INVESTIGATION OF THE BBC BY THE NATIONAL AUDIT OFFICE

HC Deb 25 February 2003 vol 400 cc165-201

`() In Part 2 of Schedule 4 to the National Audit Office Act 1983 (c. 44), the words "the British Broadcasting Corporation" shall be omitted.'—[Mr.Leigh.]

Brought up, and read the First time.

Mr. Edward Leigh (Gainsborough)

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker

With this it will be convenient to discuss the following: New clause 6—BBC research on television licensing— it shall be the duty of the BBC annually to commission and publish independent research into the efficacy, cost effectiveness and public acceptability of television licensing in the United Kingdom subject to such conditions and restrictions as the Secretary of State may by direction require.'. New clause 7—OFCOM research on television licensing It shall be the duty of OFCOM annually to commission and publish independent research into the efficacy, cost effectiveness and public acceptability of television licensing in the United Kingdom subject to such conditions and restrictions as the Secretary of State may by direction require.'. New clause 8—Preserved rights in respect of certain concessionary television licence;fees—

`(1) Part 1 of Schedule 2 to the Wireless Telegraphy (Television Licence Fees) Regulations 1997 (S.I. 1997/290) shall be amended as follows.

(2) After entry 5 in column 1 (type of licence), there shall be inserted— Television licence (including colour) (Accommodation for Residential Care (preserved rights)). (3) After entry 5 in column 2 (description of licence), there shall be inserted— A licence to install and use television receivers at such parts of accommodation which, in whole or in part, previously met the requirements specified in entry 5 in this column, where the resident of a unit of accommodation was resident in that accommodation at the time that the accommodation or part of that accommodation met the requirements specified in entry 5 in column 2 and was paying the issue fee specified in entry 5 in column 3. (4) After entry 5 in column 3 (issue fee), there shall be inserted— £5 for each unit of accommodation occupied by a resident, as defined in Part II of this Schedule, meeting the requirements specified in column 2.".'. New clause9—Public services fluid—

'(1) The Secretary of State shall by order make provision for the establishment of a fund to be known as the Public Services Broadcasting Fund.

(2) There shall be at least 3 trustees of the Fund and the order shall make provision for the terms of their appointment, including their remuneration.

(3) The primary function of the Trustees shall be the making of financial contributions to groups or organisations which make or propose to make programmes of local, regional or sectional interest for inclusion in a programme service.

(4) The Trustees shall have such other powers as may be conferred on them by the order.

(5) The BBC shall pay to the Trustees for the Fund in January of each calendar year in accordance with the provisions of the order made under subsection (1) an amount equal to 1 per cent. of the licence fee received by the BBC in the preceding calendar year.

(6) The Secretary of State may by order vary the percentage for the time being specified in subsection (5).

(7) An order under this section shall not be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.'.

Mr. Leigh

The purpose of the new clause is to enable the Comptroller and Auditor General to enjoy full value-for-money access rights to the BBC and thus to open it up to exactly the same scrutiny on Parliament's behalf as all other bodies that are funded by tax.

I stress from the outset that we are not considering a party-political issue. There is total consensus among members of the Public Accounts Committee, on which I serve, and in both Houses that the BBC's position outside the Comptroller and Auditor General's remit is a matter for concern.

The new clause is supported by the right hon. Member for Birkenhead (Mr. Field), the hon. Member for Newbury (Mr. Rendel), who is in his place, my hon. Friend the Member for South Norfolk (Mr. Bacon), the right hon. Member for Swansea, West (Mr. Williams), who is Chairman of the Liaison Committee and one of the most senior Members of the House, the hon. Member for Croydon, Central (Geraint Davies), who is in his place, the hon. Member for City of Durham (Mr. Steinberg), my hon. Friends the Members for Fareham (Mr. Hoban), and for Tatton (Mr. Osborne), the hon. Member for Tamworth (Mr. Jenkins), my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) and the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth).

Mr. Andrew Mitchell (Sutton Coldfield)

A fine body of men.

Mr. Leigh

Indeed. Those names show that there is consensus, at least on the Public Accounts Committee. Like many hon. Members, I believe that the BBC should be in the same position as other public bodies.

Mr. John Bercow (Buckingham)

Is the new clause confined solely to the audit of financial management in the BBC or would its purview extend to considering whether the BBC had honoured its obligations to observe due impartiality in matters of political and industrial controversy?

Mr. Leigh

I am grateful that my hon. Friend, with his usual perspicacity, has moved to the central argument. Let me make it clear straight away that there is no intention to undermine, affect or question the BBC's editorial independence through the new clause.

3.15 pm

We all acknowledge that although we may tear our hair out about various aspects of programmes that we personally dislike, including political views with which we disagree and interviews on "Today", the new clause has nothing to do with that. I assure my hon. Friend the Member for Buckingham (Mr. Bercow) that the Comptroller and Auditor General, who is an officer of the House, is uninterested in what happens in programmes. He simply wants to subject the BBC to the same financial scrutiny as everyone else.

We are considering £2.5 billion of taxpayers' money, which is raised through a compulsory licence fee. Let us be honest: it is effectively a poll tax on the majority of people in the country. It is no longer sustainable to keep that large sum beyond our scrutiny. I believe that the Minister privately acknowledges that, that his civil servants recognise it and that many people in the BBC accept it. Even the current chairman of the BBC publicly acknowledged that before he took up his current position. Whatever the Minister's negotiating position, I believe that everybody realises that the time is right for the BBC to come under Parliament's scrutiny.

For those who are not familiar with the system, the Comptroller and Auditor General audits central Government and the bodies that they fund. I am delighted that the Government have made progress. They are in the process of correcting past anomalies—for example, the Comptroller and Auditor General was not allowed to scrutinise some non-departmental public bodies or Government-owned companies. I bend over backwards not to be party political when I speak on behalf of the Public Accounts Committee. I therefore pay tribute to the Government for their tremendous progress.

However, the position on the BBC is much less clear. The Comptroller and Auditor General has only limited rights of access, which are far short of what is necessary. He can examine the arrangements for collecting the television licence fee and the use that the BBC makes of the grant from the Foreign and Commonwealth Office to support the World Service. Those are only two small aspects of the enormous empire that constitutes the BBC. He cannot examine or report to Parliament on the bulk of the BBC's spending, which amounts to £2.5 billion. That is wrong. I want to convince the Minister that we must right the wrong now.

Michael Fabricant

Does my hon. Friend acknowledge that there is an argument, to which I do not especially subscribe, that, if the National Audit Office were allowed to investigate the BBC, it would be in a position to judge and interfere with programming and creative policy in the corporation? Will my hon. Friend either assure me that that would not happen or at least justify the reasons for it?

Mr. Leigh

I know that my hon. Friend takes a deep interest in those matters. He talks to senior executives in the BBC and understands their mindset. I assure him, and perhaps BBC executives through him, that we have no desire to compromise the BBC's independence or limit its creativity. It would be a retrograde step if Members of Parliament, the PAC, the Comptroller and Auditor General or anybody else tried to inhibit editorial independence. The argument that that independence would be compromised—if such an argument is being put forward—simply does not stand scrutiny. Let us consider what the CAG already does. He reports on the Arts Council and no complaint has ever been made by anybody in the Arts Council saying that the National Audit Office has been questioning their artistic judgments—[Interruption.] The Minister knows all about that. Perhaps people in the National Audit Office do not have the facility with words that he has shown on previous occasions in dealing with artistic matters, but there have never been any complaints about the activities of the CAG with regard to the Arts Council. The CAG also reports on our universities, but not a single complaint has come from any university saying that he has inhibited academic freedom. That simply has not happened.

The editorial judgments made by the BBC would be the CAG's starting point. He would say "I am not responsible in any way for the editorial judgments that are being made", but he would provide a valuable insight into how the public funds that are at the BBC's disposal are being spent. We are outlaying all the money and we want to know that it is being spent efficiently and without waste. The CAG would provide Parliament with an independent insight into the quality of the BBC's financial management. That is what the process is all about. This House started its work a long time ago in scrutinising the Executive and trying to ensure proper financial management. There are still only two areas where Parliament does not have a right to investigate financial management where public money is used—the BBC and the civil list.

Mr. Alan Williams (Swansea, West)

Is not the ultimate absurdity the fact that the BBC squeals at the very thought of a non-policy Committee such as ours considering its finances, but turns up to give evidence at the appropriate Select Committee, which can consider policy?

Mr. Leigh

I am grateful that the right hon. Gentleman has mentioned that point, as I want now to deal with the Select Committee on Culture, Media and Sport. BBC executives have claimed that their appearances before that departmental Select Committee, which is involved in policy, while the Public Accounts Committee never is, provide some sort of accountability. I believe, however, that the appearances of BBC representatives before that departmental Select Committee have proved that, despite its best efforts, it does not have the expertise or support staff, including the support of the National Audit Office and its 700 staff, that are necessary to provide an in-depth analysis of what is going on in the BBC's financial management.

Mr. Brian Jenkins (Tamworth)

Surely my friend realises that no matter how much experience, expertise and will there is, without the figures, one cannot possibly make any judgment on effective use of resources?

Mr. Leigh

That is absolutely right; indeed, it explains why a Committee of Parliament that is supported by its own civil service in the shape of the National Audit Office is needed to investigate the BBC and ensure that £2.5 billion of our money, which we spend, is being spent properly. I understand that members of the Culture, Media and Sport Committee, some of whom are present in the Chamber, agree with me and realise that they cannot provide the sort of scrutiny that would be afforded by the CAG.

Last July, when the Culture, Media and Sport Committee took evidence from the BBC on its annual report, my hon. Friend the Member for Lichfield (Michael Fabricant), who is present in the Chamber, remarked to the BBC witnesses that the idea that his Committee could substitute itself for the NAO in scrutinising the BBC was—I hope that I am not misquoting him—"frankly ridiculous". That is the view of that departmental Select Committee and I entirely agree with it.

If there were some problem with editorial independence, surely a complaint would have been made about the scrutiny that we provide in respect of the World Service. As far as I know —I have checked this matter with the National Audit Office—there has never been any complaint from the chairman or chief executive of the BBC about any findings or recommendations on the World Service ever made by the Public Accounts Committee in working on Parliament's behalf. There has never been any complaint that we have interfered in the editorial judgments or freedom of the World Service. Our work on the World Service could be regarded as a pilot study. We have been looking at the World Service for all these years, we have done our studies and we have tried to improve the service and make it work better, and never has a single complaint been made about our compromising editorial independence.

The CAG is simply an officer of the House. He is wholly independent of the Government and is effectively appointed for life. The National Audit Office gives him complete discretion in respect of the topics that he chooses to examine, how he carries out his work and whether he produces a report. I cannot force him to undertake a particular inquiry and neither can members of my Committee. He is an independent officer and is completely outwith any sort of party political or even political process. He is supported by an expert staff. They have expertise and experience that are second to none, and we believe—I want to be helpful to the BBC—that they would add genuine value to the financial management of the BBC. We believe that they could help it. They are not bean counters who will crawl all over it and subject it to all sorts of difficulties and time-wasting processes. They can help the BBC, using all the experience of the NAO, in trying to ensure that that great organisation, of which we are all proud in our various ways, is as modern and progressive in its financial management as any other Government body.

Brian White (Milton Keynes, North-East)

One of the criticisms made in the IT world is that fear of the Public Accounts Committee inhibits innovation and risk taking in the public sector. How does the hon. Gentleman respond to that criticism in the context of modernisation of the BBC?

Mr. Leigh

That is a fair point and I am delighted that the hon. Gentleman has made it. The point that we make to Whitehall is that we are not risk averse—quite the contrary. We want Whitehall to take risks, as long as they are well thought out. My Committee has made numerous recommendations over the years that prove that point. We recognise that the BBC has to take risks. For example, it had to be prepared to take a risk in launching BBC News 24. All sorts of problems may be involved, but we would not create an atmosphere or background in which executives think "I am not going to launch a new television or radio channel because I might be summoned by the PAC to account for myself." If executives make mistakes and are wasteful or take decisions that result in the mishandling of tens of millions of pounds of public money, however, surely it is only right that they should be brought in front of Parliament to account for their actions.

Why should it be the case that in one part of the public sector—the BBC is effectively a part of the public sector—executives are not held to account by shareholders, of whom there are none, and are not subject to discipline under the Companies Act 1989, but are not accountable to Parliament either? I say to them that we are not trying to prevent them from taking risks. All we are saying is that, like everybody else in the public and private sectors, they should be held to account.

