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Bbc Charter

Volume 670: debated on Wednesday 2 March 2005

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3.8 p.m.

My Lords, with the leave of the House, I shall repeat a Statement made in another place by the Secretary of State for Culture, Media and Sport. The Statement is as follows:

"With permission, Mr Speaker, I would like to make a Statement about the future of the BBC.

"I will set out for the House the background to the current review of its Royal Charter, and our proposals set out in a Green Paper on its funding, governance and purposes. Published today, its title is A strong BBC, independent of government.

"Alongside the NHS, the BBC is one of the two great institutions of British national life. For over 80 years, it has sought to represent the highest standards of broadcasting. Its archives are a record of our national collective memory, from the coronation to the 1966 World Cup; from 'Dixon of Dock Green' to 'The Office'.

"Since the corporation's foundation, its Royal Charter has been reviewed by the Government roughly every 10 years, the last in 1996.

"Like its predecessors, this review has examined the corporation's scale and scope, its funding and governance. But this one has been unique in the level of public consultation, and in tackling perhaps the greatest challenge that the BBC has ever faced—the challenges in TV technology that will soon result in a wholly digital Britain.

"The BBC, like any public institution, needs to adapt if is to serve its audiences and keep pace with change. But its values, its global reach, its standards and its editorial independence must be preserved and strengthened; for that is what the British people want. The results of our public consultation and research are very clear.

"Overwhelmingly, the people like and trust the BBC. They understand and support the principles of public service broadcasting. They want the BBC to have scale. They want it to have the highest standards. They want it to be independent of government, Parliament or any commercial influence, and they want it to listen.

"But they also have significant criticisms: that the BBC is not responsive enough to their interests; that there has been a decline in quality—particularly in television, a tendency towards copycat programming at the expense of real innovation. Some people worry about the value for money of the licence fee, and particularly those who want, but cannot get, Freeview. Some of the BBC's commercial competitors believe that it has too much freedom to expand into new markets and stifle competition.

"We have to find a balance between meeting those concerns while ensuring that public service broadcasting leaves a footprint in every medium, a guarantee of quality, impartiality and innovation. That balance is harder to strike as the media change.

"In 1988, Britain had four television channels. Today, there are more than 400. In a few years, we will become a fully digital nation when the switchover from analogue to digital TV is made. As technology changes, so do the public's expectations. The challenges facing the BBC are enormous, as it plays a leading role in guiding the nation through this period of change. To do so it needs certainty about its future. So, after closely considering the Select Committee's alternative recommendations in this area, we have decided that the BBC's charter should be renewed for a further 10 years.

"I should like to turn now to the question of funding. The review looked at the different options for funding the BBC, and consulted the public. Perhaps surprisingly, the licence fee retains a high degree of public support and, although not perfect, we believe it remains the fairest way to fund the BBC. So it will continue throughout the next charter. In the coming months, we will decide on the right level for the fee to take after 2007. But beyond that, we have to take account of the rapid advance in technology and media consumption.

"So, during the life of the next charter, we will review the case for alternative funding models, particularly subscription, to make a contribution after 2016. We will review the risk to plurality in public service broadcasting, encompassing Channel 4's longer-term position; whether any public funding, including licence fee income, should be distributed more widely beyond the BBC in order to sustain plurality; and, if so, how any such distribution might take place.

"The old definition of the BBC's purposes as being to educate, inform and entertain still holds true. But by itself that is no longer enough in a world of ever increasing choice. So we have identified five new purposes for the BBC, which I set out in the Green Paper. In addition, the BBC will play a leading role in the process of switching Britain from analogue to digital television. It will be at the forefront of public information campaigns. It will help to manage SwitchCo, the organisation that will co-ordinate the technical process. It will help to establish and will fund schemes that help the most vulnerable consumers.

"Honourable Members will know from their own postbags that there is disquiet that, in some cases, households are expected to pay the fee when they cannot receive the full range of BBC services. That is why we think it is important that the BBC should help to drive the switchover process.

"I should like now to move to the issue of governance, where we will introduce radical change: a BBC-specific model that gives expression to the values on which the BBC is built.

