That this House takes note of the report of the Communications Committee on Public Service Broadcasting: Short-term Crisis, Long-term Future? (2nd Report, HL Paper 61).

My Lords, first, I thank my committee for its exceptional, hard work on the report and, indeed, for its work on all the other inquiries that we have conducted. Secondly, I acknowledge receipt of the Government’s response delivered this lunchtime, which shows Whitehall catching up with the transport concept of “just in time delivery”. It responds, in several respects, very constructively to the points that the committee made. It is an extremely well written response, which I put down entirely to the new broadcasting Minister, the noble Lord, Lord Carter.

Perhaps the first question is, “What exactly is public service broadcasting?”. We could so easily spend the next two hours debating its scope and how it is expressed. For the purposes of the debate, however, I suggest that the working definition we give at paragraph 13 of the report—

“an approach that focuses on the provision of core elements including national and regional news, current affairs programmes, the arts, children’s programming, programmes dealing with religion and other beliefs and UK content”—

roughly describes the area that we are in.

In the provision of these kinds of programmes, there is no doubt that the BBC is, and has been for three-quarters of a century, the pre-eminent provider. It is something of a national pastime to hurl bricks at the BBC. Sometimes they are justified. For example, personally, I am on the side of the Public Accounts Committee, which was reported this morning to have said that the BBC should give information about the salaries and fees that are paid to its very expensive presenters. It should make that a term of the contracts that it provides.

However, it should also be recognised how important a national asset the BBC is. One of the lessons that the Communications Committee has learnt in its short career is just how valued the BBC is at home and how much admired it is overseas. No other broadcaster is able to provide the promenade concerts or range of drama, for example, that are provided on Radio 4 and, indeed, on Radio 3. No other media organisation in this country is able to provide the range of home and overseas news that is broadcast by the BBC.

I am not one of those who believe that the future somehow belongs to citizen journalists. By their very nature they are part-time and issue-driven. They undoubtedly have a part to play, but the real need in an increasingly complex world is for professional journalists with the ability to dig beyond the press releases. Here, again, the BBC sets a standard of professionalism and objectivity that is difficult to match.

Having said that, it is always important to remember that the BBC is not the only public service broadcaster in this country. In the committee’s view, it would be entirely unsatisfactory if it was ever to become so in Britain. The Government’s response also makes that point clear. ITV, Channel 4 and Five make important contributions. With regional news, for example, ITV attracts four to five million viewers every evening and the research shows that audiences value the choice that this gives them.

Of course, however, as the committee points out, the commercial public service broadcasters currently share a common feature: they are all having to deal with the severest financial weather to hit broadcasters for over half a century. The transfer of analogue to digital has deprived them of the implied but very real subsidy that was being provided. The internet provides increasing competition for advertising revenue, and the world recession has meant company after company cutting back on spending. The impact is severe and undoubted.

My speech will concentrate on news provision, not least because, earlier in the day, the noble Lord, Lord Bragg, dealt with many of the issues surrounding the arts. We face the prospect that, unless action is taken, much broadcast news will simply disappear. ITV has already made it entirely clear that, under present arrangements, its regional news programmes—much valued but expensive to produce—will go. Equally, the much admired “Channel 4 News” programme has always relied on cross-subsidy from Channel 4 itself. In the present cold economic climate, the subsidy cannot continue indefinitely.

So the questions are those of what could be done and, of course, whether anything should be done. One argument is that it should all be left to the market. We rejected that argument, partly because some of the alternative programmes—good as they might be—could not be accessed free by the public but depend on subscription, but crucially because, if you take the area of news, going the market way would end up with a virtual BBC monopoly, which I think would be totally undesirable in a democracy.

A range of solutions were examined by the committee. There was a proposal to merge Channel 4 and BBC Worldwide—corporate engineering, as one witness described it—leading, as the Minister memorably put it, to PSB2. The government response indicates that this is still on the table for consideration. Such a merger would undoubtedly be to the benefit of Channel 4, but the evidence we heard suggested that it was opposed by the BBC. Perhaps that is not the best basis for a merger, but others may have things to say on that point. There was another proposal to put together Channel 4 and Five. This was enthusiastically supported and pursued by Five and just as enthusiastically rejected by Channel 4.

Having looked at all those options and others, the committee proposed that the best way forward would be a system of contestable funding. I think that was first advanced by the noble Lord, Lord Burns, not only in his evidence to us but previously. The noble Lord has the great advantage of previously having been an adviser on broadcasting to the present Government.

There is a danger in today’s media world of being buried in jargon, so I shall explain in practical terms what “contestable funding” actually means and how it could relate to regional news. The prospect with ITV regional news is that unless something is done it will disappear. We will be back to the 1950s: the BBC will be the monopoly provider. In fact, it would be appreciably worse than the 1950s. In those days, regional newspapers had large readerships. There were flourishing morning newspapers and very strong evening newspapers. In those circumstances no one would talk of a BBC monopoly. But today regional newspapers face as serious a crisis—perhaps an even greater crisis—than the broadcasters. Some newspapers have already closed and more closures are threatened, just as in the United States. Evening newspapers in the big cities face particular challenges. I here declare a past interest as a former chairman of the Yorkshire Post Group, based in Leeds, and of the Birmingham Evening Mail and Post Group, based in the West Midlands.

I shall try to explain why contestable funding provides a way forward. ITV would continue to provide the slots—if you like—for regional news programmes on channel three, but would neither provide the news nor bear the cost of producing it. Public funding would be offered to companies that could provide that news, but that process would be open to competition. Regional newspapers would be allowed to take part in those consortiums competing for contracts, meaning that it would be necessary to change the regulation here, and so, too, would an organisation such as ITN. However, I would welcome confirmation from the Minister that the case for relaxing regulation by allowing newspapers to take part in those consortiums would receive favourable treatment from the Government.

The net result of all that is that in the end you could have news provided with the television skill of ITN and the local knowledge of the regional press. We should remember that much of today’s regional television news is a follow-up to the newspaper stories that appear in the evening press. That plan is very close to the Ofcom proposal of independently funded news consortiums. As Ofcom points out, there is a choice between retaining the current ITV regions or going below those regions.

We should not believe that the present regional boundaries necessarily represent local interest. When I was Member of Parliament for Nottingham South, there was little interest there in what was happening in Birmingham. When I became Member of Parliament for Sutton Coldfield in Birmingham, 40 miles away, there was little interest in what was happening in Nottingham, but they were both covered by the same regional company. Of course, I add that what I propose about the regions of England also applies to the nations of Scotland and Wales, and to Channel 4’s evening news programme, which is already contracted out.

The big question then becomes how you support such a system—where does the money come from? The committee rejected more taxpayer support but made a number of other proposals. At that point in their response, the Government became remarkably coy and basically said, “Wait for the final report”. I have the utmost confidence that that is exactly what the Minister will say tonight, but let me set out some of the ways in which money can most certainly be raised.

First, there is the obvious potential in increased partnership between the BBC and other broadcasters. Whether it be BBC Worldwide co-operating with Channel 4 or studio space being made available at a regional level, the potential is great, although I accept that it will take time to deliver and develop. It will also require a commitment by the BBC to partnership that has not always been evident in the past. Secondly, the digital switchover scheme—financed by agreement by the BBC—is underspent. There is no reason why that money should not be used also and, even more so, why that amount should not continue to be used to provide secure future finance. Thirdly, although we are moving to digital from analogue, there is still a value in analogue. It is not unreasonable to say that as analogue provided the undoubted subsidy for public service broadcasting in the commercial sector, that sector might also benefit from the sale of analogue spectrum.

I do not run away from the prospect that in the final event those measures may not be sufficient or, more likely, will not be able to provide the resources quickly enough. If that is the case, there would be no other option but to use the money—or a little of it—from the licence fee. We might remember that, between 1927 and 1961, a portion of the licence fee was devoted to general public funds. I obviously recognise that that would not be welcomed by the BBC and agree with it that the licence fee should not be treated as some kind of milch cow available for the Government to finance any proposals that they happen to have in mind. Personally, I think it is questionable whether the licence fee can be diverted for providing broadband, for example, but that is doubtless a debate that we may come to. There is a much stronger case for using some small part of the licence fee for providing broadcasting; after all, that is what the public believe that they are paying for. The public would not want a situation where the BBC was the only television news provider. It would put far too much power in the corporation’s hands. Frankly, I do not think that the corporation would welcome it either.

This proposal is not an attack on the independence of the BBC. It would be ludicrous to characterise it in that way; it is to ensure proper competition and proper choice for the public. It also recognises that, in the middle of the worst recession since the 1930s, the BBC has a unique advantage of a secure income of over £3.5 billion a year. The BBC should not be defensive on this; it should not seek to defend its budget to the last pound. It is in a uniquely privileged position and should take a leadership role to help all public service broadcasting, particularly the news, through this challenging and difficult time. I take some comfort from the Government’s response, which says that they agree with the committee that,

“responding to current challenges requires a greater role for the BBC … using its talent, facilities, resources”.

We will see exactly what that means in practice.

I also believe that what I am saying is what the public would want. In the Government’s response we come to the department’s familiar Stalinist tradition. I remain of the view that it is a great pity that our elected Parliament does not have a greater say in some of these affairs.

