Electronic Communications

Appointment of the Comptroller and Auditor General – in the House of Commons at 4:43 pm on 20th May 2009.

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Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport 4:43 pm, 20th May 2009

I beg to move,

That the Communications (Television Licensing) (Amendment) Regulations 2009 (S.I., 2009, No. 505), dated 26 February 2009, a copy of which was laid before this House on 9 March, be revoked.

It is a pleasure to be supported by so many staunch supporters of the BBC on the Conservative Benches.

The Communications (Television Licensing) (Amendment) Regulations 2009 came into force on 1 April. They increase the cost of a black and white television licence by £1 to £48, which may or may not trouble Mr. Mullin who, we learned today, has had the same black and white television for 31 years, to his credit. The regulations increase the price of a colour TV licence from £139.50 to £142.50.

Why have we called this debate over a £3 increase in the licence fee? We have done so partly because of the MP expenses issue that has engulfed the House over the past two weeks. It has shown that the public are justifiably angry about the misuse of their money, whether in small sums or large, which has reminded the House to respect the taxpayers who pay our salaries. The same surely applies to all publicly funded organisations, including the BBC.

We have called for the debate also partly because the economic situation has changed beyond recognition since January 2007, when the current licence fee settlement was made. With 2.2 million people unemployed and many people facing dire personal financial circumstances, it is surely right to ask whether an increase that may have seemed reasonable in 2007 is still justified.

We should also put the rise in context. In 1997, the licence fee was £91.50. Since then, it has increased by 56 per cent.—almost double the retail prices index rate of inflation. When the BBC's commercial rivals are struggling, sometimes for their very existence, licence fee payers have been treating the BBC incredibly generously.

Photo of Philip Davies Philip Davies Conservative, Shipley

Does my hon. Friend agree that his last point gets to the heart of the matter? Since the licence fee settlement was agreed, broadcasting's economic climate has changed, and it is unsustainable for every other, commercial, broadcaster to manage on less money each year while the BBC has a never-ending increase in its income.

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

My hon. Friend does a very good job of developing my argument for me. I shall continue if I may, but he is absolutely right and his point is an important one, because the 2007 settlement was based on some key assumptions about the broadcasting market. The first was about the rate of inflation. That year, RPI inflation was 4.3 per cent., and as hon. Members may recall, that was the year in which the Governor of the Bank of England had to send a letter to the Chancellor, apologising for the fact that he had overshot his target. It was also the year in which there was an assumption that, as the commercial broadcasting market grew, the BBC would need to keep up. Both assumptions must be radically re-examined.

Yesterday, RPI inflation fell to minus 1.2 per cent., the steepest fall since 1948. That means that programme inflation, the cost of buying and commissioning programmes, is also falling, and with Channel 4's revenues down 18 per cent. and ITV's revenues down 19 per cent. in the first part of this year, there is less competition to buy and commission programmes. The traditional parity between licence fee revenue and the revenue that goes to commercial broadcasters funded by advertising has been lost. Last year, there was a broad equivalence between the two sums of money, but this year it is expected that licence fee revenue will amount to £500 million more than the entire sum received by all the commercial broadcasters funded by advertising put together.

Photo of Bill Cash Bill Cash Conservative, Stone

On the question of independent producers, is my hon. Friend concerned about the uncompetitive nature of some contracts that the BBC enters into in-house? I believe that such cosy contracts do exist. If producers inside the BBC are being subsidised and independent producers are not able to compete fairly, does not my hon. Friend think that the Public Accounts Committee should have the right to examine the BBC's accounts, as I and the Committee's Chairman, my hon. Friend Mr. Leigh, have argued for many years?

b

The arrangement between New Labour and the BBC is very very cosy indeed. I was listening to a debate on the secret family courts recently, between Jenni Murray and Bridget Prentice on Woman's hour, and it was blatently obvious that Jenni had been handed a list of questions to read out to Bridget Prentice. The BBC would never allow anyone to phone in and ask awkward questions...

Submitted by barbara richards Continue reading

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

I absolutely agree with my hon. Friend on that point. I visited some independent production studios in Kent, which made that very point to me, saying that they were unable to compete for contracts to produce BBC programmes because they were outbid by the BBC's in-house production facilities, which the independents believed were less competitive than they were. There are problems, and I wholeheartedly agree that the National Audit Office should be able to examine the BBC's accounts at will and without permission and prior agreement, just as it can with most other public bodies. That is a very important point.

Photo of David Cairns David Cairns Labour, Inverclyde

Before the previous intervention, the hon. Gentleman made the entirely accurate point that the advertising slump has seen a huge chunk of money taken out of ITV's revenue and therefore out of commercial production. However, there seems to be an odd logic in saying that ITV's losing £500 million is a pretext to take tens of millions of pounds out of the BBC's budget. If we are losing hundreds of millions of pounds from production because of the advertising slump, is it not true that now is not the time to cut the licence fee?

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

Is the hon. Gentleman suggesting that the only way to deal with the commercial predicament faced by ITV, Channel 4 and all the other commercial broadcasters is to pump more money into the BBC through the licence fee? ITV says that, next year, the disparity between advertising-funded broadcasters and the BBC will be £1 billion. There comes a point when commercially funded broadcasters are simply not able to compete with the BBC in producing programmes for large audiences. When the BBC's commercial rivals can spend less on programming and when the BBC's own costs are falling, we have to ask whether it is appropriate for the corporation to have an inflation-busting £68 million rise.

Photo of David Cairns David Cairns Labour, Inverclyde

I am grateful to the hon. Gentleman, who has been generous in giving way. I would understand the logic of his position if he wanted to take money from the BBC licence fee and give it to ITV; his argument would then make perfect sense. But he does not propose to do that. He is remarking that hundreds of millions of pounds have been taken out of broadcasting because of the advertising slump and saying that we should therefore take another £75 million from the BBC. I fail completely to see the logic of that position.

D

Giving the licence tax (ie. what is nothing more than an imposed indignity) to the ITV makes as much sense as handing it to the BBC. Why should the BBC have this funding? Is it so that after the fact, ie. when they have the money, they can proclaim to be somehow better at broadcasting? The BBC are very obviously no better...

Submitted by David Callan Continue reading

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

The hon. Gentleman does not appreciate the logic of my argument. If there is a huge disparity between the money that commercially funded broadcasters receive and what the BBC receives, that is dangerous for the broadcasting ecology, which becomes very unbalanced.

Photo of Anne Begg Anne Begg Labour, Aberdeen South

I should like to pick up the point made by my hon. Friend David Cairns. The hon. Gentleman has said that he has spoken to independent producers who cannot get their programmes on the BBC because of unfair competition within the corporation. However, despite the quotas that the BBC already has, if more money is taken from the corporation there will be less chance of getting more independent production into the BBC. The hon. Gentleman is arguing against his own case.

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

I am grateful to the hon. Lady for her intervention. We are talking about a £68 million rise in the licence fee in the context of a total licence fee income of £3.6 billion. I do not believe that it would be impossible for the BBC to find savings of £68 million without its ability to commission programmes from the independent sector being affected in any way.

Photo of Barry Sheerman Barry Sheerman Chair, Children, Schools and Families Committee

In Yorkshire, we have just discovered that ITV is closing down "Heartbeat", "A Touch of Frost" and "Sharpe"—excellent productions that attract high-volume audiences. I do not know what we are going to do about that, and it is not the BBC's responsibility. At the same time, the BBC is investing, certainly in the north-west. For the sake of creative talent, surely this is not the time to start cutting back on funding for the BBC.

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

It is excellent that the BBC is investing in our regions. However, we also have to consider whether it is giving value for money; £3.6 billion is a lot of money. I shall go on to talk about some of the things on which it spends the money—things that I think do not represent good value for money. At a time of great economic difficulty for many licence fee payers, it is legitimate to ask whether the money is being well spent.

