the BBC and soon came to an end. I fought battles on behalf of the Derbyshire branch of the Federation of Small Businesses over the perceived danger of the BBC dominating the educational software and online educational television market. I have been lobbied by my local papers, the Derbyshire Times and The Star in Sheffield, over BBC web content, and by ITV Yorkshire and Central about the potential dangers from a cash-rich and too dominant BBC.

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Do the Government’s proposals for the new charter succeed in squaring the circle, reconciling quality and innovation with the danger that the BBC will become too cash-rich and dominant? Do they tackle the four perceived problems identified by Michael Grade himself at a seminar in Millbank Tower on 30 March? The first was elephantiasis: the BBC was seen by many as being too big, too fat and too careless of the independents who were trampled along the road. The second was inefficiency: the BBC was seen as a public service with too much money. The third was management capture of the governors, and the fourth was a lack of accountability. Of course, Michael Grade went on to try to refute all those perceptions, but the fact that he could so quickly and easily identify the four main criticisms of the BBC speaks for itself.

What of the BBC Trust? The Secretary of State said that the Government had consulted widely, but they ignored most of the consultation responses that called repeatedly for a truly independent regulator. The House of Lords Select Committee said that

The White Paper described the BBC Trust as a

The chairman of the BBC Trust would still be called the chairman of the BBC.

While the trust is an improvement on what has gone before, it does not go far enough. The BBC remains ultimately its own judge and jury; who will trust the BBC—who will trust its trust, indeed—to make the right judgments on whether it is dominating a marketplace unfairly? As ITN has pointed out, the BBC Trust remains the

in some areas, such as the relationship between BBC Worldwide and the BBC licence fee-funded arm. Yet that is exactly the area about which ITN complains most often.

We would prefer a completely independent regulator to cover all public service broadcasters, not just the BBC. Michael Grade’s own answer to one of the problems he had identified—lack of accountability—was that

That simply is not good enough: there must be a more independent regulator.

As has often been said, the National Audit Office—mentioned earlier by the hon. Member for East Devon (Mr. Swire)—could play a much greater role, to everyone’s benefit. There is disagreement and there are conflicting claims over the figures used in the BBC’s licence fee application. The NAO could provide an objective and expert assessment of the conflicting figures in the Indepen and PKF reports, and the dispute over how the increase in the number of single households and thence the increase in licence fee income is accounted for, before the setting of the licence fee, rather than just scrutinising finances retrospectively. The whole process could take place in a much more open and transparent way.

Much has been said today about the digital switchover. Part of the licence fee debate relates to its costs, and the costs of targeted assistance to help
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vulnerable people cope with it. Those are matters of Government policy, and the costs should not be borne by the BBC licence fee payer through a form of stealth tax based on flat-rate poll tax principles. Like free television licences for those over 75, such Government policy costs should be borne directly by the Treasury, not factored into the licence fee increase. The money that the Government will raise from the sale of the freed-up spectrum is one obvious source of funding, which could also preclude a spectrum tax on public service broadcasters.

As the Secretary of State said, another aspect of digital switchover involves the relationship between the BBC and Channel 4 as PSBs. That extends to the relationship with S4C in Wales. We are delighted that the negotiations between the BBC and S4C are progressing so well, and we hope that an agreement between them will give S4C more control over production and programming. A clearer understanding of the financial relationship between the BBC and S4C will benefit Welsh viewers and licence fee payers alike.

I have already mentioned a number of issues that affect calculations of the licence fee, and the disputed costings presented by the BBC. The licence fee is the “least worst” of the available funding options.

Mr. Redwood: Does the hon. Gentleman agree that a licence fee means it is absolutely essential that the BBC is not biased? If he has something liberal in him, does he not accept that there is systematic bias in the BBC—in all its news output—against anyone who believes in less government, less law, less tax, less regulation and less interference?

