Motion to Take Note
BBC Governance and Regulation: Communications Committee Report
3:33 pm

Moved by Lord Inglewood

That this House takes note of the report of the Communications Committee on the governance and regulation of the BBC (2nd Report, HL Paper 166).

4:00 pm
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Lord Inglewood (Conservative)

My Lords, in opening this debate, before introducing the Communication Committee's report on the governance and regulation of the BBC, I pay tribute to my predecessor chairman of the committee, Lord Onslow, who died on 14 May last year during the report's preparation. Michael William Coplestone Dillon Onslow, 11th Baronet of West Clandon, 7th Earl of Onslow, Viscount Cranley, 10th Baron Onslow and Baron Cranley, was the kind of Member of this House that we no longer get these days. But he always made a contribution and added to the gaiety of life in doing it. His work on the Communications Committee was no exception, and I doubt that we shall see his like again here.

Why did the Select Committee on Communications decide to inquire into the regulation and governance of the BBC? There were two main reasons. First, we consider it part of our purpose to assist the House in advance of the plethora of policy initiatives and legislative and regulatory changes that we are going to see in the next few years as a result of the technological revolution currently under way across the media, which is radically changing the world in which we live. Secondly, 12 months ago the BBC was acquiring a new chairman, and we hoped that our work would be of help to the new incumbent, the noble Lord, Lord Patten of Barnes, whom I am delighted to see here this afternoon. He will no doubt advise us on whether we have been successful, and we certainly welcome some of the changes that he has brought about.

It was also five years since the last review of the charter and the establishment of the BBC Trust, so the moment was timely to consider some of changes that have ensued. However, it is disappointing that it has taken nearly nine months for the report to be debated when at least some of its topicality has been lost. After all, relevance should be a crucial aspect of the House's work.

The report itself comprises a number of distinct recommendations which group into a number of general categories. The first consists of those that relate to the internal workings of the corporation. The second relates to its outward-looking relationships with the Government, Parliament and the licence-fee payers, who are defined somewhat more widely than the literal meaning of the words might suggest. The third is much more general and relates to the wider changes going on in and around the media, to which I have already alluded.

I turn to those aspects that principally relate to the BBC's own modus operandi. We concluded that one of the biggest practical shortcomings of the way in which the BBC conducted itself was in respect of complaints, both internally and as regards the overlap between itself and Ofcom. It was overly complicated and convoluted. During the 15 years preceding our inquiry, four pieces of legislation have been passed that had implications for the handling of complaints about BBC programmes and services, and new regulatory bodies had been given different and sometimes overlapping tasks. This resulted in a system described by the noble Lord, Lord Grade, as "absolutely hopeless". The complication and confusion surrounding the complaints process was such that it took the committee and its advisers a considerable effort fully to understand it and, in an attempt to make it clearer, it was set out in one chart, which was published in our report, with possible options for complaining about the BBC. The result is startling and shows how confusing and complicated the complaints process has become. We believe that this is probably the first time that the entire complaints system has been documented for public use on a single page.

We then moved on to examine how current systems could be improved in a short time without amending the charter or existing legislation. We recommended the creation of a one-stop shop within the BBC where complaints could be registered and either dealt with directly or passed on to the relevant department.

We encouraged the BBC executive, BBC Trust and Ofcom to work together to ensure that people wishing to complain about a BBC television or radio service understood the process through which their complaint was to be handled. Furthermore, we recommended the drawing up of a new memorandum of understanding between the BBC and Ofcom, which would require that all complaints about BBC programmes and services should first be considered by the BBC, using an improved version of the existing internal process. In its response, Ofcom explained that it did not think it would be appropriate to oblige audiences to contact the BBC first, or to reject or transfer complaints without investigation. This is because, in line with its statutory duty, Ofcom treats complaints about the BBC under the same established procedure as for all other broadcasters.

However, Ofcom informed the committee that in the light of the report it had begun working with the trust to ensure that complaints to either body have consistent advice and guidance on the current process and options available. It is difficult to judge the effect of this work that Ofcom and the BBC have done together, because we have no concrete examples of exactly what has been achieved, but the committee welcomes any work that will make the complaints process more efficient and user-friendly.

While not addressing these recommendations specifically, the BBC Trust response to the report explained that it was sympathetic to many of our recommendations in this area, and announced the appointment of a chief complaints editor. In an update sent on 22 February this year, the BBC Trust said:

"After a significant amount of work over the last few months with colleagues in the BBC Executive, the Trust has recently approved the proposals for changes to the BBC's complaints processes that it believes will bring about improvements. It is a requirement that we consult the public on these changes and the Trust will launch this consultation in early March. Many of the specific changes your Committee suggested-including a single-page guide to complaints, and more systematic recording of complaints-are being progressed as part of this work. We hope that once this consultation launches that your Committee will agree that good progress is being made in this area".

We very much welcome this. We will no doubt have a close look at what transpires.

The final issue relating to complaints that I wish to mention is that of complaints relating to impartiality and accuracy. This is the sole remaining major area of BBC UK television and radio content which is not subject to external regulation, and we judged it to be inappropriate that the BBC should remain its own judge and jury in these matters. The trust told the committee in its response that it did not believe that the current situation was inappropriate, arguing that having the trust as sole regulator was fundamental to securing the independence of the BBC. In its response, Ofcom said that giving Ofcom responsibility to consider impartiality and accuracy complaints would require changes to the agreement between the Secretary of State and the BBC. Ofcom therefore could not take this recommendation forward without the Secretary of State changing the agreement first.

In his response, the Secretary of State said that the Government were not seeking to change the existing allocation of regulatory responsibilities between the BBC and Ofcom, although no reason is given for reaching this conclusion. Notwithstanding this response we remain of the view, expressed in our report, that the Secretary of State and the BBC should consider granting Ofcom the right to regulate the BBC in respect of impartiality and accuracy. We would therefore be grateful if the Minister would explain the Government's thinking about this matter, and request that it be reviewed.

All content produced by the BBC must comply with the editorial guidelines. Concerns were raised by the committee that the attempt to ensure that the BBC meets the highest standards in adhering to the rules on issues such as impartiality, accuracy, fairness, harm and offence has led to the growth of a compliance culture which is endangering the creativity of its employees and stifling innovation. This is a delicate balancing act between ensuring on the one hand that what Sir Michael Lyons, the predecessor of the noble Lord, Lord Patten, described in his farewell public speech as "memorable cock-ups" do not happen, and on the other ensuring both that BBC staff understand the compliance system and that the system is as light-touch and minimally bureaucratic as it can be.

The BBC's original response to our report informed the committee that the trust was assured by the director-general that this issue was being tackled, and that the trust had confidence that a sensible solution would be found which ensured that the editorial compliance process could be simplified while retaining integrity. Subsequently, it was explained that the aim of this exercise was to find the right balance between ensuring that the BBC meets the highest editorial standards expected by licence-fee payers and ensuring that the compliance process in place does not unnecessarily impede creativity.

It is reported that progress has been made on this front. Since last year the BBC has been piloting new compliance procedures throughout the organisation that are simpler and place clearer responsibilities on editorial leaders. The pilots, which are overseen by the BBC executive, are being spread to other parts of the organisation, and where appropriate will be rolled out permanently. Again, we very much welcome this and will watch developments with interest.

The committee also considered the issue of non-executive directors on the BBC executive board. We were concerned that the fact that executives had senior City and business roles might inflate the level of salaries awarded by the non-executives to BBC staff. We concluded that where possible candidates from the public and third sectors should also be considered alongside senior business figures when vacancies occur. Furthermore, we believe that the non-executives should be regarded predominantly as advisers on corporate and management responsibilities, advising on business or organisational issues and supporting the corporation's public service remit on issues such as IT, project management, market conditions, facilities and human resources.

In its response to our report, the BBC confirmed its intention that future appointments to these roles would include candidates from the public and third sectors. Furthermore, in its update it says that since the committee's report the BBC has made three non-executive director appointments to the executive board; that the non-executives now have clearer roles and responsibilities and are working with their executive colleagues to oversee the delivery of BBC services and operations on the executive board; and that it has cemented this new direction by publishing its expectations of those non-executive directors in a revised protocol that is available on its website. Again, we welcome that.

In 2007, public value tests, or PVTs as they are known, were introduced as a way for the trust to evaluate BBC proposals for new services or significant changes to existing services, to ensure the propriety of what is being proposed. The committee welcomed this mechanism in principle, but some witnesses explained to us that there is a lack of clarity about what constitutes a service and should therefore be subject to a PVT. That confusion arises because a decision about what constitutes a service remains at the discretion of the BBC Trust. We suggested that the trust and Ofcom should work together to agree on a suitable definition of a BBC service. In its response, the BBC told us that it was discussing with Ofcom ways in which it could assist the trust in deciding whether a potential change was significant, and pointed out that in particular there was probably scope for Ofcom to provide advice to the trust on the factors that it should take into account when considering the impact on third parties of change to a service or non-service.

In its response to us, the BBC accepted that it could be clearer when the BBC will apply the public interest test, and in its most recent update it has told us that the trust agrees with the committee's view that the dividing line between what constitutes a service and other activity classed as a non-service activity was not clear, and that to avoid future confusion the trust has decided that it should simply seek to apply the PVT to non-service activities as well as to services. Here, the determining factor for the trust in deciding whether or not to conduct a committee is the significance of the proposal, not the question of whether or not it is technically a service or a non-service. That approach provides certainty and clarity, both within the BBC and to its external stakeholders.

The trust has now put in place all the new arrangements to secure independent advice from Ofcom on the potential significance of BBC plans from a market perspective, and now seeks this advice as a matter of course when considering the significance of proposals in order to decide whether to apply the PVT. The change was implemented in time to apply to the plans under consideration by the trust as part of the Delivering Quality First initiative, and already several elements of that initiative have been submitted to Ofcom for its advice. Once again, we welcome this change.

We then turned our attention to the licence-fee settlements, and concluded that under the recent settlement money from the licence fee is going to be used to fund important activities such as the BBC World Service, S4C and Broadband Delivery UK, which sit outside the BBC's core activities. It was therefore necessary that the trust worked together with the relevant bodies in order to identify a governance framework through which the bodies overseeing these activities, particularly BDUK, would be accountable for the way in which they used this money. We welcome the BBC's response that the trust was sorting through some of the issues at the time that it advised us of this. We also welcome its agreement with this recommendation and the fact that it is making progress in this area, including through a formal amendment to the BBC's agreement with the Secretary of State. Again, I would be grateful if the Minister could advise us of exactly what progress has been made in this regard.

We also looked at the current relationship between the BBC and the National Audit Office, which can be succinctly summarised roughly as follows. Under the current arrangements, agreed between the trust, the NAO and the Government, the NAO conducts reviews of BBC services as requested by the BBC Trust, although it is not the BBC's auditor. The BBC Trust is responsible for determining which areas the NAO should investigate and the NAO then reports its findings directly to the trust, which adds its own and the executive's comments to the report before presenting it to the Department for Culture, Media and Sport, which in turn then lays the report before Parliament. This is a different process from the NAO's dealings with most other publicly funded organisations. Its rationale was to safeguard the BBC's editorial independence but, at the same time, to ensure parliamentary scrutiny of the spending of public money.

In its report, the committee recommended reform of these arrangements. We think that the NAO should agree on a work plan with the BBC Trust in advance. This is the case with many other organisations that are audited by the NAO. The period to which these work plans apply and the extent to which there are opportunities for work-plan review are matters to be agreed between the trust, the Government and the NAO. The BBC accepted that the NAO's work plan should be set in advance. The Government told us that they were committed to ensuring that the NAO had full access to the BBC's books in order to ensure greater transparency. They told us that they were in discussion with the BBC and the NAO about the detail of how this commitment could be achieved, and that the revised arrangements were to be implemented by November last year.

On 15 September last year, the Secretary of State for Culture, the Olympics, Media and Sport and the BBC agreed arrangements for the NAO's work at the BBC so that the Controller and Auditor-General will now have discretion over the subject matter of the reviews that the NAO undertakes. These reviews will continue to be reported to the BBC Trust, which is responsible for the BBC's accountability to licence-fee payers. We welcome this development.

In our call for evidence, we signalled our interest in the issue that underlies the governance and regulation of the BBC-the accountability of the BBC in general and the BBC Trust in particular. Therefore, we examined and explored what are regarded as the basic tenets of the BBC: the significance of licence-fee payers, the supremacy of the royal charter and the BBC's independence from the Government. We discovered that all three are more complex than is commonly understood. We concluded that, while the BBC Trust cannot be directly accountable to individual licence-fee payers, it should continue to consider how it might provide further transparency and continue to consult viewers, listeners and users of BBC services. The aim of this should be to ensure that those who pay for and use the BBC have more of a voice on the sort of services that it provides and its strategy for the future.

Secondly, since the BBC spends public money, Parliament-particularly the House of Commons-should have oversight and be able to scrutinise that expenditure from a value-for-money perspective. That process must not intrude on the BBC's editorial and journalistic independence. From time to time, Members of both Houses express concerns about aspects of the BBC's output. It is obviously open to them to express their opinions but the way to approach any specific concern must be through the complaints procedures that are in place for everyone.

Equally, as the events of the past decade have shown, the relationship with the Government of the day can be fraught with danger and tension. This is probably unavoidable in a free society but the Government must be clear as to the distinction between their role as midwife to the corporation and the financial arrangements surrounding it, where they have a legitimate locus standi to intervene, and the BBC's obligation to editorial and journalistic independence, where they cannot do so.

For the relationship that has evolved between the BBC, the Government, the licence-fee payers and Parliament to be sustained, all involved must understand and adhere to these basic underlying principles, which maintain a degree of balance and equilibrium between them. These relationships and the balance inherent in them are an almost archetypal British compromise. Nobody would design a system like this but it has evolved and it more or less works much, if not all, of the time. As a result, it is tinkered with at our peril. Above all, it is part of the law of the land.