Photo of John Redwood John Redwood Conservative, Wokingham

Does my hon. Friend agree that when a lot of public money is taken in small sums from people without much to spend—and under threat of imprisonment if they do not pay—it is important that costs should be controlled? It is not like the private sector; I do not mind people earning a lot of money if others pay willingly for their services. Should not the BBC look at all its people who are paid very much more than the Prime Minister, many of them with the opportunity to earn outside the BBC as well? I do not begrudge them doing that, but should we not at least control their BBC wages?

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

My right hon. Friend makes an important point. In fact, 50 people at the BBC are paid more than the Prime Minister. I thought that his point about taking care with small sums of money from people who might well not be able to afford an additional rise would be well taken by Labour Members, particularly as the Leader of the House announced today that the licence fee will not be eligible for the additional costs allowance. If any MPs were wavering on this issue, that should completely persuade them to support the motion.

We have had a week when many have questioned the very roots of our democracy, and there is a democratic issue at stake in this context too. A free society needs multiple and varied media sources. However excellent the BBC is—I believe that much of what it produces is world class and a credit to the UK—other broadcasters need to be able to flourish as well, and different voices need to be able to be heard, because that is how we provide choice for consumers and engagement for citizens. Conservative Members have always recognised the importance of plurality of provision. It was Conservative Governments who licensed ITV in 1955 and Channel 4 in 1982, unleashed the satellite and cable revolutions of the 1980s, and licensed Channel 5 in 1997.

What has the BBC done when faced with all this competition? It has flourished. It is completely false to say that there is a choice between competition and quality. It is because British public service broadcasting is the most competitive in the world that many people think that it is of the highest quality in the world. In order for that to continue, there must be a sensible balance between the revenue that commercial broadcasters are able to raise and what the BBC gets, and many will ask whether that is possible if there is a £1 billion gap between state-funded broadcasters and the rest.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

The point about the current impact on production has been well made by my hon. Friends. The BBC is also clearly playing a vital role in digital switchover. Its business plan has been well developed following a settlement in 2007 that was much below what it wanted. The hon. Gentleman's proposals could destabilise that business plan. In the Select Committee on Culture, Media and Sport, we examine the BBC all the time. I am sure that no member of the Committee would like to pre-empt the conclusions of a possible future inquiry. Nevertheless, we have considered top-slicing and recommended it in relation to Channel 4, and encouraged the BBC not to draw down the whole of the licence fee, and no member of the Committee has endorsed any such proposals as the hon. Gentleman's. [ Interruption. ]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. The time for this debate is very limited and several Back Benchers wish to make contributions. I therefore hope that any interventions will be brief.

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

The hon. Gentleman talks about so-called disruption to the BBC's business plan. Businesses up and down this country are facing disruption to their business plans caused by a very severe economic recession. If they are able to cope with that, the BBC should be able to do so as well.

Photo of Stewart Jackson Stewart Jackson Shadow Minister (Communities and Local Government)

Does my hon. Friend agree that not only the broadcast media are suffering from inappropriate incursion as a result of the year-on-year funding of the BBC? A few weeks ago, we had local newspaper week. The efforts of Members across the whole House defeated proposals for a local video internet site that would have put many local newspapers out of business. Does he, too, find that a matter of grave concern?

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

I absolutely do. My hon. Friend is making exactly the same point as I am about the importance of plurality of provision in the media and the need for multiple sources.

I want to deal with a couple of things that the Government may say in opposing the motion. First, they may say that the BBC is already making cuts. It is true that it is halfway through a £1.9 billion efficiency programme, some of which involves redundancies, but they are not cuts because no money is being returned to licence fee payers—it is being reallocated to other services. The Government may say that we are attacking the principle of six-yearly settlements, so let me scotch that. We support the idea of multi-year settlements because it is important to protect the editorial independence of the BBC. The BBC must be impartial. It should not be subject to the political weather, but it should respond to the economic climate, and that is what this debate is about.

Photo of Evan Harris Evan Harris Shadow Science Minister

With regard to the Jonathan Ross-Russell Brand incident—I make no defence of that escapade—will the hon. Gentleman confirm that his proposal is in no way a means of punishing the BBC for testing the boundaries of taste, as with "Jerry Springer: The Opera", and that it is vital that the BBC should perceive no threat from politicians about its willingness to take chances in the creative industries even if it sometimes gets it wrong?

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

I support creative risk taking, but socially responsible broadcasters should behave in a socially responsible way, and that was a lapse of taste and standards about which the BBC should have known better.

The events of the past two weeks have been grim for Westminster. We have learned the hard way what happens when one loses the trust of the public. That has happened partly because this place has received a level of scrutiny way beyond anything experienced by the BBC. The BBC, too, needs to maintain its bond of trust with the British people, which means understanding that when times are tough, it should not just pocket the money allocated to it in happier times. It should listen to people's concerns and respond to the changed economic circumstances of 2009. Waiving this year's 3 per cent. licence fee rise would do just that, and I urge wiser heads at the BBC, in the Government and in the House to respond accordingly.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport 5:01 pm, 20th May 2009

I begin with two points of solid agreement, I think, between Mr. Hunt and myself. I believe that unlike some of his colleagues, he cares about the BBC and supports the principle of the licence fee. There is a Back-Bench Bill doing the rounds of the Opposition Benches calling for the abolition of the licence fee, which is red meat for some of his more right-wing colleagues, at least five of whom support it. However, I genuinely do not believe that he is in that camp. Also, we agree that Parliament has a responsibility to licence fee payers to ensure that the BBC is adequately funded but never over-funded.

We must always strike a balance between playing fair by the BBC, giving it sufficient funding and stability to fulfil its charter purposes, and playing fair by the licence fee payer, ensuring that the licence is both good value and affordable and taking account of the prevailing economic circumstances.

Photo of Bill Cash Bill Cash Conservative, Stone

Did the Secretary of State hear a fascinating item on the "Today" programme this morning in which Sarah Montague asked the chairman of the BBC Trust some extremely relevant questions about the BBC's pay, allowances and expenses and the rest? Did he hear the chairman's replies, and what did he think about them?

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I did hear the chairman's replies, and I thought he made some very sensible and solid points. I also heard the shadow Secretary of State on the "Today" programme supporting his motion and calling for cuts. I then picked up my Racing Post only a few moments later and read, "Shadow Secretary backs BBC racing campaign." He stated:

"Because I cover not just sport, but also the media, this is an issue I will be taking up with the BBC to make sure that they give this really important industry the support that it needs."

I had to pinch myself—it was as though he were saying one thing to the Racing Post and quite another on the "Today" programme. He was saying to the former, "More money for BBC racing." It was quite astonishing.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I will, but I hope the hon. Gentleman has a good answer.

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

I just wanted to ask the Secretary of State whether he thinks licence fee payers' money is better spent supporting the racing industry or supporting a £14 million taxi bill or a £15 million flying bill.

B

Well said Mr Hunt. Burnham acts like a peevish child, he has robbed and plundered the British public and supports his cronies in the BBC...

Submitted by Bill Burrows Continue reading

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I was not making that point. I was hoping that the hon. Gentleman would have the good grace to say that he was calling for the BBC to spend more on racing on the self-same day he was on the radio calling for a 2 per cent. cut across the corporation. If he does not see any inconsistency or unfortunate timing there, I am sure others will.

Photo of Roger Gale Roger Gale Conservative, North Thanet

I might be able to help the Secretary of State. The reason why the BBC is having such problems is that its remit has grown like Topsy, way beyond anything in the charter. It has to learn to cut its coat according to its cloth like everybody else. There is a limit to how much we can allow the BBC to expand, and it has gone beyond that limit.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I take it that support for racing is off the agenda if the hon. Gentleman has his way. Hon. Members are entitled to their views, but I happen to believe that the BBC gives good value. I well remember that, a few years ago, Opposition Members and others said that the BBC should not invest in online and new media services. However, today the BBC website is an important resource for people throughout the country, providing accurate information about activities and events in this place and beyond.

Several hon. Members:

rose —

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I will make progress before giving way.