I emphasise that I am not seeking to intervene in the day-to-day running of the BBC or challenging its independent reporting. That is a lazy argument of last resort used by those who simply want to defend the status quo. But the public’s view is crucial in deciding exactly the case that I have been arguing: whether some part of the licence fee should be used for other purposes, such as helping to support public service broadcasting in the commercial sector. That is where Parliament has a proper role to play.

Those who oppose that might consider what happens at the moment. The Minister will certainly remember that the BBC charter and what flows from it are not the subject of legislation or any serious decision in Parliament; it is a straightforward deal between the Government and the BBC in which Parliament has no meaningful role. In this age of much greater transparency and promised reform, I do not believe that the present system deserves to last.

Even more, what I and the committee want is a range of public service broadcasting in this country with the BBC remaining in the lead, but with other broadcasters being enabled to make their contribution. That is the aim and the goal and it is the challenge, over the next years, that we must meet. I beg to move.

My Lords, as a member of your Lordships’ Select Committee on Communications, I pay tribute to our chairman, the noble Lord, Lord Fowler, for initiating our brief but very timely inquiry, for his skill in editing our deliberations in such a cogent form and for that excellent review of the issues that we have heard today. I declare my interests as an adviser to Macquarie Capital, whose funds invest in and manage Arqiva and Red Bee, which are companies supplying transmission and other services to broadcasters.

We await the publication of the Digital Britain White Paper this month with great interest, but we do so in the knowledge that some of its proposals are unlikely to be implemented until after the next general election. Therefore, I trust that those drafting party manifesto policies will note our concerns and the options explored in our committee report and in this debate today.

The good news today for public service broadcasting is that the policies of the past decade have protected and expanded the BBC. For that, the Government should be applauded. Licence fee income is now about £3.5 billion a year and BBC Worldwide turns over about £1 billion more. The licence fee money, as the noble Lord, Lord Fowler, said, is also being top-sliced, as they say, to help to fund the transition of households from analogue to digital broadcasting.

Looking forward for cash to sustain other parts of public service broadcasting after digital switchover is completed in 2012, the option to keep top-slicing the huge licence fee total will be almost irresistible for any cash-strapped Government, I predict. Today’s switchover subsidy may well become tomorrow’s contestable funding, in Ofcom’s phrase—money that could be bid for to fund good works such as regional news or children’s programming. Our report calls for the introduction of contestable funding to support public service broadcasting outside the BBC.

Our report also suggests that a partnership between Channel 4 and BBC Worldwide should be pursued. A joint venture might generate profits of up to £200 million a year—a win-win deal, one hopes—but an important consideration in structuring such a partnership must be to ensure that BBC Worldwide is not distracted by internal politics or fettered in its international ambition. In its highly competitive global marketplace, up against media giants many times its size, BBC Worldwide is Britain’s last best hope of producing a national champion. For politicians, that should be a priority, and any partnership with Channel 4 should be fashioned to strengthen BBC Worldwide as our global player.

It is worth noting that after 26 years on air Channel 4’s audience share is still below 10 per cent. In terms of the quantity of popular quality output, particularly in drama, ITV is the most important public service broadcaster in the commercial sector as regards programme investment and employment. It is accepted that the regulatory constraints on ITV should now be relaxed so that it can continue as a viable public service broadcaster. I therefore welcome the prospect of ITV being released from any outdated undertakings that limit its ability to get a fair share of the television advertising markets.

If the economy begins to pick up later this year, ITV will hope that past experience of television advertising being the first to suffer in a recession but the first to recover will still hold true. However, we accept that there will be a continuing threat of a loss of advertising to the internet and that that will continue to undermine the traditional business model of commercial broadcasters in the future.

That said, one area where Channel 3 must continue to compete with the BBC, and ideally match its peak-time audiences, is in news and current affairs, both nationally and regionally. Despite the quality of UK news on Channel 4 and Sky, both have relatively small audiences. The BBC, like all big, long-lived institutions, has developed its own distinctive culture, which inevitably influences its news agenda and colours its reporting. With a medium still as influential as television, it is important that peak-time audiences can still watch their popular alternative news and current affairs on Channel 3. This is particularly important in the three nations of the United Kingdom peripheral to England, which, with 83 per cent of UK viewers, naturally dominates the London-based news services.

Since Scotland got its Parliament and Wales and Northern Ireland their Assemblies, the BBC has broadcast news services adapted to the new needs of the devolved nations. Therefore, it is to be hoped that the surviving independent broadcasters on Channel 3—namely, STV in Glasgow and UTV in Belfast—are encouraged to pursue their ambitions to supply distinctive national services in greater measure than is required of any English region. In this regard, we should keep in mind that in English regions it does not matter quite as much if you have restricted local coverage because almost all you see on the ubiquitous UK news broadcasts will reflect other aspects of your nation, England.

The Government and Ofcom are understandably sympathetic, as I am, to ITV plc’s plea that it be allowed to shed its remaining public service obligations. However, ITV plc also wants to renegotiate its contract to supply programmes on the Channel 3 network to STV and UTV. Clearly, this would not be a negotiation of equals, and a deal imposed by ITV could undermine the viability of both smaller companies. A condition of the merger that created ITV plc was the network arrangement imposed by Ofcom regarding the supply of network programmes to the two smaller companies. Can the Minister assure us that Ofcom is playing a constructive role in brokering an agreement on this issue? Can we also be assured that the release of ITV plc from other public service obligations will be conditional on a settlement that ensures that STV and UTV can still aspire to make programming appropriate to the needs of nations with their own distinctive cultures and politics?

Our Select Committee concluded that the affordability and practicability of a new Scottish network and digital platform deserved further exploration. The proposal for a Scottish network broadcasting specifically Scottish programming came from the Scottish Broadcasting Commission, set up by the Scottish Government. Its report, Platform for Success, has been endorsed by all parties in the Scottish Parliament. The obvious question is how to pay for a new network costed at between £50 million and £75 million a year. Could that be a candidate for contestable funding?

Will my noble friend explore whether the Scottish Government are prepared to co-fund a new Scottish network, as the previous Scottish Executive did in alliance with BBC Scotland to launch the Gaelic language channel, BBC Alba? In the twilight of the old duopoly in public service broadcasting, it might be timely to reflect on the fact that Scotland, a nation of 5 million people, is almost unique among comparable countries in not having a television network that it can call its own.

Let me end with positive news for the UK’s other nations. Thankfully the BBC, with its licence fee income of £3.5 billion a year, has never been better off. For the three smaller nations that make up 17 per cent of all those BBC licence payers, the good news is that, at long last, their pitiful share of programme production for the BBC’s UK channels will rise to 17 per cent. For Scotland, that means 8.6 per cent of a network production budget of almost £900 million—an increase from just over £30 million a year at present to more than £70 million a year. That is a huge boost for which I give all credit to the director-general of the BBC and to the BBC Trust.

I have one concern: the 8.6 per cent target may not be reached until 2016. Surely, after half a century of marginalisation, that is too long a transition, especially in these rapidly changing times. I hope that Ofcom can put further pressure on Channel 4 to push up its percentage of programmes made outside England. I trust that our report Public Service Broadcasting: Short-term Crisis, Long-term Future, which has been so ably outlined by our chairman, will help my noble friend and the Government to preserve what is best in our broadcasting industry so that we can continue to make what I believe is still the best television in the world.

My Lords, I am grateful to the noble Lord, Lord Fowler, not only for bringing the debate to the Chamber but for so clearly stating the case. That was extremely helpful because not all of us have the noble Lord’s experience.

I have always had one anxiety. I think that we in this country treat the BBC as a sacred cow. I am sure that noble Lords know what I mean. The BBC can get away with far more than any of the commercial channels, whether in its regulation or in showing something that would count as advertising in a commercial broadcast but does not in the BBC. I feel strongly that as we pay not £3.5 billion but £3.6 billion for the BBC this year, the regulation should be the same; there should at least be a level playing field in regulation because there is not one in any other sense.

I have had some small experience in a regional television company called Meridian Broadcasting, which I joined when it started and stayed with until it was absorbed into ITV. There was always a feeling that the regulators came down much harder on the commercial companies than on the BBC. If there was a dispute, the BBC had an internal mechanism for resolving it while the ITV companies did not. I have never been happy with that. We should start looking at the BBC as part of the total provider sector in this country and not as something special to be protected as a sacred cow.

When we started to talk about digital switchover, I thought that there was bound to be a lot more competition. There would be a lot more channels and a lot more people providing advertising, and that would affect us.

I do not remember people getting very worked up about that. I was very surprised by that. I am not an expert, but it seemed to me logical to think that there would be a problem with having all those channels. I read somewhere that there was an idea that more time could be provided for advertisements. Clearly, that will not work because there is a finite amount of advertising. It just means that companies will compete with each other for that advertising; the total pot will not increase. Secondly, I fear that the quality of advertisements will decrease. I think that we have quite good quality advertisements in this country and we should protect them. We should not allow advertisements to become ridiculous and of poor quality.

