BBC Financing (Peacock Report)

HC Deb 03 July 1986 vol 100 cc1180-93

4.5 pm

The Secretary of State for the Home Department (Mr. Douglas Hurd)

With permission, Mr. Speaker, I should like to make a statement on the report of the committee on financing the BBC, under the chairmanship of Professor Alan Peacock, which was published today. I should like to record my deep gratitude to Professor Peacock and his colleagues for their industry in pursuing their inquiries and for their efficiency in completing their work and producing this report in 12 months.

The committee puts forward a number of interesting and constructive proposals for replacing the present system of financing the BBC in a few years' time. However, it rejects the proposal that the BBC should at present be funded wholly or in part by advertising and concludes that at this stage the licence fee, with some modifications, should remain as the principal source of funding for the BBC. The committee argues that, since spectrum is still scarce, and there is as yet no way in which the consumer can pay direct for the programme of his choice, the introduction of advertising would reduce the effective range of choice open to viewers and listeners. Given the original work which the committee undertook and commissioned on the economics of the advertising market and on the relationship between advertising and broadcasting services, we cannot lightly put aside its assessment of this point. However, before reaching any conclusions the Government would welcome comments on the committee's analysis.

The committee's view is that our present system of public service broadcasting has provided the best means of securing diversity of choice and programmes of quality under the prevailing market conditions. The committee sees a need for this system to remain in being for some years, though with important modifications, but argues that, under pressure for inevitable technological change, it must and should give way to arrangements where, as channels multiply and customers find means to register their own preferences directly, a genuinely competitive broadcasting market develops. The committee believes that this will take time, but in a few years, in preparation for this, payment for BBC services should be made through subscription, leading to the end of the licence fee system. In the longer term, perhaps through the provision of a national cable grid, a genuinely competitive market in television services could be brought about so that the current arrangements, dependent on the duopoly, would no longer be needed. There would be scope for greater diversity of programmes and a wider choice for consumers, who would have much greater freedom than is now possible to decide which programme services they would like and at what price. Special arrangements are envisaged to ensure that public service programmes are available which, though needed, the market might not produce unaided.

The Government see much merit in this approach, which fits well with our general philosophy. All the committee's proposals, which have profound implications for all broadcast services, and the institutions which provide them, deserve and will receive careful study. We shall reach final views on the report only in the light of parliamentary and public reaction; and we would welcome any comments from the public and other interested parties. However, there are four matters on which I should like to make some comment now.

First, there is the proposal by four members of the committee that IBA contracts should be awarded by a competitive tender, with the IBA required to make a full public and detailed statement of its reasons if it decided to award a franchise to a contractor other than the one making the highest bid. The Government have reached no conclusion on this recommendation. However, they are anxious that the option for change should remain open. This would not be the case if the IBA proceeds to arrange new ITV contracts to take effect from the beginning of 1990 for eight years. Accordingly, we are considering with the IBA the relationship between this timetable and the committee's recommendation. We do not propose to disturb the work that the IBA has in hand to make a contract for the provision of direct broadcasting by satellite services.

Secondly, there is the question of the regulation of the content of broadcast programmes. The committee suggests that broadcast services should be subject only to such regulation as is provided for all material in the general law of the land, as is the case for the print media, and that in the long term there should be no prepublication censorship or vetting of any kind of broadcasting. Our present arrangements reflect the view that the peculiarly intrusive nature of broadcasting, and in particular television, continue to require special regulatory arrangements to ensure certain standards in broadcast services. For this reason we have broadcasting authorities to enforce controls on such matters as taste and decency in broadcasting, which are much stricter than applying to the print media, or than could easily be accommodated in the criminal law. The present regulatory regime, and the institutions to give effect to it, are certainly not sacrosanct, but the Government believe that any future arrangements should he no less effective than those now in place.

Thirdly, there are the recommendations on radio. Professor Peacock's committee recommends that the BBC should have the option to privatise radios 1, 2 and local radio in whole or in part and that the IBA regulation of radio should be replaced by a looser regime. Five of the committee's members went further and said that Radio I and Radio 2 should be privatised and financed by advertising and that further radio frequencies becoming available should be auctioned to the highest bidder. I have already announced my intention to publish a Green Paper looking at the existing framework for the provision and regulation of radio broadcasting as a whole. I believe that it would be helpful for this consultative document to examine further services at national, local and community level, and that the future of BBC radio services and of those provided by the IBA should be looked at in the light of the Peacock's committee's recommendations.

