BROADCASTING

HC Deb 01 August 1978 vol 955 cc619-36

8.0 a.m.

Mr. Phillip Whitehead (Derby, North)

I am glad that my hon. Friend the Under-Secretary has the stamina at this hour to turn her attention to a quite different subject which I would prefer to have debated not at a time such as this but in a proper parliamentary debate upon the annual report of the broadcasting authorities. We have pressed for that for a long time, but have never achieved it.

I want to raise two particular matters concerning the organisation and financing of broadcasting. The first is consequent upon the publication last week of the White Paper on the future of broadcasting. The second is consequent upon the fact that the annual licence fee increase for the BBC expired at the turn of the one-year period, which was accepted on both sides as being the duration of its run, over the weekend at the end of July.

Let me first take my hon. Friend into some of the matters raised in the White Paper on broadcasting. I welcome the Government's acceptance of so much of the report of the Annan committee, a committee upon which I served. I am particularly pleased that they have taken up the four central principles which the committee attempted to enunciate as the major factors in looking ahead over the next 15 years of broadcasting change, namely, the principles of flexibility, diversity, editorial independence and public accountability.

I want to consider how well those various principles have been honoured in the commitments into which the White Paper has entered. The ground plan decised by the Annan committee essentially looked ahead at organic change in telecommunications over the next 15 years. It tried to provide a sort of route map which would take us through some of the changes. Some of the changes will be forced upon us and will be inevitable. Others will come about as a result of consideration of the way in which a properly developed pluralist system of broadcasting should be evolved.

We saw that as involving new institutions, and we tried to enshrine for those institutions an importance principle which has so far been preserved in British broadcasting. It is that separate but competing forms of broadcasting should have separate and therefore guaranteed forms of finance. One can see from the United States why that is necessary. The basis for it is simply that once there are two broadcasting organisations competing for the same forms of finance there is always the possibility, following Gresham's law, that standards will fall. For that reason we held this principle to be at the centre of the greater multiplicity of outlets and the multiplicity of editorial voices that we thought necessary for the future of broadcasting. Do we have all that? How far do we go towards it in the White Paper? That is part of my theme.

First, I deal with the BBC. I was a little surprised by the proposals in paragraph 5 of the White Paper concerning the insertion of new boards of management for the BBC. The White Paper suggests that these should be appointees of the Home Office. They have been much attacked and derided in press comment recently. There is at the heart of the proposal, which has emerged from the Cabinet and the Home Office, a misunderstanding of the direction and therefore the thrust of the logic of the Annan arguments. That is as true if we consider the arguments of the majority of the members of the Annan committee, who finally opted against the splitting of the BBC, or the logic of the minority, of whom I was one, who preferred to split that organisation into two separate corporations.

I think we all felt that the BBC was unwieldy, was top heavy, was on the way to becoming a kind of over-mighty subject too concerned with its own territorial aggrandisement within broadcasting, and with its board of governors within recent years perhaps too involved with day-to-day management, not sufficiently detached and able to take a view of the general public interest in broadcasting which is, of course, required of such a body.

The minority view on the Annan committee was that the logical answer to this was to have two separate corporations, in that the radio and television sides of the BBC had developed separately—if we were going about this from scratch, no one would have thought of putting them together—and that it would help the editorial diversity of British broadcasting to have two separate public corporations, both financed by the licence fee, to cover the national instruments of broadcasting.

We valued very highly the issue of editorial independence, and this is why in some ways the proposals in the White Paper are something of a curiosity. Critics of the present structure of the BBC—I shall quote only one—have mentioned that the great broadcasting organisations of this country form a kind of unelected double parliament making decisions on behalf of the entire society over the whole professional world of broadcasting; they can decide what resources to assign to drama, or to politics, or to competitive sport. They decide to what extent the scheduling of their organisations shall be competitive, to what extent the broadcasters are to aim at majority or minority audiences. Those powers are very great and they are vested in very few people within the BBC. If there is to be a single policy for the coverage of news, the arbitration of taste, of documentary interest and all of these matters within the one indivisible corporation, clearly there are problems in such a concentration of power, because the concentration of power involves a unity of purpose.