As has been stated, with that £3.6 billion there is now a gap between ITV and the BBC. For the first time, the BBC has more money than ITV, and that gap will grow. Next year, there will be a gap of £1 billion. Clearly, ITV will not be able to provide what it has been providing. It is useless to imagine that it can bridge that gap through revenue, which has been hurt not only by competition but by the current financial climate. That kind of gap will mean that we will not be able to stop at just finding a way to provide regional news; will have to find other ways to help commercial companies to stay viable and provide the best television.

As has already been said, we have the best television, but I would also say that we do not have the best television from the BBC. No commercial provider would make some of the programmes broadcast on the BBC. Meridian was offered a programme about Spain—I have forgotten what it was called, but it was a serial about Spain. Meridian said that it was a ridiculous programme and refused it, but the BBC took it on. It ran for a while, but it was always a ridiculous programme. There was a very expensive serial called Gormenghast. I do not know if any noble Lords saw it or followed it, but I still do not know what it meant or what it was about. Perhaps I am stupid, but it did not seem to me worth sitting to watch.

We get a lot of what I feel is a waste of a good amount of money. If you have to earn every penny and set up a department that has to sell advertising to get the money in, you do not make that sort of programme. Then you value the money that comes to you. If the money just arrives in the pot, obviously there is a slightly different attitude towards it, which is not a good thing.

I once watched 48 hours of regional broadcasting from the BBC for diversity content. I am sorry to say that it had very poor diversity content. We were given cassettes, I am glad to say, because we could not have done it otherwise, but it had very poor diversity content. A lot of the documentaries that the BBC makes about minorities and minority areas are not nearly as good as those of Channel 4. I cannot imagine who would ever think that we can bring Channel 4 and five together. I do not see much merit in channel five. It never had merit to begin with and it has not acquired it. I do not speak for channel five.

My other point is that the BBC paid money to Sky to go on its digital platform—£40 million, I am told. ITV tried to find an alternative. If the BBC had joined ITV to try to create an alternative platform, that would have meant real competition, because everything is now controlled by Sky, including cable. I have also been part of a cable company, and all the packages are put out by Sky. It controls them all. I find that distressing. Of course, it is water under the bridge and we can do nothing about it. However, it is time to start supporting our partner broadcaster in this country.

My Lords, it is a privilege to serve on this Select Committee under the excellent chairmanship of the noble Lord, Lord Fowler. He has eloquently expressed many of the concerns of those on the committee. The case for public service broadcasting has never simply been about certain subject matters themselves, but about how specialist knowledge of those genres within the industry can help to inform other programme-making and, in turn, permeate our culture. No aspect of public service programming should ever be seen as a weight around the neck of broadcasters, but rather as an opportunity to enrich the fabric of our shared society. The loss of some of that sense of responsibility and the chasing of ratings as a primary objective have led to some gaping sectors of programming which the marketplace, if left to itself, would simply not provide. In other words, there are certain definable core elements of public service content that should continue to be supported. The noble Lord, Lord Fowler, alluded to that at the beginning of his speech.

In connection with that, I was delighted when the imaginative plans for MediaCityUK in Salford were announced because among the combination of creative ingredients there seemed to be a clear commitment to enhancing some of those core elements of public service broadcasting. The BBC insists that its plans for moving departments are on course, and that includes children’s programmes, but what children’s programmes? Many of us are dismayed about the diminution of quantity and quality in children’s television provision. Some noble Lords will be too young to remember “Blue Peter”, “Crackerjack” or “The Railway Children”. Such programmes owed much to the fact that those who commissioned them were deeply conscious of their role as cultural mediators and, in a sense, still bore the Reithian torch of,

“everything that was best in every department of human knowledge, endeavour and achievement”.

Of course, we are no longer in a Reithian age, but nevertheless there are certain norms that are true in each generation. As the Voice of the Listener and Viewer has astutely observed, the quality of programmes children watch as they grow will affect the quality of our society when they form the adult population. I find it enormously disappointing and deeply concerning that this aspect of public service broadcasting appears to be given such short shrift.

Meanwhile, ITV has pulled out of the Salford plans and will now remain in Manchester in new accommodation. With both those cities in my diocese, for me to make an appropriately judged comment would require more than the wisdom of Solomon. However, I can say that this withdrawal by ITV may have a significant impact on the training facilities and experience that are a key aspect of MediaCityUK’s proposed role. As the noble Lord, Lord Puttnam, told our Select Committee in its current taking of evidence, when ITV was released from so much of its PSB obligation, it virtually walked away from its commitment to training. That is very serious, not least for the future of public service broadcasting of quality.

The third major ingredient in MediaCityUK was heralded as the independent programme-makers, which were part of the trio with BBC and ITV that would make it a world-class centre and enhance public service broadcasting. But the chairman of Northwest Vision and Media, a strategic authority for the creative industries in the region, said last month that broadcasters and educational establishments, which include the forward-looking media studies department at Salford University, will need to have the resources to get the benefit of the lower-cost content that could be made in these more modern methods. He said:

“The whole thing is a bit of a circle”.

That reinforces my huge concern that the training opportunities, which were such a key part of the imaginative MediaCityUK plans, may become much less than hoped for. That is so serious because our national reputation for high-quality public service broadcasting in particular has depended on high-quality training. I hope that the noble Lord, Lord Puttnam, will forgive me for quoting him again. He said that an abundance of talent of every kind is the only certain way of ensuring a bright future for the whole of the sector. Another department destined for MediaCityUK is religion and ethics, which, along with children’s programmes and local and regional television news, is an aspect of public service broadcasting mentioned in our report and specified as a requirement in the Communications Act 2003.

In 2007, an Ofcom survey showed that 75 per cent of people believe that,

“TV should help to promote understanding of religions, cultures & lifestyles”.

This week, two top award-winning programmes came from the BBC religion and ethics department. They were called “Around the World in 80 Faiths” and “Miracle on the Estate”, the latter of which was filmed in Manchester’s most deprived area. Those programmes demonstrated well PSB’s role in promoting understanding and social cohesion.

I am glad to note that the BBC has established a standing committee on religion and belief. No other genre in the BBC has this. It is to be chaired by my friend, the right reverend Prelate the Lord Bishop of Norwich, who cannot be in his place today. It will reflect the diversity of the nation’s religions and those of no faith. The director-general of the BBC has personally assured me of the corporation’s determination to strengthen its religious output as part of the BBC’s public service broadcasting remit. I welcome that and will watch and listen closely for it.

Public service broadcasting that fails to reflect the complex realities of faith in the modern world will fall short of helping people to understand themselves, the communities in which they live and the global issues we all face. The composer, James MacMillan, in a lecture to the Sandford St Martin Trust, which I chaired last year, said that,

“religion is, and will continue to be, for good and for ill, a constant in humanity’s narrative about itself”.

Therefore, I find it curious that although the Select Committee’s first recommendation specifically mentions programmes dealing with religion and other beliefs, the Government’s response mentions all the other core elements of public service broadcasting that the noble Lord, Lord Fowler, cited, included in our recommendation, but they exclude religion and other beliefs. Why?

Perhaps it is included in the phrase, “among other things”. But what does that mean? Is it meant to cover a multitude of sins or a plurality of religions? If it is the latter—for I hope that there can be no other conclusion—why is it so squeamish? In the light of what must have been a conscious omission, the final sentence of the Government’s response to our recommendation sounds a bit ominous. They say:

“There may well be a need to balance competing priorities”.

Perhaps I have succumbed to a fit of paranoia and, if so, I am sure that the Minister will be quick to reassure me.

Part of public service broadcasting strength in this country is its ability to touch mass audiences and not to be consigned to a ghetto. The opportunity now is for PSB to be available on as many platforms as possible—in other words, to expand and not to decline. Further withdrawal, for example from local TV news, would have an adverse effect in many of the places where I serve. It would hit local pride and community cohesion. So I hope very much that the Government will soon come to a decision about, for example, Ofcom’s proposals for independently funded news consortia and the BBC’s counterview, to ensure the continuing plurality of regional news. It really does affect places such as Manchester. The noble Lord, Lord Fowler, mentioned the decline of local newspapers, and that is demonstrably true across Greater Manchester. Only last week, I stood among the few remaining staff in the huge, almost empty building that contained what was Rochdale’s once hugely successful newspaper. Although still valued, it is sadly only a shadow of its former self.

What is clear in our report and the Government’s response is that public service broadcasting simply must not be left to the BBC alone. Partnerships would be a step in the right direction, but funding issues require tenacious long-sightedness and a genuinely sustainable model that does not risk scuppering the long-term future of PSB because of short-term expediency, an unwillingness to face up to tough questions or a desire to shrink from radical interventions.

Ofcom research showing that the public are willing to pay for PSB over and above the licence fee should not be jettisoned just because of the recession; that will end. Nor is the advertising situation terminally hopeless. The rise of internet players such as Channel 4’s 4 On Demand opens new doors for internet advertising, and the on-demand audio channel Spotify is an example of the successful provision of free advertising-funded web content. On that subject, a pot of money from which broadcasters could bid for PSB funding could be part of the solution. While we all agreed on the committee that there is opposition to top-slicing the licence fee, and from some quarters to the proposed diversion of ring-fenced digital switchover funds to help other broadcasters after 2012, I wonder whether negligible inflation allows enough slack in the RPI-linked licence fee to make this at least worth revisiting.

