Speech by Tessa Jowell, Secretary of State for Culture, Media and Sport, to the Oxford Media Convention, 18 January 2007
The Secretary of State addressed the Oxford Media Convention on the 18 January 2007. Owing to time constraints she did not deliver the speech but arranged for its distribution to delegates after her question and answer session.
Thank you to Jo for your introduction, and to the IPPR and the Said Business School for inviting me here today.
Earlier this afternoon I announced in the House of Commons the level of the BBC licence fee settlement for the next six years.
So I’d like to use at least part of my speech this afternoon to set out for you in detail what I said earlier to Parliament.
I wanted a settlement that will ensure the BBC can meet the challenges of the digital age and help bring the digital age to everyone.
The Government’s aim throughout Charter Review has been to see a strong, independent BBC.
The New Charter and Agreement plus this Licence Fee settlement I am announcing today will secure that.
A fair deal for licence fee payers, and a fair deal for the BBC.
A settlement to enable the BBC to maintain its relevance to licence fee payers.
To secure the successful delivery of digital switchover, including the help scheme for vulnerable people
I wanted the settlement to enable the BBC to widen the geographical spread of its production facilities and make better use of the creativity and talent that exists across the UK.
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And to encourage the BBC to maximise the efficiency of its operations and provide the best possible value for money to the licence fee payer.
The total package amounts to a six-year settlement, with increases in the licence fee of 3% in cash terms for two years, followed by three years at 2%; with a sixth year increase of up to 2%, the precise figure depending on a further review nearer the time.
For licence fee payers that means the price of a colour TV licence will rise from the current level of £131.50 to between £148.50 and £151.50 in 2012.
Based on the current Treasury forecasts of the Consumer Price Index – the Bank of England’s inflation measure – the licence fee will rise either above or in line with inflation in each year of the settlement.
A settlement over a six year period is vital, I believe, to provide the stability and certainty for the BBC to plan ahead and successfully help us through the digital switchover programme.
In effect, the sixth year - 2012-13, the beginning of the all-digital era for UK television - will also form the first year of the next settlement.
This will allow us to undertake a further assessment of the licence fee level in the run-up to the mid-Charter point.
And well before the next settlement is announced we will undertake the wider review of funding for public service broadcasting to which we committed in the White Paper last year.
Part of the settlement is, of course, for digital switchover. The overall settlement includes some £600 million for the targeted help scheme and £200 million for Digital UK
These switchover costs will be ring-fenced to ensure that they can be spent only on digital switchover, and that these activities cannot impact on the BBC’s own budgets.
In the White Paper we also noted that Channel 4 was likely to face financial challenges in the future as competition increased in the digital world.
We said that we would consider potential forms of help.
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Ofcom is currently conducting a detailed review of Channel 4’s finances which will provide much greater clarity on the Channel’s medium and longer term prospects.
That review is due to report towards the summer.
I am therefore keeping open, within the licence fee settlement, the possibility that we may at that point require the BBC to contribute to the first six years of Channel 4’s switchover costs.
I also welcome the BBC’s conclusion that, in principle, it can make available some spare digital terrestrial capacity – amounting to a TV slot in England and 3 radio slots – at switchover. Under the BBC Agreement, I can direct the BBC to make capacity available to another PSB, where it is in the interests of public service broadcasting in the UK. I shall decide whether and how to use that power in the light of Ofcom’s Channel 4 review.
In our Charter Review consultation a key finding was that licence fee payers want to see the BBC become more relevant to their lives and their localities, particularly if they live outside London.
Which is why we have made the need to reflect the UK’s nations, regions and communities one of the BBC’s core public purposes for the next Charter period.
In line with this, it is critical that we support the BBC’s plans to move significant amounts of production to the North West of England.
The BBC Governors last December concluded that a move to the North West would represent value for money to all licence fee payers: there will be costs involved with the move, but it will yield larger savings in the longer term. So I very much welcome the BBC Trust’s confirmation today that this important project will go ahead.
This settlement is at a sufficient level to allow the BBC to remain a major global media player, but is also one that provides the BBC with the challenge to maximise its efficiency, with the opportunity to invest the fruits of that efficiency in new and exciting technologies, services and content.
The new BBC Charter and Agreement created six public purposes for the BBC. And we made clear that, over the next ten years, the BBC will have a leading role to play in bringing the benefits of new technologies to the public – helping to shape audience expectations and develop new markets, as it has already done in DAB radio and digital TV.