Sir Charles Curran, the last director-general of the BBC, said precisely that in one of his speeches. He said: In a single organisation like the BBC there must therefore be a single approach to these matters. He was talking of the question of news coverage. Nature abhors a vacuum and a unified organisation abhors inconsistency. Yet, if we were to have a proper diversity of opinion and viewpoint in the kind of plural broadcasting system that we envisage for the future, we believed that it was necessary to have perhaps some decentralisation of editorial control. That, I think, is a fairly praiseworthy objective. It was rejected by the majority of the members of the Annan committee, who settled for administrative reform by exhortation within the BBC, and—with two dissentient voices, of course—we all suggested that local radio at least should be separated from the BBC and allowed to go its own way under a new authority charged with the development of local radio as its prime concern. That would have put a term to and set down some boundaries to the expansion of the BBC into new fields.

The White Paper has not gone for any of this. It has made a gesture to show that it follows the logic of Annan. It is a gesture which is tentatively in the direction of three broadcasting corporations rather than one, because it suggests that there should now be boards of management for radio, for the external services and for television, but with the same director-general sitting on all three boards and the same main board governors, and this measure towards decentralisation carried out by these new boards of management who are Home Office appointees—a dreaded phrase.

Sir Hugh Carleton Greene, the former director-general of the BBC, lashed out at these proposals in The Observer on Sunday. He said that half the members were to be Home Office-appointed outsiders and added: So the management of the BBC is to be placed largely in the hands of political appointees. What an opportunity for patronage! Three nice new quangos with seats for retired trade unionists and, in the case of the external services management board, for retired ambassadors and high commissioners who, however distinguished they may be, have spent their lives implementing the policies of the Government of the day—a habit, as I have had occasion to notice, which is hard to shake off. Sir Hugh, of course, is strongly of the opinion that anything which would challenge the independence of the BBC is to be regretted. I agree with him in feeling that these proposals are not, as set out in paragraph 49 of the White Paper, likely to increase the editorial independence of the BBC. They are certainly not likely to increase editorial diversity within the BBC because there is still to be one director-general, who will presumably be editor-in-chief in consultation with his chairman, exactly as has happened in recent years.

I think that there is too much protesting, perhaps, over the question of retired trade unionists, quangos and so on. How after all, are the governors of the BBC—the same will probably apply, for that matter, to members of the OBA—appointed at the moment? It is a nice point and somewhat hair-splitting to say that they are appointed by the Queen in Council rather than by the Home Office. These boards usually have retired trade unionists and such people on them. They certainly have very safe people on them. That has always been a consistent element in boards of governors—that they come from the great and the good and from the safest and most respectable elements in society. There is no reason to believe that the new boards of management would be any different.

But what major improvement would be achieved by this change? I doubt whether there would be any. First, if these boards were to be instituted they would be instituted only after painful squeals of protest from the corporation. There would be a feeling abroad that the independence of the BBC was being trifled with. If they came into existence, they would be wrapped around immediately with those subtle and emollient layers of co-ordinating bureaucracy which the BBC is so skilled at spawning on all necessary occasions. They would be lunched and entertained and taken around and in no time at all they would be fairly painlessly absorbed into the digestive system of this great organism.

So I do not think that there would be too much of a gain, and we might pay a heavy price for it if these proposals for boards of management were to go into effect.

What counter-proposals has the BBC put forward? According to The Times today, the BBC has made some proposals. BBC proposes alternative plan to White Paper", it says at the top of a report by Mr. Peter Evans. The report is very long and contains a good deal of judicious information provided by the corporation, but I cannot see much in the way of alternative proposals. We all have reason to ask the corporation, if it is so scared of these boards and concerned to put up an alternative—which suggests that it has addressed itself in a meaningful way to the problem of decentralisation and of its own top-heavy bureaucracy—what precisely its proposals are. There is a good deal of discussion of the opposition to the proposals in this report but few positive counter-proposals.