Whatever options for funding are chosen, securing a sustainable future for public service broadcasting cannot be left to chance. The Government’s response, so far as it goes, is encouraging and I look forward to their forthcoming report on digital Britain. I pray God, and it must be permissible for me to say that from these Benches, that a thriving dynamic plurality of public service broadcasting, which for so long has been such a key ingredient in what has made British broadcasting the envy of the world, will continue to inform and enlighten our culture in the United Kingdom.

My Lords, in his opening remarks, the right reverend Prelate the Bishop of Manchester said what a privilege it was to serve on the Communications Committee under my noble friend Lord Fowler. I do not want to gainsay that, but it is a pleasure and a delight to do so. My noble friend had considerable trouble getting this debate, and in so doing I dare say he abandoned his customary congeniality, but it is important that he has done so because it appears that there is an immediate problem with public sector broadcasting. That being the case, it is only right that Parliament should discuss it. Moreover, given that there is a problem with public service broadcasting, the Government must get involved. If they do not, there is likely to be blood on the carpet and wreckage from the sector as we have come to know it. Again, it is important to note that if that were to happen, Parliament should discuss it.

I believe, first, that public service broadcasting as we have it continues to be important. Secondly, I believe that PSB should not be a BBC monopoly, and in this as in other areas of life, pluralism must be what we aspire to. Finally, PSB must be at arm’s length from the Government.

I declare an interest as chairman of the CN Group, a local newspaper group in Cumbria. It has been suggested by some that the Government should subsidise local newspapers. I should like to put it on record that, for my part, I am entirely opposed to that. Equally, I think it is right that the taxpayer should not bankroll publications that are in competition with local newspapers. As has already been touched on today, in our report we have considered whether contestable funding has a place in the context of the current crisis. Even bearing in mind my caveat about chairing a local newspaper group, I think it may well do. It is an important possibility that needs to be looked into with care.

But, because of the nature of the immediate problems facing the public service broadcasting sector, I suspect that there is a fairly narrow range of options in front of us; these are, in general terms, outlined in the report. I am extremely anxious—I use that word in a general sense—that the matters described in the report will be a precursor to a series of much more intractable problems. It is not simply because I have spent too much time listening to the noble Lord, Lord Maxton, that I believe convergence between the internet, radio, TV, film and newspapers is taking place; it is more or less on us now. Because of this we need not only to identify what a public service broadcaster might be, but what a broadcaster, pure and simple, might be. At the same time we need to identify the kind of intellectual property regime which will form the legal framework within which all this will be carried on in the future.

It is clear from the evidence that the Communications Committee has been receiving recently that, for example, the distinction between film and television as it has traditionally been is beginning to break down. Equally, the same is happening between material in the printed newspaper and material on the internet. These are merely two examples of a much wider phenomenon. The character and the means of both distribution and reception of digital material is myriad. Audiences are increasingly flexible in the way in which they consume it, and they approach it differently according to the means of distribution employed. For example, watching a film on a mobile phone or on a laptop is a very different experience from going to see the film in the cinema and are not alternatives to most people who do that.

In a world where there is no monopoly of distribution, everyone becomes a supplier of digital material. This has obvious and massive implications for public service broadcasters and what they do. Equally, as a consequence, it has implications for the way in which they are going to be funded. This obviously includes the licence fee. It may have been set for a period up to 2012 but I am not sure that that will be of any relevance by the time we reach 2012. Given the speed with which change has crept up on us, all this needs to be thought about extremely deeply and thoroughly, and soon. We are facing immediately a crisis brought about by the congruence of the collapse of advertising revenue and technological change. But I do not think it is the end of the story because we are not going to go back to the status quo ante when the current financial crisis is over. I suspect that the broadcasting/digital world may be very different from the one we have been used to. It may well be the case that we ain’t seen nothing yet.

My Lords, I add my thanks to the noble Lord, Lord Fowler, for not only securing the debate but for the excellent report on which it is based. His committee goes from strength to strength and I am far from alone in the House in hoping that as soon as possible it could lose its provisional driving licence and have its long-term future secured.

It will not have escaped your Lordships’ notice that we are rapidly approaching what might be described as the end game in terms of the direction likely to be offered by the forthcoming government report Digital Britain.

Here I declare an interest as deputy chair of Channel Four. That is the same hat I was wearing when, in April last year, I accepted an invitation to a very pleasant dinner hosted by the BBC Trust, then quite recently formed. That evening we discussed the future of the BBC and of public service broadcasting more generally, and I strongly recommended that the BBC ensure that it takes on the role of the architect of the future of PSB in this country, which everyone at that dinner regarded as being, in the long term, an endangered species. I got no sense but that this view was generally accepted as being sensible, and certainly the right direction of travel. I probably should have known better—I had forgotten the lessons of history.

From its inception, the BBC has only ever truly been the architect—I could say, the all-consuming architect—of its own immediate future. In this respect, it is probably worth taking a quick canter through the corporation’s history. Originally starting as a private company, it became a public corporation only in 1927. Success as our sole national radio broadcaster was rapid, and the first serious challenge to its sense of self-preservation came, ironically, from within.

Early experiments in television had been treated benevolently, but with little serious interest from the top. It was not until the televising of the 1948 Olympics that things started to get serious, when the number of receivers in the London area increased fourfold to over 66,000 by the end of the Games. The then Comptroller of Television, Norman Collins, was sufficiently jubilant to write:

“once television is truly national it will become the most important medium that exists … the first casualty of television, possibly the only casualty, is not the local cinema or the local country theatre, it is sound radio”.

For daring to question the then received wisdom—that is, the primacy of radio—Norman Collins was quickly given the boot. Lord Reith was no pushover but, as far as I can make out, it was this that set the seal on future decades of autocracy.

The next threat rolled along a few years later in 1952, when on 11 July Parliament started to seriously discuss the possibility of a second television channel, opposed in principle by the then doyenne of television, Grace Wyndham Goldie, who reportedly told a parliamentary committee that the whole idea of a second channel was fatuous as she could barely put together a talented enough team to deliver one channel. Market forces, driven by scarcity, were obviously in play even at that early date.

There then began a two-year struggle for what was described as “the soul of the nation” when the then Conservative Government had the temerity to suggest that the most appropriate competition might be mounted by an advertising-supported channel and not one controlled and operated by the BBC. The corporation mounted a fearsome rearguard action, and the Bill establishing what became ITV was passed by only six votes, to receive Royal Assent on 30 July 1954.

More battles followed. As chancellor of the Open University, it saddens me to recall that the creation of the OU was initially opposed root and branch by the BBC as being an imposition on its editorial independence. Happily, those two organisations seem to be rubbing along rather better nowadays.

I could go on at great length, but I hope my point is clear: here is an immensely successful organisation that seems compulsively to feel that any development within the media space it occupies represents a threat, possibly a mortal threat, to its survival.

So we reach today and the regrettable possibility of a continuation of the corporation’s them-or-us attitude towards the whole of the rest of the content world. I remain a huge admirer of the BBC but, as wiser heads than mine have pointed out, it seriously endangers itself if it seeks to remain part of the problem instead of becoming that architect of a long-term answer—that is, achieving the plurality of voice that a broad consensus of both Houses and all parties appears to regard as essential to the future of democracy.

I will not delay the House by niggling about the inappropriate parsimony of the corporation’s approach to what it describes as “partnerships”. It will suffice to read the letter from ITV’s chief operating officer, John Cresswell, in yesterday’s Financial Times regarding his frustrations in trying to achieve an agreement with the BBC over the sharing of regional news obligations. Sadly, the experience he relates is all too familiar to those who have ever attempted to design a sustainable future for all the various components of our broad public service offering.

In the coming few days the BBC has a unique opportunity to change the habit of a lifetime by proving my analysis quite wrong in generously and unambiguously setting out a future for public service broadcasting that is plural, inclusive and, in production terms, as broadly based as possible. When I walked off into the night following that meeting with the trust, I was confident that it had in mind exactly this type of outcome. I find it almost tragic that the ghost of autocracy past appears to have come back to haunt its deliberations.

Without unduly delaying your Lordships, I have one very specific proposal that I would like to take the opportunity of today’s debate to float out into the ether. Our public service broadcasters are in receipt of a variety of forms of support from the public purse, which gives them a clear line of responsibility to the taxpayer as well as to the licence fee payers they serve. However, they are often unable to prepare programming and online services in a timely fashion to reflect major political debates, as they have little access to key policymakers and other political thinking on a wider number of crucial social issues. The problem is exacerbated by the long lead times the broadcasters require to prepare the very best of such material. As a consequence, their ability to deliver public value to the taxpayer and to the licence fee payer in the form of public understanding and participation is greatly diminished.

I would like to see a secure and non-partisan channel of communication established between government officials and public service broadcasters to help the latter prepare content, where they feel it is appropriate, that could better reflect the breadth of thinking and the possible options in relation to critical forthcoming debates, at both a national and international level. I propose that a mechanism be created which would enable the editorial and policy units—particularly, but not exclusively, those attached to the public service broadcasters—to have a formal and privileged access to emerging government thinking on a range of political, social and economic issues, as far in advance as is practicable. To ensure the non-partisan nature of this arrangement, any such discussion should fall under the aegis of the Cabinet Office and, through it, to the relevant Permanent Secretaries, along with such senior officials as they may designate.

