The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)
I thank the hon. Member for Garston and Halewood (Maria Eagle) for giving the House the opportunity to debate the White Paper on the future of the BBC, even if I am less than happy with the terms of her motion. The motion talks about the “threat” to the
“editorial and financial independence of the BBC”—
two principles that will be explicitly strengthened, rather than weakened, under the proposals in the White Paper. However, that is typical of the entire debate around the charter renewal process, which has been characterised by the Government’s critics tilting at windmills, perhaps in tribute to Cervantes, the 400th anniversary of whose death we are commemorating, alongside that of Shakespeare.
The White Paper was designed not to wreck the BBC, but rather to cement its status as the finest broadcaster in the world for many years to come. It was informed by an extensive consultation—the largest of its kind ever undertaken by Government. We talked frequently and at length to representatives of the BBC—both the management and the trust—in what the chair of the BBC has described as “constructive engagement”. We received more than 190,000 responses from the public; 16 focus groups were held; there was nationally representative polling of more than 4,000 adults across the UK; and more than 300 organisations and experts engaged with us. I will not list all of those, but to give a flavour of how diverse they were, let me say that they included the Austrian Broadcasting Corporation, the British Film Institute, Equity, Glasgow City Council, Sir Lenny Henry, the Met Office, the National Union of Journalists, UK Sport and the Wellcome Trust.
I am also grateful to the members of the advisory group, who provided expert views; to Armando Iannucci, who assembled two panels containing some of the best and brightest creative minds working in television today; and to David Clementi and David Perry, who conducted detailed reviews of BBC governance and licence fee enforcement respectively. Moreover, February saw the publication of reports on BBC charter review by Select Committees of both Houses. Each one was considered very carefully by myself and the Department, and I am pleased that we agreed with many of their recommendations.
Pete Wishart
I say the same thing that I said to the shadow Secretary of State. The Secretary of State will have seen from the response from Scotland that the dissatisfaction levels there are higher than in the rest of the United Kingdom. There is a sense that the BBC does not properly and adequately reflect us as a nation. What will he do to address those concerns?
Mr Whittingdale
I share those concerns. It is a matter that I discussed at some length with the hon. Member for East Dunbartonshire (John Nicolson), who is hoping to catch your eye shortly, Madam Deputy Speaker. He is a member of the Select Committee that I gave evidence to yesterday on charter review. The hon. Member for Perth and North Perthshire (Pete Wishart) is absolutely right that opinion research has shown that the level of satisfaction with the BBC, while still being high, is lower in Scotland than in other parts of the United Kingdom. That is of concern to the BBC. We have sought to put in place new measures to ensure that the BBC takes action to address that. First, there is representation on the board. We want somebody who will act as a voice for Scotland, and I will come on to the governance arrangements shortly. Secondly, there will be a new service licence for each of the nations of the UK, so there will be a specific service licence setting out in broad terms how the BBC is expected to ensure that it meets the needs of people in Scotland. However, at the end of the day, these are matters for the BBC. The service licence, like all service licences, will be set in broad terms. How the BBC goes about raising the level of satisfaction in its output in Scotland is ultimately a matter for the organisation, but I know that it is anxious to address that. I am sure that the director-general will be happy to talk to the hon. Gentleman about that.
Pete Wishart
I am very grateful to the Secretary of State for that. He knows that there is great concern about this issue in Scotland. A few proposals have emerged, including the one from the Cabinet Secretary for Culture, Europe and External Affairs in the Scottish Parliament for a much more federal type of BBC. There is also the ongoing discussion about a new service that is produced in Scotland, where we can see the eyes of the world through a Scottish production with Scottish values. Does the Secretary of State see any merit in that? If he does not, what is wrong with those suggestions?
Mr Whittingdale
This is the point at which I fear I will disappoint the hon. Gentleman. Although it is important that the BBC achieves high levels of satisfaction right across the United Kingdom, it is the British Broadcasting Corporation and it represents the whole of the United Kingdom, and I do not support making it a federal structure. The question of how it provides news coverage is for the BBC, but as it is the UK broadcaster, it is important that it should provide a UK-wide national news bulletin that draws the nation together.
Julian Knight (Solihull) (Con)
I thank the Secretary of State for so generously giving way. On this issue of Scotland and other regions in the United Kingdom, does he agree that, under this new arrangement, Scotland has far greater representation than many regions within England? The west midlands, for example, has an equivalent population to Scotland, but Scotland has a much greater seat at the table.