I do not know where this idea came from. The Annan committee looked at the composition of the boards of the nationalised industries, which are a combination of distinguished outsiders with some business experience and professionals from the industry concerned. The analogy is not exact with the BBC and it is unlikely that the Annan committee could have been prayed in aid as an inspiration for this proposal.

Indeed, one of my colleagues on the committee, Mr. Dipak Nandy, said fairly clearly in The Sunday Times at the weekend that the committee would not itself have made such a proposal. We agonised thoroughly over the question of what to do with the BBC, and because we were divided 10 to six and could not ourselves make up our minds, we presented the Government with two choices —either to divide the BBC in the interests of greater editorial diversity and as one way of getting rid of the layers of coordinating bureaucracy, or to leave well alone but stop its expansion into new media fields. The Government have let it go ahead with new expansion and have made a rather muffed gesture towards the principle of decentralisation.

What representations have the Government received from the BBC and elsewhere and what if anything do they propose as the intervening stage of discussion and consultation before legislation takes effect? We are talking in terms of 1979 for a new charter for the BBC. Essentially, the Government will have to deal with the kind of problems which the Annan committee tried to face and in a more thoroughgoing way, perhaps, than in paragraph 49 of the White Paper.

I turn briefly to the subject of the licence fee. Given the end of the one-year period after the last increase at the end of July, the BBC has, I understand, made proposals to the Government for a new increase. I should like to know exactly what the proposals are. Is it true, for example, as some newspaper reports suggest, that the proposal is for a £30 colour licence—a blow to be cushioned by the increase coming in three annual elements of £3, rather than one massive increase of £9, which would be very large?

Unlike many people in our party, some 100 of whom have signed an early-day motion suggesting that the licence fee should be abolished and replaced by the ostensibly less painful method of financing from direct taxation, I believe that the licence fee is the best system for financing the BBC. I came to think that, having joined the Annan committee thinking the precise opposite, because in many areas of our national life things are what they appear to be. If the BBC's independence is not in fact all that the BBC claims it to be, because of the negotiations it must continually have with the Home Office and the Treasury, nevertheless the fact that this is seen in the country and perhaps in the world as a linchpin of its independence from Government is an important reason for maintaining the system as it is.

It is one of the cheapest licence fees in Europe and one of the best values for money therefore that any community enjoying a broadcasting service anywhere in the western world could have. The Government must take that into account. It has to be weighed in the balance against the ever-present unpopularity of a poll tax—an unpopularity rising to a crescendo in an election year such as this probably is, when the Government face such an unpopular decision just a few months from a General Election.

We have to address ourselves to two points. First, is the level of licence fee which is sought a proper one? Second, is there any way in which we can break back front the unfortunate habit of annual review, annual increase, which is now to some extent tying down the independence of the BBC?

Even those such as myself who are critical of the bureaucracy, ambitions and sometimes claims to a kind of papal infallibility in broadcasting which the corporation gives itself nevertheless wish to see it strong, healthy and idependent. It will be none of those things unless it has an adequate licence fee income.

It is true that, as we are constantly reminded in letters from our constituents, the licence fee is unpopular. Eyebrows are raised even higher every time an enormous sum is spent on the televising of a prize fight, the buying up of a star personality or, more recently, and I think most unpopular of all, on the expenditure of £4.15 million for the purchase of the film "The Sound of Music". That is an extraordinary sum, about one-tenth of the entire cost of BBC2 for a year, spent on one old film. I find it hard to believe that individual decisions of that kind can always be justified. One reason why I want to see the broadcasting Vote properly debated in Parliament is that matters of this kind, about which the BBC governors should perhaps be asking questions, can also be discussed in the House.