One of the curiosities of the BBC is that it has its own legal code within English law. That is not unique but it is most unusual. During its deliberations the committee wondered, like many before it, whether this legal idiosyncrasy was actually justified. We recognise that the existing arrangements work but are unconvinced by some of the arguments advanced to support them. We therefore feel that the Government should look carefully at the legal structure of the BBC before their proposals for the next charter and agreement are brought forward, and do so from the perspective of whether these are the best arrangements for an independent national broadcaster paid for from public money. We very much hope that the noble Baroness will be able to confirm that this will occur.

At the start of my remarks I commented that the committee sees an important part of its role as assisting the House in the work it is shortly going to have to undertake in response to the policy initiatives and legal and regulatory change that the next few years are going to bring. Therefore, in conclusion, I reiterate paragraph 136 of our report:

"We welcome the Government's consultation as the 'first step' to the communications bill and support the wide-ranging review ahead of the Green Paper which is due to be published later this year".

That means last year; it has not yet been published. The paragraph continues:

"We see this as a useful start to discussions on the content of a future communications bill. We invite everyone in the industry and in particular the BBC Trust to respond to this review. We encourage the Government to conduct a comprehensive overview of the broadcasting industry to link the preparation of the next communications bill to the renewal of the Channel 3 and channel 5 licences in 2014 and the expiry of the current BBC Charter in 2016. Unless this is done the sector risks additional complexity and confusion".

As your Lordships will know, since then the entire media world has been shaken by the hacking scandal, which in turn, in the era of convergence, will bring about further legal and regulatory change which certainly will not be confined to the printed word but extend across the entire sector. When to this is added the ceaseless flow of innovative and technological development currently taking place, the immediate future threatens to be one of almost permanent revolution. This is an enormous challenge.

Finally, I thank our specialist adviser, Professor Stewart Purvis, for his wide-ranging and significant help, and Audrey Nelson and Emily Davidson, clerk and policy analyst respectively, both of whom have moved on to pastures new.

4:22 pm
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Lord Macdonald of Tradeston (Labour)

My Lords, I am pleased to have been a member of the Select Committee on Communications, which produced such a timely and, I believe, influential report on the governance and regulation of the BBC. I thank our chairman, the noble Lord, Lord Inglewood, for guiding us towards recommendations that he summarised very cogently. Those recommendations have been uncommonly well received. The report was welcomed by the Department for Culture Media and Sport and the regulator, Ofcom. The noble Lord, Lord Patten of Barnes, also thanked us for the constructive way in which our committee had engaged with the BBC, and described our recommendations as "considered and helpful" to the review of BBC governance that he was conducting as the incoming chairman of the BBC Trust.

I take the positive view that the reforms subsequently initiated by the noble Lord, Lord Patten of Barnes, align well with our committee's recommendations. For instance, as noble Lords have heard, we expressed concern about how the BBC dealt with complaints. The trust has now approved proposals to make the BBC's complaints process faster, simpler and easier to understand. Our committee was also concerned that BBC compliance procedures were too complicated and overcautious. As we heard, the BBC is now piloting new systems to simplify and clarify programme compliance.

Looking at the trust's regulatory responsibilities, we thought that the processes for approving changes to core BBC services were uncertain. Again, the trust has moved to reduce uncertainty in this commercially sensitive area and has also put new arrangements in place to consult with Ofcom, thereby reducing the possibility of regulatory clash. Our committee was concerned about the confusion surrounding the advisory roles of non-executive directors on the BBC executive board chaired by the director-general, and whether this might undermine the role of the board of trustees now chaired by the noble Lord, Lord Patten of Barnes. Once again, action has been taken and the authority of the trust has been made clearer in a revised protocol.

As noble Lords will see from our report, the committee was divided on how best to regulate the requirement for impartiality and accuracy in BBC output. The majority of my colleagues, concerned that the BBC was currently its own judge and jury in such matters, proposed giving final responsibility to Ofcom. However, as our chairman has said, the noble Lord, Lord Patten, in his response to our report, stated that maintaining the trust as sole regulator over these matters was fundamental to securing the independence of the BBC. Given the singular importance of impartiality to the public service delivered by the BBC, the trust is right to reserve its power of regulation in this area.

Of course, it is now eight months since our report was published. In that time, the revelations about the activities of national newspapers have put in context our rather technical concerns about standards in public service broadcasting. We now hear far fewer accusations that the BBC's rigorous compliance with standards of accuracy demonstrates a loss of nerve in its current affairs. On the contrary, a reinvigorated BBC Trust is now playing a positive role in defining programme priorities in television and radio.

As the director-general and his executives identify candidates for budget cuts, the trust has asked them to rethink their proposals for news and current affairs, saying-rightly in my view:

"We regard the BBC's journalism ... as the single most important priority for the BBC, and the core of the BBC's public service remit".

The budget of the flagship series "Panorama" will be protected, and funds earmarked for in-depth investigations have been increased. The trust has also emphasised the importance of investigative current affairs at regional level-an area of public service broadcasting not well served by other channels.

The noble Lord, Lord Patten, says he does not see the BBC Trust primarily as a regulator of the BBC, or as its cheerleader, but more as its conscience; and he thinks that the BBC should be less apologetic. For me, that holds out the promise that under the noble Lord's stewardship the BBC will also be more confident in countering attacks from commercial rivals. His wide experience in politics and public life should also enable him to see off the ideological attacks on public service broadcasting that will inevitably resurface. However, as we may hear later in this debate, there is continuing scepticism about whether the present trust structure is the best way to govern the BBC. In the second half of this charter period to 2016, the noble Lord must persuade the critics it can be made to work well. I certainly hope that he does.

With the Leveson inquiry by the day making the case for media reform, with Ofcom soon to report on media plurality, with the relicensing of channels 3 and 5 in prospect, then a new communications Act, followed by proposals for a new BBC Charter, Parliament will have a lot to say about the media in the years ahead. I therefore simply cannot understand why, at such a time, it should now be proposed-as I hear is the case-that your Lordships' Select Committee on Communications be disestablished. I trust that noble Lords agree that our report on BBC governance proves our worth and that we can count on your future support.

4:28 pm
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Baroness Benjamin (Liberal Democrat)

My Lords, I thank my noble friend Lord Inglewood for securing this important debate, and I declare an interest as a children's presenter for the past 36 years, as an independent producer, and as a past member of the Ofcom Content Board. I congratulate the Communications Committee on an excellent and comprehensive report, and on all the work that the committee has done in general.

In my speech, I should like to focus on the important role BBC governance has played in maintaining high-quality children's output and the relevance it has to the lives of children and young people. I also take this opportunity to congratulate the BBC on the 10th anniversary of the launch of its two dedicated children's channels-CBeebies for children under six, and CBBC for six to 12 year-olds. Happy birthday to you, and what a success story it has been for the channels. For a decade now, each channel has shown high-quality, commercial-free programming designed to inform, educate and entertain all children across the UK, regardless of culture, background or circumstance. In a world of overwhelming media choice and of powerful global brands competing for children's attention, CBeebies and CBBC have grown to become this country's most popular children's channels, are watched and adored by millions of children, and valued by parents, grandparents, carers and teachers. The channels have become the number one viewing choices for most children.

That is a remarkable achievement for the BBC, which goes to the very heart of public service broadcasting, as it sets a world standard for the creation and broadcast of high-quality content for children. CBeebies and CBBC have shown mostly British-made programmes, which help children understand themselves, the world around them, their place in it, how they can help to make the world a better place and how they can make a difference and change the world's thinking. Their programmes promote tolerance and diversity. There is more diversity within children's programmes than in any other genre across broadcasting. The channels broadcast programmes which teach music, history and science and programmes which give our youngest citizens a much needed voice. Last, but certainly not least, they broadcast programmes which make them laugh, relax and enjoy their childhood.

As a children's producer and presenter myself, I know from experience that such programmes are not easy to make, as the budgets are a mere fraction of those for programmes produced for adults. The BBC children's programmes are built on a tradition which goes back almost 90 years to the first ever children's programme broadcast on the BBC, in 1922, in which "Uncle Thompson" made broadcast history when he presented a few minutes' entertainment on BBC radio just for children. From that moment on, children's programmes never left the BBC. Today's programmes are made by a band of creative individuals who are all passionate about doing their best for children and dedicated to making the world a better place for our youngest citizens. Whether on television or online, the BBC supports an industry of in-house and independent creative talent dedicated to young audiences. I congratulate them all on their vision, commitment and dedication in a world in which funding for children's programmes is under the greatest pressure. I commend the BBC for recognising the importance of that part of its output.

I have campaigned for more than 25 years for broadcasters to maintain high-quality British-made programmes, as I, like many others, recognised that there was a real danger that children's home-grown UK productions were becoming extinct on the commercial channels. At present, only 1 per cent of children's programmes is made in this country, mainly by the BBC, with commercial broadcasters now making a concerted effort and commitment to produce British-made productions for children, which is wonderful and most encouraging. I have also campaigned for the BBC's children's budget to be ring-fenced. Thankfully, last year, it was. I hope that it will remain that way for many years to come.

At this point, I make a plea to the Government for the Chancellor in his Budget later this month to consider giving tax credits to the animation sector to ensure our talented animators continue to work in this country, because work is now being given to other countries which give favourable tax incentives for animation, which is a big part of our children's entertainment.

I am sure that many of us in this House have fond memories of classic children's programmes such as "Play School", "Blue Peter", "Jackanory", and "Saturday Superstore", to mention just a few. I want today's children to grow up with fond memories of British-made programmes, too, which will stay with them long into the future. Childhood lasts a lifetime, and programmes will influence them. Programmes will inspire them to become teachers, doctors, scientists, writers, entertainers- and even, perhaps, producers of children's programmes.

CBeebies and CBBC are not a luxury to be taken for granted and should continue to be supported, as they are an important part of our country's cultural, creative and social heritage, a fundamental pillar of public service broadcasting. They are simply indispensable and, in my view, serve the most important citizens in our society. Once again, I applaud the BBC for maintaining and upholding that vital part of public service broadcasting. The BBC children's mission has always been,

"to create unforgettable content to inspire all children across the UK".

Long may it continue to do so; our children deserve it.

4:35 pm
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Lord Hall of Birkenhead (Crossbench)

My Lords, I, too, am pleased that we have secured this debate today. I should declare two interests: I am deputy chairman of Channel 4 and, for more than a decade, I ran BBC News. I want to make two points about this important report; first, on impartiality and, secondly, on compliance and its effect on creativity within the BBC.

I am really glad that the report re-emphasises the importance of impartiality as a core BBC value, and BBC News is at the core of the BBC. As the report says, how to regulate and, equally importantly, how to nurture impartiality is critical. The danger in the broader media environment is that it could begin to feel like a rather old-fashioned value which may not seem so important now that one has news from so many different sources-from broadcast, from the web, from bloggers and so on. It is not like the old days, when one got one's news from one source or maybe a second.

Yet impartiality is even more important as the noise around events in the world increases and 24-hour news coverage makes it more difficult to work out the truth of what is going on. I remember standing in the news gallery-the control room of BBC News-during the first Gulf War when reports were coming in of chemical attacks on various parts of the Middle East-which we now know were not true. I remember talking to Charles Wheeler, an impeccable journalist, who went into the studio and said, "Let's be absolutely clear about what we know is true and what is not". That dedication to truth and impartiality is phenomenally important.

Impartiality is not a passive value, as John Bridcut made clear in his very impressive report on the BBC and impartiality, From Seesaw to Wagon Wheel. He said that impartiality,

"is also about breadth of view and completeness. Impartiality in programme-making is often achieved by bringing extra perspectives to bear, rather than limiting horizons or censoring opinion".

I agree with the conclusion of the report that impartiality should remain the hallmark of the BBC and a source of pride.

That is why it is important, as this report maintains, that the BBC Trust and Ofcom work together to resolve the regulation of impartiality. But of the three options that are put forward, which to choose? I can see the value of Ofcom being given the final responsibility for regulating impartiality. I can see how being both judge and jury is not good for the BBC or its audiences, but I must confess, having thought about it a lot, that I am with some on the committee-a minority, I know-who believe that impartiality is so important to the BBC that it should remain with it.

My argument is that, however infuriating some critics of the BBC may at times find it, the BBC thinks about and debates impartiality more coherently and convincingly than any other organisation I know. It has expended an enormous amount of time and effort on commissioning reports on the very real difficulties of applying the doctrine of impartiality to some very tricky areas, such as Middle East coverage, or science coverage, or commissioning the Bridcut report on impartiality itself.

There is a body of thinking and experience in the BBC that is second to none. I can tell your Lordships from my experience in BBC journalism that there is much more agonising and worrying about the impact of what it is doing, about impartiality and about getting things right than may be apparent to people watching from outside.

Another issue affecting impartiality is speed. With news and current affairs, and the issues of impartiality that arise from that, you need to respond fast, to make adjustments and correct coverage as you go, to apologise rapidly-that is really important-for demonstrable failure, and to defend journalists when necessary. All this is better done by the BBC Trust working with the executive than by involving a third party. This is not any criticism of Ofcom, which I believe could do an excellent job, but I am thinking of the journalists, editors and programme-makers to whom clarity is crucial, sometimes in very difficult and dangerous circumstances.

My second point is about compliance and the danger of it stifling creativity or bold editorial judgments. The report talks interestingly about the need for the trust to find ways of minimising the compliance culture, which a lot of people find inhibiting. I completely agree with that, but let us just think about it-it is more complex than that, as the report makes clear. It is inevitable that, with each crisis and difficulty, new mechanisms grow up to stop it happening again. Organisations think about what they have done and want to learn from that. That is especially so at the BBC, where compliance is rightly held by everyone to the very highest standards. I have been in positions where compliance or checking your facts and being certain has delayed the transmission of programmes. This was not always without controversy-nor did it make me very popular at times-but it was vital because the programmes that went out were stronger and editorially more robust.

In my view, the key here is not just the rules, which of course are vital, but the people who help the programme-makers with them. The key is to have lawyers and others who want to get programmes out. However, as the report makes absolutely clear, it must be right for the BBC to keep looking for ways to ensure that the culture is one of wanting to make bold, brave editorial judgments, and to reduce levels of bureaucracy not just in compliance but in commissioning.