Michael Fabricant

Does my hon. Friend agree that executives who are in a position in which they can be investigated are also thereby given a degree of protection? From time to time, the corporation has been criticised on the ground that it has used public licence money to compete in the commercial market. It has always denied doing that, but it is currently its own judge and jury. Would not the locus of my hon. Friend's Committee include an investigation in that area if such an accusation were made? Does he agree that his work and that of his Committee might be more believable than that of the corporation in trying to defend itself?

Mr. Leigh

In some ways, I feel sorry for the BBC. It is the national butt of complaints. We all complain about it, saying that it is not doing this or that right. We all have an opinion on it. One reason for resentment of the BBC—from MPs, members of the public and its private sector competitors—is that it is an entirely independent empire that is not held to financial account by anybody. It would be a defence mechanism for the BBC to come in front of a parliamentary Committee to explain its decisions.

3.30 pm

Dr. Howells

rose

Mr. Lansley

rose—

Mr. Leigh

I had better give way to the Minister first.

Dr. Howells

No, it is all right.

Mr. Lansley

Perhaps the Minister and I were about to make the same point. I agree with my hon. Friend the Member for Gainsborough (Mr. Leigh), but I do not want his argument to stretch too far. He appeared to agree with my hon. Friend the Member for Lichfield (Michael Fabricant), but I think that the argument is being stretched too far. If the BBC were to use licence fee money to subsidise services in a way that went beyond its public service remit and interfered with competition, it would be subject to scrutiny from the competition authorities. This does not diminish my hon. Friend's argument, but we must be clear that there are certain BBC activities that are subject to scrutiny.

Mr. Leigh

I accept that. If there is unfair competition, or if the BBC is acting outwith its statutory framework, there are other ways of righting the wrong.

Dr. Howells

The hon. Gentleman's hon. Friend the Member for South Cambridgeshire (Mr. Lansley) second-guessed me. However, I wanted to ask the hon. Gentleman another question. This is an important debate and I am enjoying his contribution very much. He said that people should be held to account. As a veteran of the PAC, I can well imagine that, if somebody had invested in a computer system—and such systems provided great fare for the PAC in many investigations by the CAG—and millions of pounds had been lost, that would be well worth investigating. However, what about an executive who was responsible for producing a series or a top-end drama that had lost millions of pounds? How would the PAC investigate that kind of loss, where earnings could have been made from the product but were not?

Mr. Leigh

That is an important intervention and it probably goes to the heart of what concerns BBC executives. It is difficult for me to give the House a categorical undertaking. I do not speak for the Comptroller and Auditor General in the way Ministers speak for their civil servants. I cannot tell the House exactly what the CAG would want to investigate. However, I have some experience of what he would want to investigate in other parts of the public sector. The Minister has put his finger on the central issue. I suspect that the CAG would, as the Minister suggests, be interested in the purchase of a new computer or information technology system that had not been properly thought through, resulting in major financial loss for the BBC. However, I cannot conceive of any circumstances in which the CAG would think that he had the expertise to second-guess the editorial judgment of senior executives in the BBC who had thought that a particular programme or series would be popular when in fact it was a great flop that nobody wanted to watch, leading to it being taken off the air with the waste of vast sums of money.

We all accept that creative people have to take risks and that sometimes they will get ahead of what public opinion wants. However, why anybody in the National Audit Office would think that they had the expertise to second-guess that kind of decision, I cannot imagine. It is not going to happen. It is not for me to speak for the CAG, but I think that I can give the Minister and the BBC that reassurance.

Mr. Jenkins

Does the hon. Gentleman accept that it is not what is produced that we want to consider, but how it is produced? Within the enclaves of the BBC—an organisation that is protected from the rigour of the world of commercial enterprise—we want to ensure that the most effective use is made of resources that are, in effect, a donation from the taxpayer. We are critical not of the programmes but of the methods used to put them together.

Mr. Leigh

The hon. Gentleman has put the argument far better than I could have done. What is being produced is none of our concern. We do not have the expertise to question whether a particular programme is desirable or not. However, how the BBC is run—this huge public corporation that spends £2.5 billion a year—is surely of some interest to Parliament.

Let me describe how the Public Accounts Committee works. The PAC does not question the right of the Government to make a particular policy decision—for example, to introduce individual learning accounts. If the Government of the day want to introduce ILAs, that is for the Government. We do not question that. However, we have a perfect right to say, "You introduced ILAs but you didn't get a sufficient grip and the whole thing went out of control. There was massive fraud and the taxpayer ended up losing tens of millions of pounds." A similar argument would apply to the BBC. We will not get involved in its policy decisions. That is the key. The PAC has a defence mechanism: we never get involved in policy decisions. We will not question a particular policy decision of BBC senior management to produce a series of programmes or even to set up an entirely new service. However, we would be interested in how the programmes were produced or the service set up.

Brian White

rose—

Mr. William Cash (Stone)

I apologise for coming to the debate rather late. I heard my hon. Friend talking about policy decisions. Does he agree that it is essential that the BBC should subscribe to its charter and to the ingredients that go with it? If it does not, it will be under attack on two fronts—on impartiality and the way that the guidelines function, and on its accounts.

Mr. Leigh

I am not going to be taken down the route of saying that we should in any way get involved in impartiality. To do so would be to defeat immediately all the arguments that I have been trying to elucidate for the past 20 minutes. It may be that the BBC is not impartial, but that is none of my business. Other mechanisms can deal with that issue, and I contend that they work perfectly well.

My hon. Friend refers to accounts management. That is something in which Parliament has a perfect right to get involved. There is no adequate mechanism—under the charter or by any other means—to question whether things are being done properly.

Another hon. Member has tried to intervene, but I must finish soon to allow other hon. Members to contribute.

Brian White

I want to ask about the BBC's quota of independent productions. Would the PAC be involved in monitoring those contracts? If so, what is to prevent it from becoming a sort of court of appeal for independent contractors who feel that they have been hard done by?

Mr. Leigh

The hon. Gentleman has done a good job in presenting some fears that BBC management may have expressed. However, some people do not understand the way in which the Public Accounts Committee operates. In this country, we raise and spend the best part of £700 billion of public money every year. The PAC is only one Committee of the Parliament. We have twice as many hearings as any other Committee but we still meet only 60 times a year. I assure the hon. Gentleman, and anybody else who takes a close interest in these matters, that the PAC will not spend the whole year—or indeed a half or a quarter of the year—crawling over every aspect of the BBC, whether quotas or anything else. I suspect that, if Parliament gets this Bill right, people in the BBC will say, "Well, we'll have to be a bit careful about our financial decisions because we could be held to account." However, there will be only one hearing, or maybe two hearings, on the BBC each year. The CAG will feel his way extremely carefully. He is very attuned to all the sensitivities about his ever getting involved in editorial independence. He will not go down any route that will get him into trouble.

Michael Fabricant

The Minister intervened on my hon. Friend to ask an interesting question from which this discussion—this sub-debate, if you like—has arisen. The Minister asked about a series, or an individual programme, that made a loss. Does my hon. Friend accept that a programme that is made for the BBC cannot, in itself, make a loss? It is not made as a commercial production, unless we have to take account of some co-production deal with, for example, an American broadcaster. Does my hon. Friend—

Madam Deputy Speaker (Sylvia Heal)

Order. This is rather a long intervention.

Mr. Leigh

I agree with my hon. Friend. I cannot conceive of a situation in which the CAG would want to become involved in decisions about the way in which the BBC is run, or in which it would be appropriate or right for the CAG to question why a series of programmes had been made. We can put that canard to rest now; it simply will not happen.

I wish to say in conclusion—I am trying to get to the end of my speech without too many interventions—that the practical and constructive work of the CAG has saved £1.5 billion over the past three years. His independence is a safeguard for the BBC and for Parliament. It is important that we keep in view the principle that lies behind the new clause: simply to increase parliamentary accountability of the BBC. In 2001–02, the licence fee raised £2.5 billion, yet although the CAG can examine its collection, he cannot look at how well the money raised is spent. That is a significant weakness in public accountability.

Arguments in favour of extending the CAG's rights of access to the BBC have been repeatedly and forcefully made on many occasions by the PAC, by the Culture, Media and Sport Committee, by Lord Sharman in his review of audit and by many others. I recognise that, in the Davies review, the BBC has been subject to some external reviews and other measures designed to improve its financial accountability, but, of course, they do not provide the ongoing parliamentary scrutiny and accountability that is needed.

The Bill provides a unique opportunity for the House to rectify a wrong that has existed for too long. It is essential that the BBC is opened up to proper parliamentary oversight. This argument will not go away; nor should it until the requirements of the House and the licence payers whom we represent are met and the new clause is accepted.

Jon Trickett (Hemsworth)

I rise partly to correct an omission: because of an oversight, my name did not appear in support of the new clause. I am a member of the PAC, and I would deplore any suggestion that the PAC's support for the proposal was anything but unanimous. All its members, from all parties, endorse all the points that have just been made so persuasively in making what is, frankly, an irrefutable case.

From time to time, probably quite frequently, all hon. Members will encounter constituents who wish to raise certain matters about the BBC and the licence fee. We are answerable for the fact that the licence fee is now well over £100 a year and is sometimes levied on extremely poor households. Yet, as we have just heard, Parliament is unable to scrutinise the mechanisms that the BBC uses to organise itself and its expenditure patterns. That is clearly wrong.

The Chairman of the PAC has just said that there are two only two areas of public expenditure where the Comptroller and Auditor General is not currently allowed to venture—the civil list and the BBC—but the PAC and certainly the NAO have looked at certain elements of royal expenditure, such as royal travel and grace-and-favour flats and other properties that belong to the royal household. So the principle itself has been accepted that Parliament, which votes the civil list, may consider certain items of royal expenditure.

The BBC is the last bastion to resist parliamentary control, although all hon. Members will notice that it frequently knocks on the door when it wants the licence fee to increase. If it expects us to be able to argue the case for raising money for the BBC, as we all do, it should accept the associated principles of accountability and transparency. A fairly puerile argument has been developed as a defensive mechanism by the BBC, which suggests that, somehow or other, its integrity would be affected by such scrutiny.

3.45 pm

All hon. Members understand the difference between a democracy and a totalitarian arrangement. In totalitarian countries—for example, Zimbabwe—the press is subject to close control by politicians. That must be resisted in a democracy. Whatever the political, editorial and creative impulses behind the media, their independence must be protected at all costs. That is precious and must be kept independent of the political process. That is well understood, and for the BBC to develop such an argument in defending itself from financial scrutiny by Parliament is, frankly, an insult to ourselves as parliamentarians, to Parliament as in institution and to the electorate, by suggesting that they would allow elected politicians to interfere in something as precious and important as the BBC's editorial and creative independence. Frankly, that argument is not sustainable, and displays a fundamental misunderstanding of the way in which the PAC and certainly the CAG conduct their business.

The fact is that the argument about the BBC's editorial independence is almost exactly analogous to the argument that we in the PAC frequently have about policy. Every member of the PAC well understands that we may not stray into policy issues when questioning civil servants. The relationship between the policy advice given to Ministers and the ministerial response is beyond the PAC's remit; it is for Parliament to address. Although we understand that, our questions may be robust occasionally, but if a member of the PAC inadvertently strays into policy issues, the other members and certainly the Chairman—I pay tribute to him for his independence and the non-partisan way in which he chairs the Committee—would quickly remind that member that he or she was straying into an inappropriate area.

It is a fact that our modus operandi is well established—the PAC is the oldest Committee of the House—and we do not stray into policy issues, but we frequently tackle financial irregularities, inefficiencies and so on. That distinction is clear in our minds, and it is precisely analogous to the argument about the way in which the BBC's finances, but obviously not its editorial policy, should be accountable to Parliament through that process.

The NAO, supported by the PAC, has identified substantial savings across the public sector over the years. That has been well demonstrated, and I should have thought that the BBC would welcome any assistance that Parliament could provide in identifying savings, which could then be redeployed into additional programming and, perhaps, more creative activities. So, if anything, I see us as an ally of the BBC.

Finally, I would tell those in the BBC who think that they are defending it that they are actually exposing themselves to criticism. This is an Achilles' heel for the BBC. I see myself as a great advocate and friend of the BBC, and I suppose that most hon. Members feel the same. When constituents ask me, "You are raising £110 a year from me"—or whatever the licence fee may be—"How do I know that I'm getting value for money from the BBC?", I would like to be able to tell them that they are getting value for money, that the accounts are subject to close scrutiny and that we are convinced, because we can demonstrate that the BBC is being examined, that such efficiency has been achieved. However, the fact is that we cannot say that, so those hon. Members who would like to defend the BBC are unable to do so, and the BBC is doing itself a great disservice. The argument is beyond persuasive—it is irrefutable—and I hope that the Minister will indicate that the Government are moving in our direction even if he does not accept the new clause this afternoon.

