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House of Lords Hansard
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12 May 2016
Volume 771

Statement

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My Lords, with the leave of the House, I shall repeat a Statement given in another place by my right honourable friend the Secretary of State for Culture, Media and Sport on the government White Paper, A BBC for the Future: A Broadcaster of Distinction.

“The Government are today laying before Parliament and depositing in the Libraries of both Houses a White Paper on the BBC charter review.

The Royal Charter is the constitutional basis for the BBC. It is the framework for how the BBC is governed and guarantees its independence. The current Royal Charter will expire at the end of 2016. Today we lay out our plans for the next one.

The White Paper represents the culmination of 10 months’ work. I would like to thank everyone who contributed to the Green Paper consultation process—not least the 190,000 members of the public. I am also very grateful to Sir David Clementi and his team for their independent review of the governance and regulation of the BBC; to committees in both Houses that made recommendations; and to all the stakeholders, BBC representatives and others who helped inform our deliberations.

The BBC is one of our country’s greatest institutions. Eighty per cent of those who responded to our Green Paper consultation said that the BBC serves audiences well or very well. Every week the BBC reaches 97% of the UK population and 348 million people across the globe, informing, educating and entertaining them and promoting Britain around the world.

It is our overriding aim to ensure that the BBC continues to thrive in a media landscape that has changed beyond recognition since the last charter review 10 years ago, and that it continues to deliver the best possible service for licence fee payers. So today we are setting out a framework for the BBC that allows it to focus on high-quality, distinctive content which informs, educates and entertains while also serving all audiences; enhances its independence while also making it much more effective and accountable in its governance and regulation; makes support for the UK’s creative industries central to the BBC’s operations, while at the same time minimising any undue negative market impacts; increases the BBC’s efficiency and transparency; and supports the BBC with a modern, sustainable and fair system of funding.

The BBC’s special public service ethos and funding model allow it to take creative risks, to be innovative and to produce high-quality content. This means more choice for listeners and viewers. The BBC delivers a huge number of outstanding programmes in drama, news and current affairs, sport, science and the arts. Many have received awards, not least at the BAFTAs on Sunday, and they demonstrate that at its best the BBC is still the finest broadcaster in the world. However, as the BBC Trust has recognised, in some areas the BBC needs to be more ambitious, particularly in its more mainstream television, radio and online services. The BBC director-general has called for a BBC that is,

“more distinctive than ever—and clearly distinguishable from the market”.

The Government are emphatically not saying that the BBC should not be popular. Indeed, some of its most distinctive programmes such as “Life on Earth”, “Wonders of the Universe” and “Strictly Come Dancing” on TV, or the “Newsbeat” programme and the Jeremy Vine show on Radio 1 and 2 respectively, have very wide audiences because they are so good. But with a 33% share in television, 53% share in radio and the third most popular UK website, and with only 27% of people believing that the BBC makes lots of programmes that are more daring and innovative than other broadcasters, commissioning editors should ask consistently of new programming, “Is this idea sufficiently innovative and high quality?”, rather than simply, “How will it do in the ratings?”.

So we will place a requirement to provide distinctive content and services at the heart of the BBC’s overall core mission of informing, educating and entertaining in the public interest. We will also affirm the need for impartiality in its news and current affairs broadcasts. The BBC’s existing minimum content requirements will be replaced with a new licensing regime that will ensure that its services are clearly differentiated from the rest of the market, so enhancing choice for licence fee payers, backed up by robust incentive structures.

The BBC will also be required to give greater focus to underserved audiences, in particular those from black, Asian and ethnic minority backgrounds, and from the nations and regions that are currently less well served. That will involve the BBC building on its new diversity strategy, maintaining out-of-London production quotas and ensuring that the BBC continues to provide for minority languages in its partnerships with S4C and MG ALBA. Over the next charter period we want the BBC to be the leading broadcaster in addressing issues of diversity. For the first time, diversity will be enshrined in the new charter’s public purposes. This, along with a commitment to serve all audiences in the BBC’s mission, will help hold the BBC to account for delivering for everyone in the United Kingdom.