"There is widespread consensus that the current model of governance is unsustainable. The governors' dual role as cheerleader and regulator does not sit easily in a public organisation of the size and complexity of the BBC. It lacks clarity and accountability. Licence fee payers need to know who is speaking up for them, and they deserve to know how important decisions are made and what influence they can exert. So the Green Paper sets out the new model which we intend to introduce—one that reflects the public value approach of the current BBC model, but which also draws significantly on Lord Burns's work.

"The BBC governors, with their dual role of managing the BBC but also holding it to account, will be replaced by two bodies, each with a clearly defined role.

"A BBC trust will be the custodian of the BBC's purpose, the licence fee and the public interest. An executive board will be accountable to the trust for the delivery of the BBC's services. The functions of the two bodies will be clearly defined, enabling the trust to judge the management's performance clearly and authoritatively.

"So the trust will have the high-level powers of approval over BBC budgets and strategy. It will have the tools to hold the BBC to account, issuing new service licences for each BBC service, and applying a public value test to proposals for new services.

"Michael Grade, whose current appointment as chairman of the BBC continues until 2008, will be the first chairman of the trust. The trust will represent the licence fee payer. To do that, it will need to listen to them and to consult them. Ways of doing this might include webcasting trust meetings, publishing audience research or electing local representative councils.

"Day-to-day management will be carried out by the executive board, which will be strengthened by a significant minority of non-executive members, and whose chair will be appointed by the trust "Over the past months, we have examined closely the changes Michael Grade has made. We have also studied the model proposed by Lord Burns for an external public service broadcasting commission.

"Our trust model builds in the strongest elements of the BBC's proposals. These include the establishment of a separate governance unit; the introduction of service licences; and the application of public value tests to new services and any major changes to existing ones.

"The BBC's proposals are a step in the right direction. But as they stand, they fall short of the accountability test because they do not resolve the confusion of the governors' dual role, and depend too much on behavioural rather than structural reform. So the BBC trust incorporates the key recommendation from Lord Burns that there should be clear separation of different responsibilities, to avoid confusion or capture.

"However, we believe that the Burns proposals for a unitary BBC board, with a government-appointed chair and an external PSB commission, also with a government-appointed chair, would fail to provide sufficient authority, clarity or distance from government. Our proposal makes sure that there is only one clear sovereign body and only one government-appointed chair. That will make the trust a powerful advocate for the public interest, able to safeguard the BBC's independence.

"But 'strong' does not mean over-mighty, and we will have to ensure that the BBC deals fairly with the wider market. The BBC's competitors have become increasingly concerned about the impact a publicly funded BBC can have on their businesses. Successive governments have allowed the BBC to be, in effect, a desirable market intervention. But we also need it to be constrained when its interests collide with the commercial sector and threaten the choice and quality of programming from other broadcasters. It should not play copycat, or chase ratings for ratings' sake.

"We do want the corporation to maximise its income from commercial services, but we also want to see a clear link between those services and its public purposes. To achieve this, the BBC will be subject to tough new internal and external processes. Ofcom will be given powers to conduct market impact assessments for proposed new services. Ofcom will retain full Competition Act powers in relation to the BBC, and in addition we will consider giving it a new power of approval over the BBC's internal code on fair trading.

"Another area of debate is the BBC's use of independent production, the balance between in-house and externally commissioned programmes. I want to ensure that the licence fee truly becomes venture capital for creativity, that it is used to put the finest talent on the air.

"Twenty-five per cent of its television productions already have to be commissioned from the independent sector, but I believe there is scope to go further. We will consider a range of options for reform in this area, including the BBC's proposals for a new 'window of creative competition' and increases in the existing quotas. Either way, I expect to see substantial progress in this area. The BBC has exclusive access to the licence fee. In return, I want it used to encourage independent productions as well as in-house.

"For radio, the BBC has adopted a voluntary 10 per cent quota. We will consult on whether that is sufficient.

"To reflect the whole of the United Kingdom and its different communities, the BBC also needs to make sure that a significant slice of production takes place outside London and it needs to provide a range of specific services for the UK's nations and regions. People should see the full diversity of the United Kingdom and their local community reflected in mainstream as well as in regional broadcasting.