Fourthly, we see merit in a number of the committee's shorter-term proposals designed to pave the way for the free broadcasting market which it wishes to create, including, for example, the recommendation to increase the proportion of television programmes supplied by independent producers. The best way of achieving this will need careful consideration.

I welcome the committee's report and the many stimulating ideas that it contains. It is a challenging piece of work, as hon. Members will find when they read it. We look forward to the constructive public debate about the future of broadcasting which I am sure it will encourage.

Mr. Gerald Kaufman (Manchester, Gorton)

In the jumble of evasive verbiage, one thing that the Home Secretary might have spared the House was his ritual tribute to Professor Peacock. For the past couple of weeks Mr. Bernard Ingham's character assassination machine has so single-mindedly devoted its attention to Professor Peacock that one might have thought the poor man was a member of the Cabinet. This is a particularly ungrateful attitude, considering that Professor Peacock was vice-chancellor of a university that awarded an honorary degree to the Prime Minister.

The report is a classic example of "ask a silly question and one gets a silly answer", except that the silly answer does not even answer the silly question. The massive report cost the taxpayer £268,000. As it is a complete waste of that money, I suggest that the right hon. and learned Member for Richmond, Yorks (Mr. Brittan)—the man who brought us not only this disaster, but those of Westland, British Leyland and the Shops Bill— should be surcharged for that amount.

Fifteen months after the Peacock committee was set up, the problem of financing the BBC remains precisely as it was on 27 March 1985. Even the Prime Minister's pet solution of advertising on the BBC has been turned down. A collection of trusties, handpicked to give the required answer, have failed to oblige. There will he a few empty places in the next honours list.

The report, in most of its recommendations, goes wildly beyond its terms of reference and seeks, arrogantly and impertinently, to restructure the whole of broadcasting— television and radio, BBC, ITV and IBA. Let me make clear the attitude of the Labour party to the main proposals. We reject the plan for BBC TV as a subscription service. That would either turn the BBC into the television equivalent of junk food, or drive it into a cultural ghetto with no guaranteed income to make plans for even the minority audiences to which it would be limited. In the end, such a system would destroy the BBC.

We reject the proposal to privatise TV during night time hours. This could introduce a completely unregulated system of television which could become a playground for pornography and violence. We reject throwing ITV franchises on to the market to go to the highest bidder. That would be to cast away the high standards achieved by many ITV companies and replace the present unsatisfactory system of awarding franchises by one that would be completely unacceptable. We reject the proposed new status for Channel 4. Why meddle with something that works brilliantly as it is?

We reject the plans for privatising and commercialising BBC, Radio I and Radio 2. Such a scheme would prevent the BBC from providing a full range of services catering for a wide spectrum of tastes. It would threaten the viability of many local commercial radio stations. It would, for one year only, bring in only a fraction of the revenue that the BBC needs every year.

We reject the indexing of the licence fee. Such a system would be unrelated to the BBC's financial needs, while perpetuating the present licence system as a regressive tax that bears most heavily on those on the lowest incomes. We reject the proposal for a £10 licence for car radios. Such a system would be hard to enforce, would discriminate for no good reason against one group of radio users, and would bring in little more than a quarter of the present licence income. We are dissatisfied with the proposal for free TV licences only for pensioners on supplementary benefit. That is completely inadequate.

The report is a mess. We warned against the setting up of the committee. Our warning has been vindicated. I tell the Home Secretary plainly that it would be unacceptable for the proposals to be implemented at the tail end of the Parliament. I make it clear to the House that the forthcoming Labour Government will phase out the licence fee for all pensioners. The forthcoming Labour Government will re-examine the financing of the BBC in a way that seeks to address itself to the problem of the licence as a regressive poll tax. The forthcoming Labour Government will ensure that the BBC, as a great national institution, internationally respected, is not only preserved, but is protected from interference by Governments of any party. Meanwhile, the proper place for the report is not a pigeon hole, but a wastepaper basket.

Mr. Hurd

It will not take me long to answer the right hon. Gentleman's questions. It is not the first time that he has read too many newspapers. His analysis of the Government's reaction to the Peacock report is wide of the mark. As I have said, the analysis fits well into our philosophy. It is odd that, having attempted to protect the committee, the right hon. Gentleman piled a number of wholly unfair epithets upon it.