Looking beyond these shores, the BBC World Service is rightly considered across the globe to be a beacon of impartial and objective news. It is a vital corrective to the state-run propaganda of certain other countries. So we will protect its annual funding of £254 million for five years and also make available £289 million of additional government funding over the spending review period, as announced by the Chancellor last year, so that the World Service can represent the UK and its values around the globe.

All organisations need a governance and regulatory structure that is fit for purpose. The BBC’s is not, and it is no longer supportable for the BBC to regulate itself. Governance failures—including excessive severance payments and the costly digital media initiative—have illustrated that the division of responsibilities between the BBC executive and the BBC Trust is confusing and ineffective. As the independent review led by Sir David Clementi made clear, there is widespread agreement that reform is vital. I can announce today that we are accepting the review’s recommendations.

The new charter will create a unitary board for the BBC that has a much clearer separation of governance and regulation. The board will be responsible for ensuring that the BBC’s strategy, activity and output are in the public interest, and accord with the mission and purposes set out in the charter. Editorial decisions will remain the responsibility of the director-general—his editorial independence will be explicitly enshrined in the charter—while the unitary board will consider any issues or complaints that arise post-transmission. And, for the first time, the BBC will have the ability to appoint a majority of its board independently of Government. This is a major change, as previously the BBC governors, and then the members of the BBC Trust, were all appointed by government.

Ofcom has a proven track record as a regulator of media and telecoms. It is the right body to take on external regulation of the BBC. We will require Ofcom to establish new operating licences for the BBC, with powers to ensure that its findings are acted upon. Ofcom will also take charge of regulating the distribution framework and fair-trading arrangements for the BBC. It will be a strong regulator to match a strong BBC.

The Government will introduce four further changes to make the BBC more accountable to those it serves. The charter review process will be separated from the political cycle by establishing an 11-year charter to 2027, with an opportunity to check that the reforms are working as we intend at the mid-term. This will be the third-longest charter in the BBC’s history and will allow for an orderly transition to the new arrangements. The BBC will become more accountable to the devolved nations; the complaints system will undergo long-overdue reform; and new expectations will be set for public engagement and responsiveness. These are major changes to the way that the BBC is governed. They will take time to take effect and it is important that this process runs smoothly, so the current BBC chair, Rona Fairhead, will remain in post for the duration of her current term, which ends in October 2018.

The creative sector is one of this country’s great success stories, growing at twice the rate of the rest of the economy since 2008 and accounting for £84 billion of gross value added and nearly 9% of service exports. The BBC should be at the core of the creative sector, supporting everyone from established players to SMEs. It is already a major purchaser, spending more than £1 billion on the services of around 2,700 suppliers involved in making programmes for the BBC.

The BBC already allows up to 50% of its content to be competed for by the independent sector. The Government now intend that the remaining 50% in-house guarantee for television should be removed for all BBC content except news and related current affairs output. Unless there is clear evidence that it would not provide value for money, all productions will be tendered. There will be a phased introduction of this requirement, which will open up hundreds of millions of pounds of production expenditure to competition. This will not only benefit the creative industries but is fundamentally a good thing for viewers and listeners, with BBC commissioning editors given greater freedom to pick the most creative ideas and broadcast the highest-quality programmes.

The BBC plans to make its in-house production unit a commercial subsidiary. We support these plans in principle—providing they meet the necessary regulatory approvals. However, the BBC can by virtue of its size and scale potentially have a negative impact on the media market, crowding out investment and deterring new entrants. Ofcom will be given the power to assess all aspects of BBC services to see how they impact on the market, with proportionate powers to sanction. Rather than seeing other players as rivals, the BBC should proactively seek to enhance, bolster and work in partnership with the wider broadcasting and creative industries. There will be a focus on this in the new charter.

In particular, the BBC will support and invigorate local democracy across the UK, working with local news outlets. The Government will also consult in the autumn on a new contestable public service content fund that will allow other broadcasters and producers to make more public service content in areas that are currently underserved, such as programmes for children and for black, Asian and minority ethnic audiences. It will be worth £20 million a year. It will be paid for from unallocated funding from the 2010 licence fee agreement. There will be more transparency in the way that the BBC promotes its own services and a requirement to steer such activity towards areas of high public value.