"In reaching these conclusions, I am immensely grateful to Terry Burns and his panel, to Michael Grade and the BBC, to Ofcom, and most of all to the members of the public who in their thousands made their voices heard. We have endeavoured to take the best of what they have told us.

"In a changing world, values still endure. In a changing world, trust becomes ever more important in people's lives. So in our changing world this Government will secure a BBC that belongs to its licence payers and embodies the values the British people want; a BBC that promotes citizenship and builds our civil society; a BBC that promotes education and learning; a BBC dedicated to creativity and cultural excellence; a BBC that celebrates our nations, regions and communities; a BBC that brings the world to the United Kingdom and the United Kingdom to the world; a BBC which is strong, independent and securely at the heart of British broadcasting for 10 more years.

"I commend this Statement and the Green Paper to the House".

My Lords, that concludes the Statement.

3.21 p.m.

My Lords, I thank the Minister for repeating the Statement and I welcome at long last the publication of the Green Paper reviewing the BBC's Royal Charter, entitled A Strong BBC, Independent of Government. I should say straightaway that we support entirely both of those sentiments.

While we welcome the Green Paper and the Statement, our view is that the Minister has not gone far enough. We are concerned that in wanting a strong and vibrant BBC, and in accepting that the BBC faces enormous challenges in the coming years, more should have been done and could be done than is proposed in the Green Paper. In a sense, it touches the edges of what might or could be achieved in relation to charter renewal. I say this while stressing that we very much want to support what the Minister called "this great institution". We believe in a strong BBC, but the coming years will present a number of challenges, particularly in relation to technological change. The changes we have seen over the past 10 years have been fundamental to the whole broadcasting arena, and I believe that a similar breadth of change must be envisaged for the coming decade.

We congratulate the BBC on fighting off all proposals for substantial and immediate change—change that should recognise extremely rapid developments both in technology and in the number of new channels. I want also to stress my belief that charter renewal should be considered within the whole broadcasting arena, because in order to maintain a strong and vibrant BBC the corporation must endure strong and healthy competition.

The Minister said that the charter should be renewed for a period of 10 years. I know that the BBC would very much welcome that. However, it is strange that when the Government consider other organisations, particularly those in the private sector such as Camelot, a period of seven years has been seen as quite long enough to ensure certainty. We should bear that in mind.

Ten years is a long time given the pace of change, particularly in relation to digital switchover. The Minister accepts that more households are switching to digital reception every day and that people now choose to spend more of their money on what they want to see and hear. Indeed, with Ofcom proposing the start of digital switchover in 2008 and contemplating the programme being completed by 2012, it is somewhat surprising that the Government are content that the charter should be renewed for 10 years.

The process of digital switchover raises certain hugely important issues. Historically, commercial public service broadcasters have relied on their privileged access to viewers to maintain high advertising premiums and high levels of investment in public service content. Unlike the BBC, these channels do not enjoy direct public funding. They have to earn their money in the marketplace and, as the digital revolution spreads, so the privileges that have underpinned their historic investment in public service content have been eroded.

In fact, the strength of the BBC is very much dependent on the viability of these other broadcasters who inhabit the landscape. It is surprising, therefore, that the Government propose to delay a change in funding until what in effect will be 2017. In response to my honourable friend John Whittingdale in another place, the Secretary of State said that the Government would not even begin to consider new ways of funding the BBC until five or six years from now.

The income of £3 billion from the current licence fee is an enormous sum of money, and one that is increasing given that we expect 2 to 3 million homes to be built over the next decade. That factor should be taken into consideration. An income of over £3 billion, when compared with what all the other broadcasters achieve, is a very large amount. Does not the Minister accept that, given the importance of and need to sustain plurality of public service broadcasting provision, it would be much more courageous now to consider seriously how other public service broadcasting providers might be supported over the coming decade, alongside and together with the funding of the BBC? It is not right to consider charter renewal in isolation.