Nevertheless, I believe that we should be considering the extent to which an increase can be granted at the same time as we are telling the corporation that we are not happy about some of its purchases, leading with "The Sound of Music", and with the amount of foreign material involved in those purchases. In today's Financial Times, Mr. Arthur Sandles, who is a fairly careful and scrupulous critic of television, has an article about the amount of bought-in material from the United States which is on television at present. He said: Last Saturday evening, surely the primest of all prime times, BBCI, the major channel of an organisation which is about to seek a one-third rise in its annual licence fee, started its peak programmes with Wonder Woman (US import), followed by an old (American) film and ending with Kojak (a US cop). Squeezed into this stars and stripes evening was one UK-made programme—an Australian comic hosting a seaside variety show. It is true that on the other side things are not much better. "The Incredible Hulk" has risen to fourth place in the ratings, doing wonders for ITV and even better than in his native country, the United States. Only Miss Esther Rantzen seems able to squeeze "The Incredible Hulk" out of the ratings at present.

Those programmes have large audiences. That is why the major television channels are competing to buy them. But when public service revenue is involved some questions should be asked, and I think that this is the proper place to ask them.

Having raised all these doubts, and discussed the degree to which many of my hon. Friends feel that the licence fee should be replaced altogether, I go on to assert that it should remain and that we should put it back on at least a triennial rather than an annual footing. If it is true that the BBC has proposed an increase in the licence fee to be phased over three annual stages, that is a step in the right direction.

It is an impossible burden for an organisation which is constantly having to distance itself from Governments and to preserve its independence if it is having to go cap in hand to the Treasury and the Home Office every nine or 10 months to discuss the next annual increment for which it must ask. The corporation is not always as straightforward as it should be in setting out precisely why it needs the money and where it will spend it. But I believe that on this occasion the increase is probably justified, and that once the House has been told, as I hope my hon. Friend will tell us today, precisely what is involved in the request we should return to a triennial system.

I want now to look at the two other elements in the White Paper which involve Government decisions about financing and to some degree new organisations. I am particularly pleased that the Government accepted the line of argument set out by the Annan committee in a unanimous recommendation that we should move towards an open broadcasting authority. As the White Paper discusses fairly early legislation, when can the initial programme board of the OBA be set up? In paragraph 18 of the White Paper, discussing the OBA, the Government suggest that the appointment of the members will be made by the Home Secretary and that these will be people with original ideas and the ability to put them into practice". I should hope so. I remind my hon. Friend that this is a channel which, even if it does not go on the air until mid-1980, will need a small nucleus of people planning the way very early on in which it should go about the commissioning of programmes. This is because it is a quite different kind of operation. This is a channel which has to live off the land very largely. It will not build itself an immense territorial empire of television studios. It will not have large numbers of people working directly for it or in its administration.

The job of deciding how the authority goes about commissioning material and hiring studios and arranging that transmitters be built requires one small but early and crucial decision to be taken. That is the decision to set up the OBA board and, more importantly, the programme commissioning body. It is no good saying that this must wait until some time far into the next Parliament I should like to have from my hon. Friend a commitment that it will be in the next Gracious Speech or in the first year of legislation of a new Parliament if we have an election first.

In the White Paper there was one departure from the proposals of the Annan committee as regards the organisation of the OBA. The White Paper suggested that the OBA must have a news service. It says: It is also desirable that the fourth channel should develop a distinctive news service, although news gathering is an expensive operation. As my small son says, "You can say that again." News gathering is a very expensive operation. That was one reason why the Annan committee decided that it was the kind of financial charge that we could not put upon the OBA, certainly not in its early days. We envisaged—and I think that most people thought that we were joking—that news coverage on the OBA would be confined to an announcer coming on occasionally and saying "It you want to watch the news please switch over to the BBC nine o'clock news, or News at Ten" or whatever. We did not see it as having a complete news empire all of its own.

Can my hon. Friend tell us whether the OBA is to have that news service set up entirely out of the launching aid or seed money—call it what one will—which the Government are to provide by way of finance? On the question of finance for the OBA, I remind my hon. Friend that it was an absolutely central principle in the Annan recommendations that the separate broadcasting outlets should have separate sources of finance. There is a problem here. Mr. Dipak Nandy made this criticism fairly strongly in The Sunday Times last weekend. The problem is that, as the OBA is proposed to be set up, it is left competing, on the one hand, for spot advertising revenue with ITV and, on the other, for public revenue with the BBC.