The BBC will be expected to share its content as widely as possible, and will also be encouraged further to open up its archive, so that other organisations and the public can enjoy its many treasures. The BBC belongs to all of us. Making its archive more widely available is just one part of a broader opening-up process. We want the BBC to be much more transparent, in particular about efficiency improvements. The BBC already plans to make £1.5 billion of savings by the end of this charter period. The BBC Trust has driven some improvements in transparency.

However, the BBC needs to become more accountable to those it serves. Only 23% of the public believe that the BBC is efficient. Licence fee payers need the BBC to spend the nearly £4 billion given to it every year more wisely. The National Audit Office has an outstanding track record. The NAO will become the financial auditor of the BBC and will have the power to conduct value for money investigations of the BBC’s activities, with appropriate safeguards for editorial matters. The board will also be required to ensure that the BBC is transparent and efficient in its spending, by reporting expenditure by genre.

The BBC already publishes data on the salaries of its staff by broad bands, and the names and detailed remuneration packages of managers earning more than £150,000. The public has a right to know what the highest earners the BBC employs are paid out of their licence fee. The new charter will therefore require the BBC to go further regarding the transparency of what it pays its talent and to publish the names of all its employees and freelancers above £450,000—the current director-general’s salary—in broad bands. The Government also expect the new BBC board to consider other ways in which it can improve transparency of talent pay. The BBC will be required to undertake a root and branch review of its research and development activity, laying out its objectives for the future.

Finally, the BBC needs a fair, accountable and sustainable funding system that is fit for the future. There is no perfect model for funding the BBC but, given the stability it provides and the lack of clear public support for any alternative model, the licence fee remains the most appropriate funding model for the next charter period. The licence fee has been frozen at £145.50 since 2010. We will end this freeze and increase the licence fee in line with inflation until 2021-22, at which point there will be a new settlement. In line with the other reforms to funding announced last July, this means that the BBC will have a flat-cash settlement to 2021-22. This will give the BBC the certainty and funding levels that it needs to deliver its updated mission and purposes. It will ensure that the BBC will remain one of the best-funded public service broadcasters in the world, receiving more than £18 billion from 2017-18 to 2021-22.

Future funding settlements will be made using a new regularised process every five years, giving the BBC greater independence from government. The licence fee concession for over-75s will be protected during this Parliament, although voluntary payments will be allowed. We will give the BBC more freedom to manage its budgets. Protected funding of £150 million a year for broadband and £5 million a year for local television will be phased out. The World Service will be an exception to this, given its enormously important role.

The current licence fee system needs to be fairer, so we will close the iPlayer loophole, meaning that those who watch BBC programmes on demand will now need a TV licence like everyone else. There will be pilots of a more flexible payment system to benefit those on lower incomes and make it fairer for everyone. At the moment, people have to pay for the first year in only six months, meaning six much higher monthly payments. We will also take forward many of the recommendations from David Perry QC’s review to make the process of investigating and prosecuting licence fee evasion more effective and fair.

Although the licence fee remains the best way of funding the BBC for this charter period, it is likely to become less sustainable as the media landscape continues to evolve. The Government therefore welcome the BBC’s intention to explore whether additional revenue could be raised at home and abroad from additional subscription services sitting alongside the core universal fee. The Government are clear that any new subscription offer would be for additional services beyond what the BBC already offers. It will be for the BBC to set the scope of these plans, but we expect it to review progress and success in order to feed into the next charter review process. We would also like to see BBC content become portable, so that licence fee payers have access when travelling abroad,

The BBC is and must always remain at the very heart of British life. We want the BBC to thrive, make fantastic programmes for audiences, and act as an engine for growth and creativity. Our reforms give the BBC much greater independence from government in editorial matters, in its governance, in setting budgets, and through a longer charter period. They secure the funding of the BBC and will help it develop new funding models for the future. At the same time, these reforms will assist the BBC in fulfilling its own stated desire to become more distinctive and to better reflect the diverse nature of its audience. They place the BBC at the heart of the creative industries, as a partner of the local and commercial sectors, not a rival.

The BBC will operate in a more robust and more clearly defined governance and regulatory framework. It will be more transparent and accountable to the public it serves and who rely on the BBC to be the very best that it can possibly be, so that it can inform, educate and entertain for many years to come. I commend this Statement to the House”.