Does the Minister accept. in the light of all this, that it is now time to make it absolutely clear on the application form for a licence that the moneys are purely for the BBC? Let us be honest, most people assume that the fee they pay covers the television set and the provision of core services. Many do not appreciate that the licence fee is purely for the funding of the BBC.

I turn now to questions of standards and public service obligations. We believe that adherence to a strong public service obligation is crucial, and the BBC is under a duty to set high standards. A clear remit to set even higher standards for programming is needed and must be assured. In that case, does the Minister agree that such a clear remit for a stronger public service obligation is now required? It is not enough simply to object to copy-cat programming and ratings chasing.

In addition, why do the Government reject the powerful recommendation made by the Public Accounts Committee in another place that spending of the licence fee should be open to full scrutiny by the Audit Commission? If the Government are serious about improving accountability and transparency, surely that change should be made straightaway.

I listened with interest to the Minister's remarks on external regulation. He will be aware that the Conservative Party has stated on a number of occasions that proper sanctions can be enforced only by an external regulator entirely separate from the BBC. Given that, 1 welcome at long last the clear support expressed by the Government for something that we have been asking for over a long period; that is, a move to correct the system whereby the board of governors has been required to act both as the BBC's external regulator and as the top tier of management.

The governance of the BBC should be conducted by an independent board possessing the necessary levels of expertise arid experience. While we accept and are pleased that the chairman of the BBC, Michael Grade, has gone some way to distance himself from the present governors' role, will the Minister accept that that falls a long way short of having an external regulator for the BBC?

Will the Minister explain the difference between the proposed independent trustees and the new arrangements for the board of governors that Michael Grade is already putting in place? Surely those so-called independent trustees will still be a part of the BBC and will not be a truly independent body, as recommended by the noble Lord, Lord Burns, in his excellent report.

We believe that Ofcom should have the power to adjudicate on accuracy and impartiality, as it does for other broadcasters. For example, many in the commercial sector complain that there is no proper channel for dealing with abuses of the dominant position that the BBC currently enjoys, and that there continue to be a number of unfair competition practices. I should say that we know that the director-general is going some way towards correcting some of those practices.

I welcome the Minister's remarks on the use of independent production. I like the term and the idea that independent production should be supported by moneys from the licence fee and will be seen as venture capital for creativity. We support that and the new initiative for creative competition.

There is much to commend what the Minister has said. The report gives all of us much to consider in the coming months, and I hope that we will take time to consider carefully all that might be achieved in having a new charter that allows the BBC to retain its strong position as a great institution.

3.32 p.m.

My Lords, like the noble Baroness, Lady Buscombe, I welcome the commitment to a strong BBC that is independent of government. I suspect that tucked away in the Statement that has just been delivered, there are a few fundamental differences that will be teased out in the weeks and months ahead.

I hope that it will damage neither the Secretary of State nor the Minister too much to say that I found the Statement most encouraging. I shall certainly use the peroration on a BBC that promotes citizenship in my speeches in the future about the BBC that we are working for.

I congratulate the Minister, but will he acknowledge that this battle is only half won? There is some way to go before we have a BBC charter that is fit for purpose. Will he explain the timetable between the Green Paper and the charter? I welcome the appointment today of a House of Lords Select Committee under the chairmanship of the noble Lord, Lord Fowler, which has come on stream at just the right moment to do a good job of work.

Although I have confidence in the Secretary of State, and the Minister, there is a danger of a non-transparent Downing Street role being inserted into the process. What guarantees are there that the infamous Downing Street sofa that was so roundly condemned by the noble Lord, Lord Butler, in his report, will not be put to use in putting together the final part of the BBC's charter?

I do not share the enthusiasm for a wider role for Ofcom. I hope that the Minister will keep Ofcom to the task that Parliament gave it, which relates to competition. I have no objection to keeping the BBC up to standard on competition, but there have been constant signals from Ofcom that it yearns for a wider role and remit over the BBC. I want the Minister to confirm that the Government will resist that.

