BBC Charter

HL Deb 21 April 2004 vol 660 cc318-55

4.51 p.m.

Lord Barnett

rose to call attention to the BBC charter renewal; and to move for Papers.

The noble Lord said: My Lords, I welcome all colleagues who have decided to participate in the debate, particularly the right reverend Prelate the Bishop of Norwich who is to make his maiden speech. We look forward to hearing it.

I should declare a past interest as vice-chairman of the BBC and for three months acting chairman in rather better circumstances than the current ones. I want to make clear at the start that I sought the debate because I care passionately about the need for a truly independent BBC—independent from government; independent from advertisers; independent from sponsors; and, above all, independent from the many siren voices we heard particularly after the publication of the Hutton report.

The Hutton report brought many of these issues to a head, especially when charter renewal is being considered. Let me say at once that I agreed with much of the criticism of the BBC. Indeed, immediately after Gilligan had made his very serious charge that Alastair Campbell had fraudulently changed a major document to justify sending British troops to be killed in a war in Iraq. I telephoned a senior executive at the BBC. I told him that while I was personally opposed to going to war, I did not believe they could possibly have evidence to justify the claim made by Mr Gilligan. It was so serious a charge, they should immediately issue an apology.

As we know, that advice was rejected. But while my advice was rejected, I believe that the Hutton report would have been better balanced if there had been some perfectly justifiable criticism of the Government, especially the MoD and Alastair Campbell in particular. I fear that Alastair Campbell's over-the-top and non-stop attacks on the BBC led to the seriously misjudged and ill-informed response by the BBC. Let me say that if I had been wrongly accused of such a serious charge, I, too—while, I hope, not being an Alastair Campbell—would have been very angry, to put it mildly. Sadly, this all led to the resignation of an excellent chairman and director general. The resignations were inevitable, in my view, following a bad piece of journalism and, more importantly, had and inadequate management of that seriously flawed journalistic charge.

These flaws must of course be eradicated; indeed, I hope that the necessary changes have already been made or will be soon. But Hutton should not, and must not, be allowed to determine the future of an independent BBC and the renewal of its charter. We now have a new chairman-elect, Michael Grade, and I offer him my congratulations and best wishes in a difficult job. He does not need to look back as far as Reith for an example of good management of the BBC. He need look no further than the noble Lord, Lord Hussey, with whom I worked closely for seven years. I am confident that Michael Grade will be strongly resistant to pressure from government—not that the present Government would bring any pressure to bear on the board of governors of the BBC—and any other source seeking to undermine the vital independence of the BBC.

Most will agree with me that it has not stopped views being expressed on governance during the current debate on renewal of the charter. Some of those views, if implemented on renewal of the charter, could have serious consequences for the very independence of the BBC that everyone professes to support. Let me take a few of the more serious proposals that have been suggested from time to time.

One of the favourite proposals relates to the "regulatory" role, at present mainly conducted by the governors. The "knee-jerk" reaction post Hutton is that this should be removed—or at least partially removed. Ofcom, under the chairmanship of the noble Lord, Lord Currie, who I am delighted to see will participate in the debate, already regulates the BBC's commercial and economic activities. It is responsible for basic standards of taste, decency and fairness. It oversees quotas for regional production and relations with the independent production sector. This morning I received an excellent document from Ofcom and I look forward to commenting on it to the noble Lord, Lord Currie, at a later stage.

The former chairman, Gavyn Davies, felt that the BBC was forging a fertile relationship with the noble Lord, Lord Currie. Knowing them both, and Michael Grade, I am sure that that relationship will continue. However, I am concerned that pressure will continue for that regulation to widen further. I hope that the Government will resist such pressure. The compromise agreed and supported by the scrutiny committee chaired by my noble friend Lord Puttnam should continue. Again, I am delighted to see that my noble friend is to participate in the debate. It leaves the governors in sole charge of the vital public service remit. If the governors fail, it would of course be a very serious matter.

Despite the Hutton report, there is no evidence of such a general failure. I see that at a recent BAFTA award ceremony, it was said, Governors are the least qualified people in the industry". That kind of statement totally misunderstands the role of the governors. Indeed, if we had 12 governors who were all former broadcasters, I doubt whether they would be able to do as good a job as the governors now do.

Another important question is the one that would have the audit of the BBC carried out by the National Audit Office. As a former chairman of the Public Accounts Committee, to which the National Audit Office reports, I need hardly say that I believe the National Audit Office does a tremendous job in the crucial area of value for money. It always has. When I was chairman of the PAC, I was delighted to be able to work with such an important body. A simple statement that the National Audit Office should be given responsibility for auditing the BBC sounds sensible. But one is bound to ask: is it sensible? There are two areas of NAO audit; one is financial and the other is value for money.

The BBC has its own independent financial audit and it has a governors' audit committee, which is chaired by a very responsible governor. National Audit Office involvement would run the risk of both duplicating and undermining the successful arrangements already in place. I imagine most people would accept that, but still argue that the National Audit Office should be given power to conduct value-for-money audits. But it should be clear that the BBC is not the same as a government department. It is a creative, risk-taking body with many commercial activities. Fear of risk-taking would be fatal to the role that I hope we all want the BBC to pursue; namely, to take creative risks. I therefore hope that the Government will accept that National Audit Office involvement would be wrong for the BBC.

The other major area of criticism of the BBC has always been described as "dumbing down" or winning ratings but losing its purpose. That is a sort of no-win issue for the BBC. Thus, let us say that it mainly put out the kind of programmes said to fulfil the Reithian mission to inform and advocate, or to serve the prejudices of white middle-class and middle-aged viewers—even, possibly, Members of your Lordships' House. If the audience figures were then low, critics would want a major cut in the licence fee. If the figures are high, as now, the critics level the charge of dumbing down. So the BBC cannot win.

One argument often put to support a cut in the licence fee is that it would release the BBC from what are called its present shackles and that it would be free to carry out its public service responsibilities. Again, one is bound to ask, "With what size of audience?". I am not sure about Members of your Lordships' House, but in the other place we did not watch an awful lot of television. Of course, that did not stop us criticising it.

I fear that such a policy could lead us down the sad path of the US public service broadcasts. It is said that such commercial freedom would enable the BBC to exploit its own powerful brand name and assets. It does that now, and it does an incredible job through that powerful name in its broadcasting around the world, especially on radio through the wonderful World Service. I hope that we will never allow such so-called commercial freedom to destroy the essence of a truly independent BBC.

I recently asked my noble friend Lord McIntosh to consider completing the consideration of charter renewal before the general election—although neither he nor I know when that will be. However, it has been thought that it will be some time next year, or perhaps the following year. I am of course aware that renewal is not due until 2006, but Parliament could be asked to decide on the kind of renewal that it wants in 2005 and it could be signed, sealed and delivered in 2005 to come into effect on the due date in 2006.

If, during a general election, the great British public, who will, of course, have read all the documents, made it clear that they disliked what had been done, it would still be open to a new Parliament to rethink. However, I am happy to find that most political parties seem to be broadly in agreement with the proposal for the renewal of the charter. Tessa Jowell, the Minister concerned, told us in a recent House Magazine article that she and my noble friend Lord McIntosh, have held public meetings all over the country and the website — has had over 25,000 unique hits. The one certain outcome is a strong BBC, independent of government". I welcome that. She went on to say that, the BBC holds a special place in the heart of the nation". I hope that that is still true, as it should be.

I note that Tim Boswell, the MP for Daventry and Conservative spokesman on the subject, despite feeling that there was a need for some change in the BBC's governance, said that, we would do well to remember its international reputation and its central contribution to our national cultural life". I hope that everyone can agree with that, too. I note that the Liberal Democrat spokesman said something similar. So I would hope that renewal of the charter in the near future could deal with the central problem of preserving the independence of the BBC as I described.

I hope that I have made clear that I do not support the idea that the BBC never gets it wrong. Of course it does, from time to time, as the Hutton report found. Its so-called "popular" programmes are often, and inevitably, not "popular" with everyone. The BBC's essential problem with a vital policy of making risk-taking programmes is that it is impossible to please everyone all the time. Making popular TV good and good TV popular has to be decided by someone. I hope that Parliament will decide in charter renewal that the decisions are best made by an independent BBC. As I said, from time to time, the BBC will get those decisions wrong. Occasionally—but, I hope, not all the time—it will allow some broadcasters to let their prejudices show, if perhaps not as firmly as happens in the tabloids or even the broadsheets.

I cannot believe that what is called commercial freedom will be better able to focus on public value. We are speaking here of an institution that provides a vital public service both at home and abroad, an institution that is truly independent and will continue to improve the quality of life in Britain and overseas. The chairman and governors have grave responsibilities in carrying out their mission. I do not believe that commercial freedom would help. I hope that renewal will be carried out speedily., as I have indicated, and preferably by political consensus. I hope that the House will agree that a strong, independent BBC setting standards for the rest of the media is vital to broadcasting generally. I beg to move for Papers.

5.6 p.m.

Lord Thomson of Monifieth

My Lords, I begin with my usual declaration of interest as a modest pensioner of the former IBA and also as the father of a BBC executive, one of whose programmes I once banned when I was chairman of the IBA. I hope that that is taken as a sufficient sign that, to use the old broadcasting jargon of due impartiality, I can claim a reasonable degree of that in approaching the subject of the review of the BBC Charter. The House's thanks are due to the noble Lord, Lord Barnett, for the way in which he introduced this debate. He himself is a doughty former deputy chairman of the BBC. Like him, I am glad to see his colleague as former chairman of the BBC, the noble Lord, Lord Hussey, in his place. I only regret that although I see him in his place, I do not see his name on the list of speakers. We must encourage him to participate in these debates.

The charter review could hardly have begun at a time of greater turbulence for the BBC, as the noble Lord, Lord Barnett, said. There is the new giant regulator combining both broadcasting and telecommunications. We welcome the chairman of that body to this debate. Ofcom will subsume half a dozen previous regulatory bodies. It has duties covering both the BBC and commercial broadcasters. Indeed, it has just published its own approach to a review of public service broadcasting, which I look forward to reading.

Naturally, it will take time for Ofcom to settle down to its great new responsibilities over such a broad area. Some of us noticed with regret the other day that it appeared unable to distinguish adequately between the interests of consumers of broadcasting and those of viewers and listeners. There is a significant difference between those two important groups and Ofcom must be able to deal with that properly.

At the same time as the new body, Ofcom, has been establishing itself, Downing Street and Broadcasting House have been having one of their confrontations, which are, fortunately, not too frequent but which are unfortunately a recurrent phenomenon of broadcasting history in this country. In this case, as the noble Lord, Lord Barnett, said, it was over the Iraq war. Both sides made mistakes in that confrontation, which resulted in honourable resignations at the top of the BBC. One consequence, if not a direct result, was that the Government's principal spin doctor made way for some old-fashioned civil servants. We hope that that may help to avoid mistakes on both sides in the future.