This country currently suffers from a crippling trust deficit. Any such scheme that was able to inject trust and co-operation into the widening gap between policy development and public understanding would, in my judgment, be a small but significant step forward.

Let me be crystal clear: in no way is this a proposition that is designed to tame the broadcasters—quite the contrary. In an age often said to be laden with political spin, I hope that it would allow them much more effectively to be the grit in the oyster of many political debates, putting down serious challenges to the Government of the day and to the Executive, but based on fact, not theory. In fact, I think this kind of proposal is all of a piece with the kind of thinking about the public value of public service broadcasters which underlies the whole of the noble Lord’s report. As I say, I also think that it is the kind of partnership which broadcasters would welcome if they are really to step up to the plate on their public responsibilities, most particularly in an age when it is ever more difficult to sort the wheat from the chaff, deluged as we are with vast amounts of information every minute of the day.

Today we have gone to the polls to vote on Europe. I do not think that anyone could honestly claim that young people in this country have a clue, or have been adequately informed, about what these issues are. Therefore, any proposal which could enable better, more accurate and more timely information to be available to young people must be a step forward. I recommend it to the House.

My Lords, I add my congratulations to the noble Lord, Lord Fowler, on his quite exceptional chairmanship of our Communications Committee. It would be hard to find a more diligent and hardworking Select Committee, and I certainly hope, along with the noble Lord, Lord Puttnam, that it will at last be established on a permanent basis.

Debating our report before the Government had fully responded was clearly not ideal. However, I am grateful for their interim reaction which at least gives your Lordships a further opportunity to re-emphasise the points that we regard as crucial if public service broadcasting is indeed to survive in this economically challenged and rapidly changing digital world.

As the report starts by saying, defining public service broadcasting has challenged many of our interviewed experts, quite apart from ourselves. Inevitably, we all have our own preferences. I prefer—perhaps not least because of the citizen consumer battles during the passage of the Communications Act 2003—the definition proposed by my noble friend Lord Birt of “a programme tradition with citizens rather than consumers in mind”.

I shall emphasise four issues in the report, the first of which, the Government’s response indicates, will find favour. British experience since the BBC ceased to be the monopoly public service broadcast provider has convinced everyone that there must be at least one public service competitor for the BBC. I agree with other noble Lords that ITV, with its successful track record of combining PSB with commercial programming and, above all, its impartial, independent news, is the one of the most obvious candidates. We should not forget either its commendable record of sourcing UK content. On the other hand, because of the undeniable and increasingly rapid move of the advertising industry to the internet, ITV, as it made abundantly clear to us, will need adequate financing for any future PSB role, all the more so in light of the Treasury’s confiscation of the valuable analogue spectrum.

I underline, secondly, the crucial need for the continuance of a second nationwide, independent, impartial public service broadcaster news service. Again, ITV’s track record clearly makes it one of the major candidates, so long as the necessary finance and partnerships are assured. It is clear, too, that UK citizens want this. Ofcom’s research showed that 86 per cent of our citizens wanted international news to be available on more than one public service broadcasting channel.

In this context, the BBC has already suggested some sharing of facilities and the use of some of its material in regional news programmes. One understands that many conversations are still under way and one expects to see many of these initiatives rolled out in due course. In light of Ofcom’s research showing high citizen demand—72 per cent—for specific nations and regions news services, I agree that the Government should also consider the relaxation of competition rules to allow some combination of print news and broadcast media companies.

Children’s PSB programming is another area where more resources are needed, with 76 per cent of parents urging more UK-sourced provision. Here, too, PSB competition is important, but—I could not agree more with the right reverend Prelate the Bishop of Manchester—the BBC clearly has the major responsibility. We must therefore hear rather more from the BBC about what priority children’s programmes will have in its future plans. I would include in that not least its online programmes. Many people, for example, will want to know what will replace the recently axed children’s online service, BBC Jam.

There was particular concern at Radio 4’s decision to end the last existing BBC children’s radio programme, put out on a Sunday evening. My noble friend Lady Warnock made a quite brilliant speech on behalf of Sound Start—which has previously piloted a children’s radio programme—on 14 May, criticising Radio 4’s decision and stressing the importance of listening for the development of children’s imagination. I urge those responsible for Radio 4’s programming and, failing that, the BBC Trust to think again.

My third point is on the proposals being advanced for partnerships and alternative forms of funding for public service broadcasting. The BBC Worldwide/ Channel 4 merger suggested by Ofcom, and perhaps still favoured by the Government, seemed to many if not all of us on the Select Committee a step too far. It would make good sense—and it is one of the benefits of the state that we are in—to use this time to see what kind of partnership can be developed and to see whether the BBC will form as good a partnership as it has promised to form. BBC Worldwide, under the direction of John Smith, has done exceptionally well. Not least, it earned one of this year’s prestigious awards for industry. Channel 4, with its hugely successful record of commissioning films, has far more international revenue to be exploited. A partnership would also give time to see how all that could be developed.

My fourth point is on the vexed question of where further funding can possibly come from for the underfunded, yet citizen-valued, PSB areas; whether news, drama or children’s programmes. As we say in paragraph 81 of our report, in some of those areas a case may already be outlined for contestable funding, to which would-be PSB programme-makers could apply. If by 2012 there is an underspend of the BBC licence fee fund—and many figures have been put on this—I, too, would go along with believing that it should be one source of funding. I am less sure about going much further than that.

Equally, I can see no reason why the considerable value of analogue spectrum should accrue only to the Treasury. However, if that was to happen—which I would support—how should such resources be allocated? It would not, I hope, be through the creation of yet another quango. Surely, Ofcom could do the job by setting up an organisation not dissimilar to its consumer panel. We may all have been aware of the fact that, although there was something called a content board, it was in fact the consumer panel that seemed to do a considerable amount on behalf of the citizen. Above all, it published its reports so that they were in the public domain. I urge that particular form on Ofcom and the Government to think about very seriously.

My Lords, we must be profoundly grateful to the noble Lord, Lord Fowler, and his colleagues, many of whom have spoken in this debate, for the admirably succinct, clear and well argued report. I shall focus on one issue—how we preserve Channel 4.

Despite the advocacy of the noble Lord, Lord Puttnam, the affairs of Channel 4 get only a fraction of the attention in both Houses of Parliament as those of the BBC or even ITV. That is partly because there is an All-Party Parliamentary BBC Group, as there is one for ITV, admirably chaired by the noble Lord, Lord McNally, but there is no Channel 4 group. That needs to be remedied in the very near future. Leaving aside the formalities of all-party groups, if you talk television with Members of this House—and with our hours being what they are we watch only a fraction of the television that normal human beings watch—it is surprising the extent to which it is Channel 4 that people are talking about and not the other main channels—even among those who, peculiar though it may seem, are not interested in racing, where the BBC is stuck in the starting stalls while Channel 4 proceeds to make the running.

Without Channel 4, the BBC would have a monopoly of non-commercial public service broadcasting. ITV has deserted or is deserting the field. Under its present leadership, it has downgraded—I apologise for the pun—anything that could claim to be public service broadcasting. Axing the “South Bank Show” is an act of cultural vandalism that future generations will wonder at. Sky Arts does a great job on limited resources, but it is of course an arm of a gigantic commercial broadcaster and relies on its benevolence to keep it going. Absent Channel 4, there would be the danger of a BBC monopoly. Monopoly is, ipso facto, undesirable, even if it is a monopoly in the hands of a world-class institution such as the BBC. Certainly, that is the view of the committee of the noble Lord, Lord Fowler. It says:

“We believe there would be dangers if the BBC were to become an even more dominant provider of public service programming”.

Channel 4 has done a quite remarkable job. It sometimes seems almost to defy gravity. That cannot go on for ever. The economics of the television market are such that it will not go on doing it on the present basis; it needs more money. Some sources can be ruled out. The advertising market’s extremely weak short run is likely to remain quite weak and in the end there will not be more money. Given the state of public finances, it does not have a prayer of getting more money from the Treasury. It is hard to avoid the conclusion that one way or another there is only one source of more money, and that is the BBC and its licence fee.

However, there is an obstacle. The BBC is a world-class institution and, among the things that go with being a world-class institution, it is a world-class lobbyist. The BBC’s position at Westminster has been noticeably weakened these past 12 months by the Jonathan Ross affair and its stance on the Gaza emergency appeal. That is not a statement of opinion on either of those things, but a measurable fact from talking to people around the House. If it were not so, the Tories would not have dared move their recent populist motion in another place to freeze the licence fee. To put it crudely—they thought there were votes in it. However, the BBC remains a giant beast in the jungle. I still bear the scars of the long battle to get it to be subject to some form of public account scrutiny. It came up again today with the BBC trying—rightly or wrongly—to keep Terry Wogan’s salary away from the committee. You get into a very dangerous and long drawn-out battle if you do not entirely take the BBC’s view on things.