My right hon. Friend Tessa Jowell, the then Secretary of State for Culture, Media and Sport, struck precisely that careful balance between the interests of the BBC and those of licence fee payers when she set out to the House the current six-year settlement—annual nominal increases in the licence fee of 3 per cent. for the first two years; 2 per cent. in years 3, 4 and 5, and between 0 per cent. and 2 per cent. in the final year.

In the first two years—2007-08 and 2008-09—the licence fee increased by 3 per cent. Let me remind the House that the retail prices index was 4.3 per cent. and the consumer prices index was 2.3 per cent. in 2007. In 2008, RPI was 4 per cent. and CPI was 3.6 per cent. For the past two years, the BBC's funding increases have, on the whole, been below the prevailing rate of inflation. That is an important context for today's debate.

On the logic of the motion that the shadow Secretary of State and the Leader of the Opposition have tabled, we might have expected a bid to uprate the BBC's position in the past two years, but I do not recall any clamour to do that. It is right not to clamour, because it is not sensible to look at any one year in isolation. However, the motion effectively asks us to do that.

Photo of Pete Wishart Pete Wishart Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (International Development), Shadow Spokesperson (Justice)

What does the Secretary of State say to Scottish licence fee payers, who face the increases although BBC commissions in Scotland come nowhere close to a population share?

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I have visited Pacific Quay in Glasgow a few times. It is a major investment by the BBC, at the heart of a developing creative sector in that part of the city. There are clear commitments, which I will outline, about increasing programme spend in Scotland. However, the motion would jeopardise that.

Photo of Barry Sheerman Barry Sheerman Chair, Children, Schools and Families Committee

I believe Labour Members share my view that the BBC is a fantastic organisation, and we will not vote for the motion. However, we are not pushovers, and when we see some of the current affairs coverage, which slavishly follows the print media rather than setting the news agenda, we get a little unhappy.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I am aware that colleagues in all parties are concerned about aspects of what the BBC does, and it is right and proper that they should present those concerns today. It is also right for the BBC to acknowledge and respond to public concerns. However, I agree with my hon. Friend's overall point—the BBC remains good value for money, and enhances our democracy and life in this country.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I will make some progress now, but I shall give way to both hon. Members before I finish speaking.

Today we are debating a 2 per cent. increase for the BBC. I recognise our responsibility to licence fee payers, particularly in these difficult times. However, the interests of licence fee payers do not revolve solely around cost. The quality of what they receive in return is also crucial. Overall, the BBC remains good value for money, although, as has been said, on some matters it needs to respond to changing public moods and changing times.

We need to take care, however, not to damage or destabilise one of the great British institutions, which is respected and revered around the world. I therefore profoundly disagree with the premise of the debate that the Leader of the Opposition has initiated today. His position is wrong in principle and in practice.

First, let me deal with principle. Let us be clear: the Conservative party today challenges the basis on which the BBC has been funded for decades. Multi-year funding deals are important, not only for the planning stability that they bring, but because they protect editorial independence and act as a bulwark against undue political interference.

The Leader of the Opposition said that his party

"would freeze the BBC licence fee for one year," and that it

"needs to be looked at year-on-year...we would freeze it this year, review it in future years."

Let us make no mistake: the uncertainty that that would create would be disastrous for the BBC and, ultimately, for licence fee payers. Instigating annual funding settlements would fundamentally alter the BBC's character, independence and impartiality, its relationship to Parliament and its role in public life. Would any Government be properly challenged by the BBC when the corporation's fate was always under review and the corporation was engaged in almost never-ending debate with civil servants and Ministers about its funding?

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I will give way to the hon. Gentleman, and I hope that he has a good answer to that point.

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

Let me make it absolutely clear that the Secretary of State is distorting what the Leader of Opposition said. He did not say that we should move to annual settlements for the BBC, and that is not our party's position, as the Secretary of State knows perfectly well. The current settlement, which started in 2007, is a six-year settlement, but the amount by which it will rise in the sixth year is to be determined at a later date. If it is so important not to settle the licence fee every year, even though it is possible to determine the amount received in the sixth year at a later date, why, given the extraordinary economic circumstances of the past six months, is it not sensible to review the position in the third year as well?

Photo of Barry Sheerman Barry Sheerman Chair, Children, Schools and Families Committee

On a point of order, Madam Deputy Speaker. The hon. Gentleman has made an extensive speech in the very short time available to us, and yet back he comes with an intervention that is longer than most speeches.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

I have already made a plea to hon. Members to be brief with their interventions. The intervention was on a point of debate. The shadow Secretary of State was challenged and I gave him the opportunity to respond.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I get on well with the hon. Member for South-West Surrey, but I take great exception to his saying that I am distorting a comment made by the Leader of the Opposition, so I shall read it again. The Leader of the Opposition said that the licence fee

"needs to be looked at year-on-year".

Could the hon. Gentleman please tell me what I am distorting? That is the stated policy—year-on-year review of the licence fee—and he cannot wriggle out of it because he does not like the implications of such a statement for the BBC.

Sometimes, the old way of doing things should be swept away, as we have seen in recent days, and rightly so. But sometimes, the old ways have merit and should be kept. I thought the Conservative party understood that.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

I would like to declare an interest: I am a supporter of some parts of the BBC. Talking about old ways, does the Secretary of State agree that, to help his justification of the case for increasing the licence fee, it would be helpful if the BBC followed this Parliament in opening up its books, in particular that on the salaries of all its staff? Its staff are paid by the taxpayer, like every hon. Member in this place, so is it not about time that the BBC followed the lead of this Parliament and opened up its books to transparency and openness?

M

Here Here,point well put Mr Pritchard
The BBC is owned by the licence payers so as shareholders all accounts should be available for public scrutiny

Submitted by Michael Wilkinson

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

Perhaps I should have made the point to the hon. Member for South-West Surrey a moment ago that the chairman of the BBC Trust commented on that earlier today and said there had been a move towards greater transparency in recent times. However, I do not believe that the hon. Gentleman publishes all the salaries of his staff, and it is not necessarily right just to say that everything should be in the public domain. Let us have appropriate transparency and accountability. I do not necessarily disagree in principle, but let us ensure that things are done appropriately.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

It is important that the BBC does not get too big for its boots—indeed, the Select Committee on Culture, Media and Sport was recently critical of BBC Worldwide. The demands on the BBC are growing with, for instance, the current discussions about Channel 4's funding gap. What would be the effect on sensible business negotiations if the BBC's settlement was simply ripped up in the way proposed?

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

My hon. Friend makes a powerful point and I will deal with precisely that issue now. I said that the Conservatives were wrong in principle, but they are wrong in practice, too. As well as causing a loss of independence, annual funding would take away the stability and certainty that a broadcaster needs to operate successfully. The BBC would lose its capacity to plan for the long term, commission the highest quality content and invest in the technologies of the future, such as the iPlayer, which so many of us benefit from and enjoy.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I must make progress.

More specifically, the cuts that the hon. Member for South-West Surrey is today calling for could have the direct effect of damaging programme making, draining funding from the creative economy at a time when other revenue sources are drying up and undermining the successful delivery of projects of importance to the future of this country.

Let me remind the House that, within the funding settlement agreed in 2007, the BBC has already made major efficiencies and is mid-way through a programme to save a total of £1.9 billion during the current licence fee period via an annual efficiency target of 3 per cent. Pay and bonuses for senior managers have been frozen for 18 months. Posts have been reduced by 7,200 since 2005, and there are a further 1,200 to go as part of further savings.

Alongside this, the BBC was charged with delivering changes of critical importance. First, out of funds in the six-year settlement, it was asked to play a crucial role in the national digital switchover project by providing practical help, through the help scheme, to ensure that the most vulnerable and disadvantaged in our community can make the switch.

Secondly, over the next two years, the BBC is relocating 2,500 staff to MediaCity in Salford, helping to form the first purpose-built media community in the UK, and permanently rebalancing media power in this country away from the capital and into the regions. This will bring huge benefits to the economy in the north-west, estimated at £1.5 billion and 15,500 jobs.

