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House of Commons Hansard
15 September 2016
Volume 614

  • With permission, Mr Speaker, I should like to make a statement. Today I am laying before Parliament a draft of the royal charter for the continuance of the BBC, together with the accompanying draft framework agreement between the Government and the BBC. The latter sets out the detail behind the charter, including out how the BBC will operate in the new charter period.

    These drafts set out the policies contained in the White Paper, “A BBC for the future: a broadcaster of distinction”, which was published in May. This White Paper was the culmination of one of the largest public consultations ever. More than 190,000 members of the public, as well as industry stakeholders and experts, gave their views on how the Government could enable the BBC to continue to deliver world-class content and services over the next 11 years. The consultation served as a reminder that the BBC matters deeply to this country, as it does to people right across the world. Far from diminishing the BBC, our changes strengthen it.

    I am very grateful to my predecessor, my right hon. Friend the Member for Maldon (Mr Whittingdale), for all his brilliant work on the BBC. My Department has worked very closely with both the BBC and Ofcom, which has taken on the job of being the BBC’s first independent regulator, to develop and agree these draft documents. I am a huge fan of the BBC. At its best, it is peerless. Our aim is to ensure that a strong, distinctive, independent BBC will continue to thrive for years to come—and also to improve the BBC where we can. I extend my personal thanks to Tony Hall and Rona Fairhead, and their teams, for their commitment to making this work.

    The new charter and agreement will enable a number of improvements. They enhance the distinctiveness of BBC content, and the BBC’s mission and public purposes have been reformed to reflect this requirement. The governance and regulation of the BBC will also be reformed. The new BBC Board will be responsible for governing the BBC, and Ofcom will take on the regulation of the BBC. The charter and agreement sets out functions and obligations that the BBC and Ofcom must follow in order to deliver this. The charter explicitly recognises the need for the BBC to be independent, particularly in editorial matters, and the BBC will appoint a majority of the members of the new board, with strict rules to ensure all appointments are made fairly and openly. The charter also provides financial stability for the BBC by making it clear that the licence fee will remain the key source of funding for the BBC for the next charter period.

    Obligations for the BBC to consider both the negative and positive market impacts of its activities are set out in the charter. Ofcom must always keep these in mind when reviewing new and changed services. The BBC is obliged to work closely with others and to share its knowledge, research and expertise for wider public benefit. The Government want a BBC that is as open and transparent as possible. The charter sets out new obligations in this regard, including publishing the salaries of those employees and talent who earn more than £150,000.

    The BBC serves all nations and regions. It needs to be more reflective of the whole of the United Kingdom, and the new charter requires this through the mission and public purposes. This will be supported by specific board representation, including the appointment of nation members, which, for the first time, will be agreed with the Administrations of Northern Ireland and Wales, as well as Scotland, as is currently the case. Provision for the nations will be regulated by Ofcom through a new operating licence regime, which will include continuing the approach of production targets for making programmes outside London. One of the BBC’s many responsibilities is to bring people together, supporting and encouraging greater cohesion, not least among the nations of the United Kingdom.

    We have made considerable progress since the publication of the White Paper and resolved a number of important areas with the BBC, allowing us to go further in the key areas of transparency, fairness, and securing independence for the BBC. In addition to the principle of a mix of public and BBC-made appointments, all made in line with best practice, I can confirm that the charter sets out that the BBC will appoint nine board members, including five non-executive directors, and that an additional five will be public appointments. This means that the BBC will appoint the majority of members to its new board, which will ensure that the BBC Board is independent and that each nation of the UK will have a voice. This will strengthen the BBC’s independence, compared with when all the BBC trustees were appointed by the Government.

    The National Audit Office will become the BBC’s financial auditor. In addition, the charter will enhance the NAO’s role and access, and allow it to conduct value-for-money studies of the BBC’s commercial subsidiaries. Such money subsidises the licence fee, so the public has every right to expect value for money.

    There will also be greater transparency, with be a full, fair and open competition for the post of chair of the new BBC Board. This is in line with the Culture, Media and Sport Committee’s recommendation. It is a significant new post, and transparency and fairness in making the appointment is vital, not least so that the industry and the public have confidence in it. I am grateful to Rona Fairhead, who has decided not to be a candidate for this new post, for the work she has done as chair of the BBC Trust, and in particular for her help in reforming the governance of the BBC.