The BBC will fight tooth and nail against topslicing, contestability, the reallocation of its digital switchover money and anything else that might cost it a bob or two. That is why the solution advocated by the noble Lord, Lord Fowler—and I hope that Channel 4 will get some money through some sort of partnership with Worldwide—is a good one. The devil is in the detail and the detail is proving very testing, but agreement there has to be. It is not the most logical solution—the most logical solution would be to take a chunk of licence fee money and give it to Channel 4—but it may be the most practicable solution, and I would rather that Channel 4 got more support through an illogical means than no support because we insisted on the logical means.

An immediate question arises from this—I think I am talking in this Chamber only to supporters of the BBC and I really mean it when I say it is a world-class institution—can the BBC afford to give up any money to Channel 4 while maintaining its role as a full service public service broadcaster? Can it even afford a larger knock from a direct subvention to Channel 4 as opposed to the indirect subvention involved in the Worldwide deal?

I was a member of the Davies committee on the BBC licence fee in 1999, and a great experience that was. The committee had a mixed membership but it agreed, as it happened, on everything except one thing; how much money the BBC needed. I recall that my noble friend Lord Gordon, who is unfortunately unable to be with us this afternoon, was on the low end of the spectrum. The chairman, Gavyn Davies, was at the high end of the spectrum, which was as well as he went on to be chairman of the BBC. I was somewhere in the middle, with all the other members scattered in between. I make that point simply to say that well-meaning people with a strongly pro-BBC view in life, which every member of that committee had, came to quite different conclusions on how much money it needed. It is a matter of judgment.

To conclude our Thursday Back-Bench contributions on a rather wicked note, my own yardstick is that so long as the BBC can afford BBC Three it has too much money. Here is a channel, much to most of the content of which is paltry, aimed at appeasing a mythical target audience of young viewers who the commercial market can adequately cater for in any case, at a cost of some £125 million per annum, and which is watched by the average viewer for three minutes a day. Compare that with the use that Channel 4 could make of money on that scale, which amounts to nearly a third of its total programme budget, and there is no contest.

My Lords, I join with others in congratulating the noble Lord, Lord Fowler, on initiating today’s wide-ranging and fascinating debate. This short report and today’s debate have rightly created a great amount of interest, not least from broadcasting organisations which believe that the noble Lord, Lord Carter, may still be in receiving mode prior to the imminent publication of the Digital Britain review. I also congratulate the noble Lord, Lord Fowler, and his committee on eliciting such a lucid holding response from the Government.

This is a brief but extremely impressive report, particularly the succinct—I note that the noble Lord, Lord Lipsey, used the same adjective—introductory discussion of what is meant by “public service broadcasting”. I agree that the nature of the content is increasingly crucial, as is universal access, but we should decreasingly predicate on which platform the content should be made available, particularly in the light of the spread of broadband. On that matter I strongly agree with the remarks of the noble Lord, Lord Inglewood.

The crisis in commercial PSB has been more drastic and happened more quickly than anyone ever expected because of the recession. That said, little planning was done to anticipate the inevitable. As we have heard today, ITV and Channel 4 are at particular risk. I worked at London Weekend Television in the 1980s, but I am not sentimental. At that time we saw the birth of Channel 4, breakfast television and home video. We have been extremely lucky that the PSB ecology of the past 20 to 30 years has lasted as long as it has, but now we need to recognise that the model needs changing.

However, it is essential—the public are insistent on this—that the plurality of PSB provision continues. If it does not, we will have the danger of the BBC being the elephant in the room, unduly dominating all forms of television activity. The committee made this point well. As it points out, however, we need better financial information from the commercial public service broadcasters. On any judgment, we are seeing PSB market failure.

I am a keen Sky news watcher, but I do not accept Sky’s denial that there is no crisis in advertising-based models. I do not want ITV, with its great PSB tradition which was so well described by the noble Lord, Lord Birt, in his evidence to the committee, to walk off into the purely commercial sunset—not least because of the impact that that would have on STV and UTV—or to allow Channel 4, with its extraordinary track record of innovation, to fail. That would have a huge impact on the creative industries, particularly independent producers.

In this debate, however, we should see the BBC’s position and strength as an opportunity and not a problem. We will not solve problems at ITV and Channel 4 by reducing the BBC’s ability to make good programmes. On these Benches we fundamentally disagree with the Conservative attempt in the other place before the Recess to freeze the licence fee. We are generally satisfied that the BBC is using its resources wisely, making considerable economies and efficiencies—some £2 billion over the past eight years. The answer is not to hobble the BBC but to ensure that it is part of the solution. We need to harness its increasingly innovative approach to the benefit of the wider PSB universe.

I usually agree strongly with what the noble Lord, Lord Puttnam, has to say, but I thought that he was unduly apocalyptic about the BBC in his speech today. On these Benches we are opposed to top-slicing. We opposed the use of licence fee money for digital switchover. We took the view that this was a government social policy that should be paid for by the Government in the same way as they pay for reduced or free licences for the over-75s.

In 2005, Sir Michael Grade said that,

“top slicing would break the clear and well understood line of accountability between the BBC and the licence-fee payer … would pose a threat to the political independence of the BBC, handing a punitive fiscal sword of Damocles to any unscrupulous government that wanted to bring the BBC to heel”.

That was strong but characteristic language and these Benches agree with that view.

The BBC has a long history of working in partnership with other broadcasters for the public benefit—for example, on Freeview, Freesat, DAB, Canvas, SAC Wales—and there are many partnership proposals on the table or in the pipeline. Given that the BBC is already entering into creative partnerships—for example, sharing regional news facilities with ITV—we should formalise this role by establishing a duty on the BBC in the BBC Charter to work in partnership with other broadcasters for mutual benefit and added public value. The BBC could then set up a partnership fund for this work. This could include the anticipated £250 million digital switchover surplus and the money already identified as going into partnership work. In the future it could include the equivalent of the digital switchover part of the licence fee.

Any projects being funded out of the partnership fund should be justified and properly overseen. Any proposal would have to pass some basic tests before being considered, such as whether it benefits the BBC, the licence fee payer or a third party. Crucially, in order to ensure proper oversight of this new duty in the BBC Charter, we must set up an independent PSB regulator along the lines originally proposed by the noble Lord, Lord Burns, whose evidence to the committee I found fascinating. The BBC Trust would be folded back into the BBC and essentially act as a conventional board of directors responsible for strategy and governance.

In contrast, the committee advocates the idea of contestable funding for PSB content. That is a very attractive idea in many ways; the problem is where the funding for it is to come from if not from the licence fee. In our view it is viable only if we can deliver additional funding that does not raid the licence fee, such as through sales of the analogue spectrum. However, I suspect that that money has already been notionally spent twice over by the Government.

We have talked much about the financial crisis facing ITV. It is hardly surprising that a consistent theme of Sir Michael Grade’s term as executive chairman has been the need for ITV to throw off some of its PSB obligations to save costs. Some of its decisions are understandable but others are extremely regrettable, such as the decision to axe the “South Bank Show”. Ministers claim that they understand the crisis facing ITV and indeed other commercial broadcasters, but they have failed to provide a crucial piece of help which was within their power—allowing product placement. We should trust broadcasters to know how to advertise without destroying their viewers’ experience. If people do not like the way that broadcasters use product placement they will go elsewhere for their entertainment. Product placement is already being seen by British audiences in much of the imported content that we have on our screens. The decision by the Secretary of State, Mr Burnham, earlier this year means that British producers and broadcasters will lose out on that vital income. On some estimates this could amount to an additional £150 million per annum in revenue to ITV, which would be a significant boost.

Then, of course, there is the question of ITV’s regional news services. I am a Londoner, so others might be more qualified to speak about the value of regional news. However, we must find a solution and continue to provide a viable alternative to BBC regional news services. There is clearly a massive difference in perception on the right way forward, with the BBC seemingly in fundamental disagreement with Ofcom and ITV. The BBC has entered into a partnership with ITV to share some local resources, but although it provides some benefit, it is clearly not satisfactory to either party. Has the time come to have a partnership between the BBC and a new third party regional news provider, rather than to continue with ITV limping along as the provider? This should be discussed. I agree completely with what the noble Lord, Lord Macdonald, said about STV and UTV. It is vital that we ensure that they are able to carry on with their broadcasting without having ITV in such a strong position in the negotiations.

Like others, I have been following the progress of negotiations on a link-up or even merger between BBC Worldwide and Channel 4. At first I was very sceptical about whether that would work. I thought that they were very different animals set up to do very different things and with different rights granted by programme creators. However, I am now a convert, largely for the reasons put forward by the committee—that there is a common culture and it could work to the advantage of both organisations. Also, the enthusiasm shown by both BBC Worldwide and Channel 4 must be taken into account, as must the belief that a profit of £200 million per annum could be generated by a joint venture. But a merger—described as “corporate engineering” in the evidence to the committee—may not be a viable option. At the minimum, I hope that a joint venture is possible. If it is to happen there needs to be leadership, and I hope that both the Minister—the noble Lord, Lord Carter—and the Digital Britain report itself will provide that.