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My Lords, I thank the Minister for repeating the Statement. Yesterday I said that the pre-briefing over the past few weeks had been extremely unhelpful—I wondered whether the strategy was to make the prospective content of the White Paper seem so awful in order that the final, not-so-bad publication became more acceptable. Whatever the motives behind the briefings, this White Paper needs to be assessed against the three tests set by all those who cherish the independence of the BBC. While we can be reassured by the headlines, and particularly the Statement that the Minister repeated, we have to focus on the fine detail. The devil is often in the detail.

On independence, the Government still seem intent on appointing many of the non-executive directors of an all-powerful new board that will be responsible for the day-to-day running of the BBC, unlike the trust and the governors before that. Can the Minister explain how those government appointments will continue to have a duty to the licence fee payer, as is currently the case, rather than to the Minister who gave them their job?

On funding and the future licence fee, the Government seem determined to create a contestable fund for which commercial rivals can bid. This is a dangerous precedent and, coming hard on the heels of the £650 million raid last autumn, will damage the BBC and the interests of viewers. Will the Minister guarantee that the contestable funding is not licence fee money? If she cannot, does she not understand that this erodes the independence of the BBC? What reassurances can she give the House that the contestable fund will not become a growing attack on the licence fee in the future?

On the BBC’s core mission, the Government want to rewrite Reith’s principles to include “distinctiveness”. How will this work in practice? Will it mean that the board can tell the director-general when to schedule programmes? Will it mean that the BBC cannot competitively schedule popular programmes against Sky and ITV? If competitors launch new services in the future, will it mean that the BBC will not be able to match them? These are the sorts of questions the Minister will need to answer, if not today, certainly in the debate we will have in the future. While I welcome the extension of the charter, everyone in this House will want to fully understand what the mid-term review will consist of. We need a better understanding of the extent to which that will result in changes to the BBC and its services.

We had a short debate on the Urgent Question yesterday, which focused on the process, obviously, because we could not comment too much on the details of the White Paper. The Minister seemed reluctant to reassure the House about how we will be able to properly scrutinise the White Paper and object to some of its contents. I remind the Minister that in 2006 there was an approval Motion in the House, to which the then Opposition tabled an amendment, which resulted in a vote. If it was good enough in 2006, why is it not good enough today? Will the Minister give us the reassurance that my noble friend Lord Alli asked for? She has had 24 hours and I hope she has used that time to reflect on how to ensure that both Houses of Parliament can properly scrutinise these proposals and reach some conclusion on them.

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My Lords, my noble friend Lady Bonham-Carter is unwell, so it falls to me to respond to the Statement from these Benches. I know that my noble friend shares my view that the BBC is the best broadcaster in the world and one of the best gifts of this nation to the world—a treasured institution, respected and trusted around the world, and playing a central role in the wider creative industries. Nothing should be done to undermine trust in the BBC or the financial and editorial independence, the impartiality, and the scale and scope of the BBC. These are the tests against which the White Paper and the charter should be judged.

I, too, thank the Minister for repeating the Statement but can she confirm whether the one-day debate that she has promised in your Lordships’ House will take place after we have had an opportunity to see the draft charter and agreement?

There is much in the White Paper that we on these Benches welcome: for example, the acceptance of the recommendation from your Lordships’ Communications Committee for an 11-year charter, to decouple the charter review process from the general election cycle and to allow full consultation and dialogue. We also welcome the abolition of the BBC Trust, which had the impossible task of being on the one hand a flag-waver for the BBC and on the other a regulator of the BBC. We support the establishment of the unitary board and an independent regulator. We also welcome the fact that diversity is to be enshrined in the new charter’s public purposes. We, too, are pleased, as the noble Lord, Lord Collins, was, that some of the rumours have proved to be unfounded. Top-slicing the licence fee for a contestable fund would have been extremely damaging. Interfering in the scheduling of programmes would have been unacceptable and forcing the BBC to sell off BBC Worldwide or its stake in UKTV would have been economic madness.