It was greatly to the credit of the Secretary of State, Tessa Jowell, that she sought to put the whole of the Hutton inquiry episode firmly behind her. She declared that it would have no effect on the Government's approach to the issues raised by the charter review. I am bound to say that she has lived up to that in the arrangements that she has made for the independent selection of a new chairman of the BBC, Michael Grade. Perhaps I should confess a degree of interest, which may undermine my claim to total impartiality: I once appointed him as the chief executive of the Channel 4 corporation. He was an extremely successful chief executive.

Michael Grade is an experienced broadcaster. He has no political past that could create problems and he has an impeccable family pedigree on the popular side of the media. I am sure that other noble Lords will join with me in wishing him every success in his new task. His first job will be the appointment of a new director-general. I hope that the governors will find a new director-general who will complement, rather than replicate, the particular qualities that Michael Grade brings to the chair of the BBC.

My main point is that I believe that a central issue for the charter review is that the BBC, encouraged by those who wish it well and encouraged by the Government with their responsibilities in this area, takes a fundamental look at the framework of relations between the management of the BBC and the governors of the BBC. They are the product of a great history. The other day I was reading the memoirs of Lord Hill—Charles Hill—who moved from chairmanship of what was then the ITA to the BBC and on arrival he discovered that he had to share secretarial facilities with the director-general. That was perhaps an unduly cosy relationship at the time, and he took steps to deal with it.

A central issue for the experience of the BBC in the new broadcasting landscape is that the interrelationship between the board of governors and the board of management of the BBC needs a radical, fresh look. It is important that they move closely in partnership with each other but they have separate responsibilities. I hesitate simply to draw the analogy with the Independent Broadcasting Authority, of which I was once chairman. When I occupied that position and when I was a colleague in broadcasting of the noble Lord, Lord Hussey, I thought that I had an advantage as chairman of the IBA over the chairman of the BBC: those in the IBA were not as intimately close to the broadcasters whom we regulated as the governors of the BBC found they were compelled to be. I offer no dogmatic formula for that, but it is important that a new framework should come out of the review of the BBC Charter, in which the governors of the BBC are more at arm's length than they have been in the past to the professional managers of the BBC and that they have their own separate infrastructure to support them in their duties as public trustees.

One cannot copy the special arrangements that were appropriate for the regulation of commercial television under the IBA, but there are great merits in some of the aspects of that relationship. At the IBA we were able to take a pride in the support and encouragement that we gave to the creative broadcasters of the various companies that held the franchises and at the same time, at arm's length, we were able to act as a critical regulator of their standards. If I were to pick on one particular issue that needs to be looked at seriously in terms of the role of the BBC in the future, I would say it is that.

In the BBC one has, warts and all, one of the great British institutions of which this country can be proud. It is important to sustain that in the changing circumstances. Paradoxically, those who 10 years ago thought that the growth of the new communications technologies—digital technology and the proliferation of channels that bring us a richness of choice that we never had in the past—would wipe away the need for a properly financed BBC at the heartland of public service broadcasting values have been proved wrong. It is important that the new charter review produces that kind of consequence.

I notice that one suggestion that has been canvassed is that, this time, because of the changing landscape, the length of the BBC Charter should be curtailed to perhaps five years. I profoundly hope that that will not be so and that the 10-year period of the charter will be sustained. The Liberal Democrats believe that public service broadcasting, particularly by the BBC, lies at the heart of a free, diverse and responsible media.

5.17 p.m.

Lord Puttnam

My Lords, in the Guardian of last Monday, Stephen Carter, the chief executive of Ofcom, ended a very good and informative article which trailed today's report by Ofcom by saying: television is an important medium, interacting directly with the society we are and want to be. Television matters to all of us". That is why I welcome this debate and thank my noble friend Lord Barnett for making it possible. In the same edition of that newspaper there was another piece by the media commentator, Roy Greenslade. He observed: Then there is that worrying matter of media concentration, as evidenced by the way in which Rupert Murdoch's News International exercised firm control over the Beckham story, with the News of the World, the Sun and Sky TV obtaining virtually all the exclusive material". To that end, Murdoch press and television channels revelled in cross-promotion. The Times, not content with trailing the Sky One interview with Rebecca Loos as, the TV scoop of the year", on its television page, felt it necessary to do so at the end of its news story. The Sun did the same, only bigger of course.

Why do I choose to open the few minutes available to me with those two quotes? During the passage of the Communications Bill, we discussed a number of times the issue of so-called cross-media ownership. I and others found it quite frustrating to get the House and the Government fully to appreciate how very different the new era of digital television would be, and the form of competition that the BBC would face. That piece from the Guardian illustrates that rather well. It is a different world and everything that I say should be understood in that context.

I very much welcome the appointment of Michael Grade. He is a friend and a colleague. I have known him many years. It is a bold appointment and one that brings enormous credit to the Secretary of State, as the noble Lord, Lord Thomson, said, and to the officials who had to shepherd through a very difficult appointment in record time with no leaks and to general approval. That is quite remarkable. The media found it almost impossible to find anyone wholly critical of the appointment, which is enormously to Mr Grade's credit.

This is possibly the right moment to pay a rather overdue tribute to Gavyn Davies and Greg Dyke. They both performed heroic service for the BBC. The nature of their departure was honourable and possibly necessary. That does not in any way deflect from the fact that they were admirable public servants and that the BBC today owes and will continue to owe them a very great debt. In particular, Greg Dyke's influence will undoubtedly be missed at the corporation.

We all want to see a bold outward-looking corporation, not a cowed inward-looking institution. I believe that Michael Grade will grasp that nettle. He understands the very complicated changing media landscape that I have just described, has enormous savvy and a great deal of—what my granddaughters would call—"bling". He will bring all of that to the corporation.

Turning to the charter review, the BBC must become more responsive to the citizens who pay for it. That has been identified rightly by the Secretary of State. I suspect that it will be an ongoing feature of the way that the charter review is both carried out and scrutinised.

The citizens who value public service value it a great deal. They do not just see it as a market-place, whatever the enemies of the licence fee may tell us. The licence fee remains the most effective and equitable form of funding that has ever been created for a public body. We all benefit from it. Even the figures, which were rather disparaged this morning by one or two of the papers. show that "only 84 per cent" of 25 to 35 year-olds watched the BBC once a week. That is not a bad statistic. There are not many businesses in the country that would be unhappy with that type of reach on a weekly basis.

Today's report by Ofcom, which I have only had a chance to scan, is an extremely interesting document. First, it certainly gives the lie to any notion that Ofcom is setting itself up in opposition to public service or as anything other than a complementary organisation there to keep intact what I still like to refer to as "our broadcasting ecology". It contains some interesting points that I have already picked up. One finding in the Executive Summary states that while, the provision of entertainment programmes was seen as television's primary function, there was substantial public agreement with the notion that the main terrestrial channels should support wider social purposes". The Executive Summary reports that, viewers thought that television lacks innovation and original ideas [and] relied too much on copycat and celebrity programming". Here lies a real opportunity for the BBC; indeed, it is a challenge. The corporation should be, and often is, the crucible for the development of "innovation and original ideas", but too often in recent times BBCI in particular has tended to fall hack on a more derivative or celebrity-driven type of material.

The BBC must step up to the plate in fulfilling both the letter and the spirit of its legal commitments to a broad public and indeed to the world I came from—the world of independent production. It must stop resorting to evasions and obfuscations or the inappropriate exercise of its power in the market-place in pressuring independent production down to a minima rather than acknowledging what is actually required of it.

The Secretary of State was absolutely right to insist that the licence fee should represent "venture capital" for the entire independent sector. Independents are the lifeblood of creativity and innovation across the sector. I know that this matter is exercising BBC governors, and I am sure that Michael Grade will be able to put many of the mistakes of the past behind them.

A commitment to a strategic and sustained investment in training is just as crucial in developing creativity and new ideas. The BBC is the single biggest employer of staff and freelancers in the industry. The critical creative mass it represents, combined with its public service remit and its unique funding formula, means that it is very well placed to absorb its responsibility to invest in the development of its own and, indeed, much of the rest of the industry's workforce. Both in relation to the industry and in playing its part in raising the skills game, the BBC should remain the flagship employer. It should act as a beacon, demonstrating through its practice its commitment to public service within the industry, and in providing an example of excellence in supporting the delivery of the Government's skill strategies across the UK.

I believe that the assets of the BBC are national assets. Perhaps the content assets which its holds are not necessarily being exploited as effectively as they might be in the new digital world, where there is an ever increasing premium on the value of intellectual property. I should like to return to that subject in a future debate. Suffice it to say that I am interested in exploring all kinds of alternative ways in which the intellectual property that belongs to the corporation might be exploited overseas in ways which bring a variety of direct benefits to the licence fee payers.

In conclusion, I should like to quote my noble friend Lord Currie, who in his introduction to the Ofcom PSB report that I mentioned earlier observed that, a publicly funded BBC needs to retain scale and viewer impact. It should be the standards-setter for the highest quality of public service broadcasting". While I suspect that I may differ in some regards from my noble friend as to how that objective might be achieved, I very happily sign up to the principle he sets out.

I have a last word to say on governance. Looking back on the joint scrutiny committee, I think that we were somewhat timorous in our consideration of the governance of the BBC. We rather took the position that "If it's not broke, why fix it'?" We should probably have been more alert to the fact that the world was changing, and probably had changed more than the governance system was able to accommodate. The BBC needs different areas of expertise on its board of governors and a better understanding of what is going on in the broad global world of broadcasting.

I am in entire agreement with the noble Lord, Lord Thomson, that what has always been lacking is the detailed ability of' the board to challenge the executive. I think that we had an extremely well managed board. As we have discovered recently in all sorts of corporate situations, boards are not there to be managed. For example, that is clear from recent experience at Shell. Its chairman just did not have access to the information that was absolutely vital to retaining shareholder confidence. Something of that was true of the BBC.

The BBC governors are entitled to have some form of secretariat which gives them the kind of information and the kind of alternative sources of information which allow them to take on the executive. That may not be the most comfortable thing that the BBC executive would wish to hear, but in hindsight had that existed I suspect that much of the trauma and drama of the past months could and would have been avoided.

5.27 p.m.

The Lord Bishop of Norwich

My Lords, I am very grateful for the many courtesies that have been shown to me since I became a Member of your Lordships' House last month. I am also grateful to the noble Lord, Lord Barnett, for promoting this timely debate. I should immediately declare an interest. I have recently become the chairman of the Central Religious Advisory Committee of the BBC. That committee, long known by the now rather unfortunate acronym CRAC, advises the BBC on all matters related to religious broadcasting. It has also been recently adopted by Ofcom, which perhaps places it in a unique position as advising the new regulator as well as the BBC.