Mr Whittingdale
There will be a non-executive member of the BBC board to represent England, but not specifically each region. The requirement on the BBC, as part of its purpose, is to serve the nations and regions. The BBC is fully aware of the dissatisfaction that is felt in some parts of England. My hon. Friend identified the west midlands. The level of investment by the BBC in the west midlands has already been debated in the House in the past. It is important for the BBC to invest in production in every part of the United Kingdom and to reflect the requirements of every part of the country.
Deidre Brock (Edinburgh North and Leith) (SNP)
Mention is made in the White Paper of sub-committees for the four nations. Can the Secretary of State elaborate a little more on what might be the make-up of those sub-committees and how they will be chosen?
Mr Whittingdale
I am afraid that I cannot do that at this stage. That will primarily be a matter for the BBC. While the charter will set out the over-arching governance structure—in other words the creation of a unitary board and an external regulator—organisation within the corporation itself is largely a matter for the BBC. Obviously, I encourage the hon. Lady to discuss that matter with the BBC and perhaps the new chairman of the board, who is currently the chairman of the BBC Trust.
I was tempted by the hon. Member for Perth and North Perthshire to talk about some of the evidence that I gave yesterday to the Select Committee. Obviously, the House of Lords Committee has also taken a close interest in these matters, and I have no doubt that the Committees in both Houses will continue to do so as we move towards producing a draft charter, which I hope to do before the summer. Members will then have plenty of time to study it in detail before debates in both Houses as well as in the devolved Administrations, as we committed to in the memorandum of understanding with the devolved Administrations. Once approved by the Privy Council, the new charter will formally come into effect on 1 January 2017 and the BBC will then transition to its new model of governance and regulation over the ensuing months.
I will not repeat all the details of the White Paper, because we had a lengthy discussion when it was published, but let me address the two specific concerns, which were raised by the shadow Secretary of State, of editorial and financial independence. On the former, the new governance structure is exactly as recommended by Sir David Clementi in his widely welcomed report. Whereas previously all of the appointments of the governors of the BBC and, following changes, the BBC Trust were made by the Government, at least half of the new BBC board will be appointed by the BBC. The six positions that are Government appointees will be made through the public appointments process, which was not previously in place. Peter Riddell, the new commissioner for public appointments, said:
“I welcome the broad principles outlined in today’s BBC White Paper about how appointments will be made to the new Unitary Board. To put these into practice, there will need to be a robust, independent process which attracts a broad range of candidates for these posts.”
That is exactly what the Government want to see. The BBC accepts that the Government should appoint both the chairman and the deputy chairman through the public appointments process. It has questioned whether the Government should make the appointment of four non-executive directors, but those four NEDs are there specifically to represent each of the nations of the UK, and their appointment is made not just by the Government in Westminster, but in consultation with the devolved Administrations. If that was taken away, we would lose the ability of the devolved Administrations to have a say in the appointment of the governor to represent each of the nations of the UK.
However, as well as putting in place a more independent board, we will also strengthen the independence of the director-general as editor-in-chief. Editorial decisions will be a matter for him and the BBC executives— not for non-executive board members. Those non-executive members will be able to hold the director-general to account for his decisions, but only after programmes are transmitted. It is clear that the board’s involvement is to oversee and to deal with possible complaints about editorial decisions, but only after transmission of programmes.
The shadow Secretary of State mentioned that we have decided to extend the term of the charter to 11 years specifically to meet the concern that it should not coincide with the electoral cycle. It is correct that we are intending to have a mid-term health check, and, as I have repeatedly said, it is precisely that—a health check. It is not an opening up of the charter. However, it does seem sensible that, if we are setting a charter for 11 years, we should not have no opportunity whatever to look at how it is working for the whole of that 11-year period, particularly at a time when changes are taking place so rapidly. We have said explicitly in the White Paper that it is a review to provide a health check focusing on the governance and regulatory reforms in the mid-term. We have gone on to say that the review will not consider changes to the fundamental mission, purposes and licence fee model as these have been determined by the current charter review process. I make it clear again that this is a health check to examine how the changes we are putting in place are working, but we do not anticipate any need to reopen questions about the charter.
Sammy Wilson (East Antrim) (DUP)
Given the criticisms of the inefficiency and value for money at the BBC, the huge payouts for people who are made redundant, for example, and then come back nearly a year later—even the National Union of Journalists has criticised that—and the high levels of pay at management level, if after five years there has been no reform or change in the squandering of money by the BBC, what will happen at the review at that stage? Would the Secretary of State reconsider the licence fee or would he put in greater financial controls?