The announcement of policy which the right hon. Gentleman has just made, after some hours of consideration of a report which took 12 months to complete, show a deeply depressing and backward-looking approach. It shows no sign of understanding the immense range of choice which technical change will open up to the customer or the effect that it is bound to have on broadcasting. I thought that the right hon. Gentleman's approach was deeply reactionary. It will be a bleak future for broadcasting, and all the talent that it contains in this country if the right hon. Gentleman's blind and blinkered approach were ever in control.

Mr. Leon Brittan (Richmond, Yorks)

Does my right hon. Friend agree that, in spite of the characteristically trivial and dinosaur-like nonsense emanating from the right hon. Member for Manchester, Gorton (Mr. Kaufman), the report amply justifies the hope that looking at the finances of the BBC would lead to radical and imaginative proposals for the future of broadcasting generally? Does my right hon. Friend also agree that although nobody would accept all the recommendations, especially some of the short-term ones, the central thrust of the proposals putting forward the concept of a BBC funded by subscription, but supplemented by an Arts Council-like body funding those programmes whose ratings alone would not keep them going, combines the highest possible degree of choice for the consumer with the central features of public service broadcasting as we have known it? Will my right hon. Friend therefore conclude that, although of course there should be full discussion of the report's details, far from being something that should be pigeonholed, the report provides a springboard for action and should not be a pretext for delay?

Mr. Hurd

My right hon. and learned Friend did a good job for British broadcasting when he set up the committee. The quality of its work justifies his faith in it. I am interested to note that my right hon. and learned Friend, like me, is personally attracted by the general philosophy that comes through in the report. Of course, we shall need time, and in some cases a good deal of time, to weigh the detailed recommendations that flow from the analysis. I hope that, despite the Opposition's dispiriting initial reaction, they will play some part — at least as individuals—in that constructive debate. We shall then be able to reach decisions on the detailed points arising from the analysis.

Mr. Clement Freud (Cambridgeshire, North-East)

Does the Home Secretary accept that my right hon. and hon. Friends will thank Professor Peacock for a well-documented and well-presented report that shows that one cannot take financial considerations in isolation? Does the right hon. Gentleman accept that we welcome the rejection of advertising, that we are alarmed at the possibility of splitting Radio 1 and Radio 2 from Radio 3 and Radio 4, which might well turn the BBC into a cultural ghetto, that we are as relaxed as he is about bringing in extra controls, of which clearly there are already enough, and that we would be bemused by Professor Peacock's recognition of a Government commitment to community radio? Will the right hon. Gentleman accept that there is no connection between broadcasting costs and the retail prices index? Will he look again carefully at his decision to index the television licence in accordance with the RPI?

On the subject of free licences, which we welcome, does this mean that the Government now accept the concept of poverty or need based on cultural deprivation or need for communication? Will this be applied more generally by the Government to anti-poverty policies?

Mr. Hurd

I am grateful to the hon. Gentleman for his comments, which I shall note with care. He is momentarily inaccurate in saying that there is some decision about the indexation of the licence fee. This is a proposal which Professor Peacock put forward. One should always be a little chary of organisations that argue that, for some God-given reason, their costs are always bound to rise substantially faster than costs as a whole. One must regard such special arguments carefully, as we know from other examples.

I should like to study the philosophical question in the last part of the hon. Gentleman's question, because I do not entirely at the moment capture its full wisdom.

Sir Paul Bryan (Boothferry)

Having wisely rejected advertising on BBC, presumably on the ground that it would lead British broadcasting down the road towards the American model, is my right hon. Friend surprised that the Peacock committee advocates the auctioning of television franchises, which really leads in much the same direction? Is my right hon. Friend aware that over the next two years there will be tremendous international developments on satellites, cable television and the like, and that the ITV and BBC are already deeply involved in this? Does he agree that in the next few years they will have plenty of opportunities, and plenty of competition too?

Mr. Hurd

My hon. Friend is right on both points. I think that the committee had a bit of a tussle on its recommendation on the auctioning of future IBA contracts. A good deal of care will have to be taken. I have announced that we are in touch with the IBA, with a view to ensuring that we do not become effectively locked into the existing system until 1998. The Government may wish to put forward changes on that front. We do not want to be debarred from taking action because the machinery has rolled on and therefore not have flexibility in 1998.

My hon. Friend is perfectly right on his second point. It is precisely the internationalisation of broadcasting through technical change that makes the next decades in broadcasting so important and exciting.