The Central Religious Advisory Committee was originally established in the 1920s in the days of Lord Reith. It was interdenominational from the start, not as a result of the wish of the Churches but because Lord Reith insisted that it should be so. So the Churches were brought together to assist the BBC in its religious broadcasting long before they worked together on almost anything else. These days the same committee includes representatives of all the world faiths. Broadcasting and in particular the BBC prompted the Churches and now the faith communities to work together in wholly constructive ways.

The very existence of the committee is at least of symbolic significance in the quest for religious understanding and harmony in a world that is beset by division and incomprehension. It is a public and social good that deserves investment. I believe it accurately reflects the wider public value of the BBC, which should continue to be supported by means other than commercial interests and advertising.

The way in which the world faiths work together in this and other areas of our national life is much less evident in some other parts of Europe, let alone the wider world. We are sometimes led to believe that the relative lack of tensions between our faith communities in this country derives from a tolerant secularism or benign unbelief. I believe that it derives much more from collaboration and cultivated friendships within the leadership of our faith communities, a tradition of which we should be proud, and which the BBC, perhaps to some people's surprise, has done a great deal to encourage.

Noble Lords may have noticed over the Easter weekend that among the television channels BBCI recorded its lowest ever share of the total television audience, at around 22 per cent. That low figure cannot have been caused by a surfeit of religious broadcasting. Such programmes were conspicuously absent or found only in graveyard slots. The received wisdom is that religious broadcasting does not pull in audiences. It is strange how that conviction endures in television when our cinemas are packed to the doors with people watching "The Passion of the Christ".

However, the overall output of religious broadcasting during Holy Week and Easter across all BBC channels, including radio, was impressive—much better than in the late 1990s—and much of it was of very high quality. That has often been obscured, not least in the print media, by the concentration on television. There is a great deal of creativity in the religion and ethics department, as well as elsewhere in the BBC—more, I fear, than the schedulers seem to encourage.

BBC1's poor ratings reflect a different broadcasting environment, to which the noble Lord, Lord Puttnam, has already referred; it is one of huge competition in the multi-channel and digital age. So the renewal of the BBC charter comes at a time when the very identity of the BBC seems uncertain. Perhaps a bishop understands better than most what it is to be regarded as a venerable institution rather than a real person, and so to live with several identities. Recently, I discovered that for myself when looking up the telephone number of a fellow bishop's office in the London directory. All my colleagues were listed—the Bishop of London, the Bishop of Southwark, the Bishop of Kensington and others—but I was surprised to discover the Bishop of Norwich listed among them. It seemed to me unexpected metropolitan recognition. I wondered whether it was the result of becoming a Member of your Lordships' House. Then I noticed the word "reservations" against my name, which is how I discovered that, in fact, I am a wine bar in Moorgate. One must learn to live with such things.

Over the years the BBC has learnt to live with a mixed identity. It needs to connect with a wide audience; otherwise the licence fee will be resented. It therefore seeks to be a popular broadcaster. Yet the public service remit means that ratings alone surely cannot be the sole determinant for its success. There is a proper liberation from those pressures and concentration on ratings that is all for the public good. Yet to interpret the BBC's public service remit simply in terms of programmes that the market would not otherwise provide would be to marginalise the corporation. Public service broadcasting does not have to be mind-numbingly dull. The BBC's output and organisation, not only in religious broadcasting through CRAC but in wider areas, should assist its public purposes in informing and entertaining our citizens, helping to build community and providing some of the social glue that all societies need to cohere and to have a common identity.

It is sometimes in areas of its most modest investment that the BBC provides substantial public good. Consider the value of local radio, for example. It was looked upon with some suspicion a few decades ago in the BBC when it went down that path. A quarter of the total radio audience listens to BBC local radio. The return in community building for little investment that comes through BBC local radio is too little celebrated, perhaps because of a certain metropolitan myopia. BBC Radio Norfolk, for example, contributes massively to the cohesion and identity of Norfolk in ways in which, I suspect, the market left on its own could not, or would not, provide.

There are controversial issues of governance that I have been told to avoid, but I hope that it is not too controversial to recognise the BBC's huge contribution to the public good, and to express hope that the renewed charter will give it the capacity to build on its very best traditions.

Noble Lords

Hear, hear!

5.35 p.m.

Earl Ferrers

My Lords, it is my happy lot to congratulate the right reverend Prelate the Bishop of Norwich on his maiden speech. It is a particular and personal pleasure for me to do so because I happen to be one of the lambs in his diocese. I should also declare an interest, although it is a funny thing to do when congratulating somebody: I am high steward of the cathedral that overlooks the right reverend Prelate's house—Norwich Cathedral. The right reverend Prelate follows a line of distinguished bishops of Norwich. I like to think that that was because of the influence that the high steward breathed over them, but I fancy that any such idea would be running down the path of disproportionate and inaccurate fantasy.

The right reverend Prelate delivered an excellent speech. It followed all the conventions of your Lordships' House: it was short, uncontroversial, engaging, jolly and we all enjoyed it. He has a glorious disposition and a great sense of humour. All those qualities will be greatly to the benefit of your Lordships' House. I congratulate him on his maiden speech and hope that we will have the pleasure of hearing him on many other occasions in the House.

The list of speakers in today's debate consists mostly of television tycoons, of which I am not one. But the BBC affects everyone, which is why I venture to participate in the debate. If an organisation benefits from—and depends on—public funds, it will always be open not only to criticism but to castigation. That is so with the BBC. There is a cry from various quarters to dispense with the licence fee, with the inference that that 'will bring the BBC to heel and make it less dependent on ready cash and more dependent on the demands of the marketplace. I am not of that view. The licence fee is astonishingly inexpensive. For some 30p a day, viewers can have access to virtually continuous entertainment, news, culture and sport. That does not make the fee any easier to pay, but, once paid, it provides astonishingly good value.

To make the BBC compete on almost similar terms to commercial television would be a disaster. The BBC has a national and international reputation. The World Service, to which the noble Lord, Lord Barnett, referred, is one such pinnacle of the BBC's reputation. That reputation must be preserved, jealously guarded and built on. By the licence fee, the BBC has become the bedrock of television. It should be the epitome of high standards and should provide good-quality programmes. It often does all those things, hut, inevitably, not always.

I agree with the right reverend Prelate the Bishop of Norwich that ratings are not everything. They may be one measurement of the value of a programme. However, they are not the only, or necessarily the best, measurement. I suppose that it was the ratings that shoved the nine o'clock news back to ten o'clock. I thought that was a major error, because if one wishes to listen to the news, one must go to bed an hour later. Some of us feel that that is a bore.

I fancy that when the noble Lord, Lord Barnett, was vice-chairman of the BBC, and my noble kinsman Lord Hussey of North Bradley was chairman, it must have been a fun combination and those were possibly some of the halcyon days of the BBC. Things might then have seemed better than they now are, and they probably were. There is no doubt that standards have dropped. It is always easy to criticise an organisation like the BBC, which bubbles with intellect, creativity. and excitement, but it must be difficult to produce programmes 24 hours a day, 365 days a year, without producing some rubbish. Those people who participate in the BBC, despite or because of their talents, make the BBC what it is. Those talents must be channelled aright.

I have an example of undesirable standards. Between January and June last year, in 60 films shown across five terrestrial channels, not just the BBC, the "F" word appeared 1,429 times. The words "Jesus" or "Christ" were used as expletives on 221 occasions. That was just in 60 films in six months, though not only screened by the BBC. I am sure that while many of us must have used, and indeed do use, these disagreeable expletives on more occasions than we would wish to admit—I dare say that the right reverend Prelates might even have been heard venturing out some expletive if they hit their fingernail with the head of a hammer—they are offensive expletives. However, to project that language into sitting rooms throughout the length and breadth of the country is a had thing.

The same goes for those scenes of appalling violence that are shown and that are supposed to be entertainment. The argument goes that if you are shocked by that, you are shocked by life, because the producers are merely depicting what happens in everyday life. That misses the point entirely. People imbibe what they see on television programmes. They think that is the way to behave. When young people see a person's head being kicked in, it is too easy for some of them to think that that is what is done and is the way to do it; indeed, that can become a motivator on some occasions for their actions.

Do these programmes have no influence on people? Of course they do. Ask any company that spends millions of pounds advertising on commercial television why it does so. The answer is because people are attracted to what they see and hear, and thereafter they go out and buy the products. If they did not do that, companies would stop advertising and would save their money. The fact is that people absorb and act on what they see. What they see while watching television in their sitting rooms is decided by the BBC, the television companies, or the producers.

Good books edify the mind; and bad books sully the mind. In the same way, good television edifies the mind; and bad television sullies the mind. Television has a huge responsibility for the way in which society develops, far greater than people often realise. The BBC does not just react to what happens. It creates thoughts; it produces ideas. Surreptitiously, possibly even without realising it, it influences. That is a huge responsibility. I just hope that when the BBC has its charter renewed, some way will be found of giving the governors of the BBC, or some other part of it, adequate control of producers to stop them putting out bad programmes, programmes promoting violence and programmes littered with what is called "strong language", which really means the copious use of the "F" word and the other obscenities that contribute precisely nothing to the programme, or to the story.

The governors must not be deterred from preventing the showing of a programme for fear of being accused of interfering with the artistic licence of the producers. After all, someone must be responsible for what is shown, and ultimately, via its various channels, it must be the responsibility of the chairman and the governors. The BBC produces such a variety of choice and such excellent programmes that surely it would not be too much to cut out the bad programmes and the really offensive language.

Lord Reith, that pioneer of BBC standards, whom I remember listening to in your Lordships' House when he was just nearby on the Cross Benches, would have been horrified at some of the material that is being put out today—only some of it; the majority is so good. I just hope that when the charter gets renewed, some way will be found of making it good and cutting out the bad.

5.45 p.m.

Lord Currie of Marylebone

My Lords, I start by congratulating the noble Lord, Lord Barnett, on introducing this debate, and congratulating the right reverend Prelate the Bishop of Norwich on his eloquent and witty maiden speech. I declare an interest of a sort as the chairman of Ofcom, although I speak in an individual capacity.

As noble Lords will recall, Parliament has tasked Ofcom with conducting a major review of public service broadcasting. It is the first time that public service broadcasters have been looked at in the round, both the BBC and the commercially funded public service broadcasters, ITV, Channel 4 and five. I hope that our review will be a significant and useful input into the debate on the BBC Charter.

As a number of noble Lords have already remarked, by happy coincidence our report on phase 1 of the review was published this morning. I hope that all noble Lords participating in the debate have received copies. If not, there are some available in the Printed Paper Office. You have the concise version; the full report is a good deal fatter and heavier, unless you get it on CD.

When my noble friend Lady O'Neill recently raised a question about Ofcom's primary duties, several noble Lords expressed concern that Ofcom's use of the phrase "citizen-consumer" might reflect a downgrading of citizenship interests at the expense of consumer interests. They went on to express the firm wish that Ofcom should give due prominence to the citizen's interests. I trust that our first report on public service broadcasting will reassure noble Lords that we do indeed give due weight to citizenship issues, as the carefully considered Communications Act requires us to do. In particular, I hope that it will reassure the noble Lord, Lord Thomson, that we do take the interests of viewers very seriously indeed. Our report argues that public service broadcasting remains vitally important in 21st century Britain because of its central role in serving the interests of citizens. To inform the review, we have gathered a mass of hard data from broadcasters, we have supplemented that with consultations with groups of citizens, expert groups, and one of the largest detailed audience surveys ever undertaken, covering some 6,000 homes.