However, there are still areas of concern. The 11-year charter period, which is welcome, helps protect independence and impartiality but also provides security in terms of planning and investment for the BBC and stability for the wider creative industries that relate to the BBC. All that would be undermined if the mid-term review allows for the unpicking of bits of the charter itself. I hope that the Minister can give us assurances that this will not be the case.

While we welcome the establishment of the unitary board, we do not believe that the independence of the BBC will be achieved if non-executive members of the board are government appointees. Although the Government currently appoint all members of the BBC Trust, it is a far less powerful body than the proposed unitary board, which will set the BBC’s editorial direction, make key decisions on programmes and even have a say on how the BBC manages news. Giving these important powers to government appointees will understandably lead to accusations that we are creating a state broadcaster and not a public service broadcaster. All non-executives on the new board should be appointed by an independent panel, not by the Government. I hope that the Minister can explain clearly to this House why she appears to disagree.

There also needs to be greater clarity about the new role of the NAO. Can the Minister give absolute assurances that the charter and agreement, and the appropriate safeguards to which she referred in her Statement, will ensure that the NAO will not be able to second-guess or interfere in the BBC’s editorial or creative judgments? To echo the noble Lord, Lord Collins: can the Minister also give an absolute assurance that when the annual £20 million for the proposed contestable fund from unallocated licence fee money runs out, the BBC will not have to pick up the tab for its continuation? Can she explain to us where the money will come from?

Ensuring the independence of the BBC from government interference will be aided by providing a role for Parliament. Votes in both Houses on the draft charter, or acceptance of my noble friend Lord Lester’s proposals for statutory underpinning of the BBC, would be wise and I would welcome hearing the Minister’s views on these ideas. The BBC is the best broadcaster in the world. It is vital that the Government do nothing to damage that reputation.

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My Lords, I wholeheartedly agree that the BBC is the best broadcaster in the world and I am grateful for the guarded welcome that has been given this morning. I should perhaps add that the noble Lord, Lord Hall, who is a Member of this House, has said today that:

“This White Paper delivers a mandate for the strong, creative BBC the public believe in. A BBC that will be good for the creative industries—and most importantly of all, for Britain”.

The noble Lord, Lord Collins, made a point that we often agree on, which is that the devil is in the detail. I am sure we will come to discuss detail on this White Paper in the weeks and months ahead, but I will seek to respond briefly to the points that he and the noble Lord, Lord Foster, made.

We have tried to put independence at the heart of the proposals we have set out today. In relation to the executive board itself, I refer the House to page 50 of the White Paper, because it sets out very clearly exactly how the appointments to the unitary board will be made. A majority of members will of course be appointed by the BBC, and there will be a non-executive chair. As I explained in the Statement, that chair has already been appointed for a transitional term up to 2018, providing valuable continuity. The non-executive deputy chair will also be a public appointment. There will then be public appointments involving the nations—Scotland, Wales, Northern Ireland and England—but all other non-executive members will be BBC board appointments.

It is good to know how the contestable fund will work at last after so much speculation. I set out that we will establish a contestable fund because we want to enhance plurality and provision, for which £20 million a year has been found for three years. It will enable the BBC to look at things such as children’s TV more imaginatively and is intended to fund underserved genres. I hope it will reassure noble Lords to know that we will be consulting on the scale of the fund and how it will operate. I do not see it at all as an attack on the fundamentals of the BBC; I see it as a great way of encouraging more creativity in this country.

There were questions about distinctiveness, which is rightly a key focus. We want the BBC to be different. It has other priorities to commercial broadcasters, and can take more risks and can innovate. That has been embraced by the BBC director-general, who has seen it as a driving force. He, of course, will be the editor-in-chief under the new system enshrined in the charter, which I think will help to offer reassurance going forward.

I wanted to say two or three things about a vote. First, we recognise how important the scrutiny of both Houses, including this House, is, and we have demonstrated that. We have had debates here which we have listened to, we have had excellent reports by the committees involved in both Houses and we have made it clear that the White Paper needs careful consideration. We have informed the House that there will be a debate in the coming Session.