Like the noble Baroness, Lady Buscombe, I welcome the emphasis on roles for the independents and the regions. However, we need to keep a couple of points clearly in view. The statement that the public like and trust the BBC needs to be spelt out. I liked the Minister reminding us that successive governments have been committed to market intervention. We are not for a free market in broadcasting. For 80 years we have had the magnificent example of a public body that distorts the market massively in the public interest, and with public support. We want that distortion of the market in favour of quality and good public service broadcasting to continue.

We welcome the point about the exclusive use of the licence fee. I am suspicious of every one of the suggestions for top-slicing, bottom-slicing, or whatever. Unless we keep that unique role for the licence fee it will be undermined.

Although the points about governance are of interest, we should remember that for 80 years the governors of the BBC have not done a bad job in delivering to Britain high quality public service broadcasting. Let us be certain that what we are putting in its place will be fit for purpose, especially with the experience, which was covered by the report of the noble Lord, Lord Hutton, of systematic and sustained bullying of the BBC by Downing Street. We must ensure that the new system of governance is bully-proof.

I want to give the Minister time to respond to what I and colleagues have to say—we shall have to work out different time shares. He will have a chance to do so in the 20 minutes of general questioning.

Only in Britain could a body of such long-term success and world esteem be subject to such sustained attack. If, as the Green Paper indicates, the Government—if re-elected—will be robust in their defence of the BBC as an iron pole of the best of public service broadcasting and in setting standards for itself and others, they can rely on the full support of these Benches.

3.39 p.m.

My Lords, I am grateful to the noble Baroness, Lady Buscombe, and the noble Lord, Lord McNally, for their responses to the Statement and the Green Paper. I hope that the House accepts that I do not need to restrict myself to two minutes in responding to them. I crave the indulgence of your Lordships if I go beyond the 20 minutes that is supposed to be allowed.

I thank the noble Baroness, Lady Buscombe, particularly for her support for the BBC and for her agreement about the challenges of change.

I was surprised to hear her view that seven years was enough for a new charter. I thought that there had been general agreement in the consultation and research process that the BBC needed a long enough period, and 10 years seem to have worked to give it the stability and assurance it needs to operate effectively. I recognise that the world will be very different 10 years from 1 January 2007. That is why we are proposing two reviews—not threatening reviews to the BBC's 10-year period of stability, but reviews helping us to make decisions that have to be taken in the light of changes.

First, there will be a review of the future of the licence fee and whether it can be sustained by itself. That will be a review roughly half-way through the period of the licence fee, but it will take place only after the end of the charter period. Secondly, there will he a review of public service broadcasting, outwith the BBC itself. Here there are actions that may have to be taken before the end of the charter review period. It would be irresponsible not to carry out those reviews, but it would be irresponsible not to give the BBC 10 years of stability and security. People generally expect that. In any case, those two reviews will he preceded by an immediate review this year of the level of the licence fee. That is part of the consultation that will now take place.

The noble Baroness, Lady Buscombe, talked about funding being only for the BBC. As the Secretary of State said in the Statement, we have already indicated that the licence fee will take responsibility for some of the aspects of digital switchover. In other words, for the marketing and digital switchover, for its participation in SwitchCo—the vehicle for that—and for whatever is done to protect the needs of vulnerable people at the time of digital switchover. All of that is in addition to the existing functions of the BBC and it will come from the licence fee. Again, I think there will generally he public support for that.

The noble Baroness talked about a clearer remit for public service broadcasting in the BBC. She did not make any particular suggestions, but I have no doubt that she will participate in the subsequent consultation.

Finally, the noble Baroness talked about the view of the Public Accounts Committee. I did not think that the Public Accounts Committee was suggesting the Audit Commission would be involved. I thought it was the National Audit Office, but I may be wrong. In any case, we reached an agreement at the time of the passage of the Communications Bill, which I thought had satisfied both parties, that the National Audit Office does have a role, by agreement, in value-formoney reviews. That was enshrined in paragraph 2 of the subsequent agreement, with, I thought, all-party support. I think that we should see that through before we make any changes.

I was delighted to find the Conservative Party claiming credit for recognising that there is a conflict in governments. There is no finer form of flattery than claiming that we thought of it first. If that makes the noble Baroness, Lady Buscombe, happy, I am happy as well.