It is one thing to have grants in aid which are specifically geared to some of the programmes that are going out, educational programmes in particular. That is something which is established already, from the Open University programmes, in the relationship between the DES and the BBC. We would expect to see that continued and extended with the OBA. I wonder about the other matters of finance, particularly the presence of spot advertising.

I want to ask my hon. Friend about one part in the White Paper which discusses the question of who will sell the advertisements on the OBA and what the relationship with the independent companies will be. This is dealt with in paras 22 to 24 of the White Paper. Para 22 says: The OBA will also be empowered to negotiate contracts under which, in return for the payment of a rental, its regular programme makers"— it does not say who they are— would have the right to sell advertising time during the programmes they supply and an understanding about how their programmes would be scheduled. Para 23 says: The ITV companies have the capacity to expand their production on programmes and the organisational arrangements for selling advertising time". It goes on to say how much the OBA will have to rely on the companies in the earlier years.

Para 24 says: There will in any case need to be discussions about the question of scheduling and the OBA may wish to consider with the IBA the possibility of some complementary scheduling between the ITV channel and the fourth channel I hope that my hon. Friend sees what I am getting at here. If, as appears possible from this, the ITV companies are to be told that they can put their programmes en bloc on this channel, bringing their advertising with them, making their own arrangements for selling the advertising time involved—the spot advertising time—there would be either a complementary service, which in no time at all would be an adjunct of ITV—what would then become ITV1—or we should have, which is almost an impossibility, the ITV companies selling different sorts of advertising in competition against themselves, which I do not think they want to do.

I should like to hear from my hon. Friend whether it is envisaged, as I believed was generally accepted, that the OBA itself should be the seller of advertising time for this channel. In this respect at least, and for this new authority, the Annan committee harked back to what I believe was recommendation 43 of the Pilkington committee, which suggested the reforming of the then ITA by allowing it to sell advertising time, so that we would no longer get, within that authority, the dichotomy between the programme companies which were at the same time makers of programmes and sellers of advertising time. That latter function would have devolved to the ITA.

That recommendation was never accepted by the Government of the day, but we envisaged that the OBA would be the seller of such advertising as appeared on the fourth channel. There seems to be a loophole here which could lead very easily, if one follows these odd throwaway passages in paragraphs 22, 23 and 24 of the White Paper, in the direction of a kind of ITV2 by the back door, with complementary scheduling, the selling of advertising by the companies, and increased dependence, which would be inevitably in peak time, upon the companies and their products of the companies, probably acting in unison. I should like to have a comment from my hon. Friend about that.

My last point is about local radio. I am glad that there is at least an acceptance of the community element in local radio and a rather vague criticism of the lack of that community element in many of our local radio stations, although the White Paper here capitulated to skilful lobbying, to which I pay tribute, from the interests in the maintenance of the existing system, which has gone on doubling up local radio stations in the BBC, which are essentially a kind of system of miniature "Broadcasting Houses", and the largest and most profitable commercial systems in the larger conurbations.

The Home Office says that it is to have a working party which is to oversee the future development. Something that appalled us when we came to look at local radio was that in this cheap, exciting and flexible local medium, Britain, which has led the world in so many forms of broadcasting, was woefully behind. We are very far behind other countries in the ingenuity and variety of our local radio stations.

It was essential to the pluralist concept of Annan that we wanted to see different kinds of local radio. We thought that a local radio authority—a local broadcasting authority—was necessary to bring them about. The Government have retreated from that because they are terrified of being accused of setting up another bureaucracy, or another quango, or whatever, and that has left us with this notional, disguised OBA in the form of a Home Office working party—one step better, I suppose, than Home Office appointees is to have Home Office employees dealing with this matter.

Will this Home Office working party be able not only to arbitrate upon the national priorities in the setting up of new stations so that we do not just have the old duopoly going on, two by two, through the larger population centres? Will it also be able to make recommendations for the insertion of new kinds of radio? Some hon. Members on both sides are interested in the provision of community services of a new kind whereby the people of a given city or community, or perhaps even of an ethnic or religious interest, would be able to own shares in and control their own local radio station. That is one possibility. The idea of non-profit-making trusts in other areas was floated by the Annan committee.