The BBC is so important to our democracy. It is also the biggest cultural force in this country, and the values it stands for and shows us day after day are vital to every one of us.

4:40 pm
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The Bishop of Liverpool (Bishop)

My Lords, the privilege of serving on the Select Committee on Communications lay very much in seeing the experience and expertise of its members engaging with the expert witnesses who gave evidence.

The BBC royal charter describes the role of the BBC Trust and uses, I believe, a significant word to describe the relationship of the trust to the licence fee and to the public interest. The trust is cast in the role of-and this is the word-guardian. In a positive sense, the trust is the guardian of the interests of the licence-fee payer, ensuring the delivery of high-quality information, entertainment and education.

Further, the trust is clearly the guardian of the values of the BBC, in that it holds the executive to account. However, as well as being a guardian for, it is also, I think, a guardian against-against political interference to ensure its international reputation for independence. I believe that the noble role of guardian, which implicates the trust in the character of the institution and in the content of its output, means that it cannot be its regulator. Any failure of an institution is a failure of its guardian. Furthermore, if the chair of the trust develops a role and relationship with the director-general akin to that between a chair and a chief executive, as cited in the report, I think that it becomes impossible for the trustees and their chair to act as some appellate body detached from the workings of the organisation.

I am persuaded that if there is an unresolved issue between the BBC and its audience, the complaint must ultimately be dealt with by an external body. Nobody can deny the enormous power of the BBC. Even its greatest admirers, such as myself, recognise that its charter and its funding place it in a unique and privileged position among broadcasters. The exercise of this power requires the greatest integrity and the closest scrutiny. As we have already been told, we are seeing through the Leveson inquiry examples of media power and media abuse, and how individuals are highly vulnerable before such power.

The committee, by a majority, favours the regulating of the BBC going to Ofcom. I was one of the minority who favoured creating an independent adjudicator. I can see the arguments for Ofcom being the overall regulator for the whole media platform. For example, during a recent bout of convalescence, I found myself watching more than my fair share of TV soap operas. While watching these programmes, I became very concerned about, for example, the exposure of babies, infants and children to very highly charged emotional scenes. Any such concern clearly should be aired before a regulator which can regulate such a point across all the platforms.

However, my fear about giving Ofcom the responsibility of regulating the BBC is simply the scale of the task and being able to do justice to that task. From the Secretary of State downwards, people recognise that the BBC represents the gold standard of broadcasting. It is in a league of its own among its competitors. You could argue that putting it with other broadcasters under the common regulation of Ofcom would raise the standard across the board, raising the bar for all broadcasters. My concern is that the opposite will happen and the excellence of the BBC will be compromised by being judged alongside inferior output, so that the BBC's famous gold standard will eventually slip to silver and bronze. The power and the privileged position of the BBC requires unique regulation to maintain its gold standard. We must raise the bar, not risk lowering it.

The report also looks into the auditing of the BBC and records a very interesting exchange with the National Audit Office in paragraph 113. Basically, the NAO says that it concerns itself with money and not with programme content. On the surface that seems an important distinction, especially for those who are worried about any interference in the editorial independence of the BBC. On reflection, surely that answer is less than satisfactory. Can you really separate programme content from programme cost? How can you decide whether the six o'clock news or "Today" are value for money without regard to the programme content? For example, a single voice on the "Today" programme for three hours would be much cheaper, but boring, as I think we would all agree. The only way to judge value for money, surely, is to have regard to the content of the programme and the size of the audience.

The impossibility of divorcing content from cost leads me to believe that alongside setting up an independent adjudicator we should establish an independent auditor with the specialist skills of being able to audit the BBC away from any political interference. The report identifies concerns about the complaints procedures at the BBC, as we have already heard, and the compliance culture within the corporation. Surely, complaints and compliance are two sides of the one coin-namely, the relationship between the BBC and its audience. Perhaps the reason the complaint procedure is so obscure-or has been in the past-and the compliance is so oppressive is because there is no independence of adjudication and auditing. The BBC should be allowed to be as creative as possible to stimulate and to provoke its audience. It should be freed from the shackles of trying to regulate itself. It should be free to do what it does best-inform, educate and entertain. The trust should be the guardian of the gold standard of public service broadcasting at every level-international, national, regional and local. That local dimension is ever more important as the Government, in pursuit of localism, devolve power to elected mayors and elected police commissioners. Local media become indispensible public fora for local democracy.

In conclusion, I believe that a stable society is one that is in conversation with its different parts, and with the wider world. I believe that the BBC Trust should be the guardian of the BBC's unique role in facilitating that national and international conversation.

4:48 pm
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Lord Fowler (Conservative)

My Lords, I agree with a vast amount of what the right reverend Prelate said, particularly about the gold standard with regard to BBC reporting.

First, I congratulate my noble friend Lord Inglewood and the committee on the report. Like him, I remember with affection Lord Onslow, who was such a great character in this House. I also congratulate the noble Lord, Lord Patten, on his appointment, which is excellent. He is already becoming the amiable face of the BBC. I used to be Secretary of State for Transport, and he reminds me rather of Peter Parker, who as head of British Rail had a very big public relations value with the railways. I know that the noble Lord will understand if I say that although I have the greatest admiration for the standards of the BBC, I do not regard it as our function here simply to be corporation cheerleaders. Nor is that the function of the Select Committee.

In the report, the committee asked questions about the positions of the charter and the trust that are fundamental but too often ignored. First, as a former chairman I will say a word about the importance of the committee, which is now so ably chaired by my noble friend. The committee was not the brainchild of the two Front Benches; they fought against its establishment. However, this House exercised its will and judgment and decided that a committee should be formed. This has proved to be a triumphant piece of good judgment by the House, for we are now living through the most tumultuous period in media history in modern memory. The past months have brought revelations of newspaper phone hacking, involving breaches of the rights of hundreds of citizens; arrests of newspaper executives-the 23rd arrest by officers working on Operation Elveden came just today; corrupt payments to the police and public officials; the revelation that the Press Complaints Commission is a toothless puppy; and, only yesterday, the resignation of James Murdoch from News International.

Much of this came from the inquiry that the Government eventually set up. I say "eventually" because, as the House may remember, for months previously I had been told by Ministers on the Floor of the House that it was far too early to talk about an inquiry, and that it was the joint view of the Department for Culture and the Home Office that the case for it had not been made. That has proved not to be the case. What it showed me was that we would be very foolish to expect a Government of either party to uphold the public interest when it comes to the media. In past years Governments have been far more concerned about upholding their own interests. That is why the committee is of such importance.

I fear that the risk now will be that Ministers will say, "We have had an inquiry and no more is necessary". I profoundly disagree. The implementation of reforms in the post-Murdoch era will be of vital public interest, and the Select Committee will have a vital part to play in proposing and scrutinising plans. Therefore, if there is any proposal from the Government to the Liaison Committee to downgrade this committee, I would strongly oppose it, and I think that they would have a fight on their hands in this House. I cannot think of a worse time for the House to stand back from its scrutinising role. It would be an utterly wrong step to take.

The report demonstrates that nothing is more important than the continuing scrutiny of the BBC. The report touches on the charter of the BBC. The prevailing official view has been that it should not be changed and that the BBC should not be put on a statutory basis. The result is that the charter is a straight deal between whoever happens to be Culture Secretary and whoever happens to be in charge of the BBC at the time. Much was made of the so-called consultation, but frankly it meant very little. A prime example is that the last consultation came out strongly against a separate BBC trust to replace the board of governors, which had been the position from 1927 to 2007, as the Select Committee pointed out-so of course a separate trust was chosen.

In other areas one might say that there was a democratic deficit. However, the then Government had their way because they were irritated to apoplexy by one report about Iraq on the "Today" programme. Something had to be done, and that something was the setting up of the BBC Trust, and also the arrangement whereby non-executives sit on an executive board, which I believe is almost unique in corporate governance.

My views are very clear. First, the trust should be abolished and the noble Lord, Lord Patten, should be made chairman of the BBC Board, with a proper board of directors or governors, or however you wish to describe them. Secondly, the BBC should be put on a proper statutory basis, even if you want to call it the BBC charter Act. The idea of making an arrangement intended to last unchanged for 10 years is totally out of date. First, it does not happen in any event. The licence fee has been frozen, the overseas service has been cut back, and various other changes have already taken place. Secondly, in the fast moving area of the media, it is fairly comical to think you can make an arrangement that lasts unchanged for 10 years.

My last point is that we are now entering the post-Murdoch age, and this has a number of consequences for the BBC. First, it is essential that the standards of the BBC are maintained. We can point to the BBC as being very much typical of British journalism and very much more typical of British journalism than the phone-hackers and the lawbreakers. I agree very much with what the noble Lord, Lord Hall, said in this regard about impartiality.

I say in parenthesis that it is not just the BBC. We saw with the terrible and tragic death of Marie Colvin of the Sunday Times an example of an outstanding British journalist and outstanding British journalism. However, the BBC has a major part to play in demonstrating the true strength of British journalism. It already has outstanding overseas journalists like John Simpson and Jeremy Bowen, and its political coverage-in spite of all the sniping that takes place-is first class, as is some of its home reporting such as health. I note that over 25 years of covering HIV/AIDS, the BBC has been outstanding in both objectivity and accuracy.

I do not always think that the BBC gets its judgments right. I read that one or two football commentators now have earnings from the BBC of over £1 million a year. I guarantee that that is not the rate paid to the brave reporters who risk their lives trying to tell the world about what is happening in Syria.

The more profound issue is that of ownership in the new media landscape. It is not fanciful to believe that one of the underlying problems with News International was the belief in its power. For example, the noble Lord, Lord Patten, will remember the headline after the 1992 election:

"It's the Sun wot won it".

Then you had politicians beating a path to the Murdoch door. That can easily become a belief that normal restrictions do not apply. All that has come to an end-and if it has not, we must ensure that it does-symbolised by the resignation of James Murdoch, and who knows what the future of the News International newspapers in the UK is going to be?

The lesson of this is not just to rejoice but to ask how we can prevent any other organisation obtaining that kind of disproportionate power. Whether it likes it or not, the BBC is part of that debate. It has a plethora of outlets and channels. As far as television is concerned, there is a multitude of competition, but what about national radio? Too often the debate is whether John Humphrys is being too aggressive in his interviews on the "Today" programme and the continual and irritating apology that they are afraid that they have not got much time for a particular item. But the real debate is not that; the real debate is what is the alternative to "Today", "The World at One" or "PM"? All those are opinion-forming radio programmes. The trouble is that to start a commercial channel in competition is practically impossible, as I think Channel 4 has found out to its cost. It is simply because the advertising is not there. It can probably be done only by the licence fee, as are all BBC programmes.

One option is to make some part of the licence fee open for bids from the likes of ITN and Channel 4 for new, alternative programmes on a new national radio channel. That is not intended to be a hostile move against the BBC. It is intended to do what we should be doing in all areas of the media; namely, to ensure that there is as much competition as possible.

Having said that, I agree enthusiastically that the BBC is one of the outstanding broadcasting organisations in the world. I wish the noble Lord, Lord Patten, the best of fortune in maintaining that legacy. I say to my noble friend on the Front Bench that the Communications Select Committee has an invaluable role at this time. Frankly, it would be madness to try to alter it. I congratulate my noble friend and the members of the Select Committee on their report.

5:01 pm
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Baroness Bakewell (Labour)

My Lords, I, too, congratulate the noble Lord, Lord Inglewood, and the Select Committee on the valiant work that they have done and the excellent report that they have produced. I wish to address two issues in this report. But first I declare an interest: I first worked for the BBC in 1955; I last worked for it last week. Between those dates, I have had a freelance relationship with both BBC television and radio, and, occasionally, the World Service. I have never held any post as director, editor, producer or other member of the hierarchy. My sole BBC experience has been as relating to the viewer and the listener directly. My contribution should be understood as something of a report from the coalface.

I want to address the matter of the current internal compliance regime. The landmark catastrophe in the BBC's history was the Andrew Gilligan and the so-called dodgy dossier affair, which led to the Hutton inquiry and the resignations of the director-general and the chairman. For broadcasters, things have never been the same since. More trivial matters, such as the idiocy of the Jonathan Ross and Russell Brand affair, have further tightened the controls exercised within the BBC on the freedom of its broadcasters. Some of this may well indeed be appropriate but it is certainly a fact that the compliance process now in place is cumbersome, excessive and inhibiting of the trust placed in experienced broadcasters to comply with the BBC guidelines.

I will give a recent example. Last week, as part of the BBC Radio 3 series "Belief", I interviewed at length the writer and poet John Burnside who is this year's winner of the TS Eliot prize. Burnside has written at length in his autobiographical A Lie about My Father of his personal involvement with heavy drinking and drug taking. This featured in the interview. I put it to him that he did not so much struggle against drink and drugs as embrace them deliberately-with which he agreed. We went on to discuss the mind-altering consequences of each. I had already been forewarned by my producer that this would be a difficult topic. She had already been alerted by her editor to "Tell Joan that this would indeed be a difficult topic". Therefore, in the middle of our discussion, I interjected, "This being the BBC, we must of course state that heavy drinking and drug taking are bad for you". Burnside agreed. I understand from my producer that this exchange will now be entered on the compliance document to signal alert about the content. This will be referred to my producer, then to her superior up the BBC ladder of authority, to decide whether it can indeed be broadcast at all.

The effects of such compliance rigmarole are threefold. First, it deskills the broadcaster. I must just as well have asked Burnside, "Tell us what fun it is to take LSD", knowing that I could trust to the safeguards higher up the system to impose its own censorship and relieve me of any judgment of my own. Secondly, it risks creating sameness about programming in which everyone self-censors and creates an anodyne sort of discourse. Thirdly, it consumes layers of bureaucracy's time and attention, not to say ever-mounting reams of paper. The report's recommendation urging the BBC Trust to reconsider the existing compliance culture will, I believe, have the hearty support of the creative community.