The noble Baroness asked what the difference is between the BBC trust, which we propose, and Michael Grade's proposals. First, there is no irreconcilable difference, because Michael Grade has indicated that what we are proposing is workable. We think that our proposals are significantly better than what was in Building Public Value last year. Our proposals are based on a formal separation of the two bodies, with total transparency of process between them. The changes that he proposed—not so much in the structure, but in the behaviour of governance—did not go far enough. The licence-fee payers will be clearer under our proposals that the trust represents their interests, holds ultimate power and is independent of BBC management. The functions and roles will be enshrined in the charter and agreement or their equivalents.

I think that upon examination the noble Baroness will find that these are significant improvements on both the models proposed to us. I am pleased to see that she is grateful for the director-general's action on accuracy and impartiality. Generally I am reassured by her support, both for the BBC and for the Government's proposals.

I am even more grateful to the noble Lord, Lord McNally, who is less equivocal in his support. He rightly says that there is some way to go. He asked me about the timetable. The consultation on the Green Paper will carry on until 31 May. Then we will have a White Paper before the end of this year. On that basis, there will be parliamentary debate on a draft charter and agreement. We have undertaken that that parliamentary debate will be no less thorough than it has been on any previous occasion.

I join the noble Lord in welcoming the establishment of a committee under the noble Lord, Lord Fowler. I am glad for all the Members who have taken part. I am sorry that the noble Lord, Lord Fowler, is not able to be in his seat on this occasion—

He heard the Statement, yes, my Lords. Anyway, that was not meant to be a recriminatory remark. I said that the noble Lord was,

"not able to be in his seat",
not that he was deliberately avoiding it.

I am puzzled by the reference of the noble Lord, Lord McNally, to a Downing Street role. He had a distinguished career in Downing Street himself. He is obviously determined never to be any part of any political party that has anything to do with Downing Street in the future. If he would care to give me details of bullying, I would be glad to respond.

The noble Lord is against a wider role for Ofcom. I can confirm that our proposed role for Ofcom is in accordance with the original basis on which Ofcom was established under the Communications Act. 2003. On his last point about the deliberate distortion of a free market in favour of the BBC and of quality and plurality, I can only agree with him.

3.48 p.m.

My Lords, perhaps I may declare an interest as a former vice-chairman of the BBC and welcome the Statement that my noble friend Lord McIntosh has repeated this afternoon. I welcome in particular the decision to renew the charter. Unlike the Opposition. I agree that 10 years seems to be—always has been and, I am sure, will be now—an appropriate time for that renewal.

Much of the Statement—and, indeed, of the Green Paper—covers complex areas, but now is not a time to debate them. I was glad to hear from my noble friend that we will have ample opportunity to do so. I look forward to participating in such debates.

Could my noble friend confirm that the Statement that the Minister made does not consider allocating any of the licence fee elsewhere, until after 2016? In other words, the alleged statement of the noble Lord, Lord Birt, and his reported views—if they are his views—have not been accepted by the Government. Perhaps he could confirm that for us.

Would my noble friend also accept what I think was a compliment—for which I am grateful—from the noble Lord, Lord McNally, on the former work of the governors at the BBC? I believe that worked well when it was properly done. Indeed, there were two separate boards: the management board and the board of governors. Under the proposals as I understand them, the management board is effectively to be called an executive board. I am happy to see the idea of including on that board some independent members from outside the BBC. It makes a lot of sense to have non-executive members on that executive board.

I welcome what my noble friend has said today. I look forward to having an early opportunity to debate the detail.

My Lords, I am grateful for that welcome. The noble Lord, Lord Barnett, asked two questions. He asked, first, about the licence fee and whether I could give an assurance that it would not be used for other than the purposes of the BBC during the 10 years of the charter period. I cannot give that assurance. I thought I had made it clear that I was not giving such an assurance. I said in the Statement and repeated in response to noble Lords on the Opposition Front Benches that we expect the licence fee to make a contribution to the cost of digital switchover. That includes the marketing costs and what I call targeted assistance, and it includes participation in the costs of SwitchCo, the governing body.