I take the point that was made about the draft charter. I am not sure I can give an answer on that today, but I will bear it in mind. We will consider whether there should be a vote in Parliament, but I remind the House that there would be disadvantages in a vote as well as advantages. My noble friend Lord Grade said yesterday that:

“One of the underpinnings of the independence of the BBC is the fact that there is never a vote on the BBC in either House”—

poetic licence—

“and that is what has contributed”—

this is the important point—

“the most to its independence”.—[Official Report, 11/5/16; col. 1741.]

I tend to concur with that view, and would say that the BBC has been enshrined in royal charter for 90 years—a system which has served us well and preserved its independence.

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My Lords, before we have the questions from Back-Bench Peers, I remind your Lordships that 20 minutes are available, so I would be grateful, as I am sure the House would, if they could be as quick as possible.

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Forty minutes.

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My Lords, at one point 40 minutes was on the table, but it has been agreed that there will be 20 minutes of questions. We are having a debate in the next Session. There will be 20 minutes available, so I ask noble Lords to be as brief as they can in their questions, to enable all noble Lords to take part.

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It is a great pity that we cannot have 40 minutes. I say to the Minister that not everyone, even on this side, agrees with what the noble Lord, Lord Grade, said yesterday. Surely it is fair to congratulate the Government on dropping some of the more unacceptable proposals that had been floated over the past few weeks and on abolishing the BBC Trust, which should never have been established and which a committee of this House said 10 years ago should not be. At the same time, will the Minister congratulate the director-general of the BBC, the noble Lord, Lord Hall of Birkenhead, on his negotiating skill?

I ask one question. There will now be an 11-year charter, but why do we need another five-year external review in between? Surely that should be left to a strong board of independent directors, whose job it is to run the corporation year by year. Surely that is their job. Above all, can we not resolve now that the BBC should be left to develop its own plans and build on its reputation as one of the world’s great broadcasters without interference?

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I am grateful to my noble friend for his congratulations; the noble Lord, Lord Hall, has indeed been very helpful in the whole process.

It is an 11-year charter. There is a five-year health check—I use those words advisedly. It is a health check. We are setting up a completely new system of governance. As my noble friend said, the BBC Trust has problems—he foresaw them, but not everyone was so able to do so—and it seems right that a health check, which is what it is, should take place.

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Before I start, I say this to the usual channels. On a day when we are adjourning for pleasure and there is no other business, you should not be time-limiting this debate to 20 minutes for those of us on the Back Benches. We deserve a proper share of time. We are adjourning for pleasure today: there is no other business. From speaking to colleagues around the House, that is the feeling of the Back Benches, and you should listen to us a little more often.

The test today for me is: does the White Paper leave the BBC more independent, or less, than it is today? My fear is that it will be less independent. We know that the Secretary of State is a little less ideologically bent towards the BBC. When I read the White Paper, I worry that there are ticking time-bombs in it in three areas. One, which we have talked about, is the appointment of board members. The second is contestability and whether that money will grow in time and be used as a mechanism to siphon off the licence fee. The third and probably the most worrying is trying to force the BBC to do distinctive programmes. My fear is that that will be used to make it move off doing popular programmes which, from the consultation, is what the public and licence fee payers want.

Will the Government confirm that nothing in the distinctiveness mandate will limit the BBC’s ability to produce the programmes it wants, schedule them when it wants to and introduce the new services it thinks are right? Will the noble Baroness answer that question?

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I thank the noble Lord for making the point about independence, but I take a different view, as I explained, on the first two items. It is clear to me that the way we have set this up, the BBC, with a stronger, more corporate board, and the editorial independence of the director-general, will be the prime focus to decide exactly on the programming. We will not be able to abolish “EastEnders” or do any of the things that people have been worrying about. It leaves the duties squarely with the BBC. There will be a modern regulator—there will be Ofcom—but it is not my experience that Ofcom interferes all that much with the content of individual commercial companies. There is occasionally the need for an appeal or complaint, and I am sure that that system will be moved across. Our general approach is to enhance independence, which I believe we have done, and make sure that the BBC can continue to make all the programmes it needs to make. I continually emphasise the point about informing, educating and entertaining, while of course serving all audiences. It will need to do that.