Mr. Whittingdale

I want to speak to new clauses 6, 7 and 9. Before I do so, I should say how pleased I am that my hon. Friend the Member for Gainsborough (Mr. Leigh) tabled new clause 4. I am even more pleased that the other members of the Public Accounts Committee have put their names to it. We debated the issue in Committee, and it was notable that everyone who spoke in Committee, from all parties represented on it, supported the idea that the BBC should come under the scrutiny of the National Audit Office. I had an impression from the Minister's response in Committee that he, too, could appreciate the arguments, and that it was a question of time rather than a debate about the desirability of such scrutiny. I hope that he may be able to provide a further guide on that point this afternoon.

My hon. Friend the Member for Gainsborough has set out a powerful case. The BBC receives some £2.5 billion of public money, and anybody who has had any dealings with the BBC recognises that it is not exactly a model of efficiency—one does not have to look hard to discover examples of waste. Nor is it a model of transparency. I am sorry that the hon. Member for Rhondda (Mr. Bryant) is not present this afternoon, as he played a considerable part in debates in Committee, and he is a former employee of the BBC. He said: When I was at the BBC, whenever there was a threat that somebody might start looking at the hooks, it was a bit like Saddam Hussein trying to hide things from the weapons inspectors; things would move from one office to another and an exciting time was had by all."—[Official Report, Standing Committee E, 6 February 2003; c. 1063.] That is his account of his experience as a senior employee of the BBC—[Interruption.] I am sure that he performed an important function in the BBC—he told us that he wrote the chairman's speeches, as I seem to recall, which is a very important function. As a former speechwriter, I recognise that. Not only has almost every Member of the House who has spoken on this subject supported the idea of scrutiny, but almost every external examination of the BBC has reached the same conclusion that it is anomalous, to say the least, that the BBC, almost alone among public bodies, should remain outside the scrutiny of the PAC.

The report to which I wanted to draw attention in particular, to which my hon. Friend the Member for Gainsborough has already referred, is the review of the funding of the BBC conducted in 1991. It stated: The most serious lacuna that results from this structure concerns financial control. The BBC is disposing of a substantial sum of what is essentially public money. The report concluded: The Panel does not accept, therefore, that more scrutiny need mean more interference. There is nothing in the National Audit Office's remit which threatens the proper independence of the BBC. It is worth remembering that the person who chaired the committee that reached that conclusion is now the chairman of the BBC. It is strange, to say the least, that since arriving in his new position he has changed his mind on that point, particularly when we consider every other report that has been conducted. Reference has been made already to Lord Sharman's report, which concluded that the Comptroller and Auditor General should be given access to the BBC as originally recommended by the Davies Review". The Culture, Media and Sport Committee reached the same conclusion, and the Public Accounts Committee has been making the case strongly, not just under the chairmanship of my hon. Friend the Member for Gainsborough but under its previous Chairman, my right hon. Friend the Member for Haltemprice and Howden (David Davis), who, I am delighted to see, has joined us in the Chamber. This is not a party political matter, as my hon. Friend the Member for Gainsborough said at the beginning of his remarks; the need for such scrutiny is widely recognised across all parties.

One or two reasons have been given for why the BBC has been so reluctant to allow the PAC and the National Audit Office access to its accounts. I recall that when the right hon. Member for Swansea, West (Mr. Williams) attempted to draw those out from the director-general of the BBC at the PAC hearings, the director-general said that he knew what they were but was not prepared to tell the PAC on that occasion. In the past, however, the BBC has argued that involving the NAO might result in interference with programming decisions.

In relation to the Minister's point about a programme that might lose money, my hon. Friend the Member for Lichfield (Michael Fabricant) is right: it is difficult to say whether a BBC programme loses money. The raison d'être of the BBC is not to make money but to fill a market failure and, therefore, make programmes that are likely to have a relatively small audience. It might be possible to sell those programmes overseas, providing an income in future, although BBC programmes are produced not for financial reasons but as part of the public service remit. I see no evidence to suggest that the Comptroller and Auditor General would wish to get involved in any question relating to programming decisions. Nor is there evidence that the involvement of the NAO would in any way affect the impartiality of the BBC, which is another argument that has been put by those who are opposed to allowing the CAG in.

My hon. Friend the Member for Gainsborough made the decisive point that the PAC and the NAO already scrutinise one part of the BBC's output—the World Service. If there is one part of the BBC in which it is most important that there should never be any suggestion of partiality, interference by Government or any political consideration, it is the World Service. The reason why the World Service is respected across the world is that people trust it for its objectivity and impartiality. When the permanent secretary was questioned on that point, she made it clear that the Foreign Office had never had any complaints about interference in the World Service. It is on that freedom that the World Service's reputation rests, yet it can be subject to examination by the NAO without any damage to its impartiality.

The arguments in favour of new clause 4 are absolutely overwhelming. I was encouraged when the Minister said in Committee that he was examining the matter, and that he would present the Government's conclusions in due course. I hope very much that he will be able to say this afternoon that he has reached a conclusion, and that he will support new clause 4, which has the unanimous support of all the members of the PAC.

New clause 7, which is linked to new clause 6, relates to the question of the future of the licence fee and its part in financing the BBC. That question, too, has a long history. It has been the subject of examination by outside bodies over several years. It was considered by the Peacock committee, and it was examined again by the committee chaired by Gavyn Davies in 1999. Most people who have examined the licence fee have recognised that, as a method of financing, it has many drawbacks. Until now, however, it has been argued that it is perhaps the least bad method of financing the BBC. Examination has been made of possible alternatives such as financing the BBC through advertising, subscription, and, possibly, direct Exchequer grant. I fully recognise that drawbacks are associated with each of those methods, too.

There is no question but that, since the issue was last examined, the whole broadcasting world has completely changed. I shall resist the temptation to refer to broadcasting ecology, as I share the Minister's distaste for the term, although I found in my research that it appeared in the original Peacock report, so it has been around for some time. The fact that we live in a world in which people have access to hundreds of television channels rather than just three or four means that the time has come when we need to look again at the licence fee. That appraisal is also particularly important given that the licence fee has been increasing year after year. Indeed, the Secretary of State confirmed only the other week that it would rise to £116.

The licence fee, as everyone who has examined it knows, is a highly regressive charge that bears heavily on those with the lowest incomes. The Gavyn Davies review said: The licence fee, correctly described, is a tax and a poor tax at that. It is levied on everyone who has a television set. It takes the same amount from every household, rich or poor. A wage-earner on the national minimum wage has to work for a week to earn enough to pay it, but pay it he or she must, whether they choose to watch the BBC or not. That is an accurate description of its effect.

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As my hon. Friend the Member for Gainsborough said, the licence fee is a poll tax. Indeed, it is considerably worse than the community charge, which attracted that label. Unlike the community charge, there is no means-tested benefit available for those who are on low incomes and who cannot afford to pay. It is almost impossible to think of any other charge levied by the state on almost every person in the country for which no means-tested assistance is available whatever.

Geraint Davies (Croydon, Central)

Do not people over the age of 75 receive a free television licence?

Mr. Whittingdale

People over the age of 75 receive a free licence, and that is very comforting for them. However, the rest of the population—whatever their income—have to pay the licence fee, so it remains a poll tax.

The effect of the licence fee was examined by the Davies review and it conducted its analysis by splitting up the proportion into income deciles. The review discovered that the flat rate charge was highly regressive and represented 1.7 per cent. of the net income of the poorest decile, but just 0.28 per cent. of the income of the top decile.

Michael Fabricant

My hon. Friend is arguing that the licence fee is a highly regressive tax, but is he suggesting that it should remain a tax that is perhaps based on income or council tax bands? Alternatively, is he suggesting that there should not be a licence fee at all and that the BBC should be funded completely from commercial sources?

Mr. Whittingdale

I do not want to anticipate the rest of my speech, but I will argue that I agree with the Government in that there needs to be a full debate on this issue. I think that the arguments in favour of the licence fee are becoming weaker by the day. I will set out why I believe that to be the case, but before that I shall conclude my comments on the drawbacks of the existing system.

My hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) has tabled a new clause that has considerable merit. It draws attention to the enormous resentment that is felt by many people about the existing concessionary licence system in which some people find that they are eligible to pay just £5 whereas their next-door neighbour may have to pay the full amount. Those who pay the full amount may look around and see that others, who may be better off than they are, are able to claim a concessionary licence. That is a cause of great anger and frustration and I suspect that every Member will have heard people complaining about how unfair the existing concessionary licence scheme is. I therefore very much welcome my hon. Friend's new clause. I hope that she will elaborate on it shortly.

The other aspect of the existing system that gives rise to real anger is the way in which the collection system is enforced. The BBC has responsibility for collecting the licence fee and it contracts that operation out. That results, however, in many people being hounded by inspectors who refuse to believe that people do not have a television set and have no particular wish to possess one.

The Committee chaired by my hon. Friend the Member for Gainsborough conducted a useful examination of the system of collecting the licence fee. Other than the World Service, that is the only part of the BBC's activities that the Committee is currently allowed to examine. It reached the conclusion that, although the licence fee enforcement officers were extremely assiduous in trying to pursue people evading the licence, they were also remarkably unsuccessful. Out of 3.5 million visits conducted by inquiry officers, only 459,000 suspected evaders were actually caught. The result is that a huge number of people are hounded, and I have heard examples of that in my constituency. I am sure that other Members also know of people who have repeatedly been pursued despite the fact that they have made it clear to the licensing office that they do not have a television set and that they have no intention of acquiring one.

The criminal sanctions that are brought against those who do not have a licence are often brought against some of the poorest people in our community. In the most recent year for which figures are available, 120,000 people had proceedings brought against them for their failure to have a television licence. That resulted in a number of convictions over the year and in prison sentences when people did not pay the fines.

I have no particular wish to endorse in any way the failure to pay a fine or, indeed, the failure to purchase a television licence, but this part of the criminal law is biting at people who are among the poorest in our society. Indeed, I understand that, in some years, licence fee crime has accounted for more than half the criminal convictions among women. That is an extraordinary figure, and it is another reason why we need to reconsider whether the licence fee remains the best way of financing the BBC.

It has been said that the licence fee still commands public support and that most people regard it as providing value for money. Indeed, for many years the BBC ran campaigns on television in which it argued that many people were unhappy that they were not able to pay even more for the BBC because it provided such wonderful value for them. However, that view is not borne out by the evidence that has been accumulated. For example, the Gavyn Davies committee considered the future of the financing of the BBC—

Geraint Davies

The report of the Public Account Committee and the report of the National Audit Office that preceded it found that about 30 per cent. of those who had had fines imposed on them for not paying the licence fee simply did not pay their fines. The hon. Gentleman seems to be suggesting that those people should not have had to pay for the licence in the first place. However, in another report from the Public Accounts Committee, we found that a similar number of people were not paying any fines at all for criminal activity. Is the hon. Gentleman therefore suggesting that they should be let off? His arguments do not hang together. People should pay fines, but he seems to think that they should not.

Mr. Whittingdale

I specifically said a few moments ago that people should pay fines and should pay the licence fee. However, as the hon. Gentleman's Committee has identified, many people do not pay the licence fee and do not pay fines. They are among the poorest in our society and, at the very least, that should give rise to questions as to whether the licence fee is the best way of continuing to finance the BBC.

I was about to say that the licence fee does not continue to command widespread public support. At the time of the Gavyn Davies review, an opinion poll was conducted. It found that 45 per cent. believed that the licence fee provided good value for money and that 42 per cent. did not. A majority of just 3 per cent. supported the view that it was good value. However, when they were asked whether the BBC should introduce advertising, 55 per cent. as opposed to 40 per cent. supported that view. When they were asked whether the BBC should introduce the sponsorship of programmes, the figure was 74 per cent. in favour as opposed to 16 per cent. against.

Since that time, a number of further opinion polls have been conducted. One conducted last October concluded that 46 per cent. favoured the licence fee whereas 51 per cent. favoured some other means of financing the BBC. In another poll conducted a few weeks later, 58 per cent. said that the licence fee was no longer justifiable in an era when as many as 300 television channels were available. That resentment will increase as the licence fee increases, especially as other broadcasters are suffering and finding it far harder to raise money. The fact that in the past few weeks the Secretary of State agreed to a further increase in the licence fee to £116 merely adds insult to injury. The original decision to increase the licence fee was taken at a different time, when commercial broadcasters were much better off than they are today.

There is another cause of resentment. A large and growing number of people have access to digital television channels and pay to receive channels that they choose to watch. People who pay a subscription for additional channels that they want to see resent the fact that they are also made to pay a licence fee to receive channels that they might not want to watch. While those who can receive digital television are beginning to resent the imposition of the licence fee, those who do not receive it equally resent the fact that they have to pay a significant amount for the development of the BBC's digital channels when they have no opportunity of watching them.