Now to the issue of how the BBC deals with complaints. As I was thinking about what to say on this, I received a letter in this place from a viewer. The letter she enclosed is from the BBC Trust which summarises her dealings with it. It goes like this: "You wrote to the BBC complaints department on 12 April. BBC Audience Services replied on 21 April. You wrote again on 10 May. The executive producer of the programme replied on 11 June. You wrote again to the Editorial Complaints Unit. Alison Wilson, the complaints manager of the unit, replied on 2 August. You have now written to the BBC on 31 October". There is no answer to this complaint, and I will explain why. The writer who sent her letter to me ends with this statement, written in capital letters: "The BBC is a corrupt institution. Evolution is the greatest hoax ever known to man. To God be the glory". Such complaints can have as many replies as you wish, but they will not solve the problem.

In the report discussion of how complaint procedures are shared between Ofcom and the BBC, one platform available to the BBC was not discussed. By that I mean the transmission times available to it on both radio and television. Back in the 1960s when television was still seen as a new and exciting medium, I had the good fortune to be part of a radical programme enterprise. It was called "Late Night Line-Up", a programme that went out every day of the year, bar Christmas day, and whose remit was to discuss the nature, range, style and structure of television itself. Every night we would broadcast critiques of programmes, analysis of what had been good or bad, and what was right or wrong about facts, policies and practice. We gave a platform to a vast range of critical voices. Even at a time when the BBC informally sought to keep Mrs Whitehouse off its screens, we went out of our way to give her a voice. In fact, we asked her to review "Oh, Calcutta!".

If the issue of how the BBC deals with complaints is still as tricky a matter as this report suggests-it offers three alternative options to the noble Lord, Lord Patten-then one option it has not included is the programme schedules themselves. BBC television has a channel devoted entirely to parliamentary affairs which, though enjoying relatively low viewing figures, is seen as an important contribution to our democratic system. I suggest that the integrity of the BBC's impartiality deserves regular and direct exposure to the public. There already exist lively but short programmes such as Radio 4's "Feedback" and television's "Points of View", but they are relatively light-hearted and not broadcast consistently enough. Channel 4's "Right of Reply", presented by my friend Gus Macdonald, now my noble friend Lord Macdonald, ran for 18 years until it was axed in 2001. If Jonathan Ross and Russell Brand had been around in the 1960s, "Late Night Line-Up" would have hauled them over the coals, if not that very night, then within days.

Issues around the so-called dodgy dossier might have taken a little longer but they would have been given important gravitas. In both cases, the viewers and listeners, addressed directly from the screen, would have seen an honest, transparent and immediate attempt to deal with complaints. This makes far more sense and is of more immediate interest to the licence payer than any amount of referrals to editorial standards committees and Ofcom.

I am certainly not suggesting that such bodies have a crucial role in the solution of this problem. I am merely suggesting an auxiliary way of satisfying both complainants and licence-fee payers simultaneously.

5:10 pm
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Lord Hastings of Scarisbrick (Crossbench)

My Lords, this is a vital debate on the governance of the BBC which allows the BBC family in Parliament to come together, as evidenced from these Benches, and the commercial Members likewise.

I declare interests as a delighted pensioner of the BBC and, probably more importantly, as the former head of public affairs and parliamentary affairs at the BBC for eight years between 1995 and 2003. Reflecting on the comments of the noble Lord, Lord Fowler, that this is a post-Murdoch era, one of my roles was to fight in this House on behalf of the BBC, then as a lobbyist for the BBC, to protect listed sports events. It was this House which stood up to the Government of the time and voted in favour of protecting listed events for public viewing.

Over the years, I have also managed to bring the issues of parliamentarians-both Members of the House of Commons and of this House-in front of my colleagues at the BBC. It is that experience of having to take the complaints of Members-who would frequently come to my office over the road in Millbank, not in tears but often in fury, and speak to me about what they felt, what they thought and how they had been misrepresented-that is informing what I want to reflect on today. I also want to say that, in recognition of the comments made by the noble Lord, Lord Fowler, the existing Select Committee-I was previously a member for two years under his chairmanship-should in every sense be enhanced and protected. As a recommendation to the Government, I say "Fiddle with it at your peril".

This report, rather grandly titled as The governance and regulation of the BBC, too easily falls into the general trap that the BBC used to encourage-continual conversation among itself about very little change. I heartily recommend some of the points put forward by the noble Lord, Lord Fowler, on the future management and governance of the BBC as being entirely appropriate.

We all want the BBC to energise and engage us; we want it to surprise and thrill us. We have heard about the wonderful 10 years of children's programming and, of course, it is also 80 years-recognised at a party tonight-of the BBC World Service, which we also celebrate.

However, I wish to reflect on the "grisly experience" that the noble Lord, Lord Grade, explained to the committee in attempting, when no longer chairman of the BBC, to complain to his former organisation about what he did not like. What is wrong with the grisly experience? You get treated like the public after you have left an exalted position.

I, too, had an annus horribilis in 2004, if I recall correctly, when still as an executive in the BBC I took a complaint directly to the director-general. It was to have a conversation about what I can only describe as a tacky, slapstick, dreadful programme-it was a ridiculous attempt to ridicule faith-"Jerry Springer: the Opera". The public had made very clear their views in preparation for that programme's broadcast late on BBC 2. More than 85,000 members of the public had said that they were disdained if not irritated at its potential. During the course of the conversation I found myself with only one last recourse, which was to phone up a senior executive at BBC 2. I shall not state the gender of that person because it would give away their name. At the time I spoke to that executive within the close confines of BBC confidence. They said to me, "The problem here is this: there is a culture of 'intransigent self-righteousness' at the core of editorial policy, complaints and, ultimately, editorial decision-making". I have never forgotten that hardened phrase. What is contained within this report about the complaints procedure-its exceptional muddle and unacceptability to the public-just raises those issues to the very core of our conversation.

So what is to be done about it? When we have an organisation that we all want to preserve and strengthen and that we all thrill at, none of us wishes to engage in crazy conversations about the further reduction of the licence fee, the unnecessary eradication of the royal charter or becoming purely a commercially driven broadcast nation. However, we do want a BBC that genuinely feels it has returned to-or enhanced-its position as the citizen's duty provider; that it stands up for the complaints, concerns and issues of the public. They are not just the payers but the customers. I quote no greater figure than the Deputy Prime Minister, who called for a John Lewis culture in business: the advantage of a John Lewis or Marks & Spencer culture is that the customer starts with knowing they are right. My experience-and that of many others-with the complaints procedures of the BBC is that the customer is instinctively treated as though they are wrong. That position needs to change.

I recall that the interim director-general, Mark Byford, established a journalism school at the BBC as part of a very bold and appropriate methodology to attempt to reinvigorate courage in the journalism of the BBC post-Hutton. Of course it was right for presenters and journalists to spend time being re-energised and rethinking how they saw their position in the world and how they reflected on matters of great controversy and interest. However, I do not recall-and I may well be wrong-those responsible for policy or complaints procedures having to go through the same criteria for re-evaluation, re-energising and getting their minds back on the right track of courage and responsibility.

There are many recommendations in this report about what to do. Maybe we will hear shortly that we are to see a split in the responsibilities of the next director-general. That is one possible way forward but it is only to hint at change. What is ultimately needed is a sensitisation within BBC policy-making among those responsible for the editorial process and for those who must, rightly, handle complaints within the BBC. I am not a fan of handing another single power to Ofcom. If you energise bureaucracies, they simply create more bureaucracies, so let us not go down that route. However, we need to sensitise the complaints and policy systems within the BBC back to the duties of ensuring that the public interest is served first; that the customer, viewer and listener must be instinctively correct in the first instance and challenged by facts only later; and that the opportunity to reply is an instant requirement rather than a delayed and fiddled process.

I believe that the BBC, as long as it retains its public resourcing and good governance, is always going to be a great organisation. In the light of that, let us make sure it has great people who make right decisions.

5:18 pm
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Baroness Fookes (Conservative)

My Lords, we have heard some very distinguished professional contributors. I, by way of contrast, am a mere amateur among the professionals. However, I have always enjoyed BBC programmes, starting from childhood. Alas, I must say to my noble friend Lady Benjamin that I go back way beyond the programmes she has mentioned. I recall fondly Uncle Mac, "Toytown", and Larry the Lamb, who went, "Baa" very plaintively on every possible occasion. I grew up admiring the BBC greatly. Indeed, I thought its standards so high that they were almost an immutable law of nature.

However, I did subsequently have occasion to revise my views somewhat. One small incident, in the great scheme of things, occurred when I was chairman of the RSPCA council. A national newspaper had engaged in what I came to regard as a witch hunt of allegations against the organisation, which was taken up by "Panorama". As result of that, I found myself grilled-there could be no other expression-to the point of third degree for about 40 minutes. I thought that I had given some very strong answers to the allegations, so imagine my fury when the edited recorded version came out and my strong answers had disappeared altogether. I was perhaps naive enough not to make complaints but I was very angry and it made me realise that there are ways in which a BBC programme can be, as I thought, slanted. Maybe I was quite mistaken, and I should have swallowed it all; but I did not. I was angry. I vowed then that if ever "Panorama" wanted to interview me again, I would do it only live. I am sure that they do not do it live these days-but that was my vow.

That experience slightly informed my approach to the work that we did on the BBC Trust regarding complaints about impartiality and accuracy. It is right as a last court of appeal that it should go to an independent body. I know that other views have been expressed today but I believe that at least as a final court of appeal that should be the case. I am perfectly happy that complaints should be taken by the BBC in the first instance. Like others on the committee, I was startled beyond measure by the complexity of what one had to do to make a complaint. My noble friend the chairman of the committee suggested that we had finally made it clear to ourselves after a great deal of effort. I am not too sure that I am clear even now if it came to making an actual complaint. There is very important work for the noble Lord, Lord Patten, to do as chairman of the trust to ensure that there is a much better system. Admittedly, some people will never be satisfied. Any of us who have been MPs in the other place will know that there are those who are never satisfied, but you cannot organise your arrangements on that basis. At least we should try to make those who have a reasonable complaint happy and in a simple system. I urge the value of the one-stop shop, which was mentioned in the Communications Committee as a way forward.

I turn to another matter about which I am concerned-the BBC World Service, which has now been brought under the general umbrella. I have no complaint about that as a decision, but I am concerned that it will continue to get the funding that it needs in the light of the stringent restrictions on funding that have to be made throughout the BBC as a whole. We as a committee suggested that one trustee of the trust should be what was described as international. I am not sure whether that has taken place, but I regard that as extremely important. No doubt the noble Lord, Lord Patten, will make this clear in his own contribution later on.

There has been a great deal of comment already about the role of the Communications Committee and whether, in fact, it has a role as a proper Select Committee and will not be downgraded to an ad hoc one. We know that the Government have in mind a new communications Bill in the next year or two. In the light of that alone, apart from any other consideration, it is extremely important that we have a proper Select Committee. After all, we gather information-a kind of folk memory, if you like-by having a continuous thread running through all our proceedings. I can well see that we might want to come back to certain issues over and over again. If we have a small ad hoc committee, as is being suggested in certain quarters, we would lose that altogether. If the Government are ill advised enough to pursue that, they cannot rely on my support-and I hope that many others in the Chamber would feel the same. I can hardly say "over my dead body", as I do not want to die for it-but that is how I feel.

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Lord Pearson of Rannoch (UKIP)

Before the noble Baroness sits down, I fully support what she says about the work of this committee but it is of course for your Lordships' House to decide the committee structure in this place, not for the Government. I very much hope that the House will support the continuance of this committee especially, if your Lordships will forgive me, when we have a number of European committees whose deliberations are completely ignored in Brussels.

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Baroness Fookes (Conservative)

Indeed, my Lords, I am aware that it is for this House. This is simply a warning shot across the bows of the Government, in case they try to do something ill-advised.

5:25 pm
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Lord Bragg (Labour)

My Lords, I, too, congratulate the noble Lord, Lord Inglewood, on securing this debate and on steering the Communications Committee so ably. I declare an interest: I work for the BBC and for Sky Arts. As for the noble Baroness, Lady Fookes, being an amateur, if your Lordships had been on a committee with her you would see how amateur she can be. The threats were the least of it. The committee met in interesting times, in the Chinese way, but it met the challenges. The success of the committee can be judged by the very high quality of those who agreed to give evidence, by the quality of the committee's report and by the quality of the discussions generated by that committee-not least, that in your Lordships' House today. The report has been taken on board by leaders in the communications industry, including the noble Lord, Lord Patten.

Political discussion in the Palace of Westminster has changed a great deal, and often for the better, over the centuries. Still there was, once upon a time, a knowledge consensus which provided a useful form of shorthand and could make a point without drawing blood. If someone in those classical days had called up the ghost of the Latin poet Virgil and referred to his extended metaphor in the Aeneid on the murky, dangerous and powerful force of rumour, then no more would need to have been said. Now, however, we must speak a little more plainly. There are strong rumours, as has been referred to already, that the Liaison Committee is contemplating the abolition of the Communications Committee and its substitution by an ad hoc arrangement. This basically means, as the noble Baroness, Lady Fookes, intimated, an end to continuity, consistency and the benefit of a constant torch being shown on the darker doings and the positive advances of the media.

If it is to be done ad hoc, then it would be ad hoc when, as the noble Lord, Lord Fowler, pointed out, there is an historic inquiry into the press-more dramatically gripping and concerning by the day-when so many committees are about to report, and when a new communications Bill is in prospect. It would be ad hoc when the world of Google, Amazon and the whole invasion of the internet from outer space threatens a reordering of the public information which has taken years to organise for the benefit of a democratic society in this country. Ad hoc is like pulling out the fire brigade when there is a smell of Rome burning. Perhaps those from whom these schemes emanate might do what it is almost always best to do with rumours-scotch them as soon as possible.