Two further asks of the BBC have emerged since the current licence fee was settled. In response to calls from colleagues in this House, the BBC Trust has committed the BBC to making significant increases in its programme making in Scotland and Wales so that, by 2016, 50 per cent. of network productions will be made outside London.

Photo of David Cairns David Cairns Labour, Inverclyde

My right hon. Friend is a great champion of broadcasting in the nations and regions. He has already mentioned the £182 million studio at Pacific Quay in Glasgow, the finest studio of its type in Europe. Is he aware that the BBC is responsible for 85 per cent. of all TV production across the whole of Scotland, and that original production from Scotland for the networks is increasing after years of going down? Would he like to speculate on the impact that a big cut in the licence fee would have on the progress that we have seen over the past couple of years?

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

My hon. Friend makes an important point. Having visited a couple of times, I know that there is a developing, but quite fragile, creative economy in that part of Scotland. There is a tendency to claim that this is all about bloated BBC pay and executives, but a point that is often missed is that much of the money goes to independent producers and small start-up creative businesses in Scotland, as my hon. Friend and I saw when we visited. That is a crucial source of funding that would be severely missed if it were to be reined in.

A further ask has emerged since the licence fee settlement was reached, and it is perhaps the most important of all. The media industry has changed profoundly during that time and continues to change at great speed. As a result, and as I have said before, it is vital that the BBC step forward to play a bigger role as a partner and an enabler of other public service content, and I welcome the moves it has made in this direction. This is firmly in the public interest, as it helps to sustain programmes that the public value. According to the hon. Member for South-West Surrey's logic, if commercial TV is shrinking, the BBC must shrink too. My argument is that the BBC should put a helping hand under other parts of the system that are struggling, so as to maintain the content that the public enjoy, value and depend on. That is the fundamental misunderstanding in his remarks today.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I have given way to Mr. Cash once already, and I want to make some progress. I will give way to some of his hon. Friends before I finish.

All four of these major undertakings—digital switchover, the move to Salford, programmes in the nations, and the BBC as partner—would be destabilised by this ill-conceived Tory attack. At a time when our commercial broadcasters are facing economic difficulties, this work only serves to underline the importance of a properly funded BBC as the backbone of our creative economy and the cornerstone of public service broadcasting. Two months ago, we saw a prime example of this with the memorandum of understanding between the BBC and ITV plc to enter into news gathering and production partnerships that will deliver cost savings rising to an estimated £7 million by 2016 in the provision of regional news in England and Wales on ITV.

Photo of John Redwood John Redwood Conservative, Wokingham

The Secretary of State says that the BBC makes provision for the nations and regions, but when will he and the BBC understand that England is a country and that it wishes to be recognised?

Photo of David Cairns David Cairns Labour, Inverclyde

What country does he think Salford is in?

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I do not know how often the right hon. Gentleman travels north of Watford, but I can tell him that Salford, which is most certainly in England, is about to benefit from a major investment in the creative economy of the north-west. If the right hon. Gentleman paid us in the north a visit once or twice, he might learn something.

Photo of John Redwood John Redwood Conservative, Wokingham

The right hon. Gentleman is deliberately misconstruing what I said. The point is that in its content and production the BBC does not recognise England; it balkanises us into regions, which people do not like.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

The right hon. Gentleman has made his point and there is no need to reply to it. I shall begin to conclude my remarks.

In recent years, we have seen how central the BBC is to this country's global prominence in innovation in the creative sector. The iPlayer has been a phenomenal success—one that we need to see replicated and its benefits shared across the creative sector as a whole. We cannot expect the BBC to play that role unless it has stability and certainty at its core.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

I am extremely grateful to the Secretary of State, who is being most kind in finally giving way to me. He keeps saying that the BBC must have certainty in order to develop its offerings for the future, but I put it to him that the commercial sector—whether it be publishing, which competes, or broadcasting—has to make do with the income that comes its way. It is coping with greatly reduced incomes at the moment, yet it sees the BBC being given absolute guarantees, which is a monopoly being solidified. That is why my hon. Friend Mr. Hunt is right to suggest that the BBC should share the pain with the rest of the British economy.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

The BBC fulfils a different role; it is not a commercial broadcaster. It is there to provide content that the commercial sector would not provide. It is there to invest in new and emerging talent and to take risks on different types of content. It is there to provide local radio of a depth and quality that the commercial sector could never reach.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

On a point of order, Madam Deputy Speaker. I apologise for failing to declare an interest. As a director and shareholder in a publishing company, I feel that it would be right for me to do so.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

The hon. Gentleman's comments will now be on the record.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I am glad they are.

To conclude, let us be clear what today's debate is about. It is about posturing and getting easy and cheap headlines for the Conservative party. It is traditional BBC bashing—yes, it may have been done with a light touch, a smile and no tie, but it is BBC bashing none the less.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. It is obvious that the Secretary of State is no longer prepared to give way.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

When in January 2007, my right hon. Friend the Member for Dulwich and West Norwood introduced the BBC settlement that we are debating today, she introduced a fair, realistic and well thought through settlement. She did so in order to provide a platform of stability and strength in a period of flux and change, and she did so on the basis of the best possible combination of independent advice, high-quality research and public debate. It was a settlement with a vision for the future of the BBC and its role. Now is not the time to rip up that settlement or to be thinking of taking money out of the system and risk destabilising not just the BBC, but our creative sector as a whole.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

I will give way one last time, but then I am going to finish.

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

The Secretary of State described our motion as an ill-conceived Tory attack, so can he tell me why early-day motion 1047, which asks for a freeze in the licence fee, was signed by more hon. Members from his own party than by Conservative Members?

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

The hon. Gentleman has brought a motion before the House today and he is asking us to vote on the licence fee. He is a member of the Tory Front-Bench team, so he represents Conservative party policy. I suggest that when a Conservative Front-Bench Member brings such a motion before the House, it indicates to those outside precisely how he and his Front-Bench colleagues think. I say again that this is an attack on the BBC led by the Leader of the Opposition, and which the hon. Gentleman has had to carry out today. I can see his discomfort in having to do so.

The licence fee is an investment in Britain's digital future. It is bringing jobs to the north-west, programme making to the regions and nations, and building our digital infrastructure. It is the prime source of investment in one of Britain's abiding strengths—our creativity. Given a choice of investment or cuts, we know where the Tory party usually stands. I urge the House to vote against the motion.

Several hon. Members:

rose —

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. Mr. Speaker imposed a 12-minute limit on Back-Bench speeches. So that I can—I hope—accommodate everyone who wishes to speak, I shall now reduce the limit to seven minutes.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport 5:25 pm, 20th May 2009

For once, I am delighted to follow the Secretary of State.

In my view, the Tory proposal is a dangerous, badly timed and, frankly, pathetic gimmick. Although, as the Secretary of State has said, the BBC is rightly the envy of the world, the whole House would acknowledge that it does not always get it right. I have been very critical of a number of its actions, which in recent times have included the aggressive approach to licence fee collection, the slow reaction of management over the Ross-Brand affair, the phone-in scandals, the excessive expenditure on taxis, aeroplanes and even Christmas parties, and the over-the-top payments to some presenters and so-called top talent. Despite that, however, I value the BBC and I value the values for which it stands.

Introducing the debate, Mr. Hunt said that it had come at a time when there was a huge debate about trust in politicians. He is right, but let me remind him that trust in the BBC has never been greater. A recent poll by the BBC Trust showed that 85 per cent. of the British people support the BBC, up from 70 per cent. two years ago. I think that we obtain phenomenally good value from the BBC. For 39p a day, licence-holding households receive 10 TV channels, some with high definition, 10 UK-wide radio stations, 46 national and regional radio services, interactive services on BBCi, the huge benefits of the iPlayer and, in bbc.co.uk, a website that gets 17.5 million unique hits every week. I think that that is pretty good value for money. The BBC also provides high-quality, UK-produced, impartial broadcast content. I believe that it is vital to our democracy, to our sense of national identity, and to the success of our creative industries.

