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9 Jan 1996 : Column 20

3.42 p.m.

Viscount Caldecote rose to move, as an amendment to the Motion, at end to insert ("but regrets that these documents do not adequately clarify the responsibilities and authority of the governors of the BBC.")

The noble Viscount said: My Lords, before speaking to the amendment I thank my noble friend Lord Inglewood and also his right honourable friend the Secretary of State for their unfailing courtesy, patience and co-operation in discussing aspects of these documents that some noble Lords feel are not satisfactory and require amendment and on which we have given my noble friend written proposals. I am most grateful.

Secondly, I must express my strong regret that this legislation--for that, in effect, is what the documents are--has been presented to Parliament in a way that prevents us going through our normal procedures with opportunities for discussion and, when necessary, amendment if the House so decides.

The main argument, as I understand it, in favour of a Charter rather than an Act of Parliament appears to be that a Charter makes the BBC more independent of government. But the existence of the Agreement with the Secretary of State giving him substantial powers in relation to the BBC makes the independence argument somewhat spurious.

Nevertheless, my noble friend and the Secretary of State have given assurances, on which of course we can rely, that anything said in debates in this House and in another place will be fully considered and amendments made to satisfy dissent clearly indicated by Parliament. However, since those assurances were given in slightly different forms on various occasions, it is of the utmost importance that my noble friend confirms them clearly today.

Broadcasting, and particularly television, is a very potent influence in our lives today. It can be a most valuable force for good and upward progress or a degrading factor in our national life. I have no doubt that public service broadcasting, as typified by the BBC, largely financed in effect by a ring-fenced tax, has over the years made a most beneficial contribution towards a fuller and more interesting life for millions of people and should continue.

I have had the good fortune to travel quite widely around the world. I have no hesitation in saying that our standard of broadcasting, led by the BBC, has been the best in the world--in creative drama, wit and humour, education and documentaries, and news and comment on public affairs.

But times have changed. Competition in broadcasting has vastly increased, together with the variety and quality of programmes available. Our task now in considering the new draft BBC Charter and Agreement is to ensure, to the best of our abilities, within the limits imposed, that our BBC regains and retains its pre-eminent position and is not tempted to follow standards downwards in response to some erroneous theory of reflecting public opinion in the face of increased competition. Independent creativity, so often

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rightly quoted as essential to lively broadcasting, need not be crude. Humour need not be offensive, nor comment destructive, to national institutions which have served us well for a long time.

Sadly, as I believe many noble Lords will agree, evidence has been accumulating that the high standards which should be expected, particularly from public service broadcasting, are being eroded and that these trends are contributing to violence and crime, to the degrading of sex, and to the corruption of young people before they are old enough to set their own standards. There has also been an unhealthy tendency to confuse comment with reporting of news, which should invariably be the truth and nothing but the truth with no risk of misleading innuendo by omissions dictated by limits of programme timing, nor indeed any departure from true impartiality on political and public affairs. Even more serious perhaps is that the governors seem powerless to prevent this decline in standards for it is hard to believe that they are willing participants in it.

These important issues all require a degree of regulation and control under the authority of Parliament. It is encouraging that the documents we are discussing today are a real improvement on present arrangements. Nevertheless, in many respects they do not go far enough and need to be further strengthened and improved without in any way infringing the principle of independence from government influence.

Independence is essential to creativity and variety in programmes. But independence, if it is not to lead to disorder, must be combined with responsibility. Its limits must be clearly defined at each level of the organisation, through rules and codes of practice consistent with the law established by Parliament. To enforce these rules, appropriate sanctions must also be available when they are transgressed. And there must be a well understood structure of leadership and direction at the top, backed up by a strong thread of confidence throughout the organisation.

The effect of the improvements in the two documents is clouded by the complex cross-references required between the Charter and the Agreement, leading in particular to confusion as to the precise meaning of rules, codes and guidelines, the latter being merely ways of explaining the codes to those who have to implement them.

As regards maintaining high standards of programmes, problems will arise, not least because the governors of the BBC are virtually judge and jury in their own case. The Broadcasting Standards Council can, and sometimes does, uphold complaints made against BBC programmes. But when a complaint is upheld, the BBC is under no obligation to take any further action except that, under paragraph 4.4(f) of the Agreement, it must publish in its annual report:

    "The number of complaints made to and upheld by the Broadcasting Complaints Commission and the Broadcasting Standards Council".

But no effective sanctions prevail such as exist in the differing circumstances of the commercial sector regulated by the ITC and the Radio Authority.

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Effective sanctions in the case of the BBC are difficult to devise. However, a real improvement could be made by amending the Agreement so that the BBC was required not only to report the number of complaints upheld but also to report on the action taken within the corporation to prevent a recurrence of the subject of the complaint. That would give substantially more effective power to the BSC and the BCC. We shall be able to return to this issue when considering Part IV of the Broadcasting Bill, which provides for the merging of the BSC and the BCC. However, I must say that a first reading of that part of the Bill indicates that the new BSC will have hardly any greater powers of sanction than the existing bodies. But that is an issue for another day.