I want to concentrate on radio, especially BBC radio-although other stations have great success, as the BBC acknowledges more and more nowadays. There is a BBC celebration of radio at Bush House this evening. It is for 80 years of the World Service, and it deserves our congratulations. It has spoken and continues to speak for this country in the highest terms. It strives to tell the truth, with nation speaking truth honestly and openly to nation, in wars and in peace. Many of your Lordships will have memories of its riches, as I do. I began my career there in 1961 and remember still the thrill of working in the European service, broadcasting to 40 countries, with Konrad Syrop, Tosco Fyvel, Ludwig Gottlieb and others, all intent on broadcasting across Europe in a voice that had been a north star throughout the Second World War. The intelligence and diligence of those in Bush House and their belief in the best that we have to give the world was inspiring, and has not wavered. Look at Iran today: an 85 per cent growth in audiences for the World Service, despite its being banned there.

I want to spend a few minutes talking about BBC domestic radio. BBC radio in this country has a reach of 47 million listeners. There have been over a billion worldwide downloads of BBC content since the launch of the podcast offer in 2007. BBC radio makes an essential contribution to our creative economy, which per capita is the biggest in the world. It employs about 2 million people in areas that we need most-that is to say, areas of niche skills. Radio 4, for instance, is the largest commissioner of radio drama in the world, while Radio 3 is the largest and most significant commissioner of new music in the world.

There is no evidence of a falling away. Total audiences are about the same as they were 12 years ago, despite a hurricane of new media, extended media and the 360-degree wrap-around-the-clock media. The high quality watermark is still there. A few of my recent favourites have been the Reith lecture given by the noble Baroness, Lady Manningham-Buller; the masterclasses at Abbey Road and Maida Vale; as always, "From Our Own Correspondent" and the "Today" programme; the "News at One" and the "News at Ten"; "The News Quiz"-and the list goes on. BBC radio knows what it is doing, and it is doing it very well.

Even Mark Thompson, the director-general of the BBC and therefore a man who has had to develop a bullet-proof mind and the caution of a wildebeest among lions, was almost content the other day when he addressed parliamentarians with an interest in democracy and said that,

"things are going quite well".

He said that unequivocally and no one heckled. That, though, arouses in a pessimistic person like myself the fear that a storm might be gathering just beyond the horizon. I wonder if it may just be waiting for us. The BBC charter renewal comes up in 2016. That means that the sharpening of knives and the lubrication of special interests begins in about 2014, and that is quite soon.

The BBC is a unique institution, as most of us in this House think-priceless in our culture, our democracy and our national character. We in the Palace of Westminster have to look over it very carefully. The overall problem, in my view, rests in what I have been saying: the BBC's success, its reach and its influence. Some other stations and organisations, most notably Classic FM, have found and developed strong profiles and are digging in on the dial. Others want to emulate that.

BBC radio today manages to deliver massively across the spectrum-I have not even mentioned Radios 1, 2, 5 and 6, each one of which at the moment is rather eerily thriving simultaneously. It delivers so well, I think, that that very reach and strength might well become the object of attack-too big, too hegemonic; let the private sector have a greater chance to grow; regulate; cut back; mutterings of "monopoly"; dismantle. This is not happening today-the cloud is not even as big as a man's hand-but those of us who see the BBC, especially BBC radio, as having fought its way back and forged so many new powerful public service identities need to keep vigilant, and a proper communications committee is the place to do that.

5:30 pm
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Lord Birt (Crossbench)

My Lords, it is a pleasure to follow the noble Lord, Lord Bragg, an old and much esteemed colleague. I applaud, as others have done, the noble Lord, Lord Inglewood, and his colleagues for a careful and insightful assessment of the often tangled regulatory issues affecting the BBC, whose director-general I once was. I particularly congratulate them on the graphic and very telling clarity of the complaints charter, of which the noble Lord was justifiably proud.

The new system of governance for the BBC is an improvement on the old. Oversight and scrutiny are more arm's-length, and the trust has clearly demonstrated its independence and its willingness to insist. Under its new chairman, who long ago proved that he is in no one's pocket, I anticipate that the trust will be still more robust.

In due course, though, the governance of the BBC will need to be considered afresh, a common note that has been struck throughout this debate. We can all see that the media landscape is changing fundamentally-tumultuous, in the word of the noble Lord, Lord Fowler-and the imminence of a communications Bill and the proximity of charter review will, I hope, oblige us to redefine comprehensively our policy goals for UK media.

I expect this will be common ground among us: over the best part of a century, no country has regulated broadcast media more effectively than the UK. However, I observe with deep regret that we have somewhat lost our touch in recent times. In the past decade the UK was slow to adopt broadband. Moreover, as new media began to have a fundamental and adverse financial impact on mature media, the previous Government failed to deal with the inevitable consequences of the decline of ITV and the medium-term threat to Channel 4 as public service broadcasters.

At the time-some of us will remember this-the noble Lord, Lord Burns, and a very distinguished panel were invited to address these issues. Their report was acute and their recommendations radical but they were comprehensively ignored at the time. Thank goodness we still have a strong BBC, which is currently in fine creative form-as good as, perhaps better than, it has ever been. I echo the noble Lord, Lord Bragg, who reminded us of the current director-general saying, "Things are indeed going quite well". However, we should not welcome the BBC's re-emergence after half a century as a near-monopoly provider of public service broadcasting in the UK.

The second failure was the current Government's. Eighteen months ago, in what felt like a covert midnight raid, they handed responsibility to the BBC and the licence-fee payer for funding the World Service and S4C. Most amazing of all, the licence fee was raided for a £150 million contribution to broadband rollout-in all, a regulatory nightmare. At the same time, the Government froze the licence fee in nominal terms. This was a double whammy. There was no Green Paper, no White Paper, no public consultation, no debate in Parliament and no discussion of, for example, the principle of asking the UK licence-fee payer to fund services for listeners overseas.

No one here would dispute the notion that, as the nation experiences the most hostile economic climate in many generations, the BBC, too, must share some of the pain. However, in the aftermath of that raid on the BBC, we should have debated the fact that, as far as I can gauge, for the first time in its history the BBC will see its core income fall well below the expected growth rate of GDP. Thus, for the very first time ever, the BBC's role will almost certainly diminish.

Other mighty challenges are ahead elsewhere in our media, as other noble Lords have mentioned. We will need a careful and measured response to the wholesale lawlessness that we now know existed in parts of our print media. Secondly-here I declare another interest as chairman of PayPal Europe-in the virtually unpoliced and unregulated online world, crime is rife and insidious practices abound. Last week's example was a Twitter application that, unbeknown to the downloader, extracts your personal phone directory from your mobile device. Even today, Google has announced its determination to amass, process and exploit across all its services the mountain of personal information that it holds about each of its billions of users.

Thirdly, we see Sky emerge as a leviathan, dwarfing all other broadcasters, including other commercial players. I have long admired Sky's track record of bold innovation. I have welcomed, again and again, the manifest benefits that it has brought. However, its dominance and increasing integration down the value chain is not healthy and requires attention.

All told, this is not a comfortable picture. The UK media are not at present in a condition of which we can all be proud. The coalition Government should consider all these challenges comprehensively and strategically and institute a proper and full public debate. Only then can we address the questions raised so ably in the committee's truly excellent report of what kind of regulatory architecture we will need over the next decade to oversee UK media in general and the BBC in particular.

Finally, we all here appear to agree with the strongly expressed views of the noble Lords, Lord Bragg, Lord Fowler, Lord Macdonald and Lord Hastings, and the noble Baroness, Lady Fookes, about retaining a Select Committee on Communications in this House. We are entering a period where its cool deliberations will never be more necessary and valuable.

5:40 pm
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Lord Gordon of Strathblane (Labour)

My Lords, I too was a member of the Select Committee which produced this report. I join my colleagues who have already spoken in congratulating and thanking the noble Lord, Lord Inglewood, on and for the skill and courtesy with which he chaired the committee and enabled us to reach our conclusions.

I am conscious that I am speaking immediately after a very distinguished former director-general of the BBC, and that the speaker immediately after me is the current chairman of the BBC, and the one after him is another former director-general of the BBC. Therefore, it is with a little trepidation that I say that I was part of the majority report which favoured ultimate regulatory authority for impartiality resting with Ofcom. I do so despite the fact that I agree entirely with what the noble Lord, Lord Hall, said. It seems to me that it is not a question of this function being taken away from the trust: the two functions are different. The trust is there to ensure good governance of the BBC, and good governance includes-indeed, this is paramount among its objectives-ensuring the impartiality of the BBC. However, that does not mean that we should make an exception of the BBC in terms of Ofcom having overall regard to impartiality among all public service broadcasters. After all, the reason we set up Ofcom all those years ago was-apart from the need to deal with the advent of convergence, which has come about a lot more quickly than we thought-a desire to get consistency. Instead of having five regulatory bodies which might reach different conclusions about taste and decency, we would have one.

At the moment, Ofcom is the final arbiter of taste and decency, not the BBC Trust, yet, frankly, taste and decency is a much more difficult issue on which to arbitrate than impartiality. I did political programmes for 10 years. Impartiality, frankly, is easy as regards current affairs but is difficult as regards drama, comedy, the time of day you screen something and what is made available to children, as the noble Baroness, Lady Benjamin, said. Therefore, I do not think that this situation takes anything away from the trust. Indeed, it rather strengthens the trust because instead of putting more and more Chinese walls between itself and the BBC in an effort to show that it is not judge and jury in this area, the trust can get closer to the BBC and be its champion, as it should be. It is in the BBC's own interests: this problem does not go away as it has become totemic. The only reason it is totemic is because we made an exception of impartiality. I think the then Secretary of State more or less admitted to the committee that the Government felt it might be a step too far to put the BBC under Ofcom during the passage of the Communications Act 2003.

In talking about the licence fee, I simply echo what the noble Lord, Lord Birt, has said. I think we all recognise that the circumstances in which the previous settlement was arrived at were exceptional given that that occurred in the midst of a comprehensive spending review. However, that is certainly not the way that the licence fee should be determined. There is inconsistency in this area. Many people in this House-indeed, I have been one at times-say that the BBC is trying to do too much. Sometimes there has been an element of truth in that. The BBC should concentrate on broadcasting, which it does superbly well. Its subsidiary should not be taking over Lonely Planet and things like that. However, the corollary of that is that the Government should regard the licence fee as providing public funding for BBC programmes, not for doing other things with which should be met out of general taxation. Although it might have been a clever move by the Secretary of State at least to ensure that the money clawed back by the Treasury stayed within the broadcasting system and did some useful things, dangerous precedents could be created if the Government of the day-and all Governments will do it-find that this is an easy pocket to pick, whereby the BBC licence fee could be raided for one project after another. We have to be very careful about that. Arguably, you could say that the rollout of broadband is analogous to the provision of a transmitter system and that you could therefore justify such moves. I would find it difficult to justify the BBC subsidising an experiment in local television that, if successful, will simply take viewers away from the BBC. What proper use of the licence fee is that?

My other point about the licence fee is worrying. I worry about the future rate of collection. At the moment, if someone buys a new television they must show that they have a licence. That is a good tracker of who might be viewing. However, now you can watch television without having a television set. You can watch it on a mobile phone or a computer. It will be tricky to ensure that we have total compliance, and I am slightly nervous that the licence fee might not prove to be future-proof in that regard.

My final, and in a way most important, point-far more important than Ofcom regulating impartiality-is to echo some of the things that the noble Baroness, Lady Bakewell, was saying. My concern is not so much the taste and decency aspects of the compliance culture but its effect on areas such as comedy. Comedy is in many ways the touchstone of whether there is good public service broadcasting, because you have to rely on people to deliver the goods. You can ask someone to make a current affairs documentary and budget as to how long it will take and roughly how much it might cost; a reasonable guess can be made. However, you cannot guess how long it will take to come up with an idea such as "Fawlty Towers" or "Yes Minister". You must have producers who are indulgent enough to give rein to people who have not come up with an idea for six weeks or even six months, but then come up with the goods. You must know the difference between those and the slackers who, frankly, should be got rid of after one month because they will never come up with an idea. You cannot do that by ticking boxes.

I am well aware that the BBC is now receiving £3.5 billion of public money; and for that you need proper accountability, systems and everything else. However, there is a grave danger that we end up with systems that require compliance, compliance by committees, and people who get promoted to making decisions about programmes who are not creative, or do not even have an eye or ear for creativity, but are good managers and balance books properly. That is an important skill, but in the order of things it is far less a skill than creativity. It is not a major problem at the moment, and I agree with the noble Lord, Lord Birt, that the BBC's output is of absolutely first-class quality. However, we must be constantly on guard that we do not have box-ticking and programme ideas being judged by a remote computer somewhere.

Apart from all that, it is the 80th birthday of the BBC World Service and an occasion for congratulation. I echo what others have said: I cannot think of a moment in history when it would be more stupid to tinker with our Communications Committee than now.

5:48 pm
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Lord Patten of Barnes (Conservative)

I should straight away declare an interest. As noble Lords cannot but be aware, I am chairman of the BBC Trust. This is a fairly rare intervention for which the House should be grateful. I shall make it fairly brief, but perhaps I may say at the outset how grateful I am to noble Lords on the Cross Benches for giving me a perch and a haven for the duration of my chairmanship of the BBC.

I congratulate the noble Lord, Lord Inglewood, on the report before us. It is a high-quality document; and that quality suggests that the life of the committee should extend not only up to but well beyond the crack of doom. I imagine that the House authorities will have taken account of all the voices raised in support of that proposition. The report was a considerable help to me when I arrived at the trust. I had said that I wanted to have a quick look at governance and make a few changes. As the noble Lord pointed out, we have responded very positively to most of the points in the report, to which I shall come back in a moment.

I should mention three of my prejudices about governance. First, it may be a consequence of the fact that I spent five years of my life working for the European Commission in Brussels that I have rather limited patience with institutional navel-gazing; I prefer to get on and try to make things work rather than engaging endlessly in institutional Lego.

Secondly, we have a national tendency to fiddle around with and reorganise the things we do best. The BBC has its faults. It can be both smug and complacent; it is not always as distinctive as it should be; it is, after all, created from the crooked timber of humanity. However, over the years, it has established a reputation as probably the best public broadcaster in the world-perhaps the best broadcaster in the world-year in, year out. We should be aware of what others have referred to as the gold standard.