Last night, in an interesting and somewhat provocative speech, the chairman of the BBC Trust, Sir Michael Lyons, argued that the way in which people think about the BBC is different from the way in which they think about commodities. The hon. Gentleman's approach seems to be that they just think about commodities, but they do not. As Sir Michael said, the British people see themselves as shareholders in the BBC, and therefore have a vested interest in its long-term future. The Tory proposal ignores that relationship, and crucially—as the Secretary of State said—it ignores the vital independence of the BBC from Government.

As we have heard, the planned increase is part of a six-year settlement. Not only is the length of that settlement critical to the BBC's ability to plan ahead, but it underpins the BBC's editorial independence. Voting against the order and for the Tory proposal would set a dangerous precedent whereby the licence fee settlement could be redrawn each year, year on year—as the Tories' leader has said—according to political whim. It would represent a fundamental and undesirable shift in the relationship between the BBC and Parliament. In short, the motion is highly dangerous, and prompts the question "Will the BBC, and especially its independence, be safe in Conservative hands?"

It is no wonder that, on Monday this week, The Guardian quoted an unnamed Tory source as saying:

"This could be the first meaningful salvo in what could be an explosive battle between a Conservative government and the BBC."

In the same article, Mr. Whittingdale, the Chairman of the Select Committee on Culture, Media and Sport, is quoted as saying that today's vote would "send a message" to the BBC. I look forward to hearing what message he thinks it will send.

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

Can the hon. Gentleman explain why, if the Tory proposal is so dangerous, two members of his party's Front Bench supported early-day motion 1047? It asks for a freeze in the licence fee, which is exactly what we are asking for today.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

I suspect that we shall have to see whether, after those two hon. Members have read the Hansard report of the debate, their names remain attached to the early-day motion. However, I hope that I may be able to persuade the hon. Gentleman.

The hon. Gentleman thinks he has scored a point, but let us address what he has said. He has said that his proposal represents a £68 million cut in the BBC budget. I hope he will stand up and intervene on me to explain where that figure of £68 million comes from, because I have had it checked by the BBC finance department. It says that if it is a one-off cut, it will actually be £75 million, but, unless he is proposing that in subsequent years there be a way above inflation-busting increase to get the BBC back on track, the cumulative impact of his proposal will actually be a cut of £325 million.

Photo of Jeremy Hunt Jeremy Hunt Shadow Secretary of State for Culture, Media and Sport

The hon. Gentleman asks me to suggest ways in which that £68 million can be found. We have talked about the taxi bill. What about the £108 million spent on imported programming, much of which could be viewed on the commercial channels if it was not being shown on the BBC?

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

I wish I had not given way to the hon. Gentleman because I asked him a clear question: where does his figure of £68 million come from, as it is incorrectly calculated? A one-off cut would be £75 million, and carried through to the end of the licence period the cut would amount to £325 million. A cut of that magnitude must be considered in the context of what is happening within the BBC. The Secretary of State has already referred to that, but we must recall that, since 2001, the BBC has already made cumulative savings of £2.2 billion, 7,200 posts have gone since 2005, and it already has plans in place for a further 15 per cent. of efficiency savings amounting to a cut of £1.9 billion by the end of the licence period, during which a further 1,200 posts will go. We also already know that pay and bonuses for senior managers have been frozen for 18 months, licence fee collection costs have been reduced by £32 million, and spending on top talent has been reduced—and the list goes on.

The hon. Gentleman said, however, that the BBC has to do what all other businesses have to do: cope with the impact of the recession. Because he has done his research, he should be aware that, in addition to all the planned cuts, the BBC now has to cope with a reduction in anticipated income because the number of new households is lower than was expected so there will be fewer new licences and because the money it will get from the sale of property in White City has massively reduced as a result of the impact of the recession on the property market. Those factors combined mean that the BBC has to find a further £400 million in cuts because of the recession.

The idea that the BBC is swimming in cash and can make additional savings at the drop of a hat is, therefore, out of date. It is unprepared for the retrospective cut that the Tories are asking for. The Tories have to say which services should be cut, too: local radio services, or the children's channel, or the parliamentary channel, or a national radio station or two? Perhaps still more importantly, what damage would the cut do to the creative industries?

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

I will give way to the hon. Gentleman shortly, if he wishes to intervene then. We know that the BBC's activities put £5 billion per annum into the creative industries. It has already been pointed out that the other broadcasters are reducing their expenditure. If there is a further BBC cut, that will have a direct impact on the creative economy.

This is a dangerous proposal that would undermine the independence of the BBC and that would, by failing to take into account recent and planned efficiency savings, put programmes and services at risk. It is also badly timed. This is a retrospective cut, and no mention has been made of the cost that would be incurred in implementing it retrospectively. Again, I have received advice, and I have been told it would be in the order of £4.3 million.

Finally, this really is pathetic, because if all the Tories can do in this recession is offer to each household in the land the princely sum of £3—less than 1p a day—people will see through that for what it is. The public do not want the BBC to be damaged or its independence to be threatened, and they will see this as a cheap gimmick. By using the BBC as a political football, the Tories have scored an own goal. It is absolutely clear that the BBC will not be safe in Conservative hands.

Photo of John Grogan John Grogan Labour, Selby 5:34 pm, 20th May 2009

I have not signed the early-day motion in question, and I rise briefly to support the Government and oppose the Opposition motion. First, I wish to deal with the argument made by the Conservative Front-Bench team that advertising has declined for commercial broadcasters and thus, by implication, that the BBC is becoming too dominant in the market. It is important to be accurate with the figures. The amount of the licence fee money that is spent on BBC television programmes is about £2.5 billion, which is roughly what will be raised this year by the traditional terrestrial commercial broadcasters in advertising income—the ratio is about 50:50; the BBC's figure could be a little higher than that of commercial broadcasters, or vice versa. Obviously, the BBC does not spend all its licence fee income on television, because it supports radio and online services too.

That argument from the Conservatives seemed to me to belong to 20 or 25 years ago, because it completely neglected the fact that a great deal of broadcasting income these days comes from subscription TV. I believe that BSkyB has a subscription income of about £3.7 billion, and the figure for Virgin—Richard Branson's company—is about £600 million, so a total subscription income of well over £4 billion, in addition to the advertising income for commercial broadcasting, has to be considered. The BBC is a much smaller player than it was 10 or 20 years ago, and it is not in any danger of becoming dominant in the market. Indeed, 10 years ago, people were fearful as to whether the BBC would have relevance, given that competition. As Front Benchers have recognised, the BBC has responded well to that competition: BBC 1 remains the most watched TV channel in the nation; BBC radio still attracts about 50 per cent. of the radio listenership throughout the country; and BBC Online is looked at by at least half the population on a regular basis.

There are two reasons why it is important that the BBC's licence fee is determined over a long period, not a short one—they have been mentioned but they are worth repeating even though they are both matters of common sense. I hope that in the coming days, or perhaps later today, the official Opposition will clarify whether they seek an annual review of the BBC's licence fee, as some of their Back Benchers—

Photo of John Grogan John Grogan Labour, Selby

I am encouraged by some of the gestures coming from those on the Opposition Front Bench suggesting that that is not the case, because it would be a big worry if it were.

There are two reasons why the BBC needs long-term funding, the first of which relates to its independence, which should not be taken for granted. It has been established over 80 years of BBC history and, as the Secretary of State said, it would be problem if the BBC director-general had to troop into the Treasury on an annual basis and, depending on what the controversy of the moment was, had to speak in the press, tailor his argument and so on. Would Jeremy Paxman be quite so aggressive to us all and would the "Today" programme be quite so pressing of the day's issues if that were the situation? Over time, what would happen to that independence? It should be valued—there is no point in having the BBC and in having the licence fee if that independence is not preserved—because it is crucial, not only to news coverage, but to the BBC's entire output.

Photo of John Whittingdale John Whittingdale Chair, Culture, Media and Sport Committee, Vice-Chair, Conservative 1922 Committee

Is the hon. Gentleman suggesting that in the run-up to the previous BBC settlement, the BBC was, in some way, restrained in its criticism of the Government? I do not believe that his Front-Bench team would feel that that was the case at the time of Hutton.