    The fundamental reforms set out in the draft charter will take time to implement, given the complexity of the changes, the need for a smooth transition and the importance of consulting on some elements of the new regulatory structure. There will be a short period of transition before the BBC Board and Ofcom take on their new governance and regulatory roles on 3 April next year. The BBC will continue to operate under current arrangements during the transitional period. Further details about the transition will be confirmed in the coming months, as we work closely with the BBC and Ofcom to ensure that all the elements of transition are managed as smoothly as possible, including the process by which the new BBC Board will be established.

    Members of both Houses will now have a chance to consider the proposals in detail. To aid them in that endeavour, I have today deposited a series of information sheets in the Libraries of both Houses. I have also sent the draft documents to the devolved Administrations so that the devolved legislatures can debate them over the coming weeks. My Culture, Media and Sport ministerial colleagues and I look forward to parliamentary debates on the draft charter and agreement in due course. Following those debates, the Government will present the charter to the Privy Council in order that the new charter is in place by the end of the year.

    The BBC is one of this country’s greatest achievements and greatest treasures. These reforms ensure that it will continue to be cherished at home and abroad for many years to come. I commend this statement to the House.

  • I thank the Secretary of State for prior sight of her statement this morning. As she rightly says, the BBC is one of Britain’s greatest achievements and greatest treasures. It is indeed the broadcaster against which other broadcasters across the world are judged, and the quality of its programmes is second to none. The BBC must be protected and sustained both in its independence and its funding. Does the Secretary of State accept that both of these are under some degree of threat?

    Will not the charter sustain a degree of Government pressure given that the BBC will have Government appointees on its new board? More significantly, does the Secretary of State accept that the introduction of mid-term reviews of the charter in the 10-year renewal cycle will put pressure on the BBC to look over its shoulder and seek to avoid upsetting the Government of the day, when it should be genuinely independent and free to comment without fear or favour on what Governments do and when Governments get things wrong? How will viewers and listeners be assured that the five-year health check will not put undue pressure on the BBC, or be interpreted as a de facto charter review? The fact that the new board has a number of Government appointees—including the chair and deputy chair with responsibility for editorial decision making—could weaken the BBC’s editorial independence. What guarantees will she give that undue Government pressure will not affect BBC independence?

    On funding, what answers does the Secretary of State have for Lord Patten—the former chairman of the BBC and Conservative Cabinet Minister—about whether the BBC’s financial security will be affected, now that the cost of TV licences for the over-75s has been foisted on it in what he described as a “heist”? The Opposition take the view that welfare benefits, such as free TV licences, should be decided on and paid for by Government, not squeezed out of the BBC’s staff and programming budgets, other licence fee payers and, as will probably happen, some of the pensioners too. What answer does she have to that fair and logical case?

    The Government have suggested that the BBC should have “distinctiveness”, in a departure from the Reithian view that the BBC should “inform, educate and entertain”. Channel 4 was created to bring distinctiveness to our viewing, but as a direct effect of the squeeze on BBC funding, great BBC entertainment programmes are being transferred to Channel 4. Is there not a risk that more of the BBC’s brilliant programmes will follow?

    Even more worryingly, the BBC’s funding might be further top-sliced in the future. Will the Secretary of State guarantee that that will not happen? Will she look again at Government policy, and its relationship with the BBC, and guarantee that the charter will not diminish the scope and effectiveness of the BBC? Does she accept that the changes being brought forward by the Government will damage the BBC, in respect of its crucial independence and, most significantly, its ability to put on the finest of programmes, because of the impact on its funding? The BBC should be able to continue to put on the finest programmes across the whole range of its broadcasting. What assurances will the Government give that when the regulation of the BBC is transferred to Ofcom, it will retain its editorial independence? Above all, what assurances can the Secretary of State give that the BBC will be able to continue making the programmes we all enjoy? Finally, will the draft charter be subject to the most rigorous parliamentary scrutiny by both Houses and the devolved Administrations?