TV audiences may not instinctively understand the term "public service broadcasting", but our evidence is that they strongly support the set of values that Parliament set out in the Communications Act. Whether in traditional or multi-channel homes, there is a firm belief that television should serve wider social and cultural purposes. Generally in Britain we do television well. UK-made programming remains strong. Television news is valued, and audiences think that the broadcasters do news and current affairs reporting well. We lead the world in digital television, and audiences value the choice that it provides.

There is therefore much in our results that is heartening, but there are some issues that give cause for concern. Audiences feel that all the main terrestrial channels, including the BBC, lack sufficient innovation and original ideas, rely too much on copycat and celebrity programming, and on occasion talk down to viewers. There is also concern about the lack of a safe environment for child viewers away from unsuitable content. That is a major concern for many people.

Audiences, however, do not always live up to their image of themselves in what they watch. The main terrestrial channels' share is down to 57 per cent in multi-channel homes, which represent more than half of all households. It is for the more challenging and uplifting fare, such as "Horizon", "Newsnight" and "The South Bank Show", that audience share diminishes most in multi-channel homes. Identifying that fact allows us to be honest about the role of public service broadcasting and make practical proposals that reflect audiences as they are, not as we—or even they—might wish them to be. Public service broadcasting needs to have impact, as well as value and quality, if it is to deliver on its mission. That requires more innovation in formats and programming, to ensure that public service broadcasting is interesting and exciting. That point was eloquently made by the right reverend Prelate the Bishop of Norwich.

So the public service ecology is coming under some strain. The shareholder-owned channels—ITV and five—have an important role as investors in UK programming. In a full multi-channel environment, they must be able to respond competitively, if they are not to diminish as investment engines for British content. We must focus regulatory intervention on the public service characteristics that give highest social value and maximum viewer impact and not give privilege to that which the market will anyway fund. That puts an even greater premium on the BBC and those who govern it to live up to the spirit as well as the letter of its remit. A publicly funded BBC needs to retain scale and viewer impact. It should be the standard setter for the highest quality of public service broadcasting.

The licence fee remains an important funding mechanism in the PSB ecology and the right one to enable the BBC to remain independent and true to its purposes. I hope that in the charter debates the issue is not "Whether the licence fee" but rather "How much, what is it spent on, and does the output have the distinctiveness, quality and range to justify the investment?".

As both a competition regulator and a public policy regulator over the BBC as well as commercial public service broadcasters, Ofcom believes that the viewer is best served by competition for quality. The BBC needs public service competition that is sufficiently effective to keep it up to the mark. That competition for quality is most likely to come from not-for-profit broadcasting, free from shareholder pressures and with an ethos which, like the BBC's, can be focused more purely on public sector output. That is one of Channel 4's core strengths. To be an effective competitor for quality, it needs to grow to a scale where it can condition the BBC's output. Its first recourse is to self-help, lean efficient running and effective and profitable commercial additions, but it may also form an important part of a greater, not-for-profit sector whole that may need strengthening in other ways. Those could include a share of contestable funding or a new source of direct funding. The available options need to be considered.

That leads me to my final point: the distinction between governance and regulation. It is important not to confuse the two, as sometimes happens with those who argue for the BBC to be brought fully under Ofcom. Regulation should apply across the sector to uphold standards, enforce quotas and secure fair competition in the interests of citizens and consumers. I believe that Ofcom will quickly demonstrate its capacity and capability to deliver effective, high-quality regulation of that kind. I firmly believe that effective regulation by Ofcom provides no threat to the independence and strength of the BBC.

Governance is different. Each broadcaster needs its own effective and independent governance mechanisms. The model is clear for the commercial broadcasters, with a conventional corporate board safeguarding shareholders' interests within the rules laid down by regulation. For the not-for-profit broadcasters, especially the publicly funded BBC, the objective of good governance must be to pursue positively and with passion the public interest at the heart of public service broadcasting independently but within the overall framework provided by regulation.

The issue of the effectiveness of the governance of the publicly owned and publicly funded broadcasters is therefore separate from the nature and scope of regulation. There are several possible models of governance that could be made to work, and I hope that, in the debates relating to the PSB review and the BBC Charter review, those will get a good airing. However, we must keep governance issues separate from Ofcom's role in providing the appropriate framework of effective regulation.

It is crucial to our democracy and to our society that we get the analysis of public service broadcasting and the consequent prescriptions right and that we succeed in maintaining and strengthening public service broadcasting for the 21st century. We must foster an effective and inclusive debate that redefines and regenerates public service broadcasting for the coming world of pervasive digital connectivity, maintaining the spirit and strengths of the past but shaping it for a new digital, multi-channel world. I hope that this debate and our PSB report published today will help to stimulate this wider national debate.

5.56 p.m.

Lord Dubs

My Lords, I also thank my noble friend Lord Barnett for making the debate possible. It is a convention of the House that we pay such a tribute, but in this case I think that we all mean it strongly.

After the Hutton report, the BBC will never be the same again. It will present an enormous challenge to the new chairman, Michael Grade, whom I congratulate warmly on his appointment, to steer the BBC through these difficult times. I pay tribute to Gavyn Davies and Greg Dyke. I thought that they both made an excellent contribution to the BBC. I am sorry that circumstances have prevented them being there at the moment. I suppose that, given the Hutton report, it was inevitable that there would be one senior resignation. I think that two resignations at the top were not necessary. I would have preferred Greg to have stayed. I know the difficulties, but Gavyn's resignation would have been sufficient. They both played an important part in strengthening the BBC, and Michael Grade will have a hard act to follow.

I declare an interest as a former chairman of the Broadcasting Standards Commission. As such, I will refer to some of the points made by the noble Earl, Lord Ferrers. We had a responsibility for dealing with complaints about taste and decency, bad language and violence. The noble Baroness, Lady Howe of Idlicote, was my predecessor as chairman of that organisation. If the noble Earl, Lord Ferrers, looked at the detail, he would see that we were fairly robust about that sort of bad language or excessive violence before the watershed. I suspect that most of his comments would apply to programming later in the evening. He may not agree that we should have been, as it were, more liberal later in the evening, but we were pretty firm before the watershed because of the young people watching.

Despite Hutton, the BBC is and will continue to be seen as a great institution. It is one of the contributions that this country has made to television and broadcasting throughout the world. The World Service is well known universally for providing the best international broadcasting that there is. I welcome the DCMS review of the BBC's Royal Charter, which was published last December. It is a helpful guide in enabling us to see the different issues. I pay particular tribute to the document that Ofcom published today. It is an excellent document on public service broadcasting. I have only had the chance to read part of it, but it is professional and comprehensive and is a good indicator of the standards that Ofcom will apply to its wider remit. I congratulate the noble Lord, Lord Currie of Marylebone, on being chairman of the organisation that has produced such a first-class document, although I confess that I have read only part of it today, in haste.

It is important for us to help the BBC to maintain its independence from government. Post-Hutton, that is of even greater importance. If the BBC is seen as subservient to government, it will have lost the ability to make one of its most important contributions to life in this country.

Perhaps I may say a little about the licence fee in that context. Of course the licence fee should be maintained. The suggestion that it should be phased out, even if not immediately but over the next few years, would be a move away from the best available system to fund a body such as the BBC and help it maintain its independence.

The newspapers have indicated concern that BBC1 has recently had lower ratings. I hope that the pressure for high ratings will not be the only way in which the effectiveness of the BBC is judged. Surely we must look more broadly at the way in which the BBC deals with its many obligations and look at the quality of some of the less highly viewed programmes, as well as look at whether the BBC can achieve good ratings in popular times. The balance between quality of programmes and ratings is important.

I shall make one suggestion. I am concerned that the struggle, at intervals, between the BBC and the Secretary of State for Culture, Media and Sport about the level of the licence fee is not healthy. I suggest that we take a leaf from the book of the Bank of England, where the setting of the interest rate has been taken from the Government and given to the independent monetary committee. It would be healthier if the BBC licence fee were determined at intervals by an independent committee—perhaps Ofcom should not have that additional burden yet—which would take on board the BBC's bid for the licence fee level for the forthcoming period. That bid should be subdivided into the various elements of BBC work. The independent committee would make a judgment on how well the BBC met its various aims and objectives and would award the licence fee accordingly. That judgment would be made independently and apart from political decision making.

Noble Lords have referred to digital switchover. There is one main constraint which may lie partly with the BBC, but which probably lies also with the Government. Large parts of the country cannot receive digital broadcasts. Until they can, digital switchover will not be possible in those regions. I have a home in the Lake District. I cannot receive Channel 5, never mind some of the other digital channels. Satellite is the only option open to me. Freeserve would not work in my area.

I take the point made by the noble Lord, Lord Currie, about separating governance from regulation. The two functions are currently merged. I welcome the comments about looking again at governance attributed to Michael Grade on his appointment as chairman-designate of the BBC. I do not believe that the governors can do both jobs. It would be better if the BBC had a model such as a management committee on which there would be a number of non-executive directors. The board of governors should have a separate responsibility to regulate the BBC until such time as Ofcom, perhaps, wanted to take over that function. I am concerned also about parliamentary accountability, a subject which we will need to debate more fully on another day.

I am concerned also that we do not yet give independent producers enough opportunities. Perhaps 1,000 independent producers are members of Pact. They should be given full scope to contribute creatively to the diversity of British television. The BBC should be under an obligation to increase the proportion of its total programming that goes to independent producers. Currently, 12 per cent of the BBC's programming budget is paid to independent producers. That is a rather low figure; it should be about doubled. I agree with Pact on that. I also agree with what the noble Lord, Lord Currie, said in his foreword to the Ofcom report. It states: The independent producers will play a key role in 'competition for quality', and a strong independent production sector is an important part of the mix to deliver effective PSB". No one can say it better than that. I welcome the clear stance taken by Ofcom in supporting independent production.

We must be careful about how the BBC's commercial activities develop. One cannot really object to activities that follow on from original work done by the BBC. The problem arises when the BBC launches a new service that is in direct competition with an existing commercially funded service. That difficulty needs to be explored in a little more detail. Commercial initiatives funded by money raised by commercial producers themselves could be jeopardised by a body that is funded by the licensee.

I pay tribute to the BBC's radio work. Although the commercial radio sector offers very good programming, I very much enjoy and welcome the range of radio production that the BBC offers on national channels and also its local coverage of news and local events. It offers some of the highest quality radio broadcasting that I have heard in any country.