I hope that I also made it clear that the review of the future funding of public service broadcasting which will take place towards the middle of the charter review period will look at the case for plurality, at Channel 4's longer-term position, and at whether any public funding including licence fee income should be distributed more widely beyond the BBC in order to sustain plurality and competition in public service broadcasting. I did not give any assurance that such a change would not take place before the end of the charter review period. I adhere to that position.

The noble Lord's second question was whether we had agreed with the noble Lord, Lord Birt. I know what the noble Lord, Lord Birt, said only from the newspapers. I have no indication that we agree or disagree with anything in particular that he is reported to have said.

My Lords, I welcome the Statement, particularly what was said about the trust model, which seems a sensible way forward, and about competition. However, in the course of her fairly long response, my noble friend Lady Buscombe made a particularly important point when she asked how we are to maintain the plurality of public service broadcasting. It was a little surprising that, in the Statement, when the Minister referred to measures to support the switch to digital, no reference was made to what I understand will be an important contribution by the BBC; that is, the provision of set-top boxes and satellites so that areas that cannot receive direct transmission will not be dependent on Sky and the existing satellite regime. That is an extremely important development, particularly in areas such as Wales where large parts are unable to receive direct transmission.

The Minister may have started to address my noble friend's concern in his last response on public service broadcasting and the licence fee. Unless there is some allocation of resources from the licence fee to the independent sector it is hard to see how that sector will maintain its position. I therefore hope that the Minister will be able to give some assurance that the review will take place sooner rather than later, and that we will not have to wait until the tail-end of the 10 years before we find ourselves with no competition to the BBC in public service broadcasting.

My Lords, on the noble Lord's first point, I do not think that I said anything about the provision of set-top boxes or aerials. If I did, I did not mean to. I have given no undertaking that anyone will give assistance in the provision of set-top boxes and aerials.

On the noble Lord's second point, I take it that he is agreeing with my response to the noble Lord, Lord Barnett. In other words, yes, we will carry out a review as the change-over of technology proceeds. What we have said is that we will start that review before the completion of the digital switch-over process—which for everywhere except the Channel Islands will be 2011. I made it clear that the outcome of the review could well involve changes in the use of the licence fee before the end of the 10-year charter period.

My Lords, does my noble friend the Minister accept that, from the point of view of public service broadcasting, the licence fee is by far the best means of financing that activity? His announcement that it will stay for the full charter period is, therefore, extremely welcome.

However, does my noble friend also accept that, from a taxation point of view, it is a rather poor tax? It is a poll tax that bears very heavily on the poor. Therefore, when the Government consider what the level of increases in the licence fee should be, will he ensure that the most rigorous inquiries are made into the efficiency with which the BBC uses that money so that any increases can be kept as low as possible?

Yes, my Lords, I can give that assurance. I am grateful to the noble Lord, Lord Lipsey, for what he said about the necessity for a 10-year period. He is entirely right. It is important that the licence fee should achieve value for money for licence fee payers. We are pleased that the BBC is already undertaking a review of its activities to ensure that value for money is achieved. That will continue to be our concern in the future.

My Lords, I also welcome the Green Paper and what noble Lords on all sides of the House have said about the BBC being a great institution in British life. The BBC is quite correctly being told to ditch its obsession with TV ratings and focus on high-quality public service programming. Can the Minister assure the House that the Government will not subsequently listen to those who attack the BBC's right to the licence fee because it is no longer aggressively fighting for ratings, a consequence of which is that its viewing figures will fall?

My Lords, that is a very good point, but I rather think that this is a debate that will never end. There is always a conflict for the BBC between the need for high-quality and varied output and ratings. From time to time, the BBC regards it as a threat if it finds itself with falling ratings. It would find it difficult to maintain the requirement for the licence fee if, ultimately, taking it to the extreme, very few people were to watch the BBC. Fortunately that is not the case. Fortunately, the BBC has been able to combine a very reasonable preservation of ratings, even in a multichannel environment, with high quality.

The important principle to which we have to look is that public service broadcasting is not simply market failure; it is good programmes of all kinds, whether they are light entertainment or high drama. They just have to be the best, whatever they are.