Paul Holmes: If the right hon. Gentleman means that there is institutional bias in the BBC simply because it exists, I cannot agree. I said at the outset that most Members, although not all, would recognise the integrity, quality and impartiality of the BBC’s work over the past 80 years. If the right hon. Gentleman means that there is bias in the presentation of BBC programmes and BBC news, I can tell him that many independent studies do not confirm that. The Government or Opposition of the day, if they feel disgruntled at any time, tend to blame the BBC—to shoot the messenger—but independent studies, including academic university studies, have never confirmed that any such bias is apparent.

Mr. MacShane: When I was a producer on “The World Tonight” in the 1970s and conducted a poll of the 24 editorial staff from top to bottom, 23 said that they would vote Liberal. Is that not a disgraceful statement?

Paul Holmes: Strangely enough, I was about to add that the only apparent bias I have discerned in 20 or 30 years of BBC-watching is the BBC’s all too common tendency to ignore the third party in British politics, which regularly receives 20 per cent. of the vote of the population.

Mr. John Whittingdale (Maldon and East Chelmsford) (Con): Does the hon. Gentleman not find it slightly worrying, however, that both the independent
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reports commissioned by the BBC governors—the first on the BBC’s coverage of Europe, the second on its coverage of the middle east—concluded that the coverage was biased?

Paul Holmes: It would be interesting to enter into a debate on the nature of that perceived bias. Certainly, others reading those reports would not take the approach suggested by the hon. Gentleman.

Although the licence fee is the “least worst” of the available options, it should be the subject of a full debate in the Chamber, rather than an announcement by the Government at the appropriate time later this year.

Mr. Edward Vaizey (Wantage) (Con): Will the hon. Gentleman confirm that he agrees with his party’s spokesman in the House of Lords that although the licence fee may be the “least worst” option now, it must be reviewed in the light of technological change?

Paul Holmes: The hon. Gentleman is right. Obviously in 10 years’ time, at the end of the next phase of the charter and the licence fee, we shall be in a very different world. Developments such as the fragmentation of television and the introduction of viewing on demand will alter the environment far more than the changes mentioned at the beginning of the debate. It may well be that in 10 years we shall have to consider other options. It is difficult to imagine what options would be better than the licence fee, but we will be in a different world.

Funding by means of advertisements and subscriptions involves various problems. I mentioned reliance on advertising earlier, when I drew attention to the fairly appalling state of American television and American so-called news production in particular. The right hon. Member for Rotherham (Mr. MacShane) mentioned the quality of such services as Fox News, which do not deserve to be described as news services. Sky News, which operates in a robust market in the UK with PSB deliverers, is far better than its American counterparts. I shudder to think what alternatives might be forced on us in years to come, but for the moment we are looking at the next 10 years of the BBC’s operation.

The BBC’s proposed fee of RPI plus 2.3 per cent. is too high, partly because of stealth-tax factors in digital takeover and targeted assistance, partly because of disputed calculations of future income such as that resulting from the growth in single households which may or may not have been double-counted—different people are producing different arguments—and partly because we must not create an excessively cash-rich BBC. The BBC already receives more per year than advertising revenue brings to the independent sector.

As ITV has argued,

There is not much confidence that that is the conclusion that will be arrived at.

However, some political sceptics need to be a little more consistent in their views on the BBC. In the
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1980s, as a teacher of history, politics and PSE—it is called citizenship today; they have simply renamed it—and as someone who was interested in politics in general, I followed carefully some of the comments from members of the then governing party, who criticised the BBC, first, on the ground that its programme output was too elitist and, secondly, on the ground that it should raise more commercial money and not rely purely on the licence fee. Twenty years later, it is interesting to note the turnaround in the comments of those people, who now criticise the BBC for chasing the ratings too much, exactly what they suggested it should do 20 years ago, and for raising too much from commercial sales of spin-off products and from overseas sales of programmes and the back catalogue.