Those problems have given rise to challenges to the licence fee. Hon. Members may be aware that a particular journalist, Mr. Jonathan Miller, publicly announced that he does not intend to pay his licence fee and, in doing so, cited the European convention on human rights. He pointed out that article 10 says: Everyone has the right to freedom of expression. That right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority". The Minister may tell us that that does not apply to the application of the licence fee, but the BBC and the Government seem remarkably reluctant to put that to the test. Although they are happy to hound people who cannot afford to pay their licence fee and, in some cases, to send them to prison, there has been an interesting delay in taking any action against Mr. Miller.

Mr. Miller is not alone. Vladimir Bukovsky recently joined his protest. I would not go so far as Mr. Bukovsky, who has compared his anti-licence protest to the hunger strikes that he organised when in prison in the former Soviet Union, but he has said: The BBC's TV licence is such a medieval arrangement I simply must protest against it. The British people are being forced to pay money to a corporation which suppresses free speech—publicising views that they do not necessarily agree with. There is also the test case in Liverpool which involves people who have failed to pay the licence fee. So a growing body of opinion is undoubtedly unhappy with the existing system of financing the BBC.

It appeared for a long time that the Secretary of State had ruled out the possibility of change to the licence fee system. She went on record as saying that she regarded it as somewhere between the improbable and the impossible". However, she appears to have changed her mind in recent weeks. I welcome her statement that the BBC needs to demonstrate that the licence fee still represents value for money and to justify that it uses licence-fee payers' money, and earns their support, by offering services that extend the range and enhance the standards of what is available". I am pleased that the Secretary of State has recognised that there will have to be a public debate in the run-up to charter renewal on whether the licence fee is still the best system for financing the BBC. Alternatives are available. It may be that no one single method is appropriate and that we have to look instead to a mix of different sources of finance for it, but the debate must happen and we contend that it must be properly informed. One way to do that is by determining the attitude of the public because they are the people who are required to pay the licence fee.

The purpose of new clause 7 is relatively modest. It would simply put a duty on Ofcom to carry out research into the efficacy, the cost-effectiveness and the public acceptability of the licence fee so that the debate, which the Secretary of State rightly said will take place, is properly informed and we know what the public think. We can no longer accept the assurance that the vast majority of people believe that the BBC is a wonderful institution for which they would happily pay as much as they are asked to contribute.

4.15 pm

New clause 9 is also a relatively modest proposition. It suggests that part of the licence fee money is used to—

Geraint Davies

On a point of order, Madam Deputy Speaker. On the list of amendments selected for discussion, new clause 7 is not included in the group of amendments that we are debating.

Madam Deputy Speaker

The group includes new clauses 6 to 9.

Mr. Whittingdale

I am speechless. If the hon. Gentleman cannot read the list of selected amendments properly, it is not for me to correct him.

New clause 9 proposes that a small part of the licence fee proceeds should be put to one side and placed in a public service fund. The essential justification for having a state-owned and state-funded broadcaster is that it supplies public service programmes that the market would not otherwise produce. I accept that the BBC will be the main provider of public service programmes for the foreseeable future, but I do not understand why it has to have a monopoly on that. Commercial broadcasters are under an obligation, as part of their public service remit, to produce public service programming. Although one can identify many excellent programmes that are produced by the BBC which no one would argue are not part of the public service broadcasting obligation, for every "Lost Prince" that it produces there is a "Forsyte Saga" on ITV; for every "Daniel Deronda", there is a "Dr. Zhivago". Many programmes that are produced by the commercial channels are equally desirable and fit the public service remit. Indeed, it is sometimes hard to distinguish between the output of BBC and ITV.

New clause 9 would put just 1 per cent. of the licence fee to one side so that broadcasters could bid for it to receive finance for public service programming. The remaining 99 per cent. would stay with the BBC. Our proposal would inject that little bit of extra competition and break the monopoly that the BBC enjoys on receiving proceeds from the licence fee. The idea is not new. It has been proposed many times. The Davies committee recognised it as having merit and the Peacock committee discussed it. Many people think that there is no reason why the BBC should continue to enjoy a monopoly of public finance for producing public service programmes. I hope that the Government will consider our modest proposal.

Mr. Lansley

Does my hon. Friend recognise that there is an argument for going further than new clause 9 in respect of the proportion of the licence fee that could be available for competitive bids to provide the public service remit and to expose the BBC directly to competition? As it is drafted, it would take 1 per cent. out of the BBC's ambit as distinct from applying competitive pressure on how well it meets its public service remit compared with other public service broadcasters.

Mr. Whittingdale

Personally, I find that an attractive suggestion, and over time, the public service fund that we suggest could grow in size and achieve that purpose. In the new clause we make provision for the Secretary of State to increase the proportion of the licence fee that could be diverted to the public service fund. At this stage, however, I do not want to be too ambitious. We are suggesting a modest first step in that direction. Given the modesty that we are displaying on the matter, I hope that that will make it all the more attractive to the Minister.

Geraint Davies

I shall speak briefly in support of new clause 4, which would give the National Audit Office and the Public Accounts Committee unfettered access to the accounts of the BBC. Through their effectiveness, the NAO and the PAC are saving about £500 million of public money each year—10 times the cost of providing the facility. Given that the BBC spends £2.5 billion, it is not unreasonable to infer that the public would save millions of pounds if the National Audit Office were able to carry out value for money and financial audits of the BBC and if scrutiny took place.

It has been argued that that would undermine the editorial independence of the BBC, but, as has been said by others, the remit of the Public Accounts Committee extends not to policy, but to effectiveness. When we audit the national health service, for instance, we are in the business not of telling surgeons how to perform heart operations, but of telling people how to manage their affairs effectively to save money. As has also been said, the millions of pounds that we would undoubtedly save could be ploughed back to provide value for the viewer in terms of the quality of programmes.

Other speakers, particularly the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale), referred to the work of the Public Accounts Committee in the context of the BBC and the licence fee. As our report states, we found that of 3.5 million visits to try to catch evaders, 80 per cent. were unnecessary. In almost 60 per cent. of those cases, people failed to answer the knock at the door, perhaps because they knew who was knocking, or because they were not in. Twenty per cent. of the visits were to vacant properties, and a further 22,000 visits were to householders who had moved. Through that simple analysis, and by examining the number of prosecutions that ended in paid fines and in people getting licences, we provided valuable insights to improve value for money in the collection of the licence fee, and thereby to help the public.

It is clear, therefore, that the activity of the NAO can help to deliver value for money. In the past three years, savings of £1.54 billion have been achieved, so the arguments for allowing a national audit to provide better value for viewers and the public are virtually unchallengeable. I urge the Government to give positive consideration to the probing new clause.

Mrs. Angela Browning (Tiverton and Honiton)

I shall speak to new clause 8, which seeks to amend part 1 of schedule 2 to the Wireless Telegraphy (Television Licence Fees) Regulations 1997. I raise the matter because since those regulations came into law constituents and local authority housing departments have brought to my attention material changes concerning the effect of the licence on people who live in accommodation for residential care, and the concessionary rules that apply.

I wrote to the Minister last year on behalf of East Devon district council, and I hope that his portfolio tonight carries that correspondence. He wrote back to me on 25 March last year, and it may save time if I outline from the Minister's own correspondence the current qualifying criteria for what is called the ARC—accommodation for residential care scheme. They include the requirement that sheltered housing must be provided for occupation by disabled persons or retired persons aged 60 years or more. The criteria also include the requirement that that sheltered accommodation should have a person such as a warden whose function is to care for the needs of the residents and who lives on site or works there for at least 30 hours per week.

The purpose of the existing requirements is to ensure that qualifying sheltered accommodation is directly comparable to a residential home. Under those conditions, people living in such accommodation and over the retirement age—but of course now under 75 years of age—qualify for the £5 a year concessionary licence. In practice, although there may be purpose-built or purpose-acquired accommodation for an older population, many housing departments are finding that if at any time they cannot fill that accommodation with people who are disabled or over the retirement age, they necessarily have to put people of mixed age groups in the accommodation. They, of course, do not qualify for the concessionary television licence, and the status of the accommodation changes.

People who lived there and previously qualified for the £5 licence suddenly find that they no longer qualify. I had a case in Crediton in my constituency where an elderly lady living in such accommodation moved from the ground floor to the first floor. On the ground floor she had qualified for the £5 licence, but unbeknown to her, by moving to a different floor of the same building, she lost that entitlement. New clause 8 seeks to tidy up the regulations in the light of the changing circumstances to give people preserved rights, so that if at any time they had qualified in a particular building but the external circumstances had changed, they as individuals would continue to benefit from that £5 licence and the preserved rights would apply to them as individuals.

When I wrote to the Minister on behalf of East Devon district council last March, he wrote back to me and stated: The Government intends to introduce preserved rights for ARC beneficiaries whose accommodation ceases to meet the qualifying criteria in such circumstances"— as I described— so long as it continues to be provided or managed by a local authority, a housing association or a development corporation. I have no disagreement with that. The Minister went on to tell me that consultations had already begun between Department for Culture, Media and Sport officials and the BBC on the formulation of the necessary amendments to the television licence fee regulations.

The Minister stated that the Government intended to introduce the amendments as soon as they could. That was a year ago, so I was a little disappointed to find that he had not used the opportunity of the Bill to amend the regulations, as there seems to have been a reasonable amount of time for the details to be finalised. I hope that tonight the Minister will look favourably on the new clause in order to tidy up the existing regulations in the light of changing circumstances. Although there are not millions of people who would qualify, there are sufficient numbers of people. As I know from the individuals with whom I have spoken in my constituency, they feel aggrieved when they previously qualified for the concession and it is removed from them through no fault of their own.

Mr. Grogan

The remarkable speech from the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) deserves some response. He described his new clauses as being relatively modest and a first step, but it is clear in what direction he would take us and what his second and third steps would be were he to find himself the Minister for Culture, Media and Sport in 2006–07—we must imagine under which Prime Minister he would be serving. His remarks today were a sustained assault on the licence fee and, at times, on the BBC as well.

The hon. Gentleman referred to a recent article inThe Sunday Times about a widespread refusal to pay the licence fee, and he offered us two examples—a gentleman called Jonathan Miller and a Soviet dissident, Vladimir Bukovsky. The hon. Gentleman said that he would not go quite as far as Mr. Bukovsky, but those two examples were supposed to demonstrate the widespread refusal to pay. He also referred to press attacks on the BBC and the general dumbing down of the BBC. He is right; there have been such attacks. I shall give the House three brief examples. The Corporation has fallen woefully short of its duties to the public"; Many of the BBC's present popular programmes would have been condemned by the BBC itself five years ago as intolerably shoddy"; The BBC's policy seriously threatens the unique role the BBC has played in the cultural and intellectual life of the country. It could prove disastrous to the standards and quality of public service broadcasting. The first quote came fromThe Times in 1958, the second fromThe Observer in 1960, and the third from a letter written in 1969. The fact that this is an old debate does not mean that it is not important. The BBC quite rightly has to justify its licence fee to each generation, but I believe that it can do so.

4.30 pm

The hon. Member for Maldon and East Chelmsford rightly characterises his new clauses as modest, but I would also characterise them as somewhat lop-sided. In the case of new clauses 6 and 7, it is like the Government doing a survey on what the public think of VAT, then using the finding that they do not particularly like paying it to conclude that the public do not like the health service, the education service or whatever. The proposals are very lop-sided. I am sorry about that, given that the hon. Gentleman appears to have liked "The Lost Prince". Like him. I was invited to its première. I was among the B-list category of celebrities, in that I was invited to "The Lost Prince", and not to the Brit awards as most contributors to this debate seem to have been.

How about asking what the public think of the BBC's output, and whether they think, for example, that Radio 2 has a successful schedule or whether they like programmes such as "The History of Britain" and "The Blue Planet"? We were talking about dumbing down, but those programmes are watched by far more people of this generation—between 6 and 7 million—than ever watched landmark programmes such as "The Ascent of Man" and "Civilisation" in the late 1960s and early 1970s, which achieved only about 1.5 million viewers. It is important to take a rather more comprehensive view of public opinion than those two new clauses propose.

Obviously, there are conflicting pressures on the BBC in regard to the efficiency of licence fee collection. If it did not collect the fee with sufficient vigour, it would be open to the criticism—such as that levelled by the hon. Member for Gainsborough (Mr. Leigh)—that it was evading its financial responsibilities. It is worth noting that since 1991, when the BBC took over responsibility from the Home Office for collecting the licence fee, levels of evasion have shrunk considerably. In 1991, there were 19.4 million licences in force; last year, the figure had grown to 23.7 million, yet evasion rates dropped from 8.8 per cent. in March 2001 to 7.9 per cent. in March 2002, and to 7.6 per cent. this year.