Mr. Merlyn Rees (Morley and Leeds, South)

Of course there will be great changes in radio and television in the next five, 10, 15 or 20 years, and no one can deny that. Does the right hon. Gentleman understand that the committee's terms of reference were far too narrow to generate a philosophy that could encompass all those changes? I should like to follow the point raised by the hon. Member who used to represent the constituency of Howden. I am afraid that I have forgotten which constituency he now represents.

I should like a clear answer from the Home Secretary to this question. Competitive tendering will cause great changes in the IBA's role. What does the right hon. Gentleman have in mind? It is not a matter of just reading the report. The issue of competitive tendering has been around for five, 10 or 20 years, so this is not a first thought. It is worrying that the Government look with approval on this. We should like to know what the Government have in mind. What will happen to the IBA next year? The advertisements were to start next October. Is the right hon. Gentleman now saying that that will be slowed down? This will happen at the time of the general election. The IBA's role must be made clear to it. The Home Secretary gave only a brief summary of what he had in mind, and this is worrying.

Mr. Hurd

The right hon. Gentleman need not be worried. This is not the first time that an intelligent committee has leapt a little outside its terms of reference. I do not think that we should complain about that, because the result is stimulating. The right hon. Gentleman has much experience of the IBA franchise and knows that the IBA has ideas on changing the present system. There is a good deal of criticism—some of it technical and some of it more philosophical—of the way in which the present system operates. I have said that we are in touch with the IBA; that we want to avoid being locked into the existing timetable. We do not want to find that we cannot make any changes which are effective before 1998 because as the right hon. Gentleman accurately said, the machinery begins to roll in the autumn of next year. Under the existing system, new franchises will be in place by 1990 and sacrosanct until 1998. I chose my words carefully, because we have not worked out with the IBA how the timing problem will be solved. Obviously I shall need to keep the House informed.

Mr. Tim Brinton (Graveshatn)

Has my right hon. Friend noted that the right hon. Member for Manchester, Gorton (Mr. Kaufman), in his attempt to rubbish and deride the excellent and thoughtfully drawn up report, managed to offer a free television licence to Lord Grade? We should consider that carefully. Will my right hon. Friend consider two points of paramount importance? First, will he consider the urgent need to decide the method of allocating franchises next time, especially bearing in mind the remark by the IBA chairman that there must be a better way? Secondly, will thought, care and adequate time be given to considering television broadcasting? Will there perhaps be a Green Paper on television, as my right hon. Friend has announced a Green Paper on radio broadcasting? Does my right hon. Friend agree that we must consider the whole scope of television as well as of radio?

Mr. Hurd

I agree with my hon. Friend's first point. The Peacock committee, although admirably unpartisan in almost all its utterances, goes out of its way specifically to reject the Labour party's policy of giving £325 million to unspecified persons—that bribe to pensioners, which the right hon. Member for Manchester, Gorton (Mr. Kaufman) has again confirmed today. That is specifically rejected by the committee, which offers an alternative proposal.

My hon. Friend is right to remind us of the urgent need to clarify the position of ITV franchises. Clearly that must be one of the first decisions to be made.

I note my hon. Friend's point about having a general review of television as well as of radio. I am reluctant to say yes to that today. Let us see how we get on with examining the television aspects of the Peacock report. On radio, many proposals are coming together— the IBA's proposal for an independent radio, the concern of the independent local radio about its present position, the prospect of community radio and Professor Peacock's proposals for Radio 1 and Radio 2—and they need to be looked at together, not decided piecemeal.

Mr. Joseph Ashton (Bassetlaw)

Is the Home Secretary aware that, despite the scathing criticism of the report, there is one excellent recommendation, which is that pensioners on social security—not all pensioners, who may be MPs or affluent pensioners—should get a free television licence paid for by a £10 tax on the car radio, which would mean the affluent members of society contributing to the less affluent? In my mind that is a good recommendation. Is there any chance of the Government introducing it?

Mr. Hurd

We will consider both wings of the Peacock committee's recommendations on that point. The hon. Gentleman will have to sort out his differences with his own Front Bench. I am not rejecting that line of approach totally today. However, it is costly and will require much thought to see whether anything worth while can be done.

Mr. Tim Rathbone (Lewes)

Will my right hon. Friend accept that the absolute rejection of this report by the Opposition Front Bench must add credibility to the recommendations of the report, remembering, as we all do, the way in which the Labour party stood against commercial television and radio before they were launched?