Although the noble Lord, Lord Carter, was very positive about the need to support children's television in his evidence to the committee, there are strong rumours that the Digital Britain review will do little to help. I therefore wrote to him on behalf of the Liberal Democrat shadow DCMS team urging him to consider that area anew. Less than 1 per cent of children's TV programmes broadcast in the UK are made in the UK. The situation is getting worse. Ofcom confirmed that UK children's television is a key public service genre and faces funding issues. It identified the clear market failure in children's television. It found that £40 million has come out of the industry in recent years, and that investment in new UK children's TV programmes is forecast to halve over this decade, with the BBC left as the only significant broadcaster outside pre-school programmes.

Both the House of Commons Culture, Media and Sport Select Committee and our own House of Lords Communications Committee, in reports last year, supported funding for children's television. The Digital Britain interim report acknowledged Ofcom's findings and stated that UK children's content would be a priority in its conclusions. Ofcom's most recent consumer research identified that parents valued children's programming as highly as nations and regions news, and in fact considered children's content a higher priority than regional news in terms of the need for an increase in current provision. A number of models have been put forward including an extension of Channel 4's remit. We on these Benches have advanced the idea of a tax credit akin to that enjoyed by the film industry. There is clear justification for special treatment to ensure the future production of UK children's television programmes, and it is vital that the Digital Britain review tackles the subject and provides solutions.

We are all setting great store by the forthcoming Digital Britain report, and are extremely grateful to the committee for its well timed report. I hope that the Government will take note of the many excellent points made by the committee but firmly set their face against top-slicing in favour of a strong partnership role and obligations for the BBC.

My Lords, I too thank the noble Lord, Lord Fowler, for securing this diverse debate on this informative and important report by the Communications Committee on public service broadcasting. Having heard so many praises from all his committee members, I wish that I, too, had had the chance to be on the committee under his enlightened leadership.

The committee has made a number of recommendations aimed at modernising the public service broadcasting industry so that, in these difficult and challenging economic times, it may survive this short-term crisis and secure a long-term future. The perceived crisis within some areas of PSB could be seen as a little exaggerated, apart from in advertising. The report’s evidence illustrates that none of the channels is particularly suffering, perhaps with the slight exception of ITV, which experienced revenue losses of 3 per cent in 2008 and is predicted to have to make cuts to the tune of £245 million by 2011. However, even it remains confident that it will survive and be,

“in a fitter state when the economy eventually turns”.

Channel Five’s owner, RTL, stated in its annual report that in 2006-07 revenue was up by 7 per cent, pre-tax, and that it was pretty self-sufficient. It, too, thought that it would weather the changes in the industry, despite the difficult economic conditions. The Enders Analysis report in 2008 stated that in many ways Channel 4 is financially in the strongest position among advertiser-funded public service broadcasters. The channel holds substantial reserves and has no pension deficits or indebtedness. Finally, the report describes the BBC’s financial position as being securer than that of virtually any other business in the country. The corporation’s total income in 2008 was £4.4 billion.

It would be wrong of me not to mention at this stage that the UK is held in the highest respect worldwide for our PSB, especially the BBC, which, as my noble friend Lord Fowler stressed, is a national asset. I totally agree with him. Why then is so much attention now being given to the possibility of various mergers and contestable funding as ways of saving PSB when, from this report, there is little evidence that PSB is experiencing any real financial problems?

It has been suggested that the reason why Channel 4 does not believe that it will continue without additional public support,

“has more to do with the company’s laudable aspirations to extend its business into many new areas ... than any real dangers to its core business”.

As many of your Lordships have asked, could this just be a guise for channels to seek more taxpayers’ money to fund their own commercial projects? What protections have we against channels with these motives? Should we not insist that any corporation receiving or seeking taxpayers’ money be subjected to proper scrutiny and independent review?

Could other areas within the industry be evaluated and trimmed down to provide cost savings? For example, it can be argued that the royal charter, the BBC Trust and Ofcom are all charged with approximately the same responsibility of upholding the independence and high standards of PSB and of acting in the best interests of licence fee payers. Could that be considered an overlap or overregulation and a waste of resources which, in this climate, might be better used elsewhere? Their aims are enshrined in the spirit of ensuring independence. After glancing at their composition, I think that their ability to perform this role could be questioned. According to the website, the chairman of the BBC Trust is a former Labour Party councillor, and the chief executive officer of Ofcom is a former policy adviser to Tony Blair who worked at another company as an adviser to Gordon Brown. Furthermore, as we all know, the appointment to the board of Ofcom is made by the Secretaries of State for the Department of Trade and Industry and the Department for Culture, Media and Sport. Does the noble Lord honestly believe that, as a result, these bodies are genuinely at arm’s length from the Government, as stressed so clearly by my noble friend Lord Inglewood?

Despite the tone of the report being centred on the lack of funds, curiously it finishes by discussing what could be done with the underspend of the digital switchover programme after completion. Can the Minister explain to the House why this money could not be used to keep vital regional news programmes on air, together with, for example, fine programmes such as “The South Bank Show”, especially in the light of the Government’s refusal to waiver this year’s 2 per cent licence fee rise, as requested earlier this year by the Conservative Party? Does this not illustrate the Government’s lack of judgment in relation to the public finances and does it not do little to maintain the bond of trust between the PSB, the Government and the people? I greatly look forward to the Minister’s response.

My Lords, we are all grateful to the noble Lord, Lord Fowler, for his presentation of the report, his introduction of the debate and his chairmanship of the Select Committee. The committee has produced a timely report because the House will recognise that the final report on Digital Britain will be produced soon and will take account of all these representations. The House will readily appreciate, however, that I am somewhat inhibited by the fact that that is only nine or 10 days away, and it ill behoves me to pre-empt its conclusions. I hope that I will be forgiven if I cannot be as definitive in response to some of the proposals as I would ordinarily like to be. The advantage of the report being presented at this time is that it helps the Government’s thinking on these critical issues, and I am grateful to the noble Lord and his committee for clarifying some of those that need to be addressed.

I emphasise that I have some difficulty in reconciling the anxieties of the committee, which are well founded in certain areas of television production. We are all aware of the problems of advertising revenue in view of the competing areas in which advertising can be presented to television. We are all aware of the fact that ITV and Channel 4 are under stress. The noble Lord, Lord Fowler, with his considerable experience in an additional area of news—the regional newspapers—brought that within the framework of this discussion.

I appreciate that the noble Lord, Lord Inglewood, has had to leave before this response, but he, too, emphasised the difficulties facing independent television in particular. I am having a little difficulty in accepting the analysis of the noble Baroness, Lady Rawlings, that all is fine in the garden, that there are not too many problems around and that a little slicing off the BBC budget will produce an easy answer to all that. First slicing the BBC budget is not a concept that I recognise, having listened to and participated in debates on committee reports in the past about the role of the BBC. I was greatly involved in the debate on the charter, the difficulties in that institution and the necessary resources and, as testified in the debate today, how well those resources are devoted to ensuring that the BBC is the foremost broadcaster in the world with a substantial role in exports, which also enjoy such a huge reputation.

I listened carefully to what my noble friend Lord Puttnam said about the history of the BBC and its somewhat jealous guarding of its resources. He is right that that should be subject to scrutiny. It may be timely that the BBC has to be a little more open to its potential rivals. In all fairness, he will have recognised areas in which the BBC is already beginning to think of partnership with independent television with regard to news provision. All is not closed on that front, nor let me say are the Government closed on the necessity of some further stimulus towards such co-operation. The committee is right to identify that there may not be a long-term crisis in British television, but there are short-term anxieties given the real difficulties at this time. The full report, for which we have less than a fortnight to wait, will address all those issues.

I can dispose of one or two issues. The noble Lord, Lord Clement-Jones, was fair but challenging in almost equal measure. He is always fertile with fresh ideas or, if not, indicating that he sees little difficulty in ideas that have been rejected. I fear that product placement fits into the latter category. The Government gave detailed consideration to all the responses on the issue, but we have not been persuaded that there are any convincing arguments in favour of allowing product placement. Although, as the noble Lord rightly enjoined the Government to do, we will address ourselves to the issue of necessary funding, we do not think that that is an avenue that can be usefully pursued, and we will not be emphasising that dimension.

The BBC is important as a global force producing wide-ranging programmes of quality and innovating successfully in new forms in today's multimedia, multiplatform age. We all recognise that public sector broadcasting gives a unique advantage to this country. It is important that the BBC has strong competition from the commercially funded public sector broadcasters: ITV and Channels 4 and Five, which, first, help to keep the BBC on its toes and, secondly, ensure that we get the most innovative and creative possibilities for our television.

ITV's regional news provision provides audiences with a different perspective from the BBC and provides a balanced view reflecting communities across the country. As the noble Lord, Lord Fowler, said in his opening remarks, it is important that we recognise that with regional newspapers under pressure, the regional dimension of news is of considerable importance.

The noble Baroness, Lady Howe, and the right reverend Prelate the Bishop of Manchester emphasised the importance of children's programmes. There was scarcely a mention of Channel Five in the debate, but we should pay due regard to the “Milkshake” brand on Channel Five, which provides high-quality organised preschool programming for children. Although I appreciate that there is concern about the quality of provision for over-10s—I think that the noble Baroness defined it in those terms—we should appreciate programming of high quality.