Despite the existence of Mr. Miller and Mr. Bukovsky, I do not really detect a mass refusal to pay that would justify the comparison to the poll tax that the hon. Member for Maldon and East Chelmsford made. Life was very different when we had the real poll tax in operation some years ago. Obviously, the licence fee is economically regressive, although it has been pointed out that those over 75 receive not just a rebate but a complete exemption from it. Indeed, that exemption was introduced three days before my father was 75. That was the one time that he thought that I had any real political influence. Of course, the licence fee is economically regressive, but, in the wider context, it is extremely progressive, because it means that the very best of our culture and national life can be made available to everyone who has either a radio or a television. Those things are not only available to the wealthy on subscription. The hon. Member for Maldon and East Chelmsford mentioned subscription TV.

When we examine carefully the alternatives to the licence fee, I wonder whether the hon. Gentleman—who clearly wants to move away from the licence fee—would really carry his party with him. I would relish a political fight in the marginal seat of Selby if, for example, someone suggested introducing advertising to the very middle England Radio 2 channel, or privatising Radio 1. It is going to be hard to hold Selby next time, but a real challenge to the licence fee and the BBC would help me to reach parts of my electorate that I might not otherwise reach.

I do not think that such a challenge would be electorally popular, especially given some of the alternatives to the licence fee, such as advertising, subscription and sponsorship. If they were introduced, the BBC would have to serve commercial priorities, not just those of the licence payer. It would also have to start competing for revenues with other commercial broadcasters. If it were funded by subscription, it would no longer be able to serve everyone. No longer would everyone be able to watch the football World cup; only those who could afford the subscription would be able to do so. Direct funding by the Government would surely endanger the political independence of the BBC.

Mr. Whittingdale

The hon. Gentleman says that direct funding from the Exchequer would surely affect the political independence of the BBC. Does he think that the World Service is affected by the fact that it is directly funded by the Government?

Mr. Grogan

Under the Conservative Government, the World Service's whole financial structure was threatened by cut after cut. That really politicised the World Service in a way that proved very difficult at the time. Thankfully, the present Government have reversed the effect of some of those cuts.

The licence fee, which funds the BBC so well, and has done over so many generations, should not be thrown aside lightly. The hon. Member for Maldon and East Chelmsford said that other public service channels produce public service programmes, and of course they do. But part of the role of the BBC down the generations has been to raise standards and to raise the aspirations of some of the commercial channels that have other pressures. The fact that we see excellent public service programmes on ITV, for example, is partly a reflection of that.

Having had some measure of disagreement with the hon. Gentleman I would agree with him on one thing. The BBC's governors must take serious account of today's debate on new clause 4, regarding accountability to the National Audit Office and the Public Accounts Committee. I urge the BBC's board of governors to discuss this issue at an early date—I know that there are differences of opinion among its members—because it is inevitable that this change will be made at some stage. It is time that the BBC recognised that.

Another allegedly modest measure is the new clause that would set up a public services fund run by trustees and would, for the first time, split the licence fee from the BBC. Obviously, the long-term aim of that proposal is to increase the percentage from 1 per cent. to perhaps 5, 10 or 20 per cent. and perhaps to have an arts council of the air, as has been introduced in New Zealand, and destroy the BBC altogether. Again, I would urge great caution. In New Zealand, it has now been decided to reverse that measure and to re-fund the public service broadcaster, because a group of trustees sitting around doling out money cannot make quality public service programmes. The BBC has a value in terms of its public service ethos and of the creativity of its producers, its staff and its training that goes back for generations, and we must be very careful indeed before we rip up that tremendous heritage.

Mr. David Rendel (Newbury)

I should like to start by making a few remarks about new clauses 6 to 9 on behalf of my hon. Friends—my hon. Friend the Member for North Devon (Nick Harvey), our chief spokesman on these issues, has suggested that, to speed up today's debate, I might make those remarks instead of him — before I go on to the real purpose of my speech, which is to speak in my capacity as a member of the Public Accounts Committee about new clause 4.

My hon. Friends and I believe that new clauses 6 and 7 are unnecessarily bureaucratic and would involve the BBC in a lot of extra research work. In practice, new clause 4 will fulfil the financial requirements. It is much better to hand to the NAO the job of making sure that the money is properly spent. We have no particular problem with new clause 8 and have some sympathy for it. New clause 9 introduces an interesting idea, albeit one that should more properly be discussed when the licence system is reviewed at the time that the charter comes up for renewal. The hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) pointed out that it would be possible for a future Government or a different Minister to increase the figure of 1 per cent. Since the whole basis of the hon. Gentleman's argument for new clause 9 is that 1 per cent. is so insignificant that we need not worry about it, for him to admit that it could be increased at the will of a Minister seems to destroy his argument.

I am delighted to join the Chairman of the Public Accounts Committee in his support for new clause 4, for which PAC members have been fighting for some time. I spoke on the proposal in the House a year ago; it was part of the Sharman report and it enjoyed the support of the PAC even before then. As the hon. Member for Maldon and East Chelmsford pointed out, the current chairman of the governors of the BBC was fully in favour before assuming that office. It is funny how people sometimes change their views. Nevertheless, if the Minister chooses to go down that route, he may not meet quite the resistance from the BBC that might have arisen under previous chairmen.

The only counter-argument to new clause 4 is that we must defend the BBC's independence. It is hard to understand why anyone should imagine that it is necessary to defend the BBC's independence against someone such as Sir John Bourn, the Comptroller and Auditor General. It is absurd to argue that Sir John would say it was important to have Jim Davidson rather than Sandi Toksvig on Radio 4 or that the NAO would ever interest itself in editorial decision making. It will examine not policy or editorial matters but whether the licence payers' money is used effectively. That is even more important now that the BBC is doing much more contracting out and buying in of programmes from independent sources. The more that is done, the more important it is to examine the contractual processes and procedures.

Only yesterday, the Comptroller and Auditor General, talking to the Public Accounts Committee about his budget for next year, made the point that he can in many ways be more objective even than a private sector auditor, who may work on a one year or three-year contract. As the contract comes up for renewal, the firm will begin to wonder whether it will be reappointed—so it comes under a little pressure to do what the client wants. Anyone who doubts the difficulties that that situation can create only has to think of the problems that Enron got into with an auditor that perhaps did not do its job well. If the National Audit Office were appointed for the BBC, it would not be under pressure to keep the BBC happy with its work because the NAO would be accountable not to the corporation but to the House.

Whereas company shareholders theoretically have the right to reappoint auditors or throw them out on a regular basis, television licence payers—in effect the shareholders of the BBC—do not have the same right. There is a standard case for appointing the NAO as the auditors for the public. It is not the Government's auditors but Parliament's auditors—and through Parliament, the NAO is the auditor for the public. Where large sums of money are spent on behalf of the licence payers, the NAO should serve as the objective watchdog guarding that money and making sure that it is properly spent.

4.45 pm

Mr. Andrew Mitchell

I draw the attention of the House to my registered interests.

I enter into debate with some hesitation, having listened to an interesting discussion as an outsider surrounded by many experts on media and culture in all parts of the House.

The case made by my hon. Friend the Member for Gainsborough (Mr. Leigh) when moving new clause 4 was unanswerable. I am ashamed to say that I was not aware that his Committee was unable to look at the BBC in the manner in which he described. I hope that the Minister, who has an enviable reputation for his willingness to unsheathe his sword and do battle with powerful vested interests, will not forbear from doing so on this occasion with the governors of the BBC.

I rise to speak as a humble seeker after truth. The Bill clearly addresses an important lacuna in broadcasting arising from far more competition and much more economic activity. All independent surveys show that the media and other creative industries will grow enormously over the next 10 years and that we will all spend much more money on such activities. It is in almost everyone's interests that the position of independent producers is improved. There is a need for a good plural marketplace in which dominant broadcasters cannot be overbearing and property rights will be properly protected.

The BBC raises by means of a compulsory tax £2,500 million a year in public money. That represents a massive privilege for the BBC and a massive interference in normal practices and terms of trade in the commercial marketplace. I listened with great interest to my hon. Friend's comments about the licence fee. I do not entirely agree with his analysis but recognise the power of his arguments. I yield to no one in my admiration for the BBC, but where there is a powerful, rampant force in the marketplace it is important that we understand the ramifications.

The Minister will recall that in 1988 Lady Thatcher made the landmark decision that 25 per cent. of public sector broadcasting should be made by the private sector—a decision that was welcomed at the time. News and sport were exempted, so in fact the percentage is probably nearer the low teens.

I think we would all agree that the best ideas in the marketplace should attract the money. That is good for our culture and for our country. Some 75 per cent. of the BBC's production is therefore in-house. Given that that does not tend to vary much over the years, the 75 per cent. is clearly guaranteed; otherwise the figure might be 76 per cent. or even 80 per cent. in one year, and rather lower in another.

That brings me to a point made by one of my hon. Friends, whose view is that the BBC's position is entirely justified by the fact that it cures market failure. Certainly it is responsible for some wonderful productions, such as costume dramas and foreign affairs documentaries, but what worries me is that it seems to cause more market failure than it addresses. Let me give four examples.

First, I understand that the BBC—funded with public money—attracts more than 50 per cent. of all radio audiences. That must have a real effect on the marketplace. Secondly, I believe that the BBC has the dominant website in the UK. It does not, as I thought, cover only news, although it covers a huge amount of news; it also deals with entertainment, children's issues and lifestyle. That dominance is deeply resented by the commercial operators, and it must crowd out some of the commercial markets.

Thirdly—I mention this with some misgivings—there is BBC Worldwide. We should be fair to the BBC, which was charged with greatly increasing its revenues by commercial means. At the same time, however, it enjoys a luscious funding settlement. BBC Worldwide is, in my view, an example of unfair competition, although that is hardly its fault. It should be told either to maximise its income, or to trade fairly in the market. It cannot do both.

Fourthly—this strikes me as, in many ways, the most powerful justification for the argument—the BBC is a publisher of books and magazines. Those publications, however, seem to me to constitute an exploitation of pieces of intellectual property. "Top Gear Magazine" is an example. I do not think the BBC has any right to intervene in the magazines market in that way, or that it should be allowed to do so. Books and magazines should be licensed into the magazines market. There should be a bidding process to provide transparent valuations in the marketplace, enabling the licence fee payer to receive the benefit and preventing the magazines market from being distorted by public money.

I end as I began. We are dealing with a huge, rampant beast in the market, at a time when many of the companies with true commercial interests are in a greatly weakened state. That is clear from some of their share prices, valuations and profit schemes. In no other UK industry do we allow public money to distort the market in this way.

I hope the Minister will give us his views, and perhaps encourage us to believe that tight control will be exercised. I should certainly like to think that ministerial attention will be focused on the points I have made.

Michael Fabricant

My hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) has raised an interesting and important point. The BBC would argue that the magazines to which he refers are not funded by licence fees, but operate in a commercial market. It would argue that the profits made from their production are used to supplement television licence fees so that programmes can be made. The point is that we have to take the BBC's word for that.

Perhaps the BBC is right, but we do not know. This returns us to a fundamental point that I made time and again in Committee, in connection with both the National Audit Office and Ofcom's role in controlling the BBC—that the BBC ought not to be its own judge and jury. Time and again, people and commercial organisations have complained about the BBC, and not just in respect of publications. When the BBC launched its own computer some years ago, in competition with other manufacturers, it was said that it was using the licence fee to fund a commercial operation.

The BBC has produced a grand document about fair trade. It states that the BBC will never compete using licence payers' money, that it always operates independently, that it is audited by a good firm of auditors, and so on. However, as I said, we can never be sure about such matters, and we need an independent organisation—not merely an auditor—to look after them. I shall be interested to hear whether the Minister proves to be the only person in the Chamber who argues against the NAO having the power to investigate such matters. It is quite extraordinary that in this day and age, only the civil list—as has already been pointed out—and the BBC are exempt from such investigation. Although I have the greatest respect for the BBC, I do not put its chairman, whose hospitality I so recently enjoyed, in quite the same category as Her Majesty the Queen.

The NAO would give protection to the BBC. Many of the accusations made against the BBC are probably not well founded. When the Bill was being considered in Committee, we were approached by The History Channel. It suggested that the BBC was acting unfairly in setting up UK History, which is available on Freeview. The BBC argued hard and well, saying, "No. We are operating in competition. Why should we provide programmes to The History Channel any more cheaply than we provide them to the public service broadcasting organisation in the United States, to the Australian Broadcasting Corporation, or to any other broadcaster?" I rather suspect that the BBC was right, but The History Channel rightly felt that this was yet another case of the BBC being its own judge and jury. How can we be sure that the BBC was right? In my view, the NAO would give the BBC the necessary protection in that regard.