I appreciate that the BBC will go through further difficult times until the Hutton report is out of its system, the governance issues have been resolved and a new director-general is in place. However, I think that the House can rest assured that we will support the BBC in these endeavours. We wish it a successful future.

6.6 p.m.

Baroness Young of Old Scone

My Lords, I thank my noble friend Lord Barnett for the opportunity to talk about a very important issue, which I suspect will become hotly contested during the next 18 months. I am proud to speak as one of the band of past vice-chairmen of the BBC. The BBC is a precious asset to this country. As many previous speakers have said, it not only sets the benchmark for public service broadcasting, but also shapes the wider broadcasting ecology. Globally, it is vital for the reputation and standing of the UK. It is not an overstatement to say that the BBC is the envy of the world, which we must not forget during the charter review.

The periodic review that the charter review represents is important for taking stock and resetting the mandate for the BBC during the next 10 years. It should give the BBC the confidence to move ahead in an innovative and confident way in playing those roles. We should not be naive about the context in which the charter review is taking place. It is not an overstatement to say that the sharks are out. There are competitors with rather longer knives than during the previous charter review. Not only global broadcasting companies, but also the UK-based commercial sector, have a very different view of the BBC than was the case at the previous charter review. There are some people, including Members of both Houses, who feel that there are some old scores to settle.

In the review, we must not be stampeded by the Hutton report. With digital and multi-channel households, we must not be fazed that the review is taking place in a very different broadcasting environment. During what could be a very turbulent process, I urge the Minister and the Government to reflect on how much the BBC is valued and the contribution that it makes not only to the nation's cultural, social and political life, but also how much it enhances our global reputation. The Government need to have courage and maturity in the face of clamour to support the BBC into the future and they must not inadvertently damage it in an effort to appease its critics and competitors.

What kind of BBC do we want to see emerge from the charter review? Above all, it must be culturally and creatively vibrant, and needs a degree of security to allow it to exercise those qualities. The BBC needs to be independent and robust, particularly in the face of political pressure. I am sure that the new chairman will be so. The BBC needs to be a strong player in the competitive environment. Because of the current competitive nature of broadcasting commercially, the public service broadcaster—if it is to fulfil the role of promoting high standards of quality and impartiality—needs to be big and strong enough to play a real role in an increasingly competitive market place. The BBC needs to be a counterweight to the big global media companies that otherwise would dominate. I share the concern of the noble Lord, Lord Puttnam, about media concentration. Indeed, the Government will experience the impact of media concentration in the run-up to the election in a distinctly unfortunate fashion.

The BBC, post-charter, needs to be an institution that is responsive and transparently accountable. It needs to be able to fulfil the remit of serving the public with a wide and distinctive range of media and channels. The charter review must ensure that all these qualities are protected, developed and promoted.

While the review will have to deal with a whole range of issues, I shall focus on only a few. First, I turn to the issue of scale and the BBC. I think that "BBC" ought to stand for "big but close" because although the BBC is an immense organisation, its scale and range is important to the public as individuals and communities at the local level as well as at the national and international levels. The BBC must be able to speak to the public and fulfil its public sector remit through a wide variety of media and channels, reaching a range of people with programmes that meet their needs, including popular entertainment. We need to see outreach to communities and the wider public through the new digital channels on TV and radio, and online. Even though some of the developments of these new channels has been controversial—some are still finding their way—I believe that they form an important part of the public service remit. They must be distinctive in order to meet the needs of particular sectors of the community for whom this channel or that delivery medium is the way that they want to receive public service television, radio or information.

I look forward to considering in detail the Ofcom public service broadcasting review, although I hope that the definition of "public service broadcasting" remains sufficiently wide and diverse. The BBC's competitors would love to see public service broadcasting, and therefore the BBC, put into a small box labelled, "Please produce only uncontroversial and unpopular programmes that no one wants to watch".

I turn to the funding of the BBC. It has been a delight to hear support expressed in the debate for the licence fee. The arguments from the last round of debates on the licence fee are still incredibly valid. Quite frankly, it is a miracle that BBC television still reaches 89 per cent of the population. Most households in the land benefit from their pifflingly small annual investment when compared with their Sky subscription. Moreover, the licence fee remains the best way to fund an independent, robust and innovative public service broadcaster. The advertising market is insufficient, while subscription is regressive and would bear down unfairly on poorer households. A top slice which could be allocated to all public service broadcasters would, I believe, lead to wastefully competitive bidding processes and risk micro-management by government. The licence fee provides sufficient security and scope to enable the public service broadcaster to exercise the flexibility, innovation and distinctiveness called for by many noble Lords who have spoken in the debate.

I shall touch on the commercial activities of the BBC. I am a mean Scot. Having paid my licence fee for many years, I want to benefit from it. There is an immense amount of material, both archival and current, which the BBC must exploit commercially if we are to achieve value for money for our past investment. The commercial activities of the BBC are fully subject to the economic regulator and to competition law. The BBC is simply exploiting assets that we have already paid for and, in doing so, it must be meticulous about adhering to fair competition policy and be transparent in meeting competition law and regulatory requirements. But let us see more of that hidden wealth we have paid for being exploited in ways that present it to other audiences while bringing funding back in to enhance the licence fee and thus the public service offering.

I want to talk about a subject also touched on by the noble Lord, Lord Puttnam; that is, the BBC and independent production. One of the risks of a "big but close" BBC is that it can act a little like a farrowing sow. I am disappointed that the noble Lord, Lord Carter, is not in his place. As a pig farmer, he would understand what I am talking about. Pigs have an unhappy knack of rolling over and squashing their piglets without realising that they are doing so. Sometimes the BBC can behave like that towards the independent sector. If the BBC is truly to condition the broadcasting ecology, it must become and clearly be seen to be the friend of the independent production sector. The 25 per cent independent production quota should be a floor rather than a ceiling and the BBC should take a positive approach to independent commissioning in order to help promote a vibrant broadcasting market.

Many noble Lords have touched on the issue of governance and accountability. I, too, add my congratulations to Michael Grade. I think it is the right appointment and an excellent choice. He will be robust in his championship of the BBC and of public service broadcasting. But it is clear that the governors and the new chairman must get the governance right in the run-up to the charter review. It is important that that is gripped early, long before it becomes a charter issue. There needs to be a robust review of governance and a redefinition of the role of the governors in order to rebuild respect in the governance of the BBC.

However, I do not believe that it is sensible to split the role of the regulator and the role of the non-executive director in the BBC. The organisation has only one purpose, and that is public service according to its public service remit. Both as regulators and as governors, they should be seeking to ensure that that single purpose is delivered. I do not think that there are two roles here.

For all other issues—commercial competition, taste, decency and so forth—the BBC is already subject to Ofcom and I am sure that my noble friend Lord Currie will hold the BBC's feet to the fire on those matters, as indeed he should. But I do not believe that there is a true distinction to be made between the role of the governors in regulating the BBC and their role in ensuring that the executives deliver the public service purpose. It is also slightly risky to have all of our broadcasters subject to a single regulator on issues of impartiality in a hotly contested and politically fraught area.

Those are the issues that will have to be tackled by the charter review. A last one that was touched on by the noble Lord, Lord Thomson, is this: let us not entertain any ideas that the charter should last for only five years. If we want a BBC that is timid, uninnovative and constantly looking over its shoulder because it is subject to permanent review, a five-year charter is the sure and certain way of achieving that. Let us look forward to a robust review, but let us not lose sight of the fact that in swimming with sharks, the very qualities of breadth, impartiality and vibrancy that make the BBC the envy of the world must not be lost.

6.17 p.m.

Baroness Howe of Idlicote

My Lords, I, too, thank and congratulate the noble Lord, Lord Barnett, on securing a slot to debate this subject. I speak as another former regulator, as the noble Lord, Lord Dubs, has already pointed out.

I have listened to and very much applauded the considerable warmth expressed by previous speakers in their views of the BBC, but of course there has been criticism as well, and I have sympathy with some of it. We have heard today, as we hear in other forums, a discussion, for example, of the role and effectiveness of the governors, their lack of financial accountability, and whether the BBC should be fully regulated by Ofcom. These are not new points, of course, but they deserve and get, I am sure, rigorous scrutiny. However, they are only one side of the case.

I have found it interesting to note that there is rather less criticism of what the BBC actually does, delivers and produces. The noble Earl, Lord Ferrers, mentioned some valid and very real areas of criticism and concern, but the quality, integrity, availability, diversity and popularity of its radio and TV products remain almost universally commended. They are not just commended, but are appreciated much more fundamentally than that. Indeed, the most striking feature of this continuing debate wherever it is held is the growing realisation by concerned citizens of precisely how important to them is the whole concept of British public service broadcasting. The noble Lord, Lord Puttnam, dwelt on this point.

People know in their bones that the BBC sets a world standard in the quality of broadcast material, both in the UK and beyond. It is in that context that, unarguably, the BBC is the gold standard bearer; the Reithian standard against which all other broadcasters are judged, and which some of them—Channel 4 and S4C, for example—can certainly sometimes match or exceed. Above all, perhaps, what people see and appreciate is the public value of its output for the UK citizen's quality of life—a matter very convincingly set out in Mark Byford's recent speech to the Foreign Press Association— supporting democracy through independent, high quality, accurate and impartial news and current affairs; creating or partnering original ambitious British cultural programmes such as "The Canterbury Tales" and the "Big Read"; and its contributions as the biggest Commissioner of music in the world. I refer also to educational support, through its co-operation with the OU; its revision services for GCSE students; pioneering expensive yet invaluable programmes such as the "Blue Planet" and, of course, the continuingly brilliant wildlife programmes of David Attenborough; and only last week we had the fascinating life and achievements of Josiah Wedgwood.

As other noble Lords have mentioned, the BBC has a universally respected global role, not only as the world's most trusted news provider but also in its role linking countries and communities and showcasing British creativity. There has never been a time when the need for the BBC World Service was greater. As your Lordships will see from page 21 of this week's The House Magazine, it is responding very well to that need. But we—the world indeed—cannot expect to have the BBC World Service without the core values of the BBC itself.

How many other publicly funded bodies and institutions in our society—or, for that matter, in any other society—can credibly make the same kind of claim to our respect? Local authorities? Hospitals? Railways? Universities? Some can, thank heavens, and still do so—but less and less, I fear. And why? Because they have become less and less independent and more and more dependent, from year to year, on Exchequer finance and the Treasury's hold on the purse strings. The greater the dependence on government-controlled money, the greater the damage to quality and independence. The recent debate on the university Bill illustrated that.

The BBC's success and independence depend, above all, on guaranteed access for a period of years ahead—and here I could not agree more—to something like the licence fee. I hope it remains for a full 10 years. I know that that is what Her Majesty's Treasury dislikes—a hypothecated tax—but it is the key reason, in my view and that of others, for the real independence of the BBC; independence not only from government, of course, but of purely commercial pressures such as audience figures and advertising revenue. The BBC knows that its owners, shareholders, citizens and viewers have a wider perspective than that: public value and diversity, as well as popularity.