My Lords, I remind the Minister that, over the years, the BBC board of governors has included the chairmen of the Broadcasting Councils for Wales, Scotland and Northern Ireland. Can the Minister assure me that the trust will also have representatives from the Northern Ireland, Welsh and Scottish areas?

My Lords, that is a detail of the trust which will be a matter for consultation in the coming months. Of course we accept, and would insist, that there will have to be people on the trust who are capable of reflecting the needs of the nations and regions of this country. How that is spelt out in the membership of the trust or in the provision of, for example, advisory committees is a matter on which we are seeking views and on which we will respond in due course.

My Lords, I, too, welcome the Statement. Following the previous question about reflecting the UK's nations, regions and communities, I welcome the statement that people should see the full diversity of the UK and their local communities reflected in mainstream as well as regional programming and that a significant slice of programme production should take place outside London.

The real problem here is that, at present, although 17 per cent of the licence payers in the United Kingdom live outside England, only about 2 per cent of the programmes seen by the United Kingdom on its network television come from Northern Ireland, Wales or Scotland. It is hard to maintain that what we are watching is the "British" Broadcasting Corporation. How would the Minister propose to take this proportion—which I guess to be less than 2 per cent—up closer to the 17 per cent represented by population and by licence revenue? That is a considerable challenge for the BBC, which I hope the Minister will encourage the corporation to address.

My Lords, I am well aware of the issue raised by the noble Lord, Lord Macdonald of Tradeston. Last year, in the course of the public consultation on the charter review, I visited Belfast, Cardiff, Glasgow and Edinburgh. I heard that view being widely expressed, particularly by the broadcasters themselves—among both the commercial broadcasters and BBC Wales, BBC Scotland and BBC Northern Ireland—who produce marvellous stuff, but could not get that networked. I have much sympathy with that view. In part, this is a matter of ensuring that the quality is good enough to be networked and, therefore, to meet the requirements of the noble Lord. It would certainly be legitimate for the BBC trust to take a view on this matter and to say to the Executive that something more has to be done.

My Lords, I, too, welcome the Statement and the fact that the Government are proposing a strong and independent BBC. At the risk of repetition, could the Minister reassure the House that when the wider place of public service broadcasting is debated, it will not just be the BBC's public service broadcasting which is considered? For instance, 33 per cent of ITV's output at present is public service broadcasting. That is currently—not seven or 10 years ahead—under strain and, to some extent, under threat. Yet that is a massive part of public service broadcasting in this country.

My Lords, I entirely agree with the noble Lord, Lord Bragg. That is exactly why I have talked about "plurality" on numerous occasions in the last three-quarters of an hour. To me, public service broadcasting is not providing the service that the people of this country require unless it comes from a variety of sources. That clearly means not just the BBC, but ITV, Channel 4, Channel Five, and so on. Indeed, there are elements of public service broadcasting in Sky—and in other channels—which are not regulated in the same way.

That is exactly why we propose to hold a review of public service broadcasting in the course of the charter period, and why we still take very seriously the Ofcom public service broadcasting review—the third phase of which was published last month. These matters are still under consideration in the latter phases of the present charter review.

My Lords, is it not clear that the standards and position of the BBC are pre-eminent in the whole world? It is the epitome of public service broadcasting; it sets the standards for other broadcasters, as we see regularly whenever we watch television or listen to the radio. Is it not also clear that the 75 per cent satisfaction rate mentioned in the Green Paper is very high, bearing in mind the amount of attention that listeners and viewers give to the works of the BBC? Therefore, must not the role of Ofcom be a limited one, because there is no reason for someone with outside interest to interfere excessively with the work of the BBC?

My Lords, I think the Statement fairly sets out the degree of public support for the BBC, which confirms what was said by the noble Lord, Lord Sheldon. The Statement also sets out areas of dissatisfaction with the BBC. I am sure that the noble Lord will recognise that there are areas where people are dissatisfied, and have some justification for being so. As for the role of Ofcom, I made clear that we are not proposing to extend that beyond what is allowed for within the Communications Act.