Thirdly, it is not long since we shaped the governance of the BBC in the charter review. In due course, we will be debating the next charter review. If you were one of my colleagues in the executive of the BBC, you could be excused for thinking that governance had been debated to death, but doubtless it will come back for a resurrection before too long. We need to remember that the BBC's institutions have often been shaped by rude politics rather than the wisdom of philosopher kings. The noble Lord-actually, let us be clear, my noble friend-Lord Fowler was pretty right earlier when he intimated that the present structure of the BBC owes quite a lot to events surrounding the one fact that the Government got right and the BBC got wrong in the run-up to the latest Iraq war. There are quite a lot of lessons in that.

Nevertheless, despite all the debate, the BBC remains a national rather than a state broadcaster and one of the most trusted institutions in the country. If you read all the polls of which media organisations people trust, the figures are so good for the BBC that they are almost impossible to use.

I want to refer to just four points in the report. They are changes that we have made. First, we accepted much of the criticism of the complaints system in the report-that it is too complicated and often too slow-and we will shortly be consulting on specific proposals to address those issues, including appointing a chief complaints officer. Secondly, we have a good relationship with Ofcom. We have agreed to use its expertise to advise the trust more formally on the market impact of BBC proposals, as the noble Lord pointed out.

Thirdly, the trust and the executive board have agreed changes which will, I think, produce more clarity about the role of non-executive members of the executive board. We noted what the committee said about the expertise of non-executive members, which is one reason for the appointment of Dame Fiona Reynolds as a non-executive member of the board, which I am sure the House will welcome. Fourthly, I refer to the improvements we are making in in-service licences, which have worked pretty well in the past and should work even better.

I mention one other thing we have done. The issue of executive as well as talent pay was pretty toxic in the BBC. We have dealt with that pretty rapidly by implementing one of the central findings of the Hutton report and putting a cap on senior executive pay in relation to median earnings. I hope that what we have done other public bodies will do as well. I have every intention of reducing the cap steadily over the next few years.

It is a privilege to work with the BBC and with such a distinguished director-general. He and his successors will have the job of continuing to provide quality programmes with a tighter budget at a time of turbulent technological change and when, as the noble Lords, Lord Macdonald, Lord Bragg and Lord Fowler, and my noble friend Lord Birt said, the broadcasting economy is changing substantially.

At the time of the coronation, the BBC had a monopoly of the broadcast economy in this country. At the time of the Diamond Jubilee, commercial revenues are twice the size of the licence-fee revenue of the BBC. There has been a fundamental change over the years, partly because of the commercial success of Sky, and people should recognise that.

As the noble Baroness, Lady Fookes, and others have said, we are tonight celebrating the 80th birthday of the World Service. We will take financial responsibility for it, on the shoulders of the licence-fee payer, in 2014. I have given an undertaking that we will continue to fund it as well as we possibly can, and there has been appointed by the Privy Council an international trustee who sits on these Benches: the noble Lord, Lord Williams, who has considerable experience in the Foreign Office, the World Service, the academic field and the UN, where he was most recently the UN special representative in Lebanon. He will be a splendid guardian of the interests of the World Service. I hope that all of us in the BBC can live up to the extraordinary standards which the World Service has established over the years and which have made us even more respected than we would otherwise have been around the world.

5:57 pm
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Lord Grade of Yarmouth (Conservative)

My Lords, in the limited time available, perhaps I may offer some recent historical context before commenting briefly on some recommendations of this excellent report of the Select Committee on Communications. As chairman of the BBC governors at the time, I was, so to speak, in the delivery room when the BBC Trust was born as the successor to the long-standing BBC board of governors.

The midwife in attendance, then Secretary of State Tessa Jowell, was not short of advice, but all were in agreement that the governors structure was no longer fit for purpose. Most took the fallout from the Hutton inquiry as a sign of governance failure. In my clear view, it was not, but that is another story.

The fault lay elsewhere. The traditional governance had failed to keep pace with the structural changes in the sector, which the noble Lord, Lord Birt, has so ably referred to. There was a failure to police the border with the private sector. The BBC regarded its licence fee payers as somehow not the same people as those who consumed and enjoyed a wide choice of media, public and private. It failed, therefore, to understand that if the publicly funded BBC expanded in any way that damaged the private sector, it risked depriving its own licence fee payers of the wider choice that they valued.

Additionally, and perhaps most damaging to the status quo then, the information and data on which governors had to rely for their decision-making were carefully prepared for them by the executive management, who naturally put the most weight on those arguments and facts which best suited the outcome that they desired-usually expansion. The same applied when there were complaints. This was always a recipe for mistrust, both inside and outside the BBC. That is the headline background.

Finding a new model for this sui generis institution was more contentious but throughout the wide debate I was always clear that the governance of the BBC had to remain inside the corporation. Only by being inside could a sovereign board effectively take the ultimate responsibility for the public's money-£2.5 billion of it in those days. You cannot effect and direct value for money after the money has been spent. I was mighty relieved when this argument eventually won the day and the required separation between management and the lay board was enshrined as the BBC Trust, operating from within the corporation.

Is it perfect? Absolutely not, as the excellent report we are debating today suggests. However, that is the wrong question. I think that the noble Lord, Lord Birt, put it better: is it an improvement on what went before? I agree with him that it is, absolutely. The evidence clearly shows that the border skirmishes with the private sector have diminished in their number and intensity, and the trust has never flinched from criticising and directing management publicly when merited on the basis of its own gathered information.

The third vital role of any sovereign body with responsibility for the BBC is to guard its independence. I see no sign that the present arrangements have done anything but strengthen the BBC's ability to defend its independence.

So, to my noble friend's report and his committee. I agree wholeheartedly that the BBC's complaints procedures are deficient, and we have heard plenty of evidence to that effect today. Since leaving the BBC, as I told the committee, I have had two reasons to complain. After months and months and hours of hard labour at the word processor, in the first case the management was eventually overruled by the trust and in the second case, after a shameful attempt to bury the apology on a major news day-the day the Chilean miners were saved-we managed to extract fulsome apologies for editorial lapses on air. It was, believe me, an exhausting process. If I, as a recent chairman of the BBC who knew his way through the system intimately and the people involved, had such difficulty extracting an appropriate apology, what chance has an outsider? Another recent example concerned Primark. It took the company three years to get the BBC to admit that it might have faked some film in a report on its manufacturing practices in India.

I believe that central to any new complaints procedure is that BBC executive involvement in it has to be removed from the complaints process-other than obviously providing evidence-as it has singularly failed to demonstrate that it understands that it is a sign of strength to concede fault, not a sign of weakness.

The report suggests giving all complaints to Ofcom. Others suggest an ombudsmen solution. However, if Ofcom is the answer, we need to remember that it is a statutory body, open to judicial review. Its processes are therefore necessarily legally meticulous and necessarily protracted. With most complaints, people are looking for speedy redress. It took Ofcom many months to reach its conclusion on the infamous Russell Brand/Jonathan Ross horror. The trust was able to summon the director-general in the week after the incident became public and it issued its condemnation and the actions to be taken as a result within a couple of weeks. If complaints move outside the BBC, the trust must not be constrained from intervening in the event of widespread public disquiet.

Should complaints about journalistic impartiality and accuracy be left with the trust? I would much prefer that they remained in that domain. One must understand that impartiality is usually a matter of subjectivity, and it is not difficult to imagine a situation where Ofcom could come to one conclusion and the BBC Trust, in defending the independence of the BBC, might come to another. I think that that would lead to further confusion.

I shall not detain your Lordships with further comments on the recommendations in the report, as they do not seem to me to undermine the principles for good governance of the BBC that I have described. However, I cannot let this opportunity pass without placing on record my undying admiration for the corporation. It is easy to criticise the BBC-and sometimes it makes it easier for you to do so-but it is a very great British institution and one of the defining and positive components that makes Great Britain somehow different. One must also not forget that, in among all the wonderful programmes and wonderful journalism, the BBC was-thanks to the noble Lord, Lord Birt-the first to spot the communications revolution and set off on its own down the digital highway. It was truly a visionary legacy on which his successors as director-general have all built, giving us Freeview-the first effective competition to Sky-then the iPlayer, and then YouView, the clever successor to the Freeview box.

BBC journalism holds an ever more important role in our democracy, at a time when our newspapers are, as we have heard, in intensive care in more senses than just the economic one. It is not hard to imagine that, in years to come, the BBC will find itself as the last bastion of fully funded, independent and impartial news. It needs to ensure that its journalism always measures up to that responsibility, to remain trustworthy and trusted. It means resisting any temptation to follow the glib, lazy and often partisan narratives that develop in other media. To take one example, in the coverage of the BP Gulf oil spill the BBC piled in with the rest of the world's media, pronouncing ecological catastrophe, long-term damage et cetera. A few months ago, however, Steve Hewlett presented a most refreshing programme on BBC Radio 4 which revisited the media coverage of that incident and concluded that that conclusion was not justified by the facts. The damage was much more contained than reported; the clean up was very efficient; and the fishermen were back in the Gulf waters finding plentiful stocks in months rather than the years that the media predicted. This was BBC journalism of the highest standard. One might have wished that the original coverage had been so evenhanded and less a slave to the general doom-laden narrative of other media.

Let me conclude by formally congratulating my noble friend Lord Patten of Barnes on his appointment as chairman of the BBC Trust. I wish him well and know that he will lead this great institution to further success and esteem while being a champion of the interests of the licence fee payers. I also commend my noble friend Lord Inglewood and his important committee on a marvellous report. The debate may be late, but the report remains very relevant. In the light of the agenda which the noble Lord, Lord Birt, laid out in his speech for the regulatory issues facing this country, the idea that this committee should become ad hoc would seem to me to be a retrograde step.

6:07 pm
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Lord Lipsey (Labour)

My Lords, I am not nor have I ever been a member of the Communications Committee, which may add a little force when I add my voice to those who have congratulated the authors of the report and insisted that any attempt by the House fuddy-duddies to kill it off must be resisted to the last. To single me out even more in this debate, I have never been a member of the staff of the BBC. I have tried a few times but was not good enough, which may be part of the reason why the BBC remains a world-class institution-and, as many speakers in the debate have said, a world-class institution it is.

One of the characteristics of most such institutions is that they tend to a certain small "c" conservatism. Your Lordships may reflect on that sentiment in view of the difficulty of getting even the smallest change in the workings of this place-which I happen to believe also does a pretty good job for the country. It can at times make the BBC appear almost comical.

I have to reflect on the great tale of the National Audit Office, as it now emerges from the report. Those of us who are veterans of the Communications Act debates will remember the frightful struggle to get any NAO involvement whatever in the BBC over the root-and-branch insistence by the corporation and its spokespeople that this would be the end of the BBC's independence. It happened, subject to it having to report to the trust. I have checked once or twice and the BBC now greatly welcomes the involvement of the NAO in ensuring that the taxpayer is getting good value for money. In a few years' time, the NAO will report to Parliament on the BBC. No damage will be done to the BBC's independence, but a huge struggle will have gone on in the mean time. That is not necessarily a bad thing, because conservatism can be good in an institution that is basically sound.

This leads me to my central point. If one looks for logic-certainly if one looks for perfect logic-in the governance arrangements of the BBC, one will not find it. When the current arrangements were first advanced by the Government, I was one of the few people who were reasonably sympathetic toward them. However, I never claimed that they were logical. In a logical world, we would go down the road recommended by the noble Lord, Lord Fowler, and have a clear-cut system of that sort. The trouble would come with the collateral damage that we would do in getting there. If the BBC considered the NAO poking about in its accounts a threat to its fundamental independence, what would it think of a reorganisation of that kind? Instead of getting on with its main job of making programmes, and its secondary job of making sure that the public are properly represented and consulted, the BBC would be involved in lengthy trench warfare with the Government, Parliament and the independent television sector. We would miss the main point. As has been said, the governance of the BBC is not perfect-but it is not bad. It can be made to work, and that is a virtue not to be swiftly cast aside.

I will make a further point on this matter. Governance arrangements exist on pieces of paper, but the workings of the arrangements depend very much on something quite other-namely, the people involved. Anyone who thinks, say, that the Davies/Dyke duarchy was the same in its workings as the Patten/Thompson duarchy-whatever might be written on bits of paper about governance-is out of touch with what went on. We could reconstruct a wonderful system of governance only to find that changes in personnel or in their personalities would render all the effort wholly redundant.

That is not for a moment to say that the arrangements should remain untouched. I have already given one example where I would like to see change: that is, in the NAO reporting to Parliament. Others are contained in the report, and the noble Lord, Lord Patten, has been putting many of them into practice. That is great. However, perhaps I might finish on a cliché and recommend to the House the old adage that evolution is better than revolution, and suggest that this is the safest way to preserve the BBC as a world-class institution in the media world of the future.

6:13 pm
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Lord St John of Bletso (Crossbench)

My Lords, I join in thanking the noble Lord, Lord Inglewood, for his able chairmanship of the committee and for his stewardship of this important report. Like all noble Lords who have spoken, I firmly believe that the BBC is the crown jewel of British broadcasting. Like the noble Baroness, Lady Fookes, I particularly value the contribution of the BBC World Service, and was alarmed by the 16 per cent cut in its £270 million budget as part of the comprehensive spending review that resulted in a substantial reduction in its workforce. I shall come back to this later.

Much of the report concerns the complaints process, which has been a common theme of noble Lords who have spoken. It is clear from the evidence that we received that the system of complaints lodged about BBC content is not just complicated and cumbersome, but in many cases far too protracted. I agree that all complaints should be dealt with in a clear and transparent manner, and that there should be a one-stop shop in the BBC where complaints are either dealt with directly or, in the case of more complicated matters, passed on to the relevant department.