The BBC knows, too, that it is more accountable in the broadest sense—its reputation matters—but more is expected of it. Noble Lords may be surprised to hear me say that in the light of Hutton, where it clearly made a mistake. Of course, who does not sometimes? But it was exposed to detailed public examination of a fairly ruthless kind, and probably rightly so. I acknowledge certainly that quality sometimes falters—one word, "Gilligan", sums that up—but, by the same token, even the Law Lords, noble and learned though they certainly are, sometimes nod. I doubt whether any of your Lordships would wish to condemn them on the strength of one word—"Pinochet", for example.

Would any other broadcaster have been similarly savaged? I do not think so. It would not have been seen as so important; our expectations would have been lower. Not so for the BBC. It knows, as we know, that it could properly be called to account, to appear in the dock in person. How many other media channels or newspapers could or would have been challenged so directly? Would any others have been so expected and so ready to expose themselves in that way?

Can any of your Lordships recall any occasion when any newspaper or TV station proprietor and his chief executive or editor resigned their office because of a factual error in their output, and then followed it up with an apology as handsome as that made in the House by the noble Lord, Lord Ryder? Of course not. But coming from the BBC, we were not quite surprised, just because it is, and remains, different.

Given that case, I, like many noble Lords, am clear about one thing. It is not that there is no case for change in anything about the BBC—of course there is—and the rapidly changing competitive digital world in which it operates makes that inevitable. We must be ready to examine with candour and with courage all these areas, but it is for those who want to make such changes to prove their case for making them —all the more so if the changes they seek to make are fundamental.

As we await the result, like many of your Lordships, I wish to congratulate the new chairman, Michael Grade. In my role as a regulator in the past I had one or two brushes with him, but the quality and the spirit of the new chairman is very appropriate for the current moment.

.26 p.m.

Lord Sheldon

My Lords, I am pleased to congratulate my noble friend Lord Barnett on introducing the debate. I see that the noble Lord, Lord Hussey, is in his place. It was, of course, the noble Lords, Lord Hussey and Lord Barnett, who were chairman and deputy chairman at a particularly important time in the BBC. The great praise that I can offer them both is that it is they who could have saved the BBC as we have known it.

During their period as chairman and deputy chairman, Margaret Thatcher, as Prime Minister, opposed the BBC licence fee, which she condemned outright as a compulsory levy with criminal sanctions. How far she might have wished to reduce the position of the BBC we can only speculate.

I have always felt that their efforts, not the arguments, and the emollient way in which they opposed the wishes of the Prime Minister of the day was the equivalent of that of Sheherezade. Again and again, following a number of meetings, they were successful in delaying any action. And so the noble Lords, Lord Hussey and Lord Barnett, helped to preserve the BBC as we have known it. It is a great tribute to them both.

My contribution to the debate is based on the profound admiration that I have had for many years of the BBC. Of course it makes mistakes, but there are many people for whom I have high praise—some in this House—and they make mistakes too; we all do. But they should not be judged only on those errors; we have to look at the whole person—or, in the case of the BBC, the whole institution.

I believe that the BBC is one of our two greatest institutions. The two greatest institutions in our country are the BBC and our Civil Service. It is a terribly sad reflection of our times that these are the two institutions which are under the greatest threat at the present time. Those who admire them both must speak out strongly in their support.

A major strength of the BBC is that we turn to it at times of crisis or of national importance. The BBC sets standards from which others cannot depart too far. It has shown its integrity and its independence and, faced with a quite unwarranted attack, sought to defend itself. It is a British institution in which one places much confidence and, as we have seen, those who attempt to denigrate the BBC find that it readily rebounds upon them. The assertion is that the BBC ought to have verified the 45 minutes with an ardour that the Government themselves did not verify in their own claim that weapons of mass destruction could be deployed in that time.

The question is: which media group is perfect? The obvious answer is "none". What we who admire the BBC can claim is that, overall, in its news programmes, it is reliable and trustworthy. The BBC does not answer to advertisers; it is not beholden to them, yet it is measured by one yardstick and much of the rest of the media is judged by another, more flexible one.

What is deeply deplorable, and even menacing, is the way in which one report, which included an inaccuracy, was used to attack the BBC and to bring about the departure of its chairman and chief executive. We all know that, from looking at some countries, the BBC must not be the Government's lapdog. It must not be bullied, a point that my noble friend Lord Dubs made very well. That is why Gavyn Davies and Greg Dyke had to demonstrate their independence, particularly because of their political background. What was wrong was the wholly intemperate way in which the Government attacked the BBC—not just Andrew Gilligan. In the face of the constant and unremitting pressure from Alastair Campbell, they had to demonstrate a sturdy defiance. The torrent produced a feeling that their independence was under attack. Their behaviour was honourable. If the representations had been less vehement, an accommodation could, I believe, have easily been reached.

When one looks at the inaccuracies of Fleet Street journalism, one is impressed by the standards of the BBC. The Government do not often attack Fleet Street with its sometimes deplorable standards, but have chosen the BBC, which has the highest standards of all the media. By contrast, the way in which the BBC has reported fairly the attacks upon its own integrity, including even unflattering stories about itself, is impressive.

Comments have been made about the independence and standards of Channel 4 and ITV 1 and 2. I acknowledge this valuable aspect. The question we have to ask is how much of this is due to the standards set by the BBC. The noble Lord, Lord Currie, accepted this important role. This is an important yardstick, and we all benefit from it. If the yardstick were removed, where would the commercial temptations lead us?

The governors cannot just be independent monitors—the noble Baroness, Lady Young, was right. They are seen, quite correctly, as supportive of the BBC's role. What is required is an overall view of the work of the corporation and the capacity to advise—sometimes robustly—but it should not be unsympathetic external advice. As my noble friend Lord Barnett pointed out, there is no evidence of failure by the governors. Of course they can make mistakes, but any mistakes must be seen in the context of 80 glorious years of British broadcasting. We may come up with some improvements in the way in which the governors are selected and run their affairs, but the greater danger is the consequence of charter renewal, which may do too much. We have to beware of that.

I was chairman of the National Audit Office for 14 years. The main reason for that, of course, is that we were not very successful in winning elections during that period. The National Audit Office is a magnificent body. It expanded, and I had the privilege of proposing the present leader of the NAO—the Comptroller and Auditor-General. It does a splendid job, but when it comes to risk-taking, there are real problems. Of course it can see to financial rectitude and it can understand risk-taking in the Ministry of Defence field. But when it comes to risk-taking in particular areas where the BBC and the arts are concerned, it does not have that kind of expertise and it is not easy to see how it could obtain it. That is why I think we should retain the present position, and that the governor's powers should not be reduced.

On the renewal of the charter, I hope that we will reach a political consensus. It would be very sad if this becomes a political football, as some people have thought. However, I hope that we shall come to appreciate that this was a period when things went slightly wrong and that we can see the wider picture and make sure that the BBC stays with us as the important embodiment of our culture and our society as we have known it.

6.35 p.m.

Viscount Falkland

My Lords, noble Lords on these Benches congratulate the noble Lord, Lord Barnett, on getting this slot today, not least for mentioning, in such favourable terms, his impression of the Liberal Democrat views about public service broadcasting. We are grateful for his reference to my honourable friend's remarks in The House Magazine and elsewhere. They were reinforced by my noble friend Lord Thomson of Monifieth.

We on these Benches believe very firmly that the BBC should remain the dominant institution in public service broadcasting and in the country's broadcasting landscape. That is not to say that we do not recognise that as we come up to the charter renewal—the Government recognise this because, otherwise, they would not be consulting so widely on it. We are at a difficult point. I do not quite follow the point of the noble Lord. Lord Dubs, as to why Hutton should have changed public service broadcasting so radically. I can see that it has been changed in the short term, but I cannot see that it has been altered for all time. Perhaps we can have a chat about that outside the Chamber.

I am probably just over the average age of Members of your Lordships' House. I always used to think that I was younger but as I looked around the Chamber tonight while listening to the debate I saw so many young and distinguished faces from the broadcasting industry and I realised that I have been glued to a radio or television set for most of what will be my 69 years.

I had a peripatetic youth. I was born before the war, as my age indicates, and was moved around during the war. I have jotted down on my piece of paper what were the most extraordinary moments in broadcasting that I experienced. I think my most extraordinary memory is of a summer's day in 1943, I think, listening to "ITMA" on the radio in the middle of the day when the sky was black with American bombers going on daylight bombing raids. There was a curious incongruity to this extraordinary happening in the sky and this wonderful programme with catch-phrases that held everybody so enthralled.

I never saw television until the coronation of Her Majesty the Queen in 1953. I saw it in France, where I was spending a short time with a family before going into the Army. I was asked to a very large gathering in the smart 16th arrondissement to see the BBC's relayed programme of that extraordinary event. It was a very wet day, as your Lordships who were alive at the time will recall. The French audience, who were affluent and elderly, were spellbound during the broadcast. Much to my embarrassment—I had only just turned 18—when it was time to leave, everybody shook my hand as they went out of the door. I always thought the reason for that was their admiration for our monarchy, but I now realise that it probably was not. It was the recognition that they were seeing first-class television broadcasting.

I have to say that since that day, broadcasting has been rather a disappointment to me. I remain firmly a radio listener. I have jotted down what I listen to and what I watch, and for a parliamentarian, I watch and listen to quite a lot. On the radio, I listen to "Today"; on Mondays, I listen to "Start the Week", and on Thursday mornings I listen, when I can, to the programme of the noble Lord, Lord Bragg—"The Moral Maze"—though that may give an inflated view of my intellectual capacity.

When it comes to television, it is not quite so encouraging. Almost every night I watch "Newsnight". I also watch "Have I Got News For You", snooker—whenever it is broadcast—and I switch to Sky for the boxing on Saturdays. I watch the History Channel and repeats of "Seinfeld" and "Dad's Army". As noble Lords may gather, I have some interest in France having spent my formative years there, so I sometimes watch the French satellite channel TV5.

On a serious note, we must decide what public broadcasting is all about. I do not think that that debate has been fully entered into. The Government are clearly trying to influence this debate and they are going about it in a sensible way. We all know about quality. I was interested to hear two very experienced noble Lords mention "beyond quality innovation". That is a great thing for the public service broadcaster —something it can do with the kind of funding that it has. It can be dangerous from time to time; it should be able to afford to fail. That is where there could be a conflict. The noble Lord, Lord Barnett, mentioned the National Audit Office. If the National Audit Office is going to overlook what has already been done by the in-house auditor, inevitably, if it sees what is perceived to be a waste of money or something that does not offer value-formoney, it will start to find things that can be disposed of. Innovation will surely be one of those. That is a serious matter that must be addressed.