Photo of John Grogan John Grogan Labour, Selby

This is a question of balance, and of whether we should have the review once every six or seven years, or once a year. An annual review would clearly mean that the process is ongoing; there would never be a time when the BBC licence fee would not be under debate. We should be talking about relatively short periods, when the charter is reviewed, whereby we decide whether we want the BBC to continue or not, then decide what the licence fee should be and then let the BBC get on with doing its job.

We rightly make huge demands of the BBC, because of its privilege in getting the licence fee. Some of those have been mentioned, and they concern not only top quality content or maintaining standards. When the BBC falls short of those standards, it causes controversy because of the affection in which it is held. The demands also relate to how in this licence fee settlement, as has been said, we are asking the BBC to engage as never before with the nations and—as Mr. Redwood has left, I believe that I can say this—with the regions of England too. The BBC is doing that in an unprecedented way. A third of BBC output will come from the regions by 2016, whereas only a quarter does so now. In Scotland, Northern Ireland and Wales, the figure will triple to some 17 or 18 per cent. of output. The partnerships that we are rightly demanding of the BBC—to advance digital radio, to preserve regional news and to get involved in all sorts of technological developments—mean that we have to ensure that it has a predictable income.

The last settlement was quite tough, and it has fallen below inflation for the last couple of years, as the Secretary of State said. The BBC has to cut its cloth according to its means, but it must have predictability.

This debate is a key indicator of the attitude of a future Conservative Government—should that ever come about—to many issues. Like the Secretary of State, on broadcasting I trust the instincts of the Conservative Front Bench and the Leader of the Opposition, who has often said that he admires the BBC as a great British institution, but those sentiments are clearly not shared by all Conservative Members.

Interestingly, it is not only on this issue that red meat is being offered. For example, I understand that it is now Conservative policy to get rid of the traditional British rule that television news should be impartial. We might end up with a domestic version of Fox News, and that would be a big change. If that were combined with calling in the director-general of the BBC once a year—I am glad that the Opposition Front-Bench spokesman has confirmed that that is not the plan, and I hope that it remains the case—broadcasting in this nation, which is valued by many people, could be under threat. That would affect not only the BBC, but commercial public service broadcasters and it would be to the detriment of the nation.

I hope that the House will endorse the current BBC licence fee and back the tremendous plans for production in the regions, top quality content and the development of new technology to which the BBC is committed.

Photo of John Whittingdale John Whittingdale Chair, Culture, Media and Sport Committee, Vice-Chair, Conservative 1922 Committee 5:42 pm, 20th May 2009

I warmly congratulate my hon. Friend Mr. Hunt on initiating this debate on the licence fee. If ever there was a time when it was right to ask again whether the licence fee should continue to increase, it is now. My hon. Friend set out some of the background to the increase in the fee against the rate of inflation, but the BBC's income is determined not just by the level of the licence fee, but the number of households that pay it, which also has been going up. As a result, the BBC has enjoyed perpetual income increases, year on year, at a time when the rest of the media sector is facing its worst crisis for 50 years.

The media are affected by the recession in the same way as every other industry. As many people who have been in business will know, one of the first casualties in a recession is advertising spend, and there has been a significant drop in advertising expenditure across the board. On top of that, we are seeing a fundamental structural change in people's consumption of media. More and more people consume media online, and as they move from traditional media outlets advertisers are following them. The result is that every commercial operator is under greater pressure than ever before. ITV has moved from children's programming and regional programming, and it has now pulled out of arts programming with the ending of "The South Bank Show". It has also cut drama. Channel 4 has identified a £150 million gap in its funding. Channel 5 is struggling to survive. Every commercial radio station is now considering its economic prospects and wondering whether it will still be in business in a year's time. As we know, local newspapers are going out of business every week.

All those sectors face competition from the BBC, and that has always been a matter for concern, but the disparity between the amount available to commercial media and that available to the BBC has now become enormous, and it is distorting the market. For the first time, the BBC's income will exceed the total advertising revenue of the entire commercial sector. That gap will grow to more than £1 billion.

Photo of Philip Davies Philip Davies Conservative, Shipley

Does my hon. Friend agree that, as opposed to the BBC press release masquerading as the Liberal Democrat spokesman's speech, even if the motion were to be passed today, that would not comprise a cut in BBC expenditure? The motion would simply result in the BBC's not being given a further increase in funding. It is nothing to do with a cut to the BBC's funding, anyway.

Photo of John Whittingdale John Whittingdale Chair, Culture, Media and Sport Committee, Vice-Chair, Conservative 1922 Committee

My hon. Friend is absolutely right. The Conservatives are entirely familiar with the claim that there will be cuts when in fact we are talking about a slightly reduced increase in expenditure.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport

The hon. Gentleman is of course absolutely right to describe the pressure on established media businesses, but, given that, will the public get the quality of media they deserve if the licence fee is cut? How can the public in this country get the quality of media they deserve and that democracy needs if the licence fee is to be cut?

Photo of John Whittingdale John Whittingdale Chair, Culture, Media and Sport Committee, Vice-Chair, Conservative 1922 Committee

We simply cannot ignore the environment in which the BBC is operating. That is not to say that the BBC does not do masses of things that are essential. However, my question is whether it needs £3.6 billion to do them. The BBC will always point to its comedy, drama, children's television, regional television and its religion, arts and education coverage. However, just because the BBC produced "Cranford", "Life in Cold Blood" or "Panorama" does not necessarily justify £3.6 billion. We have to ask whether we need all the channels that the BBC produces. BBC 3 has cost more than £500 million since it was set up, and to be honest I do not believe that the amount of product that has appeared on BBC 3 justifies that amount.

The Secretary of State said that "The BBC is there to provide content that the commercial sector would not". I entirely agree, but too often the BBC is providing content that looks very similar, if not wholly identical, to the content that the commercial sector provides. One has to ask whether it is justified for the BBC to go on paying the amount that it does in recruiting talent, top salaries, competing against commercial providers and, as my hon. Friend the Member for South-West Surrey said, bidding against commercial television to acquire imported American television or to acquire Hollywood movies—in that case, the only beneficiaries are the Hollywood studios.

The BBC does not need all the money it receives and, in the longer term, we need to be having a bigger debate necessarily about whether the BBC needs this amount or that amount, but about how we can sustain public service broadcasting in this country. There is a desperate crisis, and it is essential that the BBC is not left as the sole provider of public service broadcasting. If we are to sustain plurality, we must support commercial providers' continuing to provide public service programming. That might well need public support, and the obvious source for that is the licence fee.

Is it more in the interests of the public and the viewing public in this country that we should go on sustaining BBC 3 or yet another American import, or should we be using that money to ensure that regional news does not just appear on the BBC but continues to be broadcast on ITV? Should there be other providers of children's programming outside the BBC? I welcome that debate, which Lord Carter is currently conducting, but those points have to be taken into account in this debate.

There is very little time, but I want to finish by saying that I am profoundly disturbed by the comments made by the chairman of the BBC Trust, which was set up to be different from the board of governors. It was supposed to be an arm's length regulator, yet increasingly the chairman of the trust appears to be a champion of the BBC. When he suggests that it was somehow wrong for the Opposition to table this motion today, I have to say that he is straying on to political territory, which is very dangerous. He is also questioning the right of Parliament to determine the appropriate level of funding for the BBC. Of course Parliament should not interfere in the BBC's editorial independence, but debating the right amount of public money to go to the BBC is not interfering in editorial independence. It is a function of this House. If the chairman of the trust is suggesting that we should not be having this debate, I believe that he is in severe danger of overstepping the mark. I hope that he will think very carefully before continuing to make that argument.

Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby 5:49 pm, 20th May 2009

The Opposition's pathetic and opportunistic proposal tells us more about the intellectual decline of the Conservative party, and of its Front-Bench team in particular, than it does about the crucial problem of communications—that is, how we maintain and defend the quality of public service broadcasting in this country. The motion before us does nothing at all about that.