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My Lords, I repeat a plea that I have made more than once in this House, with regard to the Welsh language channel, S4C. Will the Government kindly give a binding undertaking to the effect that the independence and financial stability of S4C will be guaranteed and built into the new charter? Will the Minister kindly accept that this stems from an undertaking given 30 years ago by that most splendid of men, Sir William Whitelaw, when the president of Plaid Cymru was involved, very courageously, in a determined and indeed potentially terminal hunger strike. It was a contract made with the Welsh people and something that was binding in perpetuity. I ask, therefore, that that contract should be honourably observed.

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The Government are committed to S4C and to maintaining minority language broadcasting. As I made clear in my Statement, we want to strengthen and sustain S4C and we have committed to a review in 2017, covering remit, funding and governance once the charter is settled for the BBC as a whole. If the noble Lord looks at page 59 of the document that we have put in the Printed Paper Office today, I hope that he will feel reassured.

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My Lords, it was absolutely wonderful to discover that a BBC children’s budget will be maintained so that it can continue to deliver excellence. As it is intended to have funds for more children’s productions to address competition, where will the funds come from? Who will administer the funds and the cost of doing so and, most importantly, how many funds will there be to produce high-quality PSB children’s productions?

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This is our first day of discussion of the charter. I have made it clear that the BBC will have editorial independence, which of course will allow it to continue to make the children’s programmes that we all love. I explained that we were introducing a £20 million contestable fund and suggested that that could be used for children’s programming. The precise details are yet to be settled. The important point is that the Government will be consulting on the scale of the fund and how it will operate. I look forward to the noble Baroness giving us her assistance.

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My Lords, I warn my noble friend the Minister that in her Statement she came perilously close to achieving consensus with the noble Lords, Lord Collins and Lord Foster. That is a remarkable achievement, in the context of everything in the press beforehand. I welcome the fact that the majority of the new unitary board will be non-government appointed, and therefore independent members, which will enhance the independence of the BBC. On that independence, will the Government consider the possibility of limiting each appointment to one term only so that there can be no suggestion, perceived or not, of any board member currying favour for the renewal of an appointment?

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I thank my noble friend for his interesting idea. In corporate life, it is very unusual to appoint for one term only, but we have not decided on those details. There will be a transition period while the arrangements for the regulation of the board are set up. I note what he said about a one-term appointment.

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My Lords, I thank the Minister for repeating the Statement. Sadly, I am not reassured. I have deep concerns, which have already been raised by the noble Lord, Lord Fowler, and my noble friend Lord Alli. The Statement states that programmes should be made in the public interest. Who defines public interest?

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I would like to discuss this with the noble Lord. As I have explained, there is a combination of the director-general, who has editorial independence but has to take account of the public interest, the new executive board, which will on a day-to-day basis and strategically try to ensure that that is achieved, and a new regulator. The precise detail of how that will work is set out in some detail in the White Paper that we have just published. We should all have a look at it and return to that point in the debate we will have.

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My Lords, I must come back to distinctiveness. With great respect, I am afraid the Minister did not answer the question asked by the noble Lord, Lord Alli, on distinctiveness. Many of us are very concerned that this is the thin edge of the wedge that will prevent the BBC competing with commercial broadcasters in prime time and that it is deliberately designed to do so. What assurance can the Minister give to this House that that is not the intention and that that will not be the case?

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I think I can assure my noble friend that that is not the intention. It is something that the BBC has fully recognised and embraced. The BBC’s director-general has been the driving force here. He has highlighted that he wants to see a system that,

“firmly holds our feet to the fire on distinctiveness”.

To my mind, that is what the White Paper’s proposals will deliver.

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My Lords, the register declares my interest as a member of—I was going to say of an endangered species but it is a now a condemned species—the BBC Trust. Knowing the great interest in this House, I first welcome the Government’s commitment in the White Paper to ring-fencing the BBC World Service. That is very important. That presents a solid guarantee for the years ahead, as well as the certainty provided by an 11-year charter.

However, my concern is that the proposals to protect the BBC’s independence do not go far enough. Will the Minister assure the House that the Government will provide sufficient guarantees that their future decisions about the BBC and, in particular, about funding and appointments to the board are made clearly, transparently and without compromising the BBC’s independence? Furthermore, will the Minister explain what the expression “mid-term health check” means? It was never present in any charter in the previous 90 years. All the polling and assessments that have been done indicate that viewers, listeners and licence fee payers believe that the BBC is in rude good health. Is it only the Government who think otherwise?