I also agree with the proposal that the BBC should consider publishing a document on a single page on its website to explain where people should go to complain about BBC content or services. However, often complaints are made not about a mistake of fact in the programme but about omissions from the programme. This effectively results in the complaints procedure not being decided on a matter of factual accuracy but on editorial opinion. In many cases this is used by lobbyists for publicity. For example, the Palestinian lobby issued over 50 complaints about the "Panorama" programme, "The Death of Gaza". Only three complaints were upheld by the BBC Trust and the rest were rejected, but that allowed the lobbyists to claim victory and trumpet the three small victories while the BBC did not respond with an announcement on the nearly 50 defeats.

I entirely agree with my noble friend Lord Hall of Birkenhead that the BBC is committed to ensuring impartiality. It is not perfect. There is certainly scope for improvement. I certainly feel that the BBC Trust must act as a body of appeal and not another arena to restart the complaint.

I also believe that the BBC needs to be more robust in standing up to the increased use of lawyers and political lobbying, and it needs to be stricter about taking on board numerous complaints of omissions of information. Editorial weight should be given, especially in science programmes, to peer-reviewed scientific information. The climate change debate is a classic example. There is overwhelming peer-reviewed scientific evidence of the existence of manmade global warming but the BBC's need for balance means that those who deny the existence of climate change-and I am pleased that the noble Lord, Lord Lawson of Blaby, is not in his seat-are given huge, disproportionate amounts of airtime without any scientific basis for their arguments.

Another recommendation, which was mentioned by the noble Lord, Lord Gordon of Strathblane, and which I wholeheartedly support, is in paragraph 73 of our report, which says:

"We urge the BBC Trust to consider whether there are any ways of minimising the compliance culture within the BBC to reduce bureaucracy in programme making in so far as that is possible to ensure that the BBC's creativity is not compromised".

I was delighted by the strong support expressed by my noble friend Lord Patten of Barnes for the BBC World Service. How appropriate it is that we should be debating this on its 80th anniversary. Certainly, as the world's largest international broadcaster, broadcasting in 27 languages and through internet streaming and other multimedia platforms, everything has to be done to protect this great legacy and the hugely important role that the BBC World Service plays in disseminating impartial global news.

My concern is that once the World Service becomes part of the licence fee, and money for it is not ring-fenced, it will be under constant pressure because many will claim that it will not directly benefit the people who pay the licence fee. On Radio 4 yesterday there was a poll held in which 75 per cent believed that the BBC World Service played an invaluable role and would not object to part of their licence fee going to ring-fence the great work of the World Service. I appreciate that a special trustee has been set up to look after the funding of the World Service, but I would appreciate assurances from the Minister in her winding-up speech as to the sustainability and longevity of this treasured service.

I join those many noble Lords who have voiced their derision and disdain as to why the Liaison Committee of your Lordships' House should be considering converting the Select Committee on Communications into an ad hoc committee. Your Lordships' House, with its multidisciplinary skill sets, have particular expertise on legal, financial, medical, defence and, in particular, communication issues. Ahead of the communications Bill, and with the impact of the digital revolution affecting all our lives, it seems lunacy to be taking such a draconian step with no clear logical argument.

I wholeheartedly support this report, and I welcome the measures that my noble friend Lord Patten has implemented from these recommendations.

6:20 pm
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Lord Hollick (Labour)

My Lords, I commend the committee on this most helpful and excellent report. The quality of this report and the quality of the committee's most recent report on investigative journalism provide ample evidence as to why this committee should continue, particularly at a time of great turmoil in the communications industry. The report sets out with great clarity the governance structure and regulatory regime at the BBC. That is no easy task, given the BBC's high level of complexity and occasional opaqueness. There are some nice literary touches in the report, which I enjoyed. The description of the BBC Trust as a trust but not a trust and as part of the BBC but separate from it seems to come straight out of Alice in Wonderland, whereas the heroic and brilliantly successful chart, to which reference has already been made, entitled "Where to go to complain about a BBC service" would certainly be very familiar to Josef K.

Complexity can be a barrier to providing a good service to the public and can impose a quite unnecessary bureaucratic burden on the creative process. A bafflingly complex organisation, which defies easy explanation, confuses the public, leaving them with the impression of muddle, ineffectiveness and uncertain leadership. The attitude of those working within such a complex organisation can also be one of confusion and, ultimately, detachment. Recently, a programme-maker at the BBC with decades of experience told me that the BBC was two parallel universes connected by an ATM machine and manned by a compliance officer; one being a chaotic hive of programme-making and the other a labyrinth of impenetrable bureaucracy. The less that the former had to deal with the latter, the more successful the product was. To a greater or lesser extent, I fear that this same allegation could be made against other media organisations.

However, there is no need for this degree of complexity. Corporate governance models for large diverse organisations have evolved over the past two decades in response to stakeholder and government pressures to improve performance, accountability and transparency. As a result, the unitary board structure in the UK has developed to deliver a clear set of responsibilities for executive and non-executive directors and a committee structure which provides for transparent and effective oversight of regulation, risk and remuneration. The overall strategy and operational performance is the collective responsibility of the entire board.

The report tells us that the BBC Trust was created in 2007 in response to tensions between the governors and the executive management, and the chaos arising from the Gilligan affair. But, as the noble Lord, Lord Lipsey, asked, were these problems to do more with culture and leadership than organisational structure? The combination of robust, experienced leadership and effective processes can cope with tensions like this, which arise in all organisations from time to time.

The experience of Thames Television's handling of the "Death on the Rock" crisis in 1988 is most instructive. Experienced leadership at Thames, the due process of an internal inquiry, the robust support of the independent regulator which conducted its own inquiry and a fully independent inquiry after transmission enabled Thames Television to stand firm against the onslaught from the Government and sections of the media.

I contend that the creation of the BBC Trust was the wrong answer to the wrong question. The unitary board structure, which I favour, provides for clarity of purpose and message, and clear lines of responsibility to the benefit of the public, employees, suppliers, external regulators and policy-makers. The BBC needs that clarity and simplicity. Its varied activities embrace broadcasting in the UK and worldwide, programme-making and, of course, BBC Worldwide itself-its fast-growing commercial arm which occupies an increasingly pivotal role in the UK's creative economy.

The strategy, performance, allocation of capital and interrelationship of these activities has to be the overall responsibility of the BBC's senior board-the trust. Any confusion over that clear line of responsibility and direction can compromise the BBC's performance. Subsidiary activities with outside directors like BBC Executive and BBC Worldwide have the potential to confuse and compromise strategy, and lead to the question, "Who is really responsible for what?".

As we have heard and as the report sets out, the BBC complaints and compliance processes appear to lack support both within and without the BBC: too slow, too complex and too bureaucratic. The trust has responded positively to these concerns. The position of Chief Complaints Editor has been created and the complaints process itself will be simplified, as will the compliance procedure. But self-regulation can go only so far. The report's recommendation that complaints which cannot be resolved by programme-makers then go to the trust and then, if still unresolved, go to Ofcom, mirrors the process that a number of us have experienced as working well in commercial television.

I also support the committee's recommendation that Ofcom should be given final responsibility for regulating impartiality and accuracy so that the BBC is no longer in the unenviable position of being its own judge and jury. The BBC structure is fixed by the charter until 2016, and it has endured substantial review since 2003. As the noble Lord, Lord Patten, said, the time for navel gazing has come to an end and it is now time to move on. Over the next four years, the BBC must focus on its core role as the country's leading broadcaster and creative powerhouse, and how to maintain that position in a world where broadband and mobile technology and globalisation pose enormous challenges, but also offer great opportunities. It is therefore most refreshing to note that the BBC Trust, in its governance review published shortly after the committee's report, acknowledges many of its concerns and has proposed to implement measures to address them. Simplicity and clarity are embraced by the trust's review and there is a clear sense that the trust will drive for efficiency and effectiveness while guaranteeing quality and independence. The success of the measures taken by the trust will provide valuable evidence for the more wide-ranging review of structures in 2016.

The forthcoming retirement of Mark Thompson, the excellent current director-general, provides the opportunity not just to bring in new blood to what is the most attractive job in British media, but also to consider whether the executive structure is best suited to meet the challenges and opportunities that the BBC faces. Since the appointment of its current chairman, the BBC has looked like and sounded like a more coherent, single, effective organisation with a clear message. The commitment to make the current structure work effectively is to be greatly welcomed, and no doubt will continue to be supported across this Chamber and, of course, followed closely by all of us.

6:28 pm
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Lord Pearson of Rannoch (UKIP)

My Lords, as your Lordships may know, I and others have sponsored an independent analysis of the BBC's coverage of our relationship with the European Union for some 12 years, mostly of the "Today" programme but also more widely. I believe that that monitoring was influential in persuading the BBC in 2005 to set up its first outside inquiry into the scope and balance of the BBC's EU coverage. That inquiry, chaired by the former Cabinet Secretary, the noble Lord, Lord Wilson of Dinton, confirmed that the coverage had been too narrow and paid too little attention to Eurosceptic opinion in this country. It had failed in its duty of impartiality. The BBC accepted this and in its reply promised,

"to offer our audiences across all platforms clear, accurate and accessible information about the way EU institutions work and their impact on UK laws and life; to ensure impartiality by reflecting the widest possible range of voices and viewpoints about EU issues; to test those viewpoints using evidence-based argument or informed opinion ... to reveal and explain to our audiences areas of contentious fact and disputed principle".

I regret to say that subsequent analysis carried out by Minotaur Media Tracking, and then the Newswatch organisation, and to be found on the Global Britain website, shows that the BBC has failed entirely in these promises. In the six years since the BBC made those promises, its "Today" programme has devoted only 0.04 per cent of its output to the view that the United Kingdom should withdraw from the European Union. We cannot find where else in its output it has fulfilled these promises either, and the BBC cannot tell us where it has done so.

I appreciate that the view that we should leave the European Union may not find much favour with many of your Lordships, but consistent opinion polls suggest that around 50 per cent of the British people say they want to leave the EU. I therefore remind your Lordships of the BBC's charter and guidelines which require that:

"No significant strand of British public thought should go unreflected or under-represented on the BBC".

I have today received the statistics of the "Today" programme's output between 3 October and 17 December last year, an important period for events in the EU and the eurozone. There were no interviews at all with supporters of withdrawal, and the contributions which were made were so short that none contained substantive arguments or explanation of the withdrawal perspective, being accorded only seven short soundbite contributions amounting to 1.4 per cent of the 514 individual speakers on EU affairs. In total, only 534 words were spoken by withdrawal-supporting programme guests, which was 0.4 per cent of the 132,735 words of EU coverage-and that after 12 years of complaints from me and others.

So it is not surprising that I welcome this report, particularly its findings on the BBC's complaints procedure, to which several noble Lords have referred. As one of the BBC's most long-suffering and persistent complainers, I also thank the noble Lord, Lord Patten, who has supported renewed contact between me and my colleagues, Newswatch and the BBC Trust. Those colleagues now include Members of the House of Commons and we so far had one meeting with the trust, which is of doubtful outcome. We are soon to have a meeting with the executive after we have received the full report on the "Today" programme's output between 3 October and 17 December. We live in hope.

I say all this as a lifelong admirer of the BBC, which makes so many brilliant programmes in so many diverse areas. I trust that this report and this debate will help it to fulfil its duty in the important area of our relationship with the European Union. It will enjoy even greater support-

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Baroness Stowell of Beeston (Conservative)

As the noble Lord is speaking in the gap, I should inform him that he has exceeded four minutes.

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Lord Pearson of Rannoch (UKIP)

I am aware of that. I had actually finished. If the noble Baroness will allow me, I will say only that the BBC will enjoy even greater support from the British people if it does fulfil that duty.

6:32 pm
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Lord Stevenson of Balmacara (Labour)

My Lords, I thank the Communications Select Committee for its excellent report. It was news to me to find out during the debate that its future is in dispute. The weight of argument that we have heard today-and, indeed, the threats of the noble Baroness, Lady Fookes-will have scuppered any chances on that side. Surely this report and the debate show how much we need the Communications Select Committee, and long may it last.

As well as several evocative trips down memory lane-as befits any debate about cultural matters, particularly the BBC-we have also had the benefit of the views of the present chair of the BBC Trust, the noble Lord, Lord Patten of Barnes, and a former chair, the noble Lord, Lord Grade of Yarmouth, whose direct experiences in the hot seat have greatly illuminated our discussions today. Indeed, the contributions from so many current and former programme makers, broadcasters, senior executives, a former director-general, board members and owners of broadcasting interests outside the BBC have made this one of the brilliant debates for which this House is rightly famous. It has been a privilege to be a part of it.

I was briefly a member of the Communications Select Committee and I recall the discussions which led to this topic being chosen. I also remember thinking that it would be tricky to get the timing right, given the Green Paper on communications which was imminent then and is still imminent-I notice a number of rather shaky nods on the other side of the House-and which we look forward to receiving, the change in the chair of the BBC Trust, the completion of the digital switchover, the channel 3 and channel 5 licence renewals, and of course the forthcoming renewal of the BBC charter. Those were different, more innocent times, before Leveson, phone hacking and police corruption made it imperative that we approached the question of governance and regulation in the broadcasting world with a new focus.

The responses to the Select Committee's report and the debate today prove that the committee got it about right. There are substantial issues to do with governance and regulation of the BBC that have been left partially or completely unresolved since the last charter renewal in 2007, and the changes in the broadcasting ecology since then make it sensible and proportionate to take another look at this problem.

We have had a very wide-ranging debate this afternoon with many expert contributions. As time is getting on, I only intend to cover three points, the first being support for the BBC. The report starts with a ringing endorsement of the values of the BBC both in terms of its output and as one of the public institutions that defines our Britishness. Many noble Lords have endorsed that. We on this side welcome that and believe it to be true. However, although he is quoted in the report as saying that he has,

"always thought the BBC is an incredibly important crown jewel for the country, of intrinsic importance to the way our democracy functions",

it is sad that in his letter to the chair of the committee of August 2011 the Secretary of State at the DCMS, Jeremy Hunt, signally fails to speak up for the BBC. He merely welcomes the report's contribution to the ongoing debate about the governance and regulation of the BBC. Can the Minister put the record straight and reaffirm the Government's commitment to the BBC when she speaks later this evening?