  • I thank the hon. Gentleman for his comments. I agree that the BBC must be protected and sustained. The work we have done on this charter will ensure that the BBC can not just survive, but flourish in a new era. This is not the world where everybody sat down and watched the same programme at the same time; people are accessing TV programmes in entirely different ways, and we want to make sure that the charter gives the BBC the sustainable footing it needs.

    For the first time, we have made it an 11-year charter in order that it does not coincide with the electoral cycle and there cannot be seen to be political influence on the charter renewal. In addition, we want to make sure that this is the longest charter ever. Therefore, a mid-term review to ensure that the BBC is still delivering what licence fee payers, which we all are, want to see is a very important part of our proposals.[Official Report, 11 October 2016, Vol. 615, c. 3MC.]

    I must pick the hon. Gentleman up on his point about the deputy chair. There is no longer a deputy chair within the board’s structure. There are a chair and four nation members who will be Government appointments—public appointments. It is important that we have a member for each of the nations on the board and that they are full public appointments, and that the chair is an open and transparent public appointment. We are not appointing a deputy chair; it will be for the board to determine who the senior independent director should be.

    The hon. Gentleman spoke about ensuring that there is distinctiveness. The words on distinctiveness are taken from the White Paper, which was the result of the consultation to which we had 190,000 responses—the largest consultation of its kind. I accept his point about making sure that there is a difference between Channel 4 and the BBC, but the distinctiveness of the BBC is what makes it so great for licence fee payers and for us as a nation. It is the thing that makes the BBC something that we can sell across the world. I doubt that any of us who went abroad over the summer did not come into contact with some form of BBC content, programming or original idea that was being shown or talked about locally.

    The hon. Gentleman spoke about editorial independence. The charter sets out that there is editorial independence and ensures that the BBC is entirely independent. Although the public appointments will go through the full public appointments process, once they are board members, they will be BBC Board members who work towards ensuring that the BBC is the greatest it can be.

    Finally, on funding and the over-75s’ TV licences, the director-general, Tony Hall, said in July 2015:

    “The government’s decision here to put the cost of the over-75s on us has been more than matched by the deal coming back for the BBC.”

  • Order. As I mentioned to the House earlier, there is another statement to follow and then two debates to take place under the auspices of the Backbench Business Committee, to which the first is notably well subscribed, so there is a premium upon brevity. May I appeal to colleagues, even distinguished and cerebral Back-Bench Members, to avoid discursive commentary or lengthy preamble and instead just to get to a pithy inquiry, to which I know there will be a pithy reply from the Secretary of State?

  • Will my right hon. Friend the Secretary of State confirm that the draft charter is not, as some have said, either a damp squib or the brainchild of Rupert Murdoch? Does she agree that the charter makes significant changes—including the new governance structure, the new requirements for diversity, distinctiveness and impartiality, the opening up of the schedule to 100% competition, and full access to the National Audit Office—and that those changes will ensure that the BBC continues to be the best broadcaster in the world?

  • I have a suitably pithy response, Mr Speaker: yes, I agree with my right hon. Friend, to whom we owe a great debt for where we are with the charter today.

  • May I thank the Secretary of State for advance sight of the statement?

    Scottish National party Members are great champions of public service broadcasting and we welcome a number of the Secretary of State’s announcements, including the commitments to equality and diversity and to transparency and openness. That is something that we have not always seen at the BBC, not least with the appointment of Rona Fairhead. As we discovered during the Culture, Media and Sport Committee hearings, Ms Fairhead was reappointed after, apparently, a cosy private chat with the then Prime Minister. That is not how such significant appointments should be made, so the Secretary of State is entirely right to throw open the appointment to public competition.

    We also welcome the adoption of another of the Committee’s recommendations on talent pay. Does the Secretary of State agree that the BBC argument that this will be a charter to poach talent is, quite simply, nonsense? If an agent is worth his or her salt, they will know exactly how much their client and all their competition are paid. I know that from bitter experience. Perhaps the Secretary of State will agree that the danger for the BBC is that it will be forced to reveal the salaries of many of its more mediocre but overpaid employees, and that there may be some national teeth-gnashing as a result, when people discover exactly what goes on behind closed doors.