Further problems arise because programme controllers and other senior executives do not always regard as mandatory the codes and guidelines laid down and all too often interpret them as they think fit. In some cases, there is no doubt a genuine lack of understanding of the codes or ignorance of their importance. To avoid that kind of problem arising in the future, Article 7(1)(f) of the Charter needs to be strengthened so that the governors have an obligation not only to,

    "monitor and supervise the corporation's fulfilment of its legal ... obligations,"

but also to enforce them. A new obligation is also required to ensure that all controllers, senior executives and any persons having programme responsibility sign a copy of the relevant codes or rules laid down and published by the governors indicating that they have understood them and will abide by them. I am very sorry that my noble friend indicated that the Government do not share that view. It seems very odd. Surely, if we believe that this is an important matter, as I certainly do, it should, like the other important matters that are included in the Agreement and the Charter, also be included. So I hope that my noble friend will reconsider this matter and, most importantly, will be able to give assurances that the shortcomings that I have mentioned will be rectified.

Finally, I come to the position of the chairman and governors of the BBC. In Article 7(1)(a) of the draft Charter, they are required:

    "to approve clear objectives ... and monitor how far the Corporation has attained such objectives".

Those are normal functions of those responsible for the direction of any public body. But paragraph 2.1 of the Agreement states:

    "The Corporation shall be independent in all matters concerning the content of its programmes ... and in the management of its affairs".

Noble and learned Lords may well be able to interpret the subtleties of the apparent contradictions between those two statements. But for the vast majority of licence fee payers it will be difficult to understand who really runs the BBC and where the buck stops. The interrelationship between the two documents causes difficulty and confusion. The two statements appear to establish a gulf between the governors and the management of the BBC which must be damaging and cannot be conducive to the smooth running of the corporation in accordance with its obligations. A recent

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glaring example occurred in the case of the broadcast by the Princess of Wales when the director general failed to inform the chairman in advance that the programme was being made, apparently because he had no confidence in his chairman and presumably feared that the programme might be banned or interfered with in some other way.

I submit that the proposed framework for running such a great and influential organisation as the BBC is unacceptable in its present form in that the relationship is not clear between the governors, who must carry, and be seen to carry, ultimate responsibility, and the management appointed by them. The well-known question Quis custodiet ipsos custodes is also very relevant. We know who are the custodians. But who will bring them to task if they fail in their duty? That is the nub of the problem and the cause of many of the lapses from the expected high standards of the BBC.

I hope that my noble friend will be able to give firm assurances that this muddled situation will be clarified and that the other matters I mentioned will be rectified. The documents can then be resubmitted to Parliament, appropriately amended. I beg to move the amendment.

Moved, as an amendment to the Motion, at end to insert ("but regrets that these documents do not adequately clarify the responsibilities and authority of the governors of the BBC.")--(Viscount Caldecote).

3.57 p.m.

Lord Donoughue: My Lords, I wish to thank the Minister for laying the BBC Charter and Agreement before the House for debate and for meeting--as he made clear--several of the points of concern that we previously expressed. But several points remain and I propose to outline them. Since this is the only opportunity for us to discuss the future of the BBC, I hope that the House will bear with me if I cover several of the main issues. First, I must take the opportunity to thank the Minister for providing, before Christmas, the informal pre-debate discussion which many noble Lords attended. It enabled us to clarify several issues and so will save the time of the House today. I personally concluded that it was a helpful procedure which we might follow on other Bills and improve the quality of our debate.

Today's discussion of the BBC comes just ahead of next week's Second Reading of the Broadcasting Bill. Taken together, they enable us helpfully to survey the whole British broadcasting landscape. In my view, our aim should be to set out a framework which encourages growth in what is one of our most dynamic and rapidly changing technological activities, while at the same time preserving and encouraging the best of traditional British broadcasting values.

Today's discussion is of great importance to the future of British broadcasting because the BBC is of such great importance. It is important, indeed, to the standards of world broadcasting. It is one of our great cultural assets. It sets standards which others try to follow and by which others are judged. It was because of the BBC's unique quality, representing the best of public service broadcasting, that we on this side for long

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feared the destructive intentions toward it of certain neolithic Thatcherites who, in the 1980s, from a blind belief in ideological market forces and that the BBC was a nest of Marxist revolution, wished to kill off our public service broadcaster. We are greatly relieved that that virus--a kind of political mad cow's disease--has been contained, at least in relation to the BBC.