To all these things the White Paper doffs its cap; it does no more. Will the Home Office working party be able to consider these matters as well as setting up a national frequency plan and matters of that kind?

The conclusion of raising matters of this kind so early or late in the day—with the usual rapt attention from the usual packed House—is the overall impression that people outside get that we are not too interested in broadcasting or in communications, and the issues of control, accountability and access which go with them. I believe that that is wrong. There is more interest in the House, and I should like my hon. Friend to say whether the Government, who have committed themselves in the White Paper to preparing all the annual reports of the broadcasting authorities by the spring of each year, will also see their way to committing themselves to a proper annual debate here in Parliament on all those broadcasting reports.

8.35 a.m.

The Under-Secretary of State for the Home Department (Dr. Shirley Summer-skill)

I am sure that, given the opportunity, my hon. Friend the Member for Derby, North (Mr. Whitehead) would be able to take part in a weekly debate on broadcasting and make a different speech each week. I realise that he has enormous experience and knowledge of this subject, and everything he said has been carefully noted. I am sure that he will be taking an active part in the public and parliamentary debate on the White Paper.

My hon. Friend's views are very valuable, and his work on the Annan committee is greatly appreciated. I therefore shall not be able to give him an exact answer to all his questions now, because the White Paper has only just come out. There will, as I said, be public and parliamentary debate on the White Paper, when all views will be carefully considered, and that will eventually lead to a Bill. As my hon. Friend knows, a lot of water can pass under the bridge between a White Paper and a Bill, and perhaps some of the things in the White Paper are not necessarily what will appear in the Bill. But I assure my hon. Friend that what he said will be taken into consideration. If I do not give him an exact answer now, it is because these things are the subject of debate.

The proposals in the White Paper identify the four requisites for good broadcasting, which are flexibility, diversity, editorial independence and public accountability. Within this framework, the Government considered what broadcasting organisations were required and broadly concluded that new organisations should not be created unless the existing ones were not suitable for the purposes necessary in the public interest. In this connection I refer to a local broadcasting authority, which my hon. Friend mentioned.

As for the scope of the activities of the Home Office working party, I shall, if I may, look into this, think about what my hon. Friend said and write to him about the proposal. But, here again, this is something which is obviously open to debate in the immediate future.

The Government concluded that it was not necessary to establish a local broadcasting authority as Annan recommended. We consider that local radio has been very successful and that this alone is a presumption against creating a new organisation when we consider the additional expense and bureaucracy that would be involved. The only reason for a new authority would be a clear demonstration that the existing organisations were unsuitable to supervise the future expansion of local radio, and we did not think that that was so. The BBC and IBA will therefore be entrusted with the expansion of local radio.

The Annan committee rejected proposals for a single authority, a council or a commission, to supervise the broadcasting authorities, on the ground that such a body would constitute either a return to monopoly control of broadcasting or a separation of the final responsibility for the content of a broadcasting service. It did, however, propose a public inquiry board for broadcasting, but the Government reject this recommendation. They believe that such a board would all too easily develop into the council or commission which the committee rejected.

I hope it is clear that the Government are to a large extent intent on the existing broadcasting authorities—the BBC and IBA—and that they should continue to provide the services which we are so lucky to have and which compare extremely favourably with any others throughout the world.

The main new body, the Open Broadcasting Authority, will be small. It will not itself make programmes, nor will it engineer the channel or transmit the service. It will obtain the programmes and then exercise overall supervision of the service as a public service conducted in the public interest.

The service management boards which it is proposed to set up to take responsibility for supervising the programme strategy and management of each of the BBC's main services—television, radio and external services—will be new. As my hon. Friend pointed out, paragraph 49 of the White Paper describes this. For the background to this proposal, I think that paragraph 48 sums up the Government's view that there should be separate service management boards by delegating to these boards, as the paragraph says, many of the management functions which now rest with the BBC. The board of governors would be able to concentrate on its supervisory and public accountability role, which will give it a function and personality distinct from that of the service management boards. Each service management board will be responsible to the board of governors collectively for supervising the programme strategy and management of its service.