    We welcome the recognition of Gaelic, but will the Secretary of State go a little further and say whether she thinks it should have parity with Welsh? May I also address the Secretary of State’s rather strange statement that one of the BBC’s many responsibilities is to bring—

  • Order. The hon. Gentleman is out of his time, but I am sure he is finishing his sentence. It needs to be a very short sentence.

  • Thank you, Mr Speaker. Does the Secretary of State agree that the matter of a separate “Scottish Six” is entirely the responsibility of the BBC and its right to continue its pilots?

  • I detected significant personal feeling in the hon. Gentleman’s comments on pay—I will not comment further.

    The position of chair of the new BBC Board is an entirely new role; it is not a continuation of the role of the chair of the BBC Trust. I pay tribute to Rona Fairhead for the work she has done as chair of the BBC Trust, but this is a brand-new role and, as such, we took the decision that it needed to be open to a full recruitment process, to ensure that we get the right person for the job. I am grateful to Rona for the work she has done, including on the charter, and I accept that she has decided not to put herself forward for the role.

    On regional broadcasting, the hon. Gentleman will appreciate that BBC Alba is part of the BBC, whereas S4C is a separate, independent business. There may appear to be a difference in treatment, but that is to reflect the fact that BBC Alba is a wholly owned part of the BBC. I am sure the hon. Gentleman would agree that we have considerably beefed up the role of BBC Alba in the charter.

    Finally, on the point about the “Scottish Six”, let me be clear that the BBC is the nation’s broadcaster, so I expect the BBC to reflect the national mood and the national news that is important across the whole nation. The hon. Gentleman is right that it is for the BBC, which has operational independence in this matter, to determine how exactly it makes that happen.

  • I echo the Secretary of State’s praise for my right hon. Friend the Member for Maldon (Mr Whittingdale). I hope he will not take it amiss if I say that the “Maldon charter” has been considerably enhanced by the “Moorlands amendments”, particularly on transparency of pay and open competition for the BBC chairman. Will the Secretary of State confirm that diversity remains an important part of the charter and that she will work with the BBC to ensure that we see greater diversity—not just on the screen, but particularly behind it?

  • I thank my right hon. Friend for his comments and pay tribute to him for the role he carried out as, I think, the longest-serving Culture Minister we have ever seen. I agree with him on diversity and I can confirm that what he said is the case.

  • Given where we could have ended up, may I warmly welcome today’s statement, and particularly the fact that the Government have backed down on the composition of the board? Given that Rona Fairhead was appointed specifically, in effect, to abolish her own organisation—she has done so—and to oversee a smooth transfer to the new unitary board, has her treatment not been a little rough?

  • I do not accept that there has been a backdown about the board; it is about considering what is an appropriate, balanced board which is the most effective way of helping the BBC to deliver on its charter requirements. I do not agree about Ms Fairhead. The proposal is no reflection on her or her ability to perform the role; it is merely a brand-new role.

  • I welcome the Secretary of State’s decision to accept the Select Committee’s recommendation that there should be an open and fair process for the appointment of the chairman of the new BBC unitary board. When does she expect or hope that that appointment will be made and the new unitary board will assume its responsibilities?

  • As acting Chair of the Select Committee, my hon. Friend has done sterling work. The Select Committee’s report very much influenced the work we did on the charter over the summer. As I said in my statement, I expect the new board to be in place and all the regulators working by 3 April next year. I expect the new chair of the board to be appointed before that date.

  • Does the Secretary of State accept and acknowledge that many of us do not share the doe-eyed sentimentality often expressed about the BBC, especially when they have borne the brunt of its bias over several years? On the issue of transparency, why has the publication of expenses or salaries been limited of amounts over £150,000? Why can it not be brought into line with MPs’ expenses of £75,000 and include all other expenses, including travel and accommodation?

  • The hon. Gentleman has, I know, had long-term issues—that might be the best way of putting it—with the BBC and a view of bias, but I am sure he would agree that he enjoys many BBC programmes on radio and television. We should cherish and really want to protect that. When it is at its best, it is Britain at its best. The Rio Olympics was a prime example of when the whole of Britain came together. The proposals are in line with civil service obligations on pay transparency, but the first disclosures will across bigger bands than we have in the civil service.