Mr Whittingdale
We are actually putting in stronger financial controls now, because we are opening up the whole of the BBC for the National Audit Office to examine to consider the questions of whether maximum value for money is being obtained for the licence fee payer. Not only will the NAO be able to carry out value-for-money studies, as it has in some areas already, but it will become the auditor of the BBC. The NAO has a very good record of ensuring that public money is spent properly and is not wasted.
Julian Knight
To return to the health check, does the Secretary of State envisage that it would cover whether or not adequate progress had been made to allow access to independent producers, as set out in the White Paper?
Mr Whittingdale
We have set out a path that will, we hope, lead to the whole of the BBC’s schedule being opened up for commissioning. We would expect the BBC to meet the targets in doing that. We will continue to talk to the BBC about that and if it looked as though they were failing to meet those targets we might raise that with them before, but that is already set out in the charter. No changes would be required, because we have already made it clear that we expect the BBC gradually to open up the whole of the schedule until it reaches 100%.
Dawn Butler
On the subject of independent producers, after the last debate we had on the BBC I thank the Minister for Culture and the Digital Economy for helping to secure the recordings of “The Real McCoy”. I hope to have a special screening in Parliament with a Q&A with some of the original cast in the not too distant future, and I hope that both the Minister and the Secretary of State will come along.
Mr Whittingdale
I am delighted to have given way to the hon. Lady to allow her the opportunity to praise my excellent Minister, who is sitting beside me.
I want to come back to the point about the National Audit Office and its ability to carry out value-for-money studies across the BBC. It is correct that the activities of BBC Worldwide are not funded with public money—they are commercially funded—but the success of BBC Worldwide has a definite impact on the finances of the BBC since it generates income for the BBC, and it is important that we extract maximum value to minimise the burden on the licence fee payer. As I mentioned when we debated this issue in the Select Committee yesterday, BBC Worldwide has not always had a brilliant record of looking after the money it spends. The Select Committee, when I was the Chair in the last Parliament, was highly critical of the Lonely Planet saga, which resulted in a massive loss to BBC Worldwide. However, I can reassure the hon. Member for Garston and Halewood and the BBC that the National Audit Office is very aware of the concerns that have been expressed and is confident that it can provide reassurance that it will have no impact either on creative decision making in the BBC or on commercial negotiations with other companies.
The NAO already audits a number of public bodies that have commercial relationships with other companies and is well familiar with the need to maintain commercial confidentiality when necessary. I know that the Comptroller and Auditor General will continue to talk to the BBC, but I very much hope that we can find a way whereby the BBC’s concerns are satisfied. The hon. Member for Garston and Halewood also talked about the BBC’s financial independence and, as I said, I believe that we have strengthened that rather than diminished it. We have agreed that the licence fee should be subject to regular review every five years, and that for the first five-year period it should rise each year in line with inflation, having been frozen for a long time. We have also agreed to close the iPlayer loophole and to phase out the broadband top-slice. That means that the BBC can now plan with certainty on the basis of licence fee income, along with its own commercial earnings, and it will have total flexibility in how it spends its money, with the single exception of the ring fence for the BBC World Service and the top-up grant that the Government are giving to fund its expansion.
Mr Nigel Dodds (Belfast North) (DUP)
The Secretary of State is outlining the freedom that the BBC will continue to have in expenditure, but one of the big concerns for the public is transparency. Why was there a withdrawal from the proposal to force the BBC to publish the pay packages of presenters and others in the BBC? It was originally set at about £150,000, but now it is up to a massive £450,000. Why was the decision taken to increase that when most members of the public think that it was perfectly reasonable, as this is public money and the information should be out there and transparent?
Mr Whittingdale
I hear what the right hon. Gentleman says and have some sympathy with him. We debated with the BBC the appropriate level at which to set the publication limit and, after that debate, set it at £450,000 as a first step. It will mean that those individuals who are the highest paid on the BBC payroll will now be identified, and I think that is an important step forward in transparency. I hope that it is not the end of the saga and I would encourage the BBC to go further. The BBC expressed concerns about the consequences if it were required to publish the names of more individuals at lower levels of pay, but we will see how this first step goes. I share the right hon. Gentleman’s hope and I hope that in due course we might see more publication.
Helen Goodman (Bishop Auckland) (Lab)
May I suggest to the Secretary of State that tweaking that level downwards might be reviewed at the five-year point?
Mr Whittingdale
I am sure that the BBC, which will be anxiously listening to this debate, will have heard the pressure that is being put on the Government to achieve greater transparency. Since I too would like to see that, I hope that it will consider it.