I am surprised that nobody has mentioned the Elstein report clarifying the purpose of public service broadcasting, which our excellent Library gave to me. It seems almost taboo to mention the report, but I found it absolutely riveting. It dug away at things and pushed to the boundary discussion about what was perceived to be wrong with the present public service broadcaster. People have been put off by the solutions that were given, and I agree about that. However, to have dug away at some of the problems of the public service broadcaster and the difficulties that it faced was very brave. It is an extremely interesting report to read. I recall that it said that it was necessary to clarify the purpose. As a result of DCMS consultation, I hope that the purpose will be clarified. In 80 years, the purposes must surely have changed quite radically.

The need for pluralism nowadays is clear. Although I described it with a sense of humour, my eclectic watching is not unusual. Most people nowadays have broad interests. We do not all gather round the next day and discuss the same programme. We all have our own interests. Pluralism is very important in public service broadcasting. The whole landscape of advertising revenue means that the responsibility for public service broadcasting output is almost entirely with the BBC. Channel 4 and ITV cannot, without great difficulty, fulfil their public service remit, which is damaging.

The reputation of the BBC will outlive hiccups such as the Hutton report and, should a satisfactory settlement be reached for the review, the BBC will go on for some time to come. There is an interesting question in the DCMS's report, which asks: Should the BBC provide something for everyone? That strikes me as an important question. Can the BBC today possibly maintain its quality if it has to provide something for everyone? After all, we are a very widely constituted society. We are a multicultural, multi-racial and multi-religious society. We must have some objective standards or aims about what public service broadcasting will deliver, otherwise I fear that we will see too much effort to please everybody.

The way that the educative, entertainment and information roles are carried out will decide the future of the BBC. It will only carry on through the support of the licence fee payer—the public at large. It must do that with quality and without derivative programmes—I absolutely agree with the noble Lords, Lord Currie and Lord Puttnam, about derivative and celebrity-led programmes, which represent the state of affairs in much of our theatre now.

Was Gavyn Davies right? I believe that the noble Lord, Lord Barnett, asked whether changing the dominant position and advantage of the BBC within the broadcasting environment would open the door to political interference and commercial pressure. That is a very important question. The Elstein report did not agree, which is interesting. Surely, the continuing threat to the independence of the BBC is the Government's control of the licence fee, which they always hold over the BBC. It needs a leader with enormous strength of personality. I echo what other noble Lords have said about the appointment of Michael Grade. He is remarkable. Incidentally, if noble Lords ever go to dinner with Mr Grade, they should get him to do his impersonation of Tommy Cooper because it is by far the best I have ever heard.

Time is short. There is no more that I can say to a distinguished House full of noble Lords who have great experience in this subject. I am being watched very closely by my noble friend Lord McNally here beside me, who has flown in from Bulgaria—although not to hear my speech. He would have been making this speech, and with his robust good humour, he would probably have touched nerves that I cannot reach. There is no time to go into some of the interesting things that have been said. My recommendation to noble Lords who have not been present this evening is for them to read the Hansard report of the debate, because it has been fascinating.

On a final note, I am absolutely addicted to radio. Please leave it in the public sector. Whatever happens, please let it be publicly financed to maintain its quality in the future. If we think back to pre-television days, the reputation of the BBC was founded on the importance of radio to people in this country.

6.47 p.m.

Baroness Buscombe

My Lords, I will immediately follow the noble Viscount, Lord Falkland, in saying that I am also completely addicted to Radio 4. It has been as much a part of my education as anything else, so I entirely agree with what he said. I thank the noble Lord, Lord Barnett, for raising this important debate to call attention to the forthcoming BBC charter renewal. I congratulate the right reverend Prelate the Bishop of Norwich on his excellent maiden speech. I am rather sorry about our tradition of not being controversial, because we should use these opportunities early on in this period of charter renewal to be a little controversial and radical and think about all the possibilities for the future of the BBC. I have had a letter from the noble Lord, Lord Ryder, to say how sorry he is that he could not attend this debate. The governors of the BBC are busy discussing their document today, so he cannot be with us, which is a great shame.

We welcome the appointment of Michael Grade as the new chairman of the BBC. I have always thought that he has a great deal of chutzpah and I join the grandchildren of the noble Lord, Lord Puttnam, in saying that I guess that also means "blind".

This is a crucial time for the future of public service broadcasting. The broadcasting landscape has changed dramatically since the last charter renewal process, with the advent of new technology such as digitalisation, the increasing numbers of channels and availability of new platforms for delivery allowing greater diversity in programming choice, both in radio and television. Most notably, the expansion of the Internet and services such as BBC Online have meant that we now have greater choice in how, where and when we access information.

This charter renewal period offers the opportunity to consider the position and role of the BBC as an institution. The numerous issues to be addressed in this review are challenging and wide-ranging. At this early stage, definitive solutions to change should not be offered until the responses to the first phase of the consultation process have been digested. Furthermore, the BBC's submission to the review will not be made until the incoming chairman and director-general have assessed their position.

In May 2003, the Conservative Party consulted an independent group, which calls itself the Broadcasting Policy Group. The noble Viscount, Lord Falkland, referred to the Elstein report. The group was asked to address the key issues that it believed required reform within the charter renewal process. The resulting report was designed to stimulate debate, both within the Conservative Party and the broadcasting arena as a whole. Although some of the report's proposals are very radical, I believe that if we are to have an open and honest debate about the key issues that affect the future of the BBC, wide-ranging options on differing sides of the broadcasting spectrum must be introduced. We must make full use of the opportunity, but those options must be considered with great care, and always with an eye to the future, as the noble Lord, Lord Puttnam, said, bearing in mind the keen competition that the BBC will face.

The Government's charter renewal consultation paper begins by asking, what do you value about the BBC?". The BBC's role as a public service broadcaster is a central part of the British broadcasting ecology, although public service obligations are additionally conferred on the three terrestrial commercial channels. It is therefore of fundamental importance that the role and remit of the BBC as the dominant public service broadcaster is clearly defined. The charter states that the function of the BBC is to inform, educate and entertain. In return, the citizens of the United Kingdom expect the BBC to provide, among other services, impartial and accurate news programmes that they can trust.

I refer to a recent report by the Centre for Policy Studies to provide an example of why the BBC must ensure that these obligations are met. The report is entitled, An Outbreak of Narcolepsy—why the BBC must improve its coverage of the EU. The report addresses the increasing role played by the European Union in our national political life and concludes that this position is not adequately reflected by the BBC's coverage in this area. The time allocated to this important topic is of increasing significance. Only yesterday, the Prime Minister announced that following the enlargement of the EU on 1 May, the electorate should be asked for their opinion on the adoption of the European constitution. The CPS report found that since the European parliamentary elections in 1999, the time devoted by the main BBC television news bulletins was just 2.6 per cent. The report states that an analysis of the BBC's coverage of the EU also reveals an underlying assumption that listeners would find European politics dreary.

The question of the ratification of the European constitution is of fundamental importance to this nation. The relevant issues need to be covered comprehensively, thus allowing the electorate to make an informed, educated decision about their country's future governance. Suggestions to remedy the problem include the adoption of an EU affairs slot on news services and the appointment of a European affairs editor to ensure that the BBC's public service obligation in this area is fulfilled. These proposals should be considered by the BBC in light of this report. While the press provides alternative views on whether the EU constitution should be adopted, the BBC will be required to provide a balanced and impartial approach to the issues pertinent to this referendum.

I turn now to the question of funding. How the BBC is financed has long been one of the most contentious and debated aspects of its organisation. The main funding alternatives have been outlined in many reports, including the Peacock committee report in 1986 and Davies report of the Independent Review Panel in July 1999. The Davies panel, asked to consider how the licence fee could be supplemented rather than replaced, concluded that, from the BBC's point of view, the licence fee is the best way to finance public service broadcasting. The security of regular income allows the BBC to take a long term perspective … however, the downside, as with all forms of guaranteed, tax based revenue is that it frees the BBC from the need to respond to changing consumer preferences". The primary funding alternatives available include advertising, voluntary and compulsory subscription and the licence fee. I do not believe that advertising would provide an acceptable means of funding the BBC. Advertising spend is finite, and the ability of commercial broadcasters to make high-quality programming should not be compromised in any way. We need to ensure that the broadcasters subject to public service obligations remain in a commercially sustainable position in future. Furthermore, as Professor Eric Barendt—Goodman professor of media law at University College, London—said recently, introducing advertising on some or all of the BBC's public services would be likely to alter the range and quality of BBC programmes, leading inexorably to a more populist and less distinctive schedule. The programmes would have to attract high spending audiences … which could force the BBC to cut back on challenging and innovative programming … or to reschedule minority programmes out of peak times". Clear advantages exist in the development of subscription-based funding. Subscription could take a number of forms, such as voluntary, compulsory or individual programme subscription. The main advantage with this system of funding is that payment could be made on an individual or "per home" basis depending on programmes watched and number of television sets owned, as well as ability to pay. The BBC is central to the public service broadcasting ethos. At present, a voluntary subscription service would not be desirable as a method of funding the BBC, as it could dilute the fundamental principles of public service broadcasting, such as universality and social inclusion.

A gradual move towards compulsory subscription could be considered as an alternative to the licence fee. Compulsory subscription would provide a determinable income stream for the BBC but would also facilitate the forthcoming digital switchover. The compulsory subscription rate could include core BBC public service radio and television channels with the option to take further additional channels if desired. This method of funding would allow the citizen an element of choice as to which niche BBC channels they receive. However, reception of the core channels could be, as at present. a mandatory requirement. Compulsory subscription would allow the administrative costs in collecting the licence fee to be considerably reduced.

The increased availability of new technology, such as wireless Internet connection, which provides immediate access to high-speed streaming data services anywhere, including restaurants and coffee bars, warrants further consideration. WI-FI, as with a fixed internet connection, allows users to watch live, real-time BBC news broadcasts on their computer wherever they are in the world. As convergence continues and technology improves, the computer user will be able to access more data and programming via the Internet.

How the licence fee would provide a viable longterm funding mechanism for the BBC and the funding issues presented by this new technology must be fully considered. I believe, in light of the rapid advancement of technology, that the current renewal period of 10 years is long. Perhaps a shorter period of seven or even five years should be considered.

I find the proposal by Carol Tongue and David Ward to establish a council for public service broadcasting of particular interest. Their submission to the BBC' charter review public consultation proposes that, it is necessary in the first instance for the issue of funding to be removed from the primary political domain and from lobbying by the BBC and other interested parties". An alternative body, albeit with distinct powers, was suggested by the Broadcasting Policy Group.

It is imperative that the governance of the BBC is independent from both governmental influence and from the BBC's executive structure. The current system, whereby the governors are both the regulators and champions of the BBC, is not tenable and will become increasingly unsustainable. Here I very much agree with the noble Lord, Lord Dubs. Indeed. I have strong sympathy with the view that the current board of governors does not in essence adequately reflect the diverse interests of society. A transparent, accountable and external constitution must be put in its place. I urge the Government to consider an alternative structure that allows the BBC to remain strong and independent. The word "independence", which the noble Lord, Lord Barnett, focused on in the first place, is the most important word in this debate. We also welcome the publication today of Ofcom's review of public service broadcasting, Is television special? I listened with care to what the noble Lord, Lord Currie, had to say this evening.