My right hon. Friend will have noted that it says in the report that radio is 'in a different category from television'. The problem of spectrum shortage is less acute and this lessens the need for detailed regulation. Therefore, will my right hon. Friend reconsider his plans for a Green Paper on radio and turn that into a White Paper, in order to allow consumer sovereignty on radio, free speech and consumer choice locally as well as nationally and internationally, especially in community radio, which has sadly now been postponed?

Mr. Hurd

My hon. Friend is right on his first point. I fear that all those who are genuinely involved with and interested in the future of British broadcasting will have been temporarily dismayed by the outburst of the right hon. Member for Gorton and his negative tone. I note that my hon. Friend would like us to get on with the radio aspect rather more quickly, but there are different strands, which I listed in a previous answer. They have not been looked at together. One must proceed fairly steadily and with some caution, even on radio. We will try to produce a Green Paper in the autumn, and there should be a period for some discussion after that.

Mr. Jack Ashley (Stoke-on-Trent, South)

Does the Home Secretary agree that the political independence of the BBC, in addition to its financial independence, is of cardinal importance for its future? Will he make a big effort to avoid being contaminated by the prejudice and hysteria that characterise the Prime Minister and the chairman of the Conservative party in their dealings with the BBC? His own reputation, no less than that of the BBC, will be on the line in the way that he deals with this report. Will he also bear in mind that the suggestion of privatising BBC1, BBC2 and local radio is fatuous and damaging to the BBC and public broadcasting as a whole?

Mr. Hurd

I note the right hon. Gentleman's second point. On his first point, when individuals or groups feel that they are aggrieved or unfairly treated on television, it is reasonable that they should make a protest. It has nothing to do with the Home Secretary or the Home Office, but it is a legitimate activity.

Mr. Ivan Lawrence (Burton)

Is my right hon. Friend aware that many people are apprehensive that these changes in broadcasting could open the floodgates to even more vulgarity and morally offensive material than can be checked merely by an extension of the existing laws of obscenity? Can my right hon. Friend be a little more resolute and a little more reassuring about that aspect of the matter?

Mr. Hurd

I thought that I had been particularly resolute on that, because it was one of the four points which I thought needed to be tackled today in a statement which is, on the whole, a holding statement. I specifically said that we did not accept the analysis of the Peacock committee that there is no need for regulation going beyond the law of the land. The nature of broadcasting is such that, perhaps not indefinitely, but for the time being, such additional protection for the public is needed.

Mr. Don Dixon (Jarrow)

While studying the report, will the right hon. Gentleman bear in mind that since his party was elected in 1979, 7,561 pensioners in the south Tyneside district, which I represent, have had their concessionary television licences stolen from them by his Department? Will he accept that recommendation 6 does not go far enough in exempting certain pensioners? what is required, as my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), said, is a phasing out of television licences for all pensioners.

Mr. Hurd

During the lifetime of this Government we have somewhat extended the scope of the concessionary 5p licence. I am not in the least bit happy about the state of the concession. There are all sorts of borderline cases and grievances that arise out of it. I accept that. It has proved much easier to identify the difficulties than to make improvements. However, I do not think that the answer is to open the floodgates as the hon. Gentleman suggests.

Sir David Price (Eastleigh)

Does my right hon. Friend accept that there is simply not enough advertising to finance the BBC, the IBA and the press? Will he also accept that direct broadcasting by satellite will become a feature of television broadcasting and that at that point we must think of our arrangements for financing television broadcasting, not purely in United Kingdom terms, but in wider international terms?

Mr. Hurd

I have always felt a little reluctant to be absolute about the total volume of advertising. Free newspapers without any particular Government encouragement or policy have sprung up and gained a great deal of advertising, which perhaps the experts would not have supposed existed. Therefore, one has to be a little cautious about that argument. My hon. Friend will notice the careful analysis of the Peacock committee on the question of advertising, not so much the volume, as the relationship between advertising and consumer choice. I entirely agree with my hon. Friend's second point and it is something that we must never forget.

Mr. Robert Maclennan (Caithness and Sutherland)

Will the Secretary of State recognise that those who are concerned to see that the new technologies allow greater choice and the retention of high standards of public service broadcasting will be dismayed by the attitude expressed by the right hon. Member for Manchester, Gorton (Mr. Kaufman), which betrayed nothing but a deep conservatism and commitment to the status quo? Will he also recognise that there is a need for a Government response to these far-reaching and imaginative proposals and that although there are some matters that need to be debated, and some that are unacceptable, it would be unacceptable if the matter were kicked into touch until after the next election. It has been widely suggested in the press that that is the Home Secretary's intention. Will the right hon. Gentleman say something about the rolling review of television franchises, which he has not mentioned, which is one of the suggestions that have been referred to?