Therefore we welcome the fact that the Charter enshrines the public service broadcasting commitment for the BBC and that it retains the licence fee funding which is essential to it. I regret however that it does not extend the licence fee for the full 10-year term of the Charter, which would have been logical and would have assisted the BBC's long-term planning. We understand that in a fast-moving technological world the Government wish to retain some flexibility. But I must warn the House that the reality is that such flexibility, if utilised, will work only one way; that is, towards the end of the licence fee. This is therefore a reprieve and not a permanent guarantee of public financing.

Two aspects of the funding framework particularly concern me. The first is that, with the licence fee review in 2002, the BBC will feel pressures in pursuit of commercial survival to degrade quality and neglect minority interests such as education--to which I shall return later. In the recent past a previous Secretary of State said that the future of the licence fee depended on the BBC's capacity to maintain audience share. That suggests that, in order to obtain renewal of the licence, the BBC must focus on crude audience numbers and neglect minority quality. We would regret that.

The second funding aspect relates to the provision in the Agreement for other revenue sources--advertising, sponsorship, pay-per-view, and so forth. Such developments may erode the distinction between the BBC as a public service broadcaster and the other commercial broadcasters. It increases the competition for limited commercial revenues and may, in practice, reduce the independence of BBC programme producers to produce a wide range of quality programmes.

At this point I must mention an even more profound anxiety. The previous Charter allowed commercial funding--advertising and sponsored programmes--with the permission of the Secretary of State. The new Charter, in Article 3(c), is significantly different. It states that it is a Charter object of the BBC to provide programmes,

    "funded by advertisements, subscription sponsorship, pay-per-view system, or any other means of finance".

That is a profound change of emphasis. Therefore, though the verbal commitment to the principle of public service broadcasting is clearly contained in the Charter and is very welcome, the accounting reality beneath the rhetoric is a full-speed-ahead drive towards commercialising the BBC, to prepare it for full commercialisation when the licence fee ends. That is the reality and I am not happy with it.

The appointment of a new chairman of the BBC has just been announced. For a long time he was head of a leading commercial TV company and, I note, a former Conservative counsellor on the GLC. Presumably therefore he will not delay the process of

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commercialisation. I make two comments on that appointment. First, the Labour Party is totally committed to public service broadcasting and assumes that the new chairman will totally support that purpose and objective. Secondly, this is a sensitive appointment in what is in reality an election period. We are totally committed to the editorial independence and political neutrality of the BBC. We assume that the new chairman will see his role as totally to defend that neutrality and independence and not the electoral interests of the Conservative Party during the election campaign. We assume that is the case and on those standards Sir Christopher, for whom I have much respect, can expect to be judged.

I shall not bore the House by going through the whole long menu of specific sections of the Charter and Agreement. However, I shall try to focus on a few major items which particularly concern us on this side. In relation to the governance of the BBC, where the central question is the role and accountability of the governors--both the accountability of the broadcasters to the governors and of the governors to the British public--one sometimes feels that there is a degree of confusion between the roles of the board of management and the board of governors. We welcome the fact that the role and accountability of the governors is spelt out more explicitly than hitherto. But we must point out that their power appears to be greater and more centralised, though not clearly more accountable, while the powers of the national governors and councils are reduced to advisory functions.

The key roles of the board of governors under the new Charter will be, first, to approve the clear objectives and promises for the BBC's services; and, secondly, to monitor and to report annually on how those objectives and promises are carried out. Of course, much depends on how precise and meaningful the objectives and pledges are. The published statement of pledges to audiences is not wholly reassuring because it reads so vaguely. Can the Minister say whether that document was seen and approved by the governors? I am told that it was not, which does not promise much for accountability in the future. Perhaps it could be redrafted more precisely in time for the debate in another place.

When one examines closely the two main functions of the BBC governors, one detects an inherent conflict of interest. They are responsible both for developing the BBC services and for regulating them. To some extent therefore they are both judge and jury. That situation is not satisfactory and we need--this whole new raft of government proposals would be an opportunity--an independent regulator to monitor the BBC and its governors and to hold them publicly accountable. After all, huge sums of public money are involved. I say that as a great friend and fan of the BBC. It would increase public confidence in the BBC. Such a body may also regulate the whole of broadcasting--commercial as well as public service--basically to protect the consumer of broadcasting, and I am sorry that the Government retreated from a related idea floated in the White Paper.

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The situation in relation to the national broadcasting councils seems to reflect a degree of centralisation in the constitution. Previously those national councils had the power and duty stated in the charter to "control policy" in their own countries. That has been eliminated in the new Charter. The new role is to "advise and assist"; control of policy goes to the governors, though after first consulting the councils. It remains to be seen how that balance of power works out and much will depend on the membership of the national councils. Can the Minister say who selects those members? Can he confirm that it is the governors?