I realise that the BBC would not want the NAO to interfere in its direct running, and particularly in the creative side of the corporation. The Chairman of the Public Accounts Committee offered good reassurance that the PAC has neither the time nor the inclination to interfere in that way; nor, indeed, would the Comptroller and Auditor General have the necessary resources or interest to do so. The Minister mentioned a particular programme or series perhaps proving a loss-maker. The only such programme that I can think of is "Eldorado", but on the other hand the BBC has to experiment. It seemed like a good idea at the time—isn't that what it always says?—and it would be very wrong for a particular organisation to say with the benefit of hindsight that the BBC was wrong to experiment. It is experimentation that has given the BBC its very strength.

I wonder whether you, Madam Deputy Speaker, saw "The Great War"—the 40-year-old series that was originally shown on BBC2, and which is being re-run on Saturday nights. Before it was broadcast, a documentary was shown about how it was made, including the arguments and the struggle within the BBC that led to its production. The series "The Great War" was earth-shattering—

Mr. George Osborne (Tatton)

So was the war itself.

Michael Fabricant

As my hon. Friend points out, the war itself was obviously earth-shattering, but so was the series. It was the first time—

Madam Deputy Speaker

Order. The hon. Gentleman should relate his remarks to the new clause.

Michael Fabricant

They are related to the new clause, Madam Deputy Speaker. The Minister rightly pointed out the locus of new clause 4, which would allow the NAO to investigate the BBC. I simply mention "The Great War" as an experimental programme made by the BBC. It was the first time that a broadcaster—ABC also showed the series—had ever invested in producing a 24-episode series on such a specialised issue.[Interruption.] Hon. Members may chortle, but from that came the series on the second world war. That was produced not by the BBC but by the old Associated Rediffusion, which reinforces the point made by my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) that it is not only the BBC that produces public service broadcasting.

5 pm

The National Audit Office would and should not look at that area, and as I suspect that that is the only area that concerns the BBC, it need not worry. The BBC can be reassured that the NAO would consider only the structure within which the corporation's operations take place in the broadest terms, not the cost of producing individual programmes, such as that groundbreaking series, "The Great War".

As my hon. Friends the Member for Maldon and East Chelmsford and the Chairman of the Public Accounts Committee have said, universities are investigated by the PAC and they have not complained. The Arts Council falls within the ambit of the PAC, and it has not complained. I hope that the BBC will regard the change as a protective shroud, not as something that will endanger the BBC or its ethos.

I have mixed feelings about the licence fee. It is a regressive tax, but there are no easy solutions. The BBC costs £2.5 billion, which is, on the whole, probably well spent. We do not know for sure, because the NAO has not been allowed to investigate. However, if £2.5 billion were taken out of the total amount of advertising revenue available to television now, it would cripple an already semi-crippled ITV, it would cripple Channel 4 and it would destroy Channel 5. Nor would it be possible for the BBC to be funded from subscription. In that case, it would he the BBC that was destroyed. It would no longer be the public service broadcaster that most of us respect at present.

On the other hand, I support new clause 7, which would provide for research on television licensing and alternative funding for the BBC. I do not share the fears of the hon. Member for Selby (Mr. Grogan)—he spoke eloquently in support of the corporation, and I agreed with much of what he said—that if the BBC were funded by a system based on council tax bands or a percentage of income tax, it would necessarily result in the Government interfering in the daily operation of the BBC. I do not seriously suggest either method as a way of raising funds for the BBC. A percentage of income tax might be a better form of revenue for local government, although I would certainly be out of order if I pursued that thought Madam Deputy Speaker. The NAO would not wish to interfere in the daily operation of the BBC either.

In 1936, the Government—I presume that it was a Conservative Government, although I look to the historians among us to correct me if I am wrong—

Mr. George Osborne

National Government.

Michael Fabricant

The National Government set up the BBC World Service, which has received a grant in aid ever since. In 1940, there was a battle between the Government and the World Service over editorial policy, which the BBC won. Ever since, no such battle has taken place. No Government, Labour or Conservative—or a future National Government, God forbid—would ever wish to interfere with the internal editorial independence of the BBC, regardless of whether it was funded by licence fee or some form of income tax. We could always ensure that protection was provided, by modifying this legislation or the royal charter.

The BBC should regard the new clauses as helpful to its future governance. More importantly, I hope that the Government will consider them helpful, and that they will accept them.

Mr. George Osborne

I begin by saying that I enjoyed very much the speech introducing new clauses 6 to 9 by my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale). It was very eloquent and did credit to the Guild of Speechwriters, of which I am also a member.

I rise to support new clause 4, so ably moved by my hon. Friend the Member for Gainsborough (Mr. Leigh), the Chairman of the Select Committee on Public Accounts. I note that almost every hon. Member to speak in the debate also supports the proposal. The diversity of that support shows that this is a non-partisan issue. I draw the Minister's attention to the words of the right hon. Member for Swansea, West (Mr. Williams), who has enormous experience. He was a member of the Public Accounts Committee before I was born. I always bow to his much greater experience. In Committee, the Minister said that there was no one else in the House to whom I would look for more wisdom on the subject of public accountability."—[Official Report, Standing Committee E, 6 February 2003; c. 1065.] The right hon. Gentleman has now joined the Chairman of the PAC and hon. Members of all parties to urge the Government to accept a recommendation from an inquiry set up by the Government. If the Minister were still a PAC member, I suspect that he would have put his name to the clause as well, and probably spoken in favour of it. I am sure that his instincts are correct and that we shall hear from him shortly.

In the bipartisan spirit in which the new clause was moved, I want to congratulate the Government on the way in which they set up the Sharman inquiry and on their acceptance of almost all the inquiry's recommendations. In the coming months and years, the Comptroller and Auditor General's remit will be extended to many non-departmental public bodies that previously escaped public and parliamentary scrutiny.

That that is an excellent thing is accepted on all sides of the House, and it makes all the more strange the Government's refusal to accept Sharman's recommendation about the BBC. That is the only major recommendation in Sharman that the Government do not support, and it is a glaring omission. The arguments advanced by the Government are not convincing to any hon. Member who has taken part in the debate.

My hon. Friend the Member for Gainsborough made it clear that the BBC is nervous about the proposal because it believes that it threatens the corporation's editorial independence, the way it goes about commissioning programmes or covering political events, and all sorts of other activities. That concern demonstrates an ignorance of the work of the CAG and the National Audit Office. I hope that that ignorance is genuine and innocent. As has been said several times, the new clauses deal with the implementation of policy, not with policy itself. That must be right, given the amount of public money—£2.5 billion—involved.

It must be a central principle in a democracy that there should be clear and transparent accountability when it comes to the spending of public money. That is not the case with the BBC at the moment. There are 12 BBC governors, supported by a small staff. Even if they had the inclination, they are unable to provide the same scrutiny of the BBC's finances as the NAO, which has more staff and greater expertise.

The BBC has nothing to fear. After they have survived an encounter with the PAC, departmental permanent secretaries say that they have learned something and that the discussion has served to improve the way in which they manage their Departments and run Government programmes. It is one of the reasons why the Government accept the overwhelming majority of the recommendations from the National Audit Office and the Public Accounts Committee. It would do the BBC a lot of good, on its own terms, to have its work scrutinised and improved on by the NAO. As my hon. Friend the Member for Gainsborough said, there is no question that the Comptroller and Auditor General would try to second-guess the BBC's right to make a drama series out of a Jane Austen book or to cover a particular political event. That would not happen; it is not the way in which the Comptroller and Auditor General operates. It must, however, be correct that someone—I would argue that it should be the Comptroller and Auditor General—should examine matters such as the way in which the BBC commissions programmes and the cost of commissioning programmes vis-à-vis other organisations, how it makes use of its extensive property holdings and whether those buildings are being efficiently used, how it provides digital services, and the way in which it commissions IT systems. That is the bread and butter work of the PAC and the Comptroller and Auditor General in relation to Departments, and they produce pretty outstanding results. The BBC has nothing to fear from that kind of scrutiny.

That is not just my view but the view of a vast range of organisations, reports and independent inquiries into the subject. It is the conclusion of the Sharman inquiry and of the independent review panel chaired by Gavyn Davies. It is worth reminding hon. Members of what the review panel's report said: The most serious lacuna that results from the structure of the BBC concerns financial control. The BBC is disposing of a substantial sum of what is essentially public money. It then quoted a letter that had been sent to the panel by the then Chairman of the Public Accounts Committee, my right hon. Friend the Member for Haltemprice and Howden (David Davis), who said: The Comptroller and Auditor General's inability to report to Parliament on the way the BBC uses the licence fee seriously weakens the accountability of the BBC. Gavyn Davies' review panel said: We agree and, accordingly, recommend that the National Audit Office should be empowered … to carry out periodic financial audits of the BBC's accounts and its fair trading arrangements. It is also the view of the Select Committee on Culture, Media and Sport and the right hon. Member for Manchester, Gorton (Mr. Kaufman), who said to the BBC: The idea that Parliament, which creates you and funds you, ought not to have the right for the NAO to investigate you I have to say … is a misuse of the very important ethos of BBC independence in terms of politicians not interfering in any way with what you broadcast. He was absolutely spot on.

I shall be interested to hear what the Minister says. Every hon. Member who spoke, on both sides of the House, supported the new clause. If the Minister were to say that it does not have to be done through legislation, but can be done by amending the BBC charter, and gives a commitment to do that, we would all be satisfied. I want to hear from him either a defence of the indefensible—the exclusion of the BBC from the remit of the Comptroller and Auditor General—or, I hope, a clear indication that the Government will move forward on a central recommendation of a report that they initiated.

Dr. Howells

This is not an easy one for me. The hon. Member for Gainsborough (Mr. Leigh) spoke elegantly and convincingly. He is right that I am a veteran of the Public Accounts Committee, and I have a theory that once one has experienced that, one is changed for ever. When he responded to my intervention, he said some reassuring and important words about what the Comptroller and Auditor General does and what the Public Accounts Committee is interested in. I trust that those important words will be heard throughout the country.

5.15 pm

I note that there are many race courses in the constituency of the hon. Member for Tatton (Mr. Osborne). I do not know whether that is significant. He said that he would perhaps think more kindly of the Government if I gave him an undertaking to consider the new clause.

Mr. Whittingdale

Not consider, but act.

Dr. Howells

The master of semantics has spoken and I shall not argue.

The hon. Member for Gainsborough convinced me that the Comptroller and Auditor General is not interested in trying to influence editorial policy and that his scrutiny would not therefore constitute a threat to editorial independence or the governors' important powers. If I have anything to do with the matter, such scrutiny will be one of the most important matters that is considered in the course of charter renewal, and of the renewal of the agreement between the BBC and the Secretary of State.

Michael Fabricant

Will the Minister give way?

Dr. Howells

In a second. Let me finish the point first.

As I explained in Committee in response to an almost identical new clause, the Public Accounts Committee's recommendation can be implemented without amending schedule 4 of the National Audit Office Act 1983, as new clause 4 proposes. Section 6(3)(d) of the 1983 Act permits the National Audit Office to carry out value-for-money reviews of the BBC by agreement between the corporation and a Minister of the Crown. I understand the difficulty that the hon. Member for Gainsborough experiences with that.

The amount of NAO access that the hon. Gentleman proposes could be achieved without changing existing legislation, but I agree that it is by no means such an elegant solution. It is complicated and should be examined at the appropriate moment, when the charter is up for renewal and we reconsider the agreement between the Secretary of State and the BBC.

David Davis (Haltemprice and Howden)

The interim proposal that the Minister outlines is better than nothing but not much better. The NAO sought such powers over the Housing Corporation and housing associations; it now has them through the Government's response to the Sharman report. It explicitly sought to negotiate access, but that was denied it on the occasions when it was necessary, for example, in cases of criminal fraud. That is the problem. Negotiation of access gives people who are misbehaving, or not behaving as well as they should, the right to opt out of the process. That is why the Minister's option is so weak.

Dr. Howells

I agree with the right hon. Gentleman that it is a weaker option, although not as weak as he suggests. It has been suggested that relying on section 6 of the 1983 Act would give the BBC a power of veto over NAO access. However, agreement between the Secretary of State and the BBC is at the centre of the corporation's regulatory framework. That arrangement works effectively and has not prevented the Government from introducing necessary regulatory measures.