Mr. Hurd

The Peacock report is an analysis on which is festooned a whole series of practical recommendations which have different times for decision on them —different opening times, if one can put it that way. Some of them need speedy decisions, and one of them, as the hon. Gentleman and one of my hon. Friends pointed out, is the next round of ITV licences. I accept that. How that is handled is not a matter that can be postponed indefinitely. There are other matters on which the Peacock committee puts a longer time scale, as it divides its recommendations into three stages. Therefore, I do not think that there will be a moment when the Government take decisions on the whole range of recommendations simultaneously. That is not what will happen. There will be a series of decisions. Some of them will be needed fairly soon, and some will not be needed for several years. We will take those decisions after listening to the views expressed.

Mr. Anthony Nelson (Chichester)

Is it not apparent that the Peacock committee, which was set up largely because the licence fee was high and rising, has totally failed to grasp the nettle? In fact, it has recommended an increased licence fee through indexation and significant conversion costs for every television in the land. As the licence fee is expensive, costs over £50 million a year to collect, and is inequitable, will my right hon. Friend leave open the door to introducing advertising? If there is a shortfall in the financing of the BBC, will he ensure that the cost comes from the general body of taxation, so enabling, in the course of time, the licence fee to be abolished for everybody?

Mr. Hurd

I note my hon. Friend's views. The Peacock committee looks forward to the eventual abolition of the licence fee, but not through its replacement by advertising, let alone as a call on general taxation, which I doubt any Chancellor of the Exchequer is likely to smile on as an idea. My hon. Friend's views, which I note, come out of considerable study of the matter. I am sure that he will find opportunities to develop them further when the House debates the report.

Mr. Tony Banks (Newham, North-West)

Is it not a fact that the Peacock committee, rather like the Widdicombe inquiry before it, was set up by the Government to produce evidence to support the Government's own prejudices, and that both have failed, which is why both are effectively being sidelined? Will the Home Secretary tell the House whether the Conservative party intends to drop its politically vindicative and malicious campaign against the BBC a campaign now being spearheaded by the gauleiter for Chingford? Does not the Home Secretary want to defend public service broadcasting, which is one of the finest things that we have in this country, or is he intent on still trying to get the same level of objectivity on the BBC as we see in The Sun, the Daily Mail and the Daily Express?

Mr. John Stokes (Halesowen and Stourbridge)

On a point of order, Mr. Speaker. Is it in order to refer to an hon. Member as a gauleiter?

Mr. Speaker

It is an inelegant phrase.

Mr. Hurd

The BBC will not bless the hon. Member for Newham, North-West (Mr. Banks) for defending it in those terms. He does the cause in which he believes no good by acting in that way. If one appoints people of that quality to a committee, one does not do so because one knows the answers that they will come up with. That would be absurd. My right hon. and learned Friend the previous Home Secretary did not do that. The committee has not come up with an answer that will cause delight to any established interests or institutions, and probably all the better for that. It is in the good tradition of public service committees and investigations in this country.

Mr. Nigel Forman (Carshalton and Wallington)

As one who has not yet had an opportunity to read the Peacock report, may I ask my right hon. Friend to summarise briefly, for the benefit of the House, the reason why the report came down against advertising? I have a feeling that I shall share that conclusion. Furthermore, does my right hon. Friend agree that if there were to be competition in future between a BBC financed by subscription and independent television financed by advertising, that would not be fair to the BBC?

Mr. Hurd

On the first point, on the whole the report agreed with the point of view of my hon. Friend the Member for Eastleigh (Sir D. Price) about the total volume of advertising. It went on to make a philosophical point, that if one were looking carefully at the way to get consumer choice, one would probably not do it through advertising, but through ways in which the consumer can directly choose and pay for what he wants. I am sorry, but I missed my hon. Friend's second point.

Mr. Forman

It was about subscription, and the unfair competition between subscription finance for the BBC and advertising finance for independent television.

Mr. Hurd

When my hon. Friend reads the report, he will see that that is treated as part of its investigation further into the future. We shall have to look carefully at the question of subscriptions and also at the sorts of measures that might be needed fairly soon to make it possible to move towards subscription; for example, the sorts of fittings that might be needed on sets.