  • If the BBC is so universally wonderful and popular as we have heard, why does it need the criminal law in place to coerce people to pay for it? Does my right hon. Friend agree with me that if the BBC wants to take public money, it should be transparent and that if it does not want to be transparent, it should not take public money?

  • My hon. Friend knows that we carried out the Perry review on decriminalisation, which found that there was a need for a criminal sanction under the system. This is one of the issues that will continue to be looked at. The BBC, of course, needs to be transparent to show that it is producing value for money for the licence payer.

  • I thank the Secretary of State for what she said about the importance of the BBC; any organisation that can turn Ed Balls into Fred Astaire is truly remarkable. Will she emphasise that this charter renewal does not undermine the flexibility of BBC Scotland’s news programming, and underline how important it is for audiences, not politicians, to choose programming?

  • I agree with the hon. Gentleman: it is for the BBC and the viewing public to make that determination. They will watch the programmes they want to watch, and the BBC can take editorial decisions around that. I am not sure that the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) is that keen now to be married to Fred Astaire.

  • Just for absolute clarity, may I ask the Secretary of State why there is no provision in the statement for Scotland’s very own six o’clock news?

  • That is a matter of editorial independence at the BBC, and it is for it to make that decision.

  • When appearing before the Education and Culture Committee of the Scottish Parliament, lead officials from the BBC eventually admitted after hard questioning from the Convener that ultimately decisions over commissioning would rest with London executives. Does the Secretary of State feel that the new charter will genuinely satisfy the desire of many in Scotland for greater autonomy on editorial and commissioning decisions lying where it should, with commissioners in Scotland?

  • The hon. Lady will have seen a letter from the director-general setting out his view of how the BBC ensures that that happens, and as an independent BBC, it is for the BBC to make sure that happens.

  • I welcome my right hon. Friend’s statement, in particular in relation to the involvement of the National Audit Office and the value-for-money assessments it will make. Does my right hon. Friend agree that that should deliver confidence, transparency, accountability and financial rigour?

  • The BBC is increasingly unable to afford sports events and programmes such as “The Great British Bake-Off”, which has now gone to Channel 4, and we are now seeing pressures on BBC services and a merger of news channels. Is it not the case that this Government keep top-slicing and undermining? We see the BBC asked to fund the World Service, local TV, and now the £600 million for over-75s’ TV licences. This Government do not care about the BBC.

  • I totally disagree, and I will quote again the director-general:

    “Far from being a cut, the way this financial settlement is shaped gives us, effectively, flat licence fee income across the first five years of the next charter.”

  • Will the Secretary of State ensure that no decisions are taken about the monitoring service at Caversham Park before important Select Committee inquiries are held next month? And can I just say that I do not share this unhealthy obsession with what other people earn? I was always told that it was rude to ask.

  • I will write to my right hon. Friend on that matter.

  • The Secretary of State talked a lot in her statement about the nations, but will she say how the charter will impact on regional news programmes and local radio such as BBC Humberside?

  • The decisions about news programming are editorial matters for the BBC and it has editorial independence as set out in the charter, but I strongly agree that we need strong regional programming across the whole of the UK, and that is what is clear in this charter.

  • Following the previous question, the Secretary of State will be aware that the English regions feel that their voice is not heard loudly enough. She refers specifically to Scotland, Wales and Northern Ireland; what board representation will there be from the English regions?

  • I can assure my hon. Friend that there will be an English board member—a public appointment —and I will do everything I can to make sure that that board member represents the regions of England.

  • In its latest annual report on BBC Wales output, Audience Council Wales said that the corporation needs to be more accountable to Welsh audiences. How will this be achieved following implementation of the charter and can the Secretary of State commit to a Wales member sitting permanently on the board of Ofcom now that it has assumed the role of external regulator?

  • I think the hon. Gentleman is confusing the new unitary board with Ofcom; they are separate bodies. Ofcom is the regulator; the new unitary board will have governance over the BBC.