I see that my time is up, but I want quickly to touch on one important area relating to the BBC's commercial activities. The BBC continues to work hard to try to persuade us that its commercial activities remain at arm's length from its publicly funded activities. However, in truth there are areas where the BBC is blatantly abusing its powerful brand, for example, in areas of cross-promotion. The BBC will, I fear, undermine its reputation as a public service broadcaster, diminish its ability to defend its core purposes and weaken the UK broadcasting industry as a whole if it does not take up this issue with care.

On the positive side of its commercial activities, I join the noble Lord, Lord Puttnam, in urging the BBC to consider ways of using its incredibly valuable intellectual property worldwide to commercial advantage—more funding for greater investment in quality programming makes good sense.

I wish that I had more time to respond to my noble friend's passionate speech about programme content. The process of charter renewal has just begun. We need more time for debate. As the noble Lord, Lord Puttnam, said the other evening in the debate on higher education, there is never enough time to say what needs to be said. I wonder if it might be possible for those of your Lordships who are particularly interested in this matter to meet informally. Personally, I believe that together we could make a valuable contribution. I entirely agree with the noble Lord, Lord Sheldon, who said that political consensus is what is required here. It is something that we in your Lordships' House could really look to. In that way I believe that we could make a really valuable, worthwhile and long-term contribution to the debate and therefore to the future of our most loved BBC.

7.1 p.m.

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)

My Lords, the month of March 2004 was a horrible month for me. I spent a good deal of it travelling round the country—Scotland, Wales, Northern Ireland and the English regions—on behalf of my department taking part in the public consultation on the charter review. At this point I look carefully at my officials in the Box who are lovely people.

I visited independent producers and watched children in Govan, Glasgow conduct a debate on the licence fee. I visited children in Southampton who had their own TV studio in their school. I talked to BBC and other public service broadcasters. I held industry seminars and rather unsuccessful public meetings. All of those people had the right to say what they thought about the BBC. The only person who did not have that right was me. I do not care for that. I am not known as a person without opinions. The same position applies today. The only opinion I can pronounce on behalf of the Government as we get into the public consultation process is that we believe that the outcome will be a BBC which is strong and independent of government.

The noble Lord, Lord Barnett, extended that to the BBC being independent of advertising as well. I was about to say that I had some sympathy with that but that would be going beyond my remit. However, I heard what he said. I am grateful to the noble Lord both for finding a slot for this debate and for the way in which he introduced it. All of the comments that have been made and the very many deeply felt views which have been expressed today are now part of the consultation process, or will be when Hansard is published tomorrow morning. It is difficult to beat the sound bite of the noble Lord, Lord Barnett, about the role of the BBC in making popular TV good and good TV popular. I think that he would agree to extend that to radio, but that comment sums up what many of us think about the BBC. It was a good introduction to what has been a good debate.

It was a particular privilege to hear the maiden speech of the right reverend Prelate the Bishop of Norwich. If he will give me the relevant phone number, perhaps I can make my reservation for his future speeches because certainly today's speech was an excellent maiden speech. He referred to religious broadcasting. He may know that under the guidance, with the help of the right reverend Prelate the Bishop of Manchester, we have, as we undertook to do during the debates on the Communications Act, convened a very wide-ranging meeting on religious broadcasting which will take place on 30 June this year. At that meeting we shall hear a very wide range of views on the issues on which the right reverend Prelate touched in his speech.

As I am not in a position to express opinions, all that I can really do in the time that is available to me is to say something about the way in which we are approaching the charter review. It is fortunate that the debate is taking place on the day on which Ofcom presented its findings and conclusions on stage one of its review of public service broadcasting. That was referred to by the noble Lords, Lord Thomson and Lord Puttnam, and, of course, by the noble Lord, Lord Currie. The great thing about the report, to which the noble Lord, Lord Currie, referred, is that the very wide-ranging research carried out by Ofcom showed continuing public support for the BBC and for a greater social purpose for the BBC. The report maintains the duality between the role of citizen and consumer. The Ofcom report states that even if, with wider choice, the role of the BBC in maintaining the interest of the consumer fades away, the role of the BBC in protecting the role of the citizen will continue and, indeed, be strengthened. That makes it all the more perverse that Ofcom still insists on using the portmanteau word "consumer". I acquit it of any charge of abandoning the citizen, but it is going about it in a very strange way.

However, having said that, our own consultation activity, which has been going since December, is proceeding very well. In early December we distributed more than 400,000 leaflets on request to public libraries, local government offices and anyone who would take them. We distributed 200,000 leaflets to Take a Break on 4 March. As I said, we have held public meetings and consultation visits throughout the United Kingdom to allow people to speak directly to Ministers about the issues. We have also given children and young people an opportunity to have their say. There have been around 5,500 responses to the initial consultation, including a large number from interested organisations and the broadcasting industry. We have had 26,000 visitors to the charter review website. All of this work is hugely complicated to analyse but we are now engaged in the analysis process although clearly it is too early for me to give any indication of the thrust of that.

Following that analysis we shall carry out our own research and, around the turn of the year, we shall publish a Green Paper in which we shall reach preliminary conclusions and in which we shall isolate some of the significant and viable options which might arise from the consultation process. At the same time we have ensured the independence of the process by putting in place a strong adviser to underscore our commitment to objectivity. As is well known, that adviser is the noble Lord, Lord Burns, who will chair a small independent panel to help to marshal the arguments and set out the options for consideration.

All of this was started early to ensure that we have adequate time to debate the issues and develop what will replace the current charter on 1 January 2007. Following our Green Paper to be produced at the turn of the year, a White Paper will follow in 2005. They will take into account the results of major consultation exercises, the first of which closed at the end of March, as I said. At that stage, we must clearly think about parliamentary scrutiny. I do not think that any agreement has been reached with the authorities or usual channels in either House about what the parliamentary scrutiny will be, but I give an undertaking that it will be no less thorough than the scrutiny that took place on the previous occasion.

I have done most of what I am able to do. There are a few factual points that noble Lords raised to which I can respond. The noble Lord, Lord Dubs, referred to digital coverage and the fact that about 25 per cent of the population is not able to receive digital terrestrial television. I hope that he realises that the significance of that is that we have said that we shall not undertake the switch-off of analogue television until the act of switch-off makes available, from analogue spectrum, the same coverage of digital television as there has been. We cannot achieve 100 per cent before switching over, but we can achieve the same proportion when we carry out the switchover itself.

The noble Baroness, Lady Buscombe, had some very valuable things to say about the coverage of European issues in broadcasting and by the BBC. In particular, she spoke on the need for impartiality in considering those issues. Now that we shall have a referendum, that is even more important. The existing charter and agreement ensure that the governors exercise responsibility for impartiality, and that the BBC treats, controversial subjects with due accuracy and impartiality, both in the Corporation's news services and in the more general field of programmes dealing with matters of public policy or of political or industrial controversy". The noble Lord, Lord Thomson, queried the timing of the charter review process and suggested that the charter should be reduced to five years.

Lord Thomson of Monifieth

My Lords, I said as strongly as I could that I hoped that the rumours about five years were totally untrue and that the Government remained firmly committed to 10 years.

Lord McIntosh of Haringey

My Lords, I am delighted to hear that; I misunderstood the noble Lord. The noble Baroness, Lady Young, made the same point. He is quite right, of course. The significance of that was that the Government decided very early on that we would set a formula for the licence fee until 2006, to ensure that there was no political pressure possible through it during the run-up period to the renewal.

Earl Ferrers—the noble Earl, Lord Ferrers; he likes to be addressed properly—made a point about responsibility for taste and decency on television. He was answered largely by the noble Lord, Lord Dubs. However, under the terms of the Communications Act and associated amendments to the BBC agreement, the core responsibilities of the BBC governors are retained. The Act introduced a number of new external requirements to be monitored and enforced by Ofcom. They include most programme code standards, including taste and decency. There has been no weakening of the regulatory process, although the noble Earl is of course entitled to his view about the result in terms of what appears on screen.

Earl Ferrers

My Lords, does the Minister not agree that, although the noble Lord, Lord Dubs, said that the matter was monitored, the horse has already left the shed? It is only monitored because something bad has been said.

Lord McIntosh of Haringey

My Lords, I understand the noble Earl's point and that there are those who feel that, whatever the rules, there are occasions—some people think that there are large numbers of occasions—when they are not adhered to.

The noble Baroness, Lady Young, made a point about independent production quotas. It is certainly true that, in 2002–03, only 21 per cent of qualifying programmes on BBC1 and BBC2 were independent productions. I do not excuse that in any way. The BBC expects to exceed the quota for the present year, 2003–04, and the governors will monitor the position very closely. I entirely agree that the 25 per cent should be a floor, not a ceiling, and that we should look to a larger role for independent production companies and for an improvement in the relationship between the BBC and the independent productions that it commissions.

I have made a boring speech; I had to make a boring speech. I make boring speeches on the subject all the time, because I cannot do anything else. I repeat the mantra: the result of the process will be a BBC that is strong and independent of government.

7.16 p.m.

Lord Barnett

My Lords, I thank all noble Lords, and the one noble Earl, who participated. The debate has been particularly good, and was enhanced by the maiden speech of the right reverend Prelate the Bishop of Norwich. I am sure that we all want to hear him again on many occasions. He is obviously attuned to the House at a very early stage. He was amusing and had excellent points to make, and we were delighted to hear him.

I obviously cannot refer to many of the speeches. However, the noble Earl referred to me and everyone else who participated as television tycoons. I have never been described in that way before. I do not know whether to thank him, but I have certainly never considered myself a tycoon in any sense of the word. It is very interesting; he spoke of the "F" word being used 1,429 times—I think that he counted it, personally—over a couple of days. I hope that it will not happen again, and that he will be able to stop counting very soon.

I have one comment to make on the excellent speech of my noble friend Lord Puttnam. He wanted to see the board of governors being able to challenge the executive. When the noble Lord, Lord Hussey, was the chairman and I was his deputy, I am happy to say that we always were able to challenge the executive and did. I hope that future boards of governors will continue to do the same.

My only other point—I do not have much more time—is for my noble friend Lord Dubs, who made an excellent point. Everyone who spoke in the debate wanted to see greater independence for the BBC. My noble friend spoke about the possibility of having an independent body along the lines of the Monetary Policy Committee of the Bank of England deciding the size of the licence fee, rather than the Government themselves. I have had a little to do with the Monetary Policy Committee on the Select Committee on Economic Affairs, and I appreciate the point. As my noble friend Lord McIntosh is in a listening mode, rather than having an opinion at this stage, I hope that he took note of that comment, which is well worth making.

Again, I thank everyone who has participated in what I consider to have been an excellent debate by a very distinguished band of speakers. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.