Mr. Max Madden (Bradlord, West)

Is the Home Secretary aware that he has looked and sounded a very sad and forlorn figure at the Dispatch Box this afternoon'? Could it be that, as the Peacock committee has not said things that the Prime Minister wanted to hear, he recognises that the Government have no broadcasting policy? Are not the Government's problems vividly illustrated by yesterday's announcement that the chairman of the Conservative party is in a bunker monitoring the broadcasting media for bias, which he defines as anything against the Conservative party, against the Government or against the Prime Minister? As the report is destined for the wastepaper basket, will the right hon. Gentleman salvage one good thing from and give a free television licence to all pensioner households, which at least would be some compensation for the paltry way in which the Government have treated pensioners over the past few years?

Mr. Hurd

In fact, I was made considerably cheerful by the Peacock report. Any momentary gloom that may have settled on me was as a result of the ignorant and blinkered reaction that it received from the Opposition Benches. It is an excellent report. I believe that for many years to come people will look back on it as the necessary stimulus to the next stage in British broadcasting. I have already answered the other two points that the hon. Gentleman made. Individuals in groups are perfectly entitled to muster their complaints against broadcasting authorities. Many people do that. If my right hon. Friend the Member for Chingford (Mr. Tebbit), in his other capacity, set that in hand, there could be no possible objection to it.

Mr. Edward Leigh (Gainsborough and Horncastle)

Does my right hon. Friend not think it strange that the Labour party should so comprehensively reject the choice that subscription should bring? Does he also not think it strange that the Labour party should favour a poll tax on the poor and elderly, which is what the licence fee is? Has my right hon. Friend noticed the finding on page 87 of the report, that an overwhelming majority—69 per cent. — think that the introduction of advertising would not reduce the standards of the BBC, as well as the finding, a few pages later, that the introduction of advertising on the radio would allow radio to take a quantum leap in terms of expenditure? Does all that not add up to a substantial case for advertising to be brought in, at least on local radio, and Radio 1 and Radio 2, which are only popular programmes?

Mr. Hurd

The committee accepted that case with regard to Radio 1 and Radio 2 and, to some extent, local radio. That is one of the points that the Government and the House will want to consider.

Mr. Andrew Faulds (Warley, East)

Instead of setting up a limited inquiry, which was expected and supposed to pursue the Prime Minister's whims, is it not the case that what the BBC needs is the appointment of another son of a manse with the standards of Lord Reith, to jettison the competitive nonsense of breakfast television and the rubbish of local radio, and to return to the BBC's prime purpose of cultural excellence and political independence?

Mr. Tony Banks

And jobs for Andrew Faulds.

Mr. Hurd

If the hon. Gentleman is making the suggestion that I think he is, and suggesting a candidate for that post, he has many of the necessary qualifications, but I am not sure whether he has all of them.

Mr. Stokes

Is my right hon. Friend aware that our discussions this afternoon will scarcely be understood by most people in this country, whose main concern about the BBC is its utter lack of patriotism and continuing Left-wing bias? Is my right hon. Friend aware that producers are entirely out of hand and are trying to brainwash much of the population, and that no other nation or Government in the world would put up with that except ours? My right hon. Friend should do something about that.

Mr. Hurd

Parliament and the law, fortunately, have given the Home Secretary no power to intervene in the sorts of matters that disturb my hon. Friend and many of my right hon. and hon. Friends. The remedy for the aggrieved citizen or group is to gather together the facts and evidence and present them to those to whom Parliament has given responsibility—the governors of the BBC and the Independent Broadcasting Authority. My view is that the more that is done, the better.

Mr. Chris Smith (Islington, South and Finsbury)

Is it not the case that the main drive of the report, despite its welcome rejection of the principle of advertising on the BBC, is to undermine the fundamental principles of public service broadcasting, with the possible introduction of large elements of commercialism, scope for deregulation and bringing in the philosophies of the market economy to BBC broadcasting? Would that not be a sad day for the principles of public broadcasting, which have served this country so well for decades?

Mr. Hurd

The report has got behind the established familiar and rather weary battle lines between public service broadcasting as the BBC knows it and those who believe that it should be done with advertising. It has moved beyond those battle lines and tried to tease out a way in which the individual can make a choice of programmes. The committee has done a good job in making that analysis.

Viscount Cranborne (Dorset, South)

Does my right hon. Friend accept that many people will accept his summary of the report's recommendations and welcome them on the ground that they will strike a blow against the smugness and arrogance of so much of the BBC's domestic broadcasting, born as it is of an organisation that has its foundations in the old-fashioned 1940s corporatism, which is no doubt why the Labour Front Bench admires it so much?