Mr. Lansley

Does the Minister recall paragraph 18(4) of the BBC charter? It states: The Corporation shall at all reasonable times upon demand give to Our Secretary of State or Our Secretary of State for Foreign and Commonwealth Affairs and all other persons nominated by either of them full liberty to examine the accounts of the Corporation and so on. It is therefore not necessarily the case that access to the accounts happens with the BBC's agreement. Are the Government willing to use that paragraph of the charter?

Dr. Howells

Obviously, I would have to consider the request that was made, but I am not aware of any request having been made in those terms. I may be wrong and the right hon. Member for Haltemprice and Howden (David Davis), who chaired the Public Accounts Committee, or even the hon. Member for Gainsborough, its current Chairman, might be able to help me, but I am not aware of any such request. If I discover that such a request has been made, I shall let the House know.

Michael Fabricant

I sought previously to intervene on the Minister to ask a question that it is even more suitable for me to ask now. He recognises that the proposed solution might be unsatisfactory as a short-term solution and has accepted in Committee and today that there is an argument for national audit investigation, although perhaps not under the mechanism proposed through my hon. Friend the Member for Gainsborough (Mr. Leigh). He said that if he was still around when charter renewal was discussed, the matter would then be considered. What is the current policy of the Department? Just as there may or may not be life after death, there must also be policy after a Minister goes.

Dr. Howells

The policy is precisely what I am saying to the House: we can rely on section 6 of the National Audit Office Act 1983. However, I hope that I have hedged that about with enough reassurances to provide the hon. Gentleman at least with a clear picture of what this Minister thinks. I hope that that is helpful.

I recognise that many hon. Members feel strongly about this subject and I understand their arguments about the need to ensure the BBC's accountability to Parliament and licence payers. As I explained in Committee, successive Governments have been reluctant to grant the NAO greater access to the BBC because of concerns that that could compromise the corporation's editorial independence and inhibit its creativity. I repeat that I think that the hon. Member for Gainsborough eased very considerably the worries and concerns of this place in that regard. Instead, other means have been adopted to ensure financial accountability, and the BBC is subject to a range of external reviews as well as to independent audit. However, the Government will respond formally to the report of the Public Accounts Committee. It would not be right for me to pre-empt that response, but I can assure hon. Members that, in reaching our conclusions, we will certainly bear in mind the very powerful arguments that have been advanced here and elsewhere.

New clause 6 would require the BBC to commission and publish every year independent research into the efficacy, cost-effectiveness and public acceptability of television licensing in the United Kingdom. In contrast, new clause 7 would impose the same obligations on Ofcom. The National Audit Office already has power to carry out reviews on the economy, efficiency and effectiveness of arrangements for collecting fees and enforcing the television licensing system. The NAO's most recent report on the subject was published in May last year and the Public Accounts Committee published its report on 18 December last year. The independent research proposed by new clauses 6 and 7 might therefore be in danger of overlapping with the NAO and PAC review arrangements. Moreover, that research would have to be undertaken with a frequency that we do not believe to be necessary.

Of course, the question whether the television licence fee is the best way of funding the BBC is a different matter. Public acceptability of the licensing system is part of that broader question. We shall be considering that issue in detail during the charter review process, which is due to begin in 2004. The proposed research would therefore also duplicate the Government's own deliberations and consultations in the charter review period. If the television licence fee is retained as the mechanism for funding the BBC, it will be after very careful consideration of all the relevant issues, including its sustainability in the longer term. We therefore doubt the need for an annual review of the arrangements.

In any event, it seems inappropriate for such research to be commissioned by the BBC, as new clause 6 proposes. It is for the Government and not the corporation to determine how the BBC should be funded. New clause 6 requires the research to be independent. However, because the issue here is the way in which the BBC should be funded, we do not think that it would be appropriate for the corporation to be responsible for commissioning that research.

Let me turn to new clause 8. I can well understand the concern of the hon. Member for Tiverton and Honiton (Mrs. Browning) over the loss of entitlement to the accommodation for residential care—ARC—concession on the television licence. She gave the House some reasons for that, such as changes in the housing mix and the level of warden provision in sheltered housing schemes. I can also understand the sense of frustration that she and others feel—and I include myself in this—that the preserved rights to the concession, which the Government undertook to introduce nearly two years ago, are still not in place.

In drafting new clause 8, the hon. Lady may have appreciated the reasons for the delay. At least, I assume that she may have. The regulations that govern the ARC scheme are very complex and the scheme gives rise to a number of anomalies. We were anxious, when introducing preserved rights, to avoid creating new anomalies or further complicating the administration of the scheme—which has often been the effect of previous changes. I am pleased to tell the hon. Lady that, in the next few weeks, we shall introduce amending regulations that will introduce preserved rights to the ARC. The regulations will be subject to the negative resolution procedure but will be in place well before this Bill receives Royal Assent.

I should add that new clause 8, as it stands, would not achieve its aim of introducing preserved rights; it would require a person to have been paying the issue fee for a concessionary licence.

Mrs. Browning

I am very pleased to hear what the Minister has said. As many others will be, I am delighted at his pledge to introduce the new regulations in the next few weeks. I tabled the new clause, but I had hoped that the Government would have done so. I accept that it may be technically flawed, but I wanted to prompt the Minister into the action that he has just announced.

Dr. Howells

I think that the hon. Lady made a very good fist of it, which is why I wondered whether she had found it difficult. I certainly do.

Mrs. Browning

I had a lot of help.

Dr. Howells

That goes without saying—[Laughter.] I did not mean that in a nasty way—this place is besieged by lobbyists.

New clause 9 would establish a public services broadcasting fund, funded by the BBC licence fee, to pay grants to groups or organisations to allow them to make programmes of local, regional or sectional interest for inclusion in a programme service. As I understand the new clause tabled by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale), the programme services that could benefit are not limited to BBC services. The fund would be set up by order of the Secretary of State and would be approved by a resolution of each House.

I am afraid that we cannot see our way to accepting the new clause. It would not be sensible—at least at present—to require that licence fee funds be deployed on the basis proposed. The BBC is at the heart of our broadcasting system and the licence fee is the way in which we have chosen to fund it. That decision was endorsed by Parliament at the time of the last renewal of the BBC charter—in 1996 under a previous Government. I accept that there is reasonable discussion about the proper role of the BBC and about the way in which it is constituted and funded. That discussion will no doubt lead to a more structured debate when we embark on the process of charter review in 2004.

The hon. Member for Newbury (Mr. Rendel) reminded us that the proposal in the new clause would amount not to a small sum of money but to £25 million. There would be no obvious means of accountability, which would be difficult to accept. As I have said, next year will see the beginning of the process of charter renewal.

Mr. Leigh

The Minister has said that he is prepared for the Comptroller and Auditor General to look into the finances of the BBC during the process of charter renewal, which he has said will be in 2004. When will the Government resolve this issue? Will the Minister start the process now, having listened to this debate? Will the process have ended by 2004? May we have an idea of the time scale?

Dr. Howells

The hon. Gentleman is quite right to ask that question. The charter comes up for renewal in 2006, but the process starts in 2004. Therefore, it begins in a very short time.

As I have said, we will begin the process of charter renewal next year. I assure the House that the Government will be very content for the issues that have been touched on today to be fully examined in that context. At this stage, however, it does not seem to us that the proposed new clause could be justified in the framework of the BBC's current role and constitution, or that it would add anything useful to the arrangements on the BBC agreement set out in the Bill. I therefore ask the hon. Gentleman to withdraw new clause 4 and suggest that new clauses 6, 7, 8 and 9 should not be pressed to a Division.

Mr. Leigh

I wish to say a few words to thank all those hon. Members who have spoken in the debate. In particular, I wish to thank my hon. Friends the Members for Maldon and East Chelmsford (Mr. Whittingdale), for Tatton (Mr. Osborne), for Lichfield (Michael Fabricant), and for Sutton Coldfield (Mr. Mitchell) and the hon. Members for Newbury (Mr. Rendel), for Hemsworth (Jon Trickett), for Croydon, Central (Geraint Davies) and all those hon. Members who have spoken in favour of new clause 4. I am very grateful to them for their support.

Some people say that debates in the House do not matter. I am a parliamentarian; I believe that they do matter, and this debate has made a difference. Debates make a difference when strong and independent-minded Ministers are prepared to listen and respond to them, not to take refuge in the conceptual bullshit of their brief. The Minister has done precisely the opposite of that today. He has given a very important commitment on behalf of the Government. After all, Ministers speak on behalf of the whole Government; there is such a thing as collective responsibility, and therefore what a Minister says at the Dispatch Box must be considered with great care.

The Minister has said today that, hitherto, there was an objection to Parliament, in the shape of the NAO, having a statutory right of access to investigate the BBC's finances because of the concern about its editorial independence. One assumes that the Government accepted that concern. In reply to what I have said today, the Minister has said that he accepts our reassurances. He accepts my reassurance, as Chairman of the PAC, that in no way do we want to interfere with the BBC's editorial independence, and he did so speaking for the Government.

I believe that the debate has taken matters a great deal further. It is true that the Minister did not say that he accepts new clause 4. I did not expect him to do that—it is not the way the House operates—but he went almost as far as he possibly could in saying that, like every other hon. Member who has spoken, he accepts the inevitable logic of statutory access. Voluntary access is simply not good enough.

My right hon. Friend the Member for Haltemprice and Howden (David Davis) made an important intervention in saying that we simply cannot have a situation where an organisation's auditors have to request access to examine what may be a very difficult issue. That is not acceptable, but the Minister has given some important reassurances. I have listened to his speech very carefully, and I am grateful to him for what he said.

Mr. Deputy Speaker (Sir Michael Lord)

Does the hon. Gentleman wish to press new clause 4 to a Division?

Mr. Whittingdale

We would like to press the new clause to a Division.

Question put, That the clause be read a Second time:—

The House divided: Ayes 200, Noes 304.

Division No. 93]	[5.33 pm
AYES
Ainsworth, Peter(E Surrey)	Blunt, Crispin
Allan, Richard	Boswell, Tim
Amess, David	Bottomley, Peter(Worthing W)
Ancram, rh Michael	Brady, Graham
Arbuthnot, rh James	Brake, Tom(Carshalton)
Atkinson, David(Bour'mth E)	Brazier, Julian
Bacon, Richard	Breed, Colin
Baker, Norman	Brooke, Mrs Annette L.
Baldry, Tony	Browning, Mrs Angela
Barker, Gregory	Bruce, Malcolm
Baron, John(Billericay)	Burnett, John
Barrett, John	Burns, Simon
Beith, rh A. J.	Burnside, David
Bellingham, Henry	Burstow, Paul
Bercow, John	Burt, Alistair
Beresford, Sir Paul	Cable, Dr. Vincent