I expected to see Mr. Whittingdale sitting and squirming with embarrassment through the deluge of rubbish poured on us by his Front Bench spokesman. The Opposition's agenda has been revealed to be top-slicing the BBC's licence fee—that is the unstated purpose of the motion—and the fact that he at least had the courage to make that specific merely demonstrates that the intellectual rot has affected even him.

Photo of Philip Davies Philip Davies Conservative, Shipley

And I am very grateful too, but does the hon. Gentleman agree that top-slicing was recommended by the Select Committee as a whole? He will not have failed to notice that the Committee has a Labour majority.

Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

I do not want to embark on top-slicing, and neither does the National Union of Journalists or anyone with a real concern for public service broadcasting. Once top-slicing starts, it never stops. If it starts, we shall end up with what happened when I was in New Zealand. There, the licence fee was frozen and never increased, with the result that demand for commercials to be broadcast on the public service broadcasting channel kept on growing.

The motion shows that today's Conservative party has very little noblesse and damn all oblige. The spirit of Willie Whitelaw, a man who was generous to the BBC and to public service broadcasting, is frankly dead. The Opposition are clearly obsessed with the cost of everything, but care little for a valued institution such as the BBC. When the Tory Front-Bench spokesman made his speech, he was surrounded by the boot boys of the Tory party, but most of them have left to do their boot work somewhere else. His was an intellectually feeble argument, and I am pleased to see that the Tory grandees are not participating in it.

The BBC has its faults, and we could go on about them at length. I wish that I had been paid the sort of salary that Jonathan Ross gets—I used to present a programme called "24 Hours A Day" and I was worth it—but there is no need to go on about the BBC's faults, as all big organisations have them. Freezing or cutting the annual licence fee increase would secure only pathetic savings and, once we embarked on such a process, it would never stop. What would happen next year, or the year after? Another cut would be proposed.

The motion shows that the Tory party is reneging on the licence fee, which has been the basis for the financing of public service television over the years. It has been ring-fenced to the BBC to provide quality in public broadcasting through culture programmes, children's programmes and regional services. The latter are very important in Yorkshire, and the BBC provides all the services from which ITV is pulling out. Are the Opposition arguing that, because ITV is cutting its public service obligations, we should force the BBC to do the same? Is that the essence of their argument—that, because ITV has had to make sacrifices, we should impose sacrifices on the BBC?

That is totally illogical. The BBC is the bastion and guardian of public service television in this country. Are the Opposition suggesting that the money saved on the licence fee should go to ITV, or are they proposing these savage cuts just to make the BBC show the same sacrifice as ITV? If so, that argument is illogical.

Photo of Ed Vaizey Ed Vaizey Shadow Minister (Culture, Media and Sport)

The argument is that the money should go back to the licence fee payer—the taxpayer.

Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

Well, that would be a very generous donation to everybody. That would make no difference to most people's cost of living. It is a futile gesture—and one that the Conservatives will want to repeat next year. We cannot suddenly impose such a cut in the third year of a six-year settlement. It was far from a generous settlement—it led to redundancies at the BBC when it was reached—but the BBC is working on the basis of it. The organisation needs stability. It is implementing a decision to make efficiency savings of 2 per cent. a year, and is doing quite well in that respect; the process is producing more redundancies than I would like. The BBC needs stability to plan and organise its resources for the long term, and the six-year settlement gives it that stability.

The Opposition suddenly want to take back that settlement. They want to interfere and stop it. That is crazy; it is just illogical. One would not run a sensible business in that fashion. The measure would mean the immediate loss of £75 million to the BBC. By 2012-13, the cumulative loss would be £325 million. Where, according to the Opposition, should those economies come from? Should they come from children's programmes, or from cutting BBC 3 or BBC 4? Should they come from cutting out local radio altogether? That would save £100 million; that is just £25 million more than the cut that would need to be made in the first year under the proposal. Should we close down Radios 1, 2 and 3? Is that what the Opposition are saying? Where will the economies come from to produce the cut? There is no case for it, and there is every argument against it. The Opposition's proposals are just a piece of opportunistic vandalism, which, as I say, shows the sad decline in the Tory party. They are a foretaste of what is undoubtedly to come, as the Tories re-screen their magnum opus, "Carry on Cutting"—cut, slash and burn.

Photo of Bill Cash Bill Cash Conservative, Stone 5:56 pm, 20th May 2009

In an intervention on my party's Front-Bench spokesman, I raised the question of the BBC's accounts, for an important reason. A number of us, including the Chairman of the Public Accounts Committee and Mr. Whittingdale, who is the Chairman of the Culture, Media and Sport Committee, have raised the matter time and again. All the arguments that we heard, including those of the Liberal spokesman, Mr. Foster—he apparently got his arguments from the finance director of the BBC—and all the arguments about the extent to which we are talking about value for money ultimately depend on whether we can see the accounts. I do not need to repeat the point; if we do not have a proper method of referring the accounts to the Public Accounts Committee, a lot of the analysis in this debate is completely worthless, because we do not really know.

In the same way, in-house productions are a cosy contractual arrangement, in many instances. That means that we do not really know whether they are sufficiently competitive with independent producers. I understand that "Panorama"—I hope that I am not wrong—has 40 programmes a year, of which 30 are in-house. If we are to have a thriving, competitive television and radio industry, it really does matter that we have accurate figures on how the various organisations operate in competition with one another.

I agree with my hon. Friend about the "Today" programme and the remarks made by the chairman of the BBC Trust today. Sarah Montague performed an interesting and important service today. It is the first time I have heard a presenter on any BBC programme raise the question of pay, expenses and allowances in the BBC. I am afraid that the Minister did not deal with that point. He quoted what the chairman of the trust said. I heard what the chairman said, and I have it written down. He referred to the trustees' expenses, and, I think, to the board. He did not deal with the whole BBC employment structure; that is very important. I pay tribute to Sarah Montague for asking the questions that she did, and to the people who were no doubt behind her, who ensured not only that the questions were asked, but that she challenged the chairman of the trust when he tried to duck the issue.

My hon. Friend is right. I have written extensively to Mark Thompson and before that to Michael Grade, and I have had a series of meetings with directors-general over the past 10 or 12 years or more. I have written to them on many, many occasions about the way in which the BBC functions in terms of impartiality and bias, but I have never had the kind of replies that I would have expected.

I believe in the BBC. It is an enormously important concept and it does an enormous amount of good, but it must operate on the basis of proper impartiality and accuracy. I am afraid that when one looks at the guidelines and then at the charter, it is evident that the guidelines are largely written for the benefit of getting the BBC to be able to control the conduct of editorial policy. The charter is much clearer. It refers to the question of impartiality in relation to public policy. Frequently we find ourselves caught up in the argument about whether the BBC is partial or impartial, according to party policy. That is not the issue. There are many subjects on which it is essential that the BBC should focus impartially on public policy, not merely party policy.

We are about to move forward in an extensive and necessary reform of Parliament. Our Parliament has become a sham and it is essential that we address the problems ourselves. It is essential that we look at the BBC in the same light. It is important that the BBC provides from within itself the processes of regulation and self-regulation to ensure that we get what the BBC is capable of producing. It has been and it can be a first- class organisation. I strongly believe that we need a system of enforcement of the BBC's obligations in relation to impartiality and inaccuracy. That is important for the BBC, as Sarah Montague made clear this morning. It is essential for the BBC as a whole, from the director-general downwards.

There has been a severe lack of impartiality on a very big issue that is before the electorate—the European question. There has been a failure to address that— [Interruption.] As my hon. Friend Philip Davies says, the BBC has admitted that. I have the papers and correspondence that I have had with the BBC on that subject. It is important for this good reason: if we are to reform our Parliament, we must ensure that we return power where it belongs.

The BBC has more power and influence in many respects—probably in most respects—than Parliament. The best way to keep a secret is to make a speech in the House of Commons. The BBC's presenters and interviewers can ask questions and supplementaries, and they can do things that we cannot do, but we are elected. I am sure they understand that, but I wish they would demonstrate it rather more and make sure that they are as impartial as we believe they should be, and as we try to be in this place.