As regards the members, only about half of the members will be new appointments. Overall, therefore, the Government's proposals will lead to very few additional appointments beyond those which now exist. There will be an increase in ministerial appointments, but ministerial appointments in broadcasting are an essential aspect of the accountability of the broadcasting organisations. Ministers are, of course, accountable to Parliament for the appointments which they make. My hon. Friend's views on retired trade unionists and ambassadors are duly noted.

Part of the Government's aim in the White Paper has been to increase the accountability of the broadcasting organisations. The Government believe that more substantial internal changes are needed to this end in order to increase the diversity of approach to programme making. I feel that this will serve to achieve this end.

The Annan committee saw some advantage in different sources of finance for the different broadcasting authorities. Unfortunately resources are limited, although the Government understand that general view. The Government have concluded that the BBC should continue to be financed from the revenue of the broadcast-receiving licences. We have noted that the buoyancy of the licence fee system is decreasing, and we shall therefore keep under review whether the licence fee can continue to provide the BBC with an adequate source of income in the long term.

My hon. Friend asked what the BBC was proposing. I note that the chairman, Sir Michael Swann, stated: In the press I have seen figures of £27, £28 and £30, all quoted in recent months and that is perfectly correct; it is something in that bracket. We very much want a licence fee settlement that will last us for 3 years and we are going to ask for one. However, I remind the House that the cost of the BBC is at present running at an annual rate of about £300 million. The levy on the independent television companies at present produces about £60 million a year. This is already paid into the Consolidated Fund, and to use it to provide part of the necessary revenue for the BBC would not reduce the overall claim on public funds. The Government consider that it is impractical at present to increase direct public expenditure by the sums which would be necessary to finance the BBC.

The Government are aware that the BBC's income in past years has been kept buoyant by people first obtaining television sets new and, secondly, by their changing from black and white sets to colour sets, for which a higher licence fee was necessary. The Government have noted that this buoyancy is decreasing now that over 60 per cent. of television licences are for colour reception. It will therefore be necessary to keep under review whether the licence fees can continue to provide the BBC with an adequate source of income in the longer term.

With regard to my hon. Friend's suggestion about a triennial licence fee, many similar suggestions have been put forward to ameliorate the effect of an annual licence fee. Effect could be given to this only if the system were made much more complex. This would inevitably increase the cost of administering the system and hence the level of the licence fee. The Government therefore agree with the Annan committee that the licence fee should continue to be payable annually.

I remind the House that 25p television licence savings stamps are obtainable at all post offices, and these provide a way of saving for the licence fee. I believe that these stamps, which are already widely used, are the most sensible way of people providing for the need to meet the cost of their television licences.

The Government will expect the OBA to look to advertising to provide an important and increasing source of its finance. The Annan committee had in mind in particular block advertising and sponsorship. These by themselves might well not provide sufficient finance, so the Government propose to permit spot advertising. The Government accept, however, that the OBA will need some Government assistance from them, particularly in the early years, to establish the sort of service envisaged. There will, therefore, be some Government funding of the OBA.

With regard to the setting up of the OBA board, I assure my hon. Friend that this and very many other matters arising from the White Paper are now under discussion. These discussions are in process and will continue. The Home Office is discussing details of the structure and financing of the OBA with the IBA and with independent television companies. The proposals, which build on to the existing structure of broadcasting in this country, are open to public and parliamentary debate, and all views and comment on the proposals will be welcomed. There is no question of the Government dragging their feet on the proposals in the White Paper.

I conclude by saying that our broadcasting services will continue to be financed from advertising and public funds, but the bulk of the latter will be the revenue from television licence fees. We shall continue to discuss the proposals with the existing broadcasting authorities, and as soon as we have the views of individuals and organisations which wish to comment we shall be able to proceed with a Bill.