Mr Andrew Turner (Isle of Wight) (Con)
Is my right hon. Friend absolutely certain that nobody wishes the limit to be set at a much lower level?
Mr Whittingdale
The people who initially did not want it to be set at a lower level were in the BBC. The BBC raised concerns about the potential consequences. For instance, it talked about whether it might result in poaching once people’s salary levels were known. There was also a concern that it might have the effect of bidding up salaries. I do not think that those concerns are merited, but as I say, we have taken a first step towards greater transparency and I hope that in due course we can go further.
Let me very quickly address the point raised by the hon. Member for Garston and Halewood about the contestable pot. The contestable pot is a small amount of money, amounting to £60 million over three years, which, out of the total amount of money available to the BBC, is a very small amount. It does not affect the July settlement. We made it absolutely clear that the Government stand by the July settlement, and the funding for the contestable pot does not in any way affect it. We will be consulting on precisely how the contestable pot will operate. The hon. Lady raises concerns about whether it will fall within the requirements in respect of state aid. I rather hope that that will become an academic issue in a few weeks’ time but if, extraordinarily, it still applies, we will need to take that into account.
Far from threatening the BBC, the proposals in the White Paper, as my right hon. Friend the Member for Ashford (Damian Green) said earlier, have been welcomed by it. Lord Hall, the director-general, said:
“This White Paper delivers a mandate for the strong, creative BBC the public believe in. A BBC that will be good for the creative industries—and most importantly of all, for Britain.”
The BBC Trust chairman has, as I mentioned earlier, talked about the
“constructive engagement between the Government, the BBC and the public”
which
“has delivered a White Paper that sets good principles, strengthens the BBC’s governance and regulation and cements a financial settlement”.
The chair of the Producers Alliance for Cinema and Television, Laura Mansfield, said:
“This is an historic charter for the UK’s entire production sector and recognises the world-leading creativity British producers bring across every genre of production. This white paper will give BBC commissioners the freedom to choose the very best ideas, wherever they come from, whether that’s BBC Studios, the smallest or the largest production companies, while ensuring diversity of supply and regionality is rightly protected.”
The right hon. Member for Tottenham (Mr Lammy) was one of the first people who celebrated the fact that diversity is for the first time to be enshrined in the BBC charter.
Mrs Helen Grant (Maidstone and The Weald) (Con)
On regulation and diversity, does my right hon. Friend agree that Ofcom itself may need to better reflect the population of the United Kingdom, especially as diversity becomes an ever-increasing component of its regulatory requirement?
Mr Whittingdale
Does my hon. Friend mean the composition of Ofcom or its actions?
Mrs Grant
The make-up. At present its diversity figures at senior management level are about 6%.
Mr Whittingdale
My hon. Friend raises a perfectly valid point. Obviously, Ofcom is a public body. We would want to set an example in achieving diversity, and if its performance falls short, that is something which I know my hon. Friend the Minister for Culture and the Digital Economy and I will be happy to point out to the chairman and the chief executive.
Sammy Wilson
Can the Secretary of State clarify whether one of the benefits for the BBC will be that it will now have access to the database of Sky and other broadcasters, so that it can identify the names and addresses of people who may not be licence fee payers?
Mr Whittingdale
We are looking at ways of enforcing the licence fee requirement. Anybody who watches live television is required to have a licence, so those databases represent people who are required to have a television licence.
I wish to add in reply to my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) that although I would not suggest that she is not right to be concerned, Ofcom took a major step towards greater diversity with the appointment of a female BME chief executive, who is doing a fantastic job. I am sure she would agree that there is still more that needs to be done.
Mrs Grant
Diversity is an important issue which is close to the hearts of many of us and we are making good headway on it, but does my right hon. Friend believe that designated funding—ring-fenced funding—might be helpful in driving diversity, as suggested by Lenny Henry?
Mr Whittingdale
We have set diversity as one of the public purposes in the charter. How the BBC delivers that is a matter for the BBC, but having been given that requirement, it will have to state how it will go about it, and that will be subject to Ofcom scrutiny.
The BBC reaches 97% of the UK population and 348 million people around the world every week. It is one of our most recognisable and strongest national brands and an utterly vital source of information, education, entertainment and soft power. It is precisely because the BBC has such a special place in British life and is so valued by the British people, and because the rest of the world feels the same way, that this Government wanted to secure its future and enable it to thrive in a media landscape that has changed beyond recognition in the past decade. That is what the proposals in this White Paper do.