I remain troubled therefore about the accountability of the governors to the public and particularly the accountability of the corporation to the governors, though the situation is much improved. I am troubled also about the process of centralisation at the BBC which leaves the nations and regions within the United Kingdom with too little power in the BBC constitution. I am also troubled that the BBC is no longer required to appoint any advisory committees. Certainly we hope that the BBC retains from the old regime the particular advisory committees--the advisory councils--on education, science and religion. These, regrettably, are no longer specifically referred to in the new document.

I shall leave others in the House--I see the names of the usual list of distinguished suspects among our speakers today--to explore the highly subjective, and in my view ultimately insoluble, dilemmas concerning taste, bias, accuracy and so on in programme standards. Many of the concerns of the noble Viscount, Lord Caldecote, derive from that area. I sympathise with a number of his points, though I would not vote for his amendment. These documents go further than previously, and in my view go better, to commit the BBC to the highest programme standards. It may be seen as a weakness that the Charter suggests only guidelines, which are ultimately unenforceable. In the modern media world, where the trashy gutter standards of tabloid journalism are increasingly infecting television, that may indeed be risky. Bad television drives out good. Perhaps that should be nailed down with an enforceable code, as with the Radio Authority. That would bolster good management against bad journalists. But it is not desirable to be too nannyish. Ultimately good television is creative. To shackle its creativity excessively would be to inhibit its quality. Certainly in the fields of the broadcast arts, I would not want the BBC to be forced to conform, say, to the Cromwellian puritanism of the political right, or to the yobbo philistinism of the Sun newspaper, and I wish it would not conform to the neo-Stalinism of the politically correct thought police. The problem is to achieve balance between achieving creativity and avoiding too much offence. What is before us is not a bad balance--with a little more authority behind the code. After all, people can always switch off the television.

There are a number of particular points which concern me which I wish to raise with the Minister. The first is about the BBC's support for the arts. Currently its arts expenditure, at around £300 million, is vitally important to our cultural world. It is Britain's biggest patron and

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sponsor. But the huge financial pressures on the BBC to go commercial, to go down market, to cut costs must put some of its arts support in doubt, especially the support for new music and arts, which are less popular, and for live performances, which are more expensive. In that threatening context I view with concern the alterations in the words in the Agreement referring to the BBC's crucial obligation to support the arts. In the previous Charter, in the so-called "governors' resolutions", there was an unequivocal commitment to new arts and to live performances. That is now weakened, with just a mention among the vague pledges. I would urge the Government, even at this late hour, to amend and strengthen that commitment.

There is also in that section a reference to the BBC's commitment to programmes of "an educational nature". That is not good enough. All kinds of programmes--general nature programmes--are generally educational. That is not enough. Indeed, it is worrying that programmes such as Esther Rantzen's chat show are alleged--I say "alleged"--to be funded under the adult education budget. We are particularly concerned that there appear to be cuts planned in the schools television and radio programmes. Because of that threat I believe that the Charter and Agreement should contain not weaselly words about "programmes of an educational nature" but specific commitments to a minimum output and guaranteed standard of specifically educational programmes, as indeed already applies to Channel 4.

The issue of the privatisation of the BBC's transmitters is bound to arouse concern on this side of the House. We will have a further opportunity to debate that in the Broadcasting Bill. Our approach will be influenced by the proposed arrangements to regulate the future transmission pricing costs to the BBC and for the proceeds of the sale to go to the BBC. I hope that the Minister will give us some details and some reassurances on that point.

I have two final points. On radio, with its new commercial character, could the BBC now launch a commercial radio station based on advertisements, competing with and indistinguishable from the commercial radio channels? It appears so. On the World Service, we are deeply concerned about the most recent savage cuts which threaten the range and quality of this unique broadcasting asset. But I should like to leave that very important issue to my noble friend Lord Dubs when he speaks later.

This Charter and Agreement are much better than we might have feared. I must congratulate Ministers on resisting the barbarians who were earlier at the gates. We still have concerns about the obligations on arts and educational programmes and about the provisions for borrowing and for the privatisation of the transmitters. We are not fully satisfied with the accountability of the governors or the role of the regions in the new constitution.

But my final concern is more general and is about the whole future of the BBC, whoever are in government. Looking at the dramatic changes taking place in the media, the immensely costly digital revolution in technology, the rapid expansion of satellite and cable

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competition, the convergence of media forms, the huge multiplicity of channels to be on offer, the growing number and public acceptance of subscription channels, I actually worry about the real capacity of the BBC to survive in that immensely costly world. It will certainly and inevitably suffer a big decline in market share. It has already lost coverage of some of its precious sporting jewels. As the BBC is steered by the Government towards even greater commercialisation, and as it grows less distinct from other commercial broadcasters, I wonder whether it will be able to maintain the case for taking the licence fee from a public who is watching it much less. Personally, I am not too optimistic. It will be the responsibility of a future government to fight that important battle for public service broadcasting even more strenuously and to preserve it for this country.

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