Calton, Mrs Patsy	Lewis, Dr. Julian(New Forest E)
Cameron, David	Liddell-Grainer, Ian
Carmichael, Alistair	Lidington, David
Cash, William	Lilley, rh Peter
Chapman, Sir Sydney(Chipping Barnet)	Llwyd, Elfyn
	Loughton, Tim
Chidgey, David	Luff, Peter(M-Worcs)
Chope, Christopher	McIntosh, Miss Anne
Clappison, James	Mackay, rh Andrew
Clifton-Brown, Geoffrey	Maclean, rh David
Collins, Tim	McLoughlin, Patrick
Conway, Derek	Malins, Humfrey
Cormack, Sir Patrick	Maples, John
Cotter, Brian	Marsden, Paul(Shrewsbury & Atcham)
Cran, James(Beverley)
Curry, rh David	Maude, rh Francis
Davey, Edward(Kingston)	Mawhinney, rh Sir Brian
Davis, rh David(Haliemprice & Howden)	May, Mrs Theresa
	Mercer, Patrick
Djanogly, Jonathan	Mitchell, Andrew(Sutton Coldfield)
Doughty, Sue
Duncan, Peter(Galloway)	Moore, Michael
Duncan Smith, rh Iain	Moss, Malcolm
Evans, Nigel	Murrison, Dr. Andrew
Ewing, Annabelle	Oaten, Mark(Winchester)
Fabricant, Michael	O'Brien, Stephen(Eddisbury)
Fallon, Michael	öpik, Lembit
Field, Mark(Cities of London & Westminster)	Osborne, George(Tatton)
	Ottaway, Richard
Flight Howard	Page, Richard
Flook, Adrian	Paice, James
Forth, rh Eric	Paterson, Owen
Foster, Don(Bath)	Pickles, Eric
Fox, Dr. Liam	Portillo, rh Michael
Francois, Mark	Price, Adam(E Carmarthen & Dinefwr)
George, Andrew(St. Ives)
Gibb, Nick(Bognor Regis)	Prisk, Mark(Hertford)
Gidley, Sandra	Pugh, Dr. John
Goodman, Paul	Redwood, rh John
Green, Damian(Ashford)	Reid, Alan(Argyll & Bute)
Greenway, John	Rendel, David
Gummer, rh John	Robathan, Andrew
Hague, rh William	Robertson, Angus(Moray)
Hancock, Mike	Robertson, Hugh(Faversham & M-Kent)
Harris, Dr. Evan(Oxford W & Abingdon)	Robertson, Laurence(Tewk'b'ry)
Harvey, Nick	Robinson, Mrs Iris(Strangford)
Hawkins, Nick	Roe, Mrs Marion
Hayes, John(S Holland)	Rosindell, Andrew
Heald, Oliver	Ruffley, David
Heath, David	Russell, Bob(Colchester)
Heathcoat-Amory, rh David	Salmond, Alex
Hendry, Charles	Sanders, Adrian
Hogg, rh Douglas	Sayeed, Jonathan
Horam, John(Orpington)	Selous, Andrew
Howard, rh Michael	Shepherd, Richard
Howarth, Gerald(Aldershot)	Simmonds, Mark
Hughes, Simon(Southwark N)	Simpson, Keith(M-Norfolk)
Hunter, Andrew	Smith, Sir Robert(W Ab'd'ns & Kincardine)
Jack, rh Michael
Jackson, Robert(Wantage)	Soames, Nicholas
Jenkin, Bernard	Spelman, Mrs Caroline
Johnson, Boris(Henley)	Spicer, Sir Michale
Keetch, Paul	Spink, Bob(Castle Point)
Kennedy, rh Charles(Ross Skye & Inverness)	Spring, Richard
Stanley, rh Sir John
Key, Robert(Salisbury)	Steen, Anthony
Kirkbride, Miss Julie	Streeter, Gary
Kirkwood, Sir Archy	Stunell, Andrew
Knight, rh Greg(E Yorkshire)	Swayne, Desmond
Laing, Mrs Eleanor	Syms, Robert
Lamb, Norman	Tapsell, Sir Peter
Lansley, Andrew	Taylor, Ian(Esher)
Laws, David(Yeovil)	Taylor, John(Solihull)
Leigh, Edward	Taylor, Matthew(Truro)
Letwin, rh Oliver	Taylor, Dr. Richard(Wyre F)

Taylor, Sir Teddy	Willetts, David
Thomas, Simon(Ceredigion)	Williams, Hywel(Caernarfon)
Thurso, John	Williams, Roger(Brecon)
Tonge, Dr. Jenny	Willis. phil
Turner, Andrew(Isle of Wight)	Wilshire, David
Tyler, Paul(N Cornwall)	Winterton, Ann(Congleton)
Tyrie, Andrew	Winterton, Sir Nicholas(Macclesfield)
Viggers, Peter
Walter, Robert	Wishart, Pete
Watkinson, Angela	Yeo, Tim(S Suffolk)
Webb, Steve(Northavon)	Young rh sir George
Weir, Michale	Younger-Ross, Richard
Weir, Michael
Whittingdale, John	Tellers for the Ayes:
Wiggin, Bill	Mr. Mark Hoban and
Wilkinson, John	Mr. John Randall

NOES
Ainger, Nick	Colman, Tony
Ainsworth, Bob(Cov'try NE)	Connarty, Michael
Alexander, Douglas	Cook, Frank(Stockton N)
Allen, Graham	Cook, rh Robin(Livingston)
Anderson, rh Donald(Swansea E)	Corbyn, Jeremy
Anderson, Janet(Rossendale & Darwen)	Corston, Jean
	Cousins, Jim
Armstrong, rh Ms Hilary	Cox, Tom(Tooting)
Atherton, Ms Candy	Cruddas, Jon
Austin, John	Cryer, John(Hornchurch)
Baird, Vera	Cummings, John
Banks, Tony	Cunningham, rh Dr. Jack(Copeland)
Barron, rh Kevin
Bayley, Hugh	Cunningham, Jim(Coventry S)
Beard, Nigel	Cunningham, Tony(Workington)
Beckett, rh Margaret	Dalyell, Tam
Begg, Miss Anne	Darling, rh Alistair
Bell, Stuart	Davey, Valerie(Bristol W)
Benn, Hilary	David, Wayne
Benton, Joe(Bootle)	Davies, rh Denzil(Llanelli)
Berry, Roger	Davis, rh Terry(B'ham Hodge H)
Best, Harold	Dawson, Hilton
Betts, Clive	Dean, Mrs Janet
Blackman, Liz	Dismore, Andrew
Blizzard, Bob	Dobbin, Jim(Heywood)
Borrow, David	Donohoe, Brian H.
Bradley, rh Keith(Withington)	Doran, Frank
Bradley, Peter(The Wrekin)	Dowd, Jim(Lewisham W)
Bradshaw, Ben	Drown, Ms Julia
Brown, rh Nicholas(Newcastle E Wallsend)	Eagle, Angela(Wallasey)
	Eagle, Maria(L'poolGarston)
Brown, Russell(Dumfries)	Edwards, Huw
Bryant, Chris	Efford, Clive
Buck, Ms Karen	Ellman, Mrs Louise
Burden, Richard	Ennis, Jeff(Barnsley E)
Burgon, Colin	Farrelly, Paul
Burnham, Andy	Field, rh Frank(Birkenhead)
Byers, rh Stephen	Fisher, Mark
Cairns, David	Fitzpatrick, Jim
Campbell, Mrs Anne(C'bridge)	Fitzsimons, Mrs Lorna
Campbell, Ronnie(Blyth V)	Flint, Caroline
Caplin, Ivor	Flynn, Paul(Newport W)
Casale, Roger	Follett, Barbara
Caton, Martin	Foster, rh Derek
Cawsey, Ian(Brigg)	Foster, Michael(Worcester)
Challen, Colin	Foster, Michael Jabez(Hastings & Rye)
Chapman, Ben(Wirral S)
Chaytor, David	Foulkes, rh George
Clapham, Michael	Francis, Dr. Hywel
Clark, Dr. Lynda(Edinburgh Pentlands)	Galloway, George
	Gardiner, Barry
Clark, Paul(Gillingham)	George, rh Bruce(Walsall S)
Clarke, rh Tom(Coatbridge & Chryston)	Gerrard, Neil
	Gibson, Dr. Ian
Clelland, David	Gilroy, Linda
Coaker, Vernon	Godsiff, Roger
Coffey, Ms Ann	Griffiths, Jane(Reading E)
Coleman, Iain	Griffiths, Nigel(Edinburgh S)

Griffiths, Win(Bridgend)	McFall, John
Grogan, John	McGuire, Mrs Anne
Hain, rh Peter	McIsaac, Shona
Hall, Mike(Weaver Vale)	McKechin, Ann
Hamilton, Fabian(Leeds NE)	McKenna, Rosemary
Hanson, David	Mackinlay, Andrew
Harman, rh Ms Harriet	McNamara, Kevin
Havard, Dai(Merthyr Tydfil & Rhymney)	MacShane, Denis
	McWalter, Tony
Henderson, Doug(Newcastle N)	Mahmood, Khalid
Henderson, Ivan(Harwich)	Mahon, Mrs Alice
Hendrick, Mark	Mallaber, Judy
Hepburn, Stephen	Mandelson, rh Peter
Heppell, John	Mann, John(Bassetlaw)
Hesford, Stephen	Marris, Rob(Wolverh'ton SW)
Heyes, David	Marshall, David(Glasgow Shettleston)
Hill, Keith(Streatham)
Hoey, Kate(Vauxhall)	Marshall, Jim(Leicester S)
Hood, Jimmy(Clydesdale)	Marshall-Andrews, Robert
Hopkins, Kelvin	Martlew, Eric
Howarth, rh Alan(Newport E)	Meale, Alan(Mansfield)
Howarth, George(Knowsley N & Sefton E)	Merron, Gillian
	Michael, rh Alun
Howells, Dr. Kim	Miller, Andrew
Hoyle, Lindsay	Mitchell, Austin(Gt Grimsby)
Hughes, Kevin(Doncaster N)	Moffatt, Laura
Humble, Mrs Joan	Mole, Chris
Hurst, Alan(Braintree)	Moonie, Dr. Lewis
Illsley, Eric	Morgan, Julie
Ingram, rh Adam	Mountford, Kali
Irranca-Davies, Huw	Mudie, George
Jackson, Glenda(Hampstead & Highgate)	Mullin, Chris
	Munn, Ms Meg
Jackson, Helen(Hillsborough)	Murphy, Denis(Wansbeck)
Jamieson, David	Murphy, Jim(Eastwood)
Jenkins, Brian	Naysmith, Dr. Doug
Jones, Jon Owen(Cardiff C)	Norris, Dan(Wansdyke)
Jones, Kevan(N Durham)	O'Brien, Mike(N Warks)
Jones, Lynne(Selly Oak)	O'Hara, Edward
Jones, Martyn(Clwyd S)	Olner, Bill
Joyce, Eric(Falkirk W)	O'Neill, Martin
Kaufman, rh Gerald	Organ, Diana
Keeble, Ms Sally	Osborne, Sandra(Ayr)
Keen, Alan(Feltham)	Owen, Albert
Keen, Ann(Brentford)	Perham, Linda
Kelly, Ruth(Bolton W)	Picking, Anne
Kemp, Fraser	Pickthall, Colin
Khabra, Piara S.	Pike, Peter(Burnley)
Kidney, David	Plaskitt, James
Kilfoyle, Peter	Pollard, Kerry
King, Andy(Rugby)	Pond, Chris(Gravesham)
King, Ms Oona(Bethnal Green & Bow)	Prentice, Ms Bridget(Lewisham E)
Kumar, Dr. Ashok	Prentice, Gordon(Pendle)
Ladyman, Dr. Stephen	Prescott, rh John
Lammy, David	Primarolo, rh Dawn
Lawrence, Mrs Jackie	Prosser, Gwyn
Laxton, Bob(Derby N)	Purchase, Ken
Lazarowicz, Mark	Purnell, James
Lepper, David	Quin, rh Joyce
Levitt, Tom(High Peak)	Rapson, Syd(Portsmouth N)
Lewis, Ivan(Bury S)	Raynsford, rh Nick
Lewis, Terry(Worsley)	Reed, Andy(Loughborough)
Linton, Martin	Robertson, John(Glasgow Anniesland)
Lloyd, Tony(Manchester C)
Love, Andrew	Ross, Ernie(Dundee W)
Lucas, Ian(Wrexham)	Roy, Frank(Motherwell)
Luke, Iain(Dundee E)	Ruane, Chris
Lyons, John(Strathkelvin)	Ruddock, Joan
McAvoy, Thomas	Russell, Ms Christine(City of Chester)
McCafferty, Chris
McCartney, rh Ian	Ryan, Joan(Enfield N)
McDonagh, Siobhain	Sarwar, Mohammad
MacDonald, Calum	Savidge, Malcolm
McDonnell, John	Sawford, Phil
MacDougall, John	Sedgemore, Brian

Shaw, Jonathan	Todd, Mark(S Derbyshire)
Sheridan, Jim	Touhig, Don(Islwyn)
Shipley, Ms Debra	Trickett, Jon
Short, rh Clare	Truswell, Paul
Simon, Siôn(B'ham Erdington)	Turner, Dennis(Wolverh'ton SE)
Simpson, Alan(Nottingham S)	Turner, Dr. Desmond(Brighton Kemptown)
Singh, Marsha
Skinner, Dennis	Tynan, Bill(Hamilton S)
Smith, rh Chris(Islington S & Finsbury)	Vaz, Keith(Leicester E)
	Vis, Dr. Rudi
Smith, Geraldine(Morecambe & Lunesdale)	Ward, Claire
	Wareing, Robert N.
Smith, Jacqui(Redditch)	Watts, David
Smith, John(Glamorgan)	White, Brian
Smith, Llew(Blaenau Gwent)	Whitehead, Dr. Alan
Southworth, Helen	Wicks, Malcolm
Squire, Rachel	Williams, Betty(Conwy)
Starkey, Dr. Phyllis	Wills, Michael
Stevenson, George	Wood, Mike(Batley)
Stewart, Ian(Eccles)	Worthington, Tony
Stinchcombe, Paul	Wright, Anthony D.(Gt Yarmouth)
Strang, rh Dr. Gavin
Stringer, Graham	Wright, David(Telford)
Stuart, Ms Gisela	Wright, Tony(Cannock)
Sutcliffe, Gerry	Wyatt, Derek
Taylor, David(NW Leics)
Thomas, Gareth(Harrow W)	Tellers for the Noes:
Timms, Stephen	Mr. Phil Woolas and
Tipping, Paddy	Charlotte Atkins

Question accordingly negatived.