In conclusion, I urge the Government to respond positively to all the concerns expressed during the earlier consultations, during earlier debates in this place and during today's debate.

6.50 pm

Alan Keen (Feltham and Heston) (Lab/Co-op): I would like to make a few points almost at random, rather than reading out any of the briefings that have been sent around. To show it is at random, I shall start with the notes I made when my right hon. Friend the Member for Rotherham (Mr. MacShane) was speaking. Thank goodness he left the BBC a long time ago, because he said that not many of his constituents watch the BBC, or did he say that none of them did so? I think that the reason he gave was that it does not present Parliament very well. At least two Opposition Members shouted something out that I took to mean that they wanted more of Parliament on the BBC. I think that we have damaged our credibility already, before we have even started the debate.

A few years ago, the issue came before the Select Committee on Culture, Media and Sport, when the BBC wanted to switch “Yesterday in Parliament” from 8.45 am on Radio 4 FM to long wave. There were many complaints in the House. Hundreds of Members signed an early-day motion. I was probably the only one who said that I would not sign it. I asked Members whether they had really thought about it. I said that, if we could not persuade more than 30 of us to walk 25 yd down the Corridor to listen to us, why should we make 3 million people listen to “Yesterday in Parliament” on the radio? The reason the BBC wanted to switch it to long wave was, of course, that it did not want to lose 3 million listeners in one fell swoop. Therefore, if we really believe that it is the poor presentation of Parliament on the BBC that reduces the number of viewers, we will struggle to persuade people about anything.

I support the new charter and will discuss one small aspect of it. I was an admirer of the previous chair and the director-general of the BBC. I was particularly saddened when they were both forced to resign by the then board. I recognised the problem pretty quickly. The strength of the then chair, acting as an executive chairman along with the director-general, was an Achilles heel when it came to realising that something had gone wrong.

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We had an early meeting with the all-party group on the BBC. The then acting director-general came along. I asked him immediately whether he agreed that there should be two chairs, one chairing the board itself and one acting as an executive chairman. I asked the same question in the Select Committee on a number of occasions. No one agreed with me that that would be a good idea, but I see that it is going to happen, so it is possible to have a chair working with the executive proactively within the BBC, as well as a chairman or chairwoman of the trust itself. That is a great step forward.

It took people longer than it took me—I am giving myself some praise—to realise that. I would like to make a personal appeal to the current chair of the BBC that he use his vast experience, skill and knowledge of the industry to work on the proactive side of the divide, rather than be chair of the trust. We need his experience alongside the director-general, pushing the BBC forward.

A separate issue is democracy. I was delighted to read the report of the previous debate, which unfortunately I could not attend after the first 10 minutes. My hon. Friend the Member for Cannock Chase (Dr. Wright) mentioned democracy and said:

Why cannot the public therefore be allowed to vote in some way for the members of the trust who will represent them? Those people will control where their money goes each year. It is something we should look at. It is a very difficult issue. The House is probably the last place in the world that will condemn representative democracy, but we have the technology nowadays. It is not easy but we should look at the possibility of at least some of the members of that trust being elected directly through the increasingly efficient method that the various television companies employ, usually on a Saturday night.

I would like to talk quite personally for a few moments. It is easy to criticise the licence fee as being regressive. By strict definition, it probably is, but if you do not mind, Mr. Deputy Speaker, I will speak about my own experience. When I was brought up I did not know what a university was. My grammar school head teacher could do nothing to persuade me to stay on at school for two more years or to go to university—to disappear somewhere, when I was not sure where or what it was. After that, what job would I do? I could not be convinced. I have regretted it many times since, but, apart from sport on the BBC, I do not watch anything unless it enhances my knowledge of the world, whether it be science, astronomy or whatever. All my education has probably come from the BBC. We have to be careful. My right hon. Friend the Member for Rotherham may be right that not enough of his constituents watch the BBC, but he must not say that none of them does. I have spent a lot of my life watching it and the benefits to me have been immense.

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