Mr. Hurd

I note my hon. Friend's analysis. I had better be cautious in endorsing it.

Mr. Dennis Skinner (Bolsover)

Is the Home Secretary aware that we have got his drift that the controversial decisions in the report will be left to one side until the votes have been counted? Is he further aware that if, in the pursuit of untrammelled market forces applying to the BBC and the media generally, an ex-Home Secretary had written some serious drama in that environment, he would not have a cat in hell's chance of getting it in that media if it was subjected to those market forces, because the media would be searching for the lowest common denominator?

Mr. Hurd

If the hon. Gentleman is referring to me, I can tell him that I have already had substantial difficulty under the existing system in getting my works in the media. The hon. Gentleman will not tempt me in that way.

Mr. Roger King (Birmingham, Northfield)

I congratulate the committee on producing a substantial report, which of course one cannot fully digest in the short time that it has been available. Does my right hon. Friend express any immediate regret at the fact that a more courageous step has not been taken in relation to sponsorship of many of the existing television programmes? I can see no reason why sport should not be sponsored. We would then solve the ludicrous problem that arises when we switch on television during the World Cup and see commercials and state organisations vying with each other to bring us the same pictures.

Mr. Hurd

That was certainly a mess. I agree with my hon. Friend on that point and it may lead to more interest in the line of thought that he has developed.

Mr. John Powley (Norwich, South)

There are many important points in the recommendations which I welcome. However, may I draw my right hon. Friend's attention to recommendation 5 and the rather dubious recommendation of imposing a tax on those who buy motor cars, simply to subsidise the licence fee? The retail trade, of which I was a member, welcomed the abolition some years ago of the car radio licence fee, for good reasons. It would be a retrograde step to bring it back in any form. If we applied the logic of the imposition of a tax on motor vehicle purchases, why not impose a tax on the purchase of other commodities to subsidise the television licence fee?

Mr. Hurd

I note my hon. Friend's point. I am sure that many people will share that view. We will have to examine carefully the section of the report which covers the twin proposals to which my hon. Friend has referred.

Mr. Peter Griffiths (Portsmouth, North)

Does my right hon. Friend agree that, whatever the merits of the long-term proposals for television, the great disappointment is that the essentially negative and blinkered attitude of the BBC has meant that there is no prospect of any early relief for my constituents and the constituents of other hon. Members who find the TV licence fee a burden? Does my right hon. Friend accept that that is evidence that those of us who divided the House over the last rise in the television licence were correct to do so and that we may be called upon to do so again?

Mr. Hurd

The report obviously does not conceal the view that the days of the BBC licence fee system are numbered. We must all consider the analysis of the report carefully and see whether we agree with the conclusions. If we do, we should work out what steps should be taken in that direction. I am not sure how my hon. Friend would tread that path, and the Government have taken no decisions on that. However, we must first consider the analysis and then the recommendations.

Mr. Christopher Chope (Southampton, Itchen)

Will my right hon. Friend thank Professor Peacock for producing a report that is far more radical than many of us had thought possible? Will he also confirm that the Labour Opposition's attitude confirms how hostile that party is to any consumer interest? Will my right hon. Friend, since he has so warmly endorsed the report's goal of making the consumer king, say when he intends to implement recommendation 1 for peritelevision sockets in all new television sets?

Mr. Hurd

That is one of the technical decisions to which I referred earlier. We must decide whether the technical argument is correct anti whether a change in the law is needed, as the report suggests. However, my hon. Friend's basic point is correct. Over recent decades the Opposition have fallen into a trap in their contempt for the principle of consumer choice. They have shown that contempt again today.

Mr. Peter Bruinvels (Leicester, East)

Does my right hon. Friend accept that £58 is far too much for what is offered on the BBC? Will he accept that we should be hearing today not that the fee will be reduced over the next two or three years, but that it will be reduced immediately? Any delay will be seen as a victory for the BBC. The programmes offered on the BBC at the moment are pretty boring, to say the least.

Encouragement should be given to promote BBC local radio. If "pay as you view" comes in—and that sounds like a good idea — very few people will want to pay anything for what the BBC is offering in the current schedules.

Mr. Hurd

My hon. Friend has given us the benefit of a wide range of his reactions to the report. He will leave the House to pick and choose among these reactions and no doubt we shall hear more about them.