There is no doubt that children's programming must be an important dimension of public sector broadcasting, but a degree of competition ensures plurality of voices and competition for quality which, in turn, drives down some costs. The challenge for the Government is to examine how we could sustain public sector broadcasting provision, including the BBC, in the new multichannel digital age with all its challenges. The Digital Britain interim report, which we published a few months ago on 29 January, set out our early thinking on these matters and outlined the key priorities that we think need to be addressed. Our starting point was certainly that a strong, fully funded and efficient BBC acts as an enabler for the rest of the sector. Most of the fruitful ideas that have emerged from the committee’s useful report and that have been presented during this evening’s debate, build on the BBC as the cornerstone.

However, we also need strong alternatives to the BBC. My noble friend Lord Macdonald emphasised that in relation to the provision of television in the nations. He will appreciate that aspects of the relationship between ITV and the channel 3 licensees as a whole are essentially regulated by Ofcom and the OFT. In 10 days’ time, we will set out in Digital Britain our views about how we see that relationship developing, but I reassure my noble friend that his strong voice on the necessity of ensuring that this dimension of public sector broadcasting is given due attention will be testified in that report. I know that noble Lords will take the earliest possible opportunity of pressing the issues further.

Underpinning the initial position is the Government’s belief that public sector broadcasting requires plural provision. Where there are anxieties about public sector broadcasting outside the BBC, we need to address them. That is why I am grateful that this debate gives us the chance to do so. The committee argued that to deviate from the current, accepted definition of public service broadcasting would be counterproductive, and we agree. It is the cornerstone of this debate. There are enough challenges with regard to the points that have been made in the committee’s report and in this debate without us wrangling over definition. We believe that the concept and framework that we set out in the Communications Act 2003 and the characteristics and public purposes put forward by Ofcom provide the proper starting point for examining public service content, and we are grateful to the committee for confirming that that is how it sees things.

In response to calls for plurality of public service broadcasting beyond the BBC, let me restate that we have repeatedly given our firm commitment to sustaining public service content provision including and beyond the BBC, which is why we address the issues that the committee identified. It will be seen from the Government’s response that we seek to respond to them positively. I am grateful to the noble Baroness, Lady Flather, for introducing the issue of diversity. Plurality of sources does not meet the requirement if we do not have plurality of voices and do not give due regard to minority cultures. I am grateful for her contribution on this matter, just as I am grateful to my noble friend Lord Macdonald for expressing a similar viewpoint with regard to the nations of the United Kingdom and how they need to be considered as we conclude our thinking.

Following Ofcom’s public sector broadcasting review, the Government have been looking at a number of options, including the feasibility of contestable funding, structural changes, new networks or commissions or making no further intervention in this market at all. I am glad that the committee did not think that the last was an option for the Government, because we will be positive in the final Digital Britain report, which is imminent. The Government, like the committee, welcomes the BBC’s commitment to commissioning more network programming from the nations. The timetable and the commitment are a matter for the BBC, and we should support the BBC’s endeavours to reach its targets as quickly as it can.

Particular reference was made to Channel 4, not least by my noble friend Lord Lipsey. We noted that Ofcom, in its final PSB statement published in January, recognised that production from and portrayal of each nation and region of the UK on UK networks was a concern for many, which is why Ofcom decided to increase Channel 4’s out-of-London production quotas to 35 per cent in spend and volume. Within that it also embedded a quota for 3 per cent for production from Scotland, Wales and Northern Ireland. But that is a demand on Channel 4. My noble friend Lord Lipsey was eager to identify that Channel 4 also needs some support, which is why I emphasise that in 10 days’ time we will identify progress on these matters.

I cannot adopt the somewhat complacent position of the Opposition Front Bench with regard to the challenge facing ITV in terms of resources. But I want to emphasise—I am sure that the noble Baroness, Lady Rawlings, will join me—that independent television is a tremendously important dimension of our broadcasting world. ITV1 remains the UK’s largest commercial channel. In 2008, it achieved an audience share of 17.2 per cent, which is more than twice the share of its nearest commercial rival, Channel 4. It should be therefore recognised for its significance. Across peak viewing hours, ITV1 remains the UK’s most popular channel with a share of 23.9 per cent, which is slightly ahead of BBC1 with 23.4 per cent. We should recognise how much independent television and ITV1 are appreciated by the nation. Of course, it has held its share of the television advertising market over a long period, despite the fact, as we all appreciate, that there are now competitors outside linear television which help to create the present difficulties.

ITV’s commitment to public service content has not only contributed to sustaining a wide range of voices and perspectives, but it has also helped to improve the standards of the UK media landscape. I believe that independent television not only has played a significant role in the recent past, but that that role needs to be sustained. However, content markets are changing significantly with the development of alternative viewing patterns, which is why the committee’s report talked in terms of short-term crisis and why I am pleased to report both the committee’s constructive response to some of these areas and that of other noble Lords. The noble Lord, Lord Clement-Jones, was concerned to emphasise partnership and the Government certainly think that that needs to be exploited and developed.

I also accept that the regulatory framework that applies to ITV may need to change further to reflect the changes in the media landscape. My noble friend Lord Macdonald made that point with great force. I cannot comment in detail without pre-empting the more general position to emerge shortly. But that point is very well taken. Of course, I want to emphasise that the Government are considering a new entity which builds on Channel 4’s assets from purely public ones to perhaps public-private partnerships to achieve our objective of a large-scale, sustainable and flexible provider of high-quality public service content.

I know that that is too general an expression to satisfy my noble friend Lord Lipsey who would want me to be more precise about the commitment to Channel 4. I can express only this general commitment, but he knows that that presages a considerable degree of detail in the report, which we all await with, I have no doubt, considerable impatience. However, I have greater patience than many because it enables me on this occasion to postpone conclusions on some of the more difficult issues. My noble friend Lord Carter will address these issues before the House in the near future.

In conclusion, changes are required in the commercial broadcasting sector if we are to secure the plurality of provision that both policymakers and audiences want. Our aim is to build on the strengths and traditions that will redefine and meet the very new and challenging digital age. Government intervention in the marketplace is difficult to determine and I am grateful to the Select Committee for recognising the difficulties in its report and recommending that we tread with delicacy and care. There is no easy, overriding and simple solution for this area. We need to think carefully before we tread at all, and of course, at the heart of this lies the crucial question of affordability.

The Digital Britain agenda is ambitious and encompasses public service broadcasting along with the wider digital and creative industries. The report is imminent and I know that the House is looking forward to it as much as I am. For the moment, I can only express gratitude to the committee, which has advanced the debate considerably with this report.

My Lords, this has been a good debate, and coming before the Government’s White Paper, it is also well timed. I thank everyone for their contributions. The noble Lord, Lord Macdonald of Tradeston, emphasised the need to make BBC Worldwide a national champion, and I agree with what he said about STV and UTV. The noble Baroness, Lady Flather, had cautionary words for the BBC which it would do well to heed. The right reverend Prelate the Bishop of Manchester raised the issue of the new MediaCityUK in Salford, where we may be on the verge of missing a great opportunity, particularly in training. He also underlined the state of broadcasting, and the Minister would do well to note what he has had to say.

My noble friend Lord Inglewood underlined the importance of the long-term impact of the digital revolution. The noble Baroness, Lady Howe, emphasised the need for an alternative regional news service to that of BBC programming. The noble Lord, Lord Lipsey, talked about the importance of Channel 4 and had some words to say about BBC Three, which no doubt are now being pored over in BBC House.

I thank the three Front-Benchers. As always, I agree with part of what each of them said and disagree with other parts. The noble Lord, Lord Clement-Jones, emphasised the need for a plurality of public service broadcasting and I certainly agree with him. However, he came out against any top-slicing of the licence fee. In an ideal world I might even agree; but we are not in an ideal world, we are in a crisis, and we will not be thanked if we do not examine options such as contestable funding. My noble friend Lady Rawlings spoke well about the position of regional news and I agree with what she said, but she did rather underplay the critical financial position of commercial broadcasters in this country.

The noble Lord, Lord Davies, spoke with his usual charm about the problems being encountered by broadcasters. I was encouraged by his aside about regional newspapers, but I continue to disagree with the Government’s position as set out in their paper that everything in this area should be decided between the BBC and the Government, and that there should be no effective role for Parliament. I will not repeat my arguments on that because he has heard them before. He nods his head in assent, but I say to him that in the end, we will win.

Lastly, and in many ways most importantly, I refer to the speech of the noble Lord, Lord Puttnam. He made a fundamental point when he said that it seems that the BBC is concerned only with its own future. Indeed the noble Lord, Lord Lipsey, pointed out that while it is a world-class organisation, by golly it is also a world-class lobbyist. I agree with the noble Lord, Lord Puttnam, that all public service broadcasting is in a crisis today and that the BBC must play a leading part in getting us out of it. In other words, the BBC must look outwards. Unless it does so I do not think it will be truly forgiven.

It has been a good debate. We now wait for the Government’s final report. I think I detected in the Minister’s remarks that he promised us a debate on that final report. Being a wise man, he does not nod or make any gesture of any kind on that point. In all seriousness, I hope that we will have a debate upon it. With those words, I commend the Motion.