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The Government have rightly undertaken a review of the charter and have come up with proposals for a new charter, which to my mind represents a great deal of continuity, for 11 years. Points of detail have already begun to emerge in this debate, and I am sure we will debate them further in the weeks and months ahead. I have already sought to explain that the health check is important because we are setting up a new system, and as a responsible Government we should be looking at how it works. A five-year health check, which is just that and not a major charter review, seems to be a good addition to the toolbox.

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My Lords, as someone from Scotland who is a great admirer of the BBC, I have to say that the part I admire most is the title, “British Broadcasting Corporation”. Can the Minister reassure me that under the new proposals the British component of news broadcasting across the UK will be protected, and that in determining news coverage for the devolved countries of the UK the BBC will base any changes on viewer evidence and not on the political desire of a devolved Government?

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We have made a number of detailed proposals about news, but I very much take the point that my noble friend has made.

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My Lords, I strongly object to the Government deciding at the last minute to reduce the question time from 40 minutes to 20; until the very moment they began, 40 minutes was on the screen. The Statement says that the Government are committed to the BBC thriving in future, but in practice do these proposals not actually reflect an agenda to cut back the BBC’s market share? Is that not really what this is all about? When the Government have achieved that in due time, will they not use that as an excuse in a future review of the licence fee to cut back the BBC’s income as well?

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I empathise with the point about timing. I am not sure that I can do anything about that today but of course we will have further discussions on future occasions and, as noble Lords know, my door is always open on any subject. On the question of funding, the licence fee will rise in line with inflation over the next five years, which is highly positive. The BBC is one of the best-funded public broadcasters in the world. It is true that last year there was an agreement under which the BBC made a contribution to the public expenditure problem that the Chancellor faced, but today’s charter sets out excellent arrangements that assure the BBC a strong future, for exactly the reasons that the noble Lord, Lord Hall, set out. This is a real era of opportunity for the BBC. Where we were in previous debates is not where we are now.

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My Lords, when the Minister talks about a health check after five years, does she accept that to this House it sounds like a dose of the bubonic plague rather than anything that is going to be healthy? I shall ask one quick question in order that others can get in. When she talks, in the context of distinctiveness, about “robust incentive structures”, should we be worried? What does she mean?

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In recent years the BBC has done a lot to make itself more efficient. It has worked with us in government on explaining its thinking about the way that studios and competition should develop. I went into some detail in the Statement and I very much stand by that. It will help the BBC to thrive and be more successful. It will help the independent industry; it will help the small companies that the BBC is already using and in fact mean that even more small companies are able to work for the BBC and improve our creative industries in Britain, which of course are worth £84 billion a year.

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My Lords, I gently say to my noble friend that a health check can sometimes lead to surgery. Would she say a little more about the World Service, which she has already referred to? We are all delighted that it has been ring-fenced, but can she assure me that if there is a need in this very volatile world for extra languages, such as Middle Eastern languages, to be added to the World Service repertoire, she will be entirely sympathetic and that there will be sufficient flexibility for that to happen?

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We should reiterate our record on languages today, having confirmed extra money and having brought in extra languages and countries recently. This is a vital contribution to the UK’s soft power and an excellent settlement.

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My Lords—

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My Lords, I have been waiting a very long time to get in. I want to return the Minister to one of these devil details: the public service content fund. She addressed the question asked by my noble friend Lord Collins but she did not answer it. I therefore ask her again: will she give a guarantee that that will not be used to salami-slice the licence fee? That guarantee is particularly important in view of the grudging acceptance in the Statement of the licence fee and the fulsome praise she gave for that public service content fund. Does the Minister accept that the licence fee is the foundation for the excellence of the BBC as the world’s most outstanding national broadcaster?

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Did the noble Lord mean the contestable fund?

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I have now lost the thread of the noble Lord’s question.

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Will the Minister give a guarantee that that fund will not be increased in future to salami-slice the licence fee from the BBC?

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That is certainly not our plan. I have explained that it is a £20 million fund, that we are looking at what it can do and that we are consulting on it.

Sitting suspended.