Secondly, there is BBC funding. The last licence-fee settlement, as we have heard, required parts of the licence fee to be used to fund a range of activities outside the BBC's core activities, including the BBC World Service, S4C and Broadband Delivery UK. The report asks how the BBC Trust can ensure that bodies managing these services are properly accountable, which is of course a very proper and appropriate question. However, surely, as we heard earlier in this debate, the deeper question is what impact these additional-and to some extent ring-fenced-commitments will have on the ability of the BBC to perform its core functions.

As the report acknowledges, what is commonly referred to as the BBC licence fee is in fact a tax on television usage, which is set by the Government, collected by an agent on behalf of the BBC, paid to the Treasury and disbursed back to the BBC via the DCMS. It is a rather complex process and raises issues about the relationship of the BBC to its viewers-or more correctly to all licence-fee payers-and to the public interest, which is often expressed in terms of accountability to Parliament.

The BBC currently spends some £3.5 billion each year, so it is right that it should be subject to scrutiny on its budget. The report is critical of the role of the Government in setting the licence fee this time around, pointing out that the speed of the negotiations and the secrecy surrounding them were such that licence-fee payers and Parliament were not even aware of the options being considered until after they had been decided.

Can the Minister comment-as the Secretary of State failed to do-on the Culture, Media and Sport Select Committee's conclusion, which is strongly supported by the report from the Select Committee on Communications? It says in relation to the licence fee that,

"it is vitally important that both licence fee payers and Parliament should have some involvement when far-reaching decisions about funding and the responsibilities are taken".

Can she give us an indication of what steps the Government will be taking to ensure that this happens in future when licence fees are being discussed?

My third point is about what we have spent most of our time in the debate circling around, which is the dichotomy between the role of the trust as champion of the BBC and its duties as the regulator of the BBC and all its services. The key question is of course whether the BBC Trust should cede responsibility for regulating impartiality and accuracy to Ofcom. A majority of the committee have proposed that this should be the case, but there are a number of options and we have heard an additional one during the debate today.

I looked carefully at the responses to the original report. The Secretary of State says that:

"The Government is not seeking to change the existing allocation of regulatory responsibilities between the BBC and Ofcom".

The then new chair of the BBC wrote to say that he was going to ensure that impartiality was a core responsibility of the BBC Trust. As we have heard, Ofcom rather ducked the issue, saying it would require changes to the agreement between the Secretary of State and the BBC, so it was not a recommendation that Ofcom could take forward. We therefore do not know what its views would be, should it be given that option.

I have tried to keep a rough running score-card of how people have declared themselves during this debate but I am afraid I got confused, not least by the noble Lord, Lord Fowler, who blew the whole thing up with a torpedo by saying the whole structure was wrong anyway and we could not possibly decide one way or another on the merits of the questions asked. However, it was broadly balanced, I think, across the House, with some for and some against. Most of those from within the BBC were in favour of retaining the status quo, while quite a lot of those from outside were in favour of the report's recommendations. There will, of course, be many lessons to learn from Leveson and all that brings with it, but surely one of the main lessons, to which some noble Lords referred, is that self-regulation cannot ultimately work in today's world. I can sympathise with the case that has been made for retaining all the functions relating to the BBC within the BBC, but at the moment I agree with my noble friend Lord Hollick that this feels like a 20th-century response to what is now a 21st-century problem. I endorse what the noble Lord, Lord Inglewood, said in requesting that the Minister in her response gives some understanding as to why the Government do not wish to move on that matter.

I turn to the question of accountability to Parliament. The issue seems to be partly about the guarantee that can be given by a royal charter and partly how and on what terms Parliament should be involved in monitoring the BBC. The point is made that there is always the possibility of amending the charter, and it is widely understood that the agreement is to be changed regularly on that basis. It would be helpful if the Minister could assure us this evening that, as the report recommends, the Government should commit themselves,

"to follow not just the letter but the spirit of the constitutional arrangements which define and underpin the BBC's ongoing independence".

On the question of the accountability of the BBC to Parliament, there is obviously some disagreement on procedures, even if there seems to be a coalescence of views around Sir Christopher Bland's formulation that,

"the BBC should not be accountable for its output, but has to give an account to Parliament".

Can the Minister give us any guidance on how the Government think this important relationship can be put on a proper footing going forward? As the report suggests,

"the two Houses of Parliament and especially their Committees are important fora where the views of licence fee payers can be aired".

In this context, it is worth noting that our other major public service broadcaster, Channel 4, is accountable to Parliament for the delivery of its remit. The Secretary of State for Culture, Media and Sport lays Channel 4's annual report and accounts before Parliament, and the chairman and chief executive of Channel 4 appear annually before the Culture, Media and Sport Select Committee to discuss Channel 4's performance. Perhaps the Minister could comment on whether that is a model which the Government might consider going forward.

This debate has informed, educated and entertained us in equal measure. I call on the Minister to wind up the debate with some wise words that will help us forward in this complicated issue, to which I am sure we will return. Many noble Lords referred to the charter process and other things that will need to be discussed here. Perhaps she could take something from the suggestion of my noble friend Lady Bakewell that how she responds should be in the form of a late-night line-up.

6:42 pm
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Baroness Garden of Frognal (Liberal Democrat)

My Lords, I thank my noble friend Lord Inglewood for securing this debate-albeit somewhat delayed-and for setting out so clearly his committee's report on the governance and regulation of the BBC. We have been truly privileged in the course of this debate to hear from highly distinguished speakers with wide-ranging expertise, including a former and current chair of the BBC Trust and a former director-general.

I add my congratulations to CBeebies and CBBC on their 10th anniversary-although, like my noble friend Lady Fookes I have more fond memories of Larry the Lamb and, indeed, Muffin the Mule-where are they now? I also add congratulations to the BBC World Service on its 80th birthday this week and confirm our support for the invaluable work which it undertakes internationally, support that we have heard from all around the House this evening.

In response to the noble Lord, Lord Stevenson, and others, at the outset I would like to reiterate the key point that the Government are fully committed to an independent BBC that forms the cornerstone of public service broadcasting in this country. Nothing this Government do will undermine that. The Government will ensure that the BBC remains a national asset of fundamental importance and that it will continue to bring great benefits to our country's culture, to its democracy and to its creative industries.

Secondly, it is important to put on the record that the BBC's governance and regulation will be fully assessed at the next charter review. Although we have not yet determined the exact remit or the timing of the next charter review, everything that follows should be viewed in that context. I do not want to pre-empt or undermine the charter review by trying to provide answers today to some of the questions that noble Lords have raised.

It is fair to say that reservations have been expressed in the past about whether the trust model is as effective as it can be. Its primary role is to champion the cause of licence-fee payers and, as the right reverend Prelate has said, to be the guardian of standards. But it has not always been clear to observers whether its primary role might not be to represent the BBC as an institution. It was very encouraging, therefore, that in building on the work of his predecessors the noble Lord, Lord Patten, recognised governance and regulation as an issue that had to be addressed as a matter of priority on taking up his appointment as chair of the trust. The governance review published by the trust last summer was welcome and we would encourage the trust to monitor the effectiveness of its recommendations. The trust should and does seek continuous improvement in the operation of the BBC's governance system, within the current charter framework.

In relation to salaries at the BBC, the BBC's executive pay strategy, published last summer, is also encouraging. We were pleased to hear the noble Lord, Lord Patten, announce that the freeze on bonuses for the most senior executives will continue, and his assertion that the public service BBC needs to distance itself in this way from the market. This realistic approach is welcomed. The BBC holds a privileged position and is not simply another broadcaster operating in the market.

The BBC often comes under criticism for a lack of impartiality in its content, particularly in relation to news and current affairs, and matters of impartiality have been raised by noble Lords this evening. This gives rise to the calls for the Government to intervene, but this would not be right. The editorial independence of the BBC is sacrosanct and the Government have no intention of undermining that. Any regulation of the BBC must be at arm's length from government and give everyone confidence that the way the BBC operates is impartial.

There are also calls for the BBC to be regulated by an external regulator, such as Ofcom. Many noble Lords addressed this matter, including my noble friend Lord Fowler. My noble friend Lord Inglewood raised the attraction of Ofcom having the same regulatory powers over the BBC as it has over other broadcasters, particularly on matters of impartiality and accuracy. There could be difficulties for Ofcom in devoting itself fully to upholding the public interest in BBC services and programmes, in defending the independence of the BBC itself and in satisfying the need for direct accountability to licence-fee payers, so the Government are not seeking to make changes at this stage. The appropriate time would be to consider this within the next BBC charter review. It is a long-standing principle, dating from the earliest days of the BBC, that it has responsibility for impartiality in its output. The noble Lord, Lord Hall, illustrated that. The need to provide impartial services has been central to the BBC's development and activities. The principles of due impartiality and accuracy remain at the heart of the BBC's editorial independence, and on that basis regulation has remained with the BBC.

We would encourage the BBC to build on the conclusions of the noble Lord, Lord Patten, about the BBC's complaints system in his governance review. Certainly, the new chart has won plaudits from all around the House for outlining just how complex the complaints procedure can be. If the BBC wants the existing allocation of regulatory responsibilities to remain, it has a strong incentive to make sure that the existing system can command confidence. The Government maintain that a royal charter remains the most appropriate mechanism of establishing the BBC, as this provides the necessary level of independence from government and Parliament. My noble friend asked about the legal structure of the BBC and whether this should be reviewed before the next charter and agreement. The Government consider that the appropriate time for such a fundamental matter is the next BBC charter review, when the issue can be looked at in the wider context of an examination of the BBC's constitution, role and functions. The Government have no plans to undertake an analysis of the matter before then.

As noble Lords will be aware, and as the noble Lord, Lord Stevenson, reminded us, the Government have a review of the communications sector in the pipeline. While the role of the BBC cannot be completely excluded from any review of the public service broadcasting landscape, we have made it clear that the communications review is not a review of the BBC-that will be for the BBC charter review-but of course any relevant issues arising from the communications review will be taken into account in the charter review.

My noble friend and others asked about the licence fee settlement. The noble Lords, Lord Birt and Lord Gordon, were among those who raised that issue. The BBC has undertaken considerable work in taking on the funding responsibilities arising from the licence fee settlement, and in response to the point made by the noble Lord, Lord Birt, about lack of consultation on the licence fee settlement, the pace of the licence fee negotiating and the spending review meant that there was not time to consult widely all interested parties. That reflected the Government's need to deal with the desperate state of the national finances.

The noble Lord, Lord Gordon, raised a point about the new funding responsibilities, which are of course related to its public purposes. He raised the question of technological changes allowing the evasion of the licence fee. The Government are certainly aware of changing viewing habits in relation to technological developments, and we shall need to keep that matter under review.

The BBC has supported the Government in developing the local TV initiative. In December 2011 the Government published their final policy position on local TV and announced the first 20 locations that are expected to get local TV licences. We expect to see those rolling out soon.

An amended BBC agreement was laid in Parliament in February 2011 to facilitate the transfer of funding of the World Service to the BBC. In September 2011 a further amended BBC agreement was laid in Parliament to formalise the BBC's new funding responsibilities in relation to S4C, the World Service, BBC Monitoring, local TV and broadband. Various noble Lords have brought up their concerns about this extended remit for BBC funding. The partnership with S4C will reform its governance and facilitate the BBC's funding of it, but the partnership arrangements are subject to a public consultation by the Government that is open until 4 May.

The BBC is currently in discussion with government officials, including those from Broadband Delivery UK, about the arrangements for its funding of broadband. The amended BBC agreement of September 2011 provided for the National Audit Office to have full access to the BBC's accounts to ensure greater transparency. The NAO, as has been mentioned in the debate, now has discretion over which areas of BBC expenditure should be subject to value-for-money studies and when. This met a commitment in the coalition programme and was a very positive move. In response to the point about this from the noble Lord, Lord Lipsey, it is right that the NAO should report to the BBC Trust, given that the trust has responsibility for value for money in the BBC.

My noble friend Lady Benjamin asked whether the Government will consider tax credits for animation. My noble friend's point is noted. Tax credits are of course a matter for the Treasury to consider, but I will ensure that her support is relayed.

There was a point that was made from all around the House. My noble friend Lord Fowler, the noble Lord, Lord Bragg, and my noble friend Lady Fookes-in fact, nearly all noble Lords-expressed disquiet at the thought that the Communications Committee might possibly be discontinued. It is above my remit to give assurances on that, but I assure noble Lords that the strong messages that have come from all sides of the House today will be relayed to the relevant quarters on that point.

I thank all noble Lords who have contributed their considerable expertise to this debate. I hope that I have answered the questions that were put to the Government; if not, I aim to reply in writing. The contributions from around the House have been illuminating, stimulating and productive. I thank my noble friend and his committee for their report and for highlighting matters of governance and regulation, which are vital elements in maintaining the role and function of the BBC. I say again that the Government are fully committed to an independent BBC that forms the cornerstone of public service broadcasting in this country. The BBC is a source of immense pride to the UK and the Government will play their part in ensuring that it maintains its position as the world's most respected broadcaster.

6:53 pm
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Lord Inglewood (Conservative)

My Lords, the hour is late and the debate has been long and comprehensive. It has been defined by expertise, a breadth of understanding and differing and varying perspectives, which together have made a bubbly cocktail and a good debate. I thank everyone who has taken part. Normally in your Lordships' House we have one respondent to a debate, but today in practice we have had two: the noble Lord, Lord Patten, on behalf of the BBC, and the Minister. Particular thanks go to each of them.

If this Chamber were a TV channel, I fear that this debate would not be showing in prime time. Very much the opposite, in fact; late on a Thursday afternoon is a graveyard slot. It is proof positive of the importance of the topic and the interest of the House that so many people have taken part, and I know that a considerable number of others would have liked to have done so, had their diaries permitted.

Finally, as chairman, I feel a responsibility for the integrity, purposes and work of the Communications Committee, and I am very grateful for the support indicated for it on all sides of the House. We have done a good afternoon's work. I beg to move.

Motion agreed.