  • The Secretary of State will be aware of the epic battle that took place during the last Parliament between the Public Accounts Committee—of which I was a member—and the BBC over the issue of redundancy payments for senior managers and their reappointment. Part of that involved the discrepancy between the legal resources of the Committee and those of the BBC. While I welcome the involvement of the National Audit Office, will the Secretary of State undertake to ensure that the Committee has the appropriate resources and powers to hold the BBC to account?

  • I can give my hon. Friend that assurance. I can also tell him that we are imposing a cap of £95,000 on redundancy payments.

  • Will the Secretary of State tell us what limit has been placed on the commissioning of programmes? A 100% commissioning rate could constitute privatisation by the back door.

  • Obviously the BBC needs to produce original content, but the fact that it does so by commissioning through independent production companies means that we have a thriving independent production sector which can then sell to the rest of the world. I encourage the BBC to do that, to ensure that we have those creative clusters. An amazing amount of activity and a number of new businesses have resulted from the BBC’s presence in Manchester, and its commissioning of programmes there.

  • Does the Secretary of State share my hope, and that expressed by Clare Balding, that the revealing of “talent” salaries will not reveal a gender pay gap?

  • That is a good point.

  • I am glad to see that some progress is being made on this issue, as about 850 BBC staff are based at Pacific Quay in my constituency. BBC Alba is currently struggling with a 73% repeat rate of programmes—including, over Christmas, my beloved children’s programme “Dotaman”, which was first broadcast in 1985. Will the Secretary of State grant MG Alba’s request for the BBC to increase its in-house programme contribution to BBC Alba to 10 hours a week, to match its contribution to S4C?

  • As I pointed out to the hon. Lady’s colleague the hon. Member for East Dunbartonshire (John Nicolson), BBC Alba is a wholly owned subsidiary of the BBC, whereas S4C is not. However, I agree with her that there is some fantastic broadcasting from Glasgow, and we do want to ensure that BBC Alba and others have the resources that they need.[Official Report, 11 October 2016, Vol. 615, c. 3MC.]

  • Both “The Village” and “The League of Gentlemen” were made in my constituency; I suppose I must be the MP for Royston Vasey. Such programmes bring great economic benefit to the areas that people visit to see where they are made. Does any part of the draft charter encourage the production of programmes outside London, so that all our constituencies can benefit from the BBC?

  • I must declare an interest: I have cousins who live in the village of Hadfield, otherwise known as Royston Vasey, and I am extremely keen to ensure that more people visit it, because they will go to my cousins’ village shop.

  • Can the Secretary of State confirm that her colleagues will publish, by local authority area, the cost of free television licences for the over-75s? I was told in a written parliamentary answer that the Scottish figure was £49 million, which is a lot of money. Will the Secretary of State respond to the criticism, made by many of us, that transferring that cost from the Government to the BBC will have a detrimental effect on high-quality programming?

  • I simply do not agree that there will be an impact on programming when the BBC’s guaranteed licence fee is rising in line with inflation over a five-year period.

  • I welcome the statement, but will the Secretary of State assure me that the excellent training and development and apprenticeship programmes run by the BBC will not be affected by the charter review?

  • I can give my hon. Friend that assurance.

  • Will the Secretary of State explain how these measures will deal with the widely accepted view—which may be shared by the Opposition spokesman, the hon. Member for Luton North (Kelvin Hopkins)—that the BBC is institutionally biased in favour of the European Union?

  • I am sure my hon. Friend will be pleased to know that Ofcom is the regulator under the new proposals, and that the National Audit Office will be assessing value for money for the taxpayer. All that will help to ensure that the issue of BBC bias is addressed.

  • Can my right hon. Friend confirm that under the charter the BBC will continue to invest properly in excellent local radio stations such as the one that is shared by her constituents and mine?

  • I do not know how my hon. Friend restrained himself from mentioning BBC Radio Stoke by name. I know that BBC Radio Stoke will not give me an easy time if I do not give that assurance.

  • Order. I do not think that the hon. Gentleman is seeking to intervene on this statement, although it is very likely that he will wish to intervene on the next.

  • Indeed. I am grateful.