Photo of Rob Wilson Rob Wilson Opposition Whip (Commons) 6:04 pm, 20th May 2009

I am a supporter of the BBC and value its history. I had intended to spend some time talking about the great contribution that the BBC has made to this country and the world over many years. That was until I heard Sir Michael Lyons this morning on the radio, so I will take all that good stuff as read. On Radio 4 he suggested that if Parliament stopped the rise in the licence fee, it was a recipe for curbing the independence of the BBC. What absolute nonsense. It strays dangerously into politics. My hon. Friend Mr. Cash was right about that, and Sir Michael should have stayed well away from the issue, because the public no longer trust the BBC rigorously to enforce balance as it once did and was once famous for. The latest reported indiscretions involve the complaints that the BBC Trust upheld about the accuracy and bias of Jeremy Bowen in an article that he published marking the 40th anniversary of the six-day war. The trust said that Bowen

"should have done more to explain that there were alternative views on the subject which had some weight".

That breach of impartiality guidelines underlines the BBC's failure in recent years to stop its innate liberal bias from turning into unbalanced reporting. The BBC's pro-metropolitan, liberal attitude is well documented. Some of the most significant work on the topic was compiled by ex-BBC producer Antony Jay for the Centre for Policy Studies. In his pamphlet entitled, "Confessions of a Reformed BBC Producer", he describes the tribal-like mentality of BBC employees. Jay claims that BBC staff worked and socialised with people who have the same experiences and believe in the same principles, naturally reinforcing their pre-existing prejudices. Jay confessed:

"We so rarely encountered any coherent opposing arguments that we took our group-think as the views of all right-thinking people."

More recently, Andrew Marr famously described the BBC as not "impartial or neutral", arguing that it had a "cultural liberal bias" due to the type of people who were attracted to work there.

The European elections in June represent a particularly difficult challenge for the BBC: licence fee payers expect the BBC not only to give a fair hearing for the major political parties, but to report impartially on the debate between European integrationists and Eurosceptics. So far, it has been a challenge too far. An internal report for the BBC in 2005 found that its news suffered from an "institutional mindset" that led to a

"reluctance to question pro-EU assumptions".

It said that the BBC journalists are ignorant of how the EU works and have failed to show how much of British policy originates in Brussels, and it criticised managers who

"appear insufficiently self-critical about standards of impartiality".

The report concluded that

"the BBC is getting it wrong, and our main conclusion is that urgent action is required to put this right".

Unfortunately, urgent action has not been forthcoming. Another internal investigation in 2007 accused the BBC of trendy left-wing bias and stated that it was guilty of omitting opinions that were

"off limits in terms of a liberal-minded comfort zone".

The report noted that the BBC had come late to several important issues, including Euroscepticism and immigration.

The BBC's liberal obsession with multiculturalism means that it has become completely out of touch with large swathes of the country. The corporation has effectively censured the topics that people care about, because of its culture of uber-political correctness. That is also why the BBC gives a fairer hearing to trendy left-wing organisations such as Amnesty International and Liberty yet treats spokespeople for the Countryside Alliance and Migrationwatch UK as eccentric bores.

Photo of Rob Wilson Rob Wilson Opposition Whip (Commons)

Thank you very much.

The BBC continues to demonstrate scant regard for balance and decency. At the heart of the issue, I fear, is the lack of willpower on the part of BBC senior executives to stand up to its high-profile broadcasters and performers. The BBC cares more about its high-profile and well-paid employees than about the people who actually pay their wages. That is why my constituents, like my colleagues, will not accept willingly an increase in this TV tax.

F

It is correct to say that The BBC continues to demonstrate scant regard for balance and decency. In particular, and like most of the media, the BBC shows consistent pro-Zionist, pro-Israeli bias. I fail to understand why Israel is the only country in the world that cannot be criticised in the mainstream...

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Several hon. Members:

rose —

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. I have a difficulty, because the Secretary of State would like to make a short reply and Mr. Hunt is entitled to have the last word; perhaps, though, he is not interested in having it.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Mr. Davies can have one minute, and I will allow the balance to the Secretary of State.

Photo of Philip Davies Philip Davies Conservative, Shipley 6:09 pm, 20th May 2009

I am sure that one minute is about as much as people will be able to stomach from me anyway; your judgment is wise, Mr. Deputy Speaker.

The issue before us is whether the BBC needs an increase in funding. I have been prompted to speak because of the appalling mathematics that have been on show in the House, particularly from the hon. Members for Great Grimsby (Mr. Mitchell) and for Bath (Mr. Foster). The issue is not about making a cut to the BBC's income, but about not giving the BBC an increase. When somebody's pay is frozen, it is frozen, not cut—they have just not been given an increase. The BBC's problem is that it sees no increase as a cut, because it has become so feather-bedded by the licence fee and the taxpayer. It has become totally out of touch with the economic reality faced by everybody else.

I should like to make a particular point before I conclude. The BBC is supposed to be for the whole country, but recently, for example, it made a decision about horse racing, which is a sport that cuts across the social divide like nothing else. The BBC is trying to abandon such projects to go for the high-profile stuff; it completely lacks a good sense of priorities. It should concentrate on things that the British people as a whole want. The issue is about priorities. The BBC does not need all this increase, and that is why I will support the motion.

Photo of Andy Burnham Andy Burnham The Secretary of State for Culture, Media and Sport 6:11 pm, 20th May 2009

With the leave of the House, Mr. Deputy Speaker, I should like to make a few brief comments in conclusion. It has been an excellent debate. Mr. Foster made an excellent speech, and said two things with which I profoundly agree. He said that the BBC does not always get things right; he was right to say that, and it is right for it to be acknowledged. He also said that the BBC was not safe in Tory hands, and some of the views emanating from the Conservative Benches this afternoon made that point abundantly clear to anybody who cared to pay attention. The argument from those Members was that the rest of the media industry was under pressure, so the BBC should be under pressure—the quality of all the media must go down. That is an awful argument.

There was a revealing moment when Mr. Hunt was asked where the money would be found. The hon. Gentleman went over the line that we should never cross. He started saying that he would make cuts to the number of imported programmes; he said that he might offer up "The Wire". That was a very revealing moment about Tory meddling in the BBC.

My hon. Friend Mr. Grogan, chair of the all-party BBC group, said that Tory policy on broadcasting is about scrapping impartiality in non-public service broadcasting news. It is also about allowing product placement. That strategy would see the quality of TV news and broadcasting go right downhill, and the public do not want that. The Tories' real policy is to cut the licence fee and top-slice—

One and a half hours having elapsed since the commencement of proceedings on the motion, the Deputy Speaker put the Question (Standing Orders No s . 16(1) and 17(2) and Order, 18 May) .

The House proceeded to a Division.

The House having divided: Ayes 156, Noes 334.

Division number 140 Appointment of the Comptroller and Auditor General — Electronic Communications

Aye: 157 MPs

No: 334 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly negatived.

Photo of Crispin Blunt Crispin Blunt Shadow Minister (Home Affairs) 6:30 pm, 20th May 2009

On a point of order, Mr. Deputy Speaker. There are now at least 25 flags of a proscribed terrorist organisation flying over Parliament square. You will have heard numerous points of order about the obstruction, expense and conduct of the Tamil demonstration. Although I understand that decisions about the conduct of public order are an operational matter for the police, the message being sent out about our tolerance of terrorism is a wider policy matter of importance to us all. I would invite you, as a matter of urgency, to communicate to the relevant authorities the view that the unimpeded and open support of a terrorist organisation in front of Parliament sends the most unhelpful wider message about the conduct of our counter-terrorist strategy.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

I am grateful to the hon. Gentleman for giving me notice that he was going to raise that point of order, which I am sure will be of concern to the whole House. Mr. Speaker has expressed his own concerns about what is happening in Parliament square and all its implications, but as the hon. Gentleman knows, we do not have the full scope of authority to deal with the situation. However, I am grateful to him for putting the latest situation on the record, and I am sure that the relevant authorities will take note.