However, we need to be careful to ensure - through measures such as Ofcom’s market impact assessments and the public value test - that the BBC does not stifle markets.
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Overall, there are both big opportunities and big challenges ahead over the next five years. But one of the biggest questions – the BBC Charter and licence fee settlement - is now answered.
Looking further ahead, I am also delighted to be publishing today some research that my Department commissioned from Robin Foster, whom many of you will know from his time at the BBC and at Ofcom.
Some five years after the Communications White Paper, we wanted Robin to take another look forward - towards a 5 to 10 year horizon - to stimulate thinking about the dynamics of change and how broadcasting regulation might adapt.
I should stress that it is Robin’s personal assessment: not Government policy, but it does reflect interviews with key stakeholders and we – and you – will want to think about its implications.
The executive summary of the report is in your delegate packs.
Robin’s report was commissioned to provide food for thought and there’s some meaty stuff there.
There are a number of challenges in his analysis – for you and for Government.
In particular, the impact of the end of the spectrum-scarce, analogue model for Public Service Broadcasting.
But we should not mourn the passing of the old analogue system.
The only grounds for regret would be if we failed to set to work in good time to put a new system in place for the digital age.
This may need new legislation, new institutions and new funding solutions.
I know you have had many discussions on these issues throughout today, and I don’t want to repeat those – especially not at this end of the day.
I’ll just focus on two of the most important changes under way:
First, Broadband.
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When I became Culture Secretary in 2001, 1% of UK homes were broadband enabled, today it’s more than 40%.
Two years ago, the broadband debate was stuck in the alien language of structural separation and local loop unbundling.
But things have moved incredibly quickly - last year at this conference, producers and broadcasters were locked in a battle over new media rights for programmes over the internet.
A battle that I was delighted to see resolved quickly by negotiation rather than slowly through intervention.
That kicked off a year of unprecedented interest in, and fretting about, the impact on television of broadband.
The second big change is of course Digital Switchover.
Three years ago, dTV was a reality for only a minority of UK homes.
Two years ago at this conference, everyone was asking whether or not we would ever commit to switchover.
This year marks the beginning of switchover's implementation, with digital penetration already close to 75% of homes.
In little more than eight years, digital television has grown from a standing start to give the UK the highest level of digital penetration of anywhere in the world.
The trend continues to rise, across all platforms - terrestrial, cable and satellite. 17 million households now have digital television of one form or another – that’s almost as many as have cars.
The question now rising to the top of the agenda is: how does our world-renowned Public Service Broadcasting model adapt to flourish in the new digital environment?
Things are moving fast. (That’s partly why this is such an exciting sector to work in).
In my view, the explosion of broadband and the switch to all-digital TV are the two single most important developments, with the most far-reaching implications for the television sector.
They will set the scene for how the industry unfolds over the rest of the decade.
And the arrival of real broadband as a mainstream household proposition presents far more opportunity than threat for television.
It’s always hard to predict these things, but I believe that Television will prove to be the ultimate killer application for the next generation of Internet-based services, or Web 2.0.
YouTube and Google Video are amazing innovations, with all their quirkiness, immediacy and fun.
But, on another level, user-generated content is simply serving to remind us of the durability and power of television and of all the creative brilliance, high production values, directorial originality that goes with great television.
So we should start thinking about DSO not as a destination but as a journey.
DSO is of course a critically important process and one that we must get right. But, once we’ve done so, where will it leave us?
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Both broadband and the progress of DSO provide the context for the underlying questions facing us all and which have been part of your debates today:
'What sort of television do we want in this country in five to ten years’ time?'
And, more specifically, ‘what will be the respective contributions of both the private sector and public service broadcasters to the achievement of these objectives?’
As Ed Richards said this morning, we need to develop a digital media vision.
And that’s where attention should now begin to shift following the conclusion of the BBC Charter Review process.
The future of broadcasting, and of public service broadcasting within it, is something that my department is of course actively engaged with.
Robin Foster’s report identifies a number of challenges to the operating and funding models for all existing broadcasters and develops four scenarios with different implications for the future of media in the UK.
How far and how fast the challenges arise will depend on many factors, but we all need to be prepared to face them.
And to embrace them as an opportunity to secure the quantity and quality of television content – available by whatever means – that people continue to say they want.
We have published his report this morning as part of our initial contribution to the debate, but I’d like to draw out one key conclusion - the need for flexibility.
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Flexibility in regulation and flexibility in policy to adapt.
We cannot predict and provide for any one particular scenario.
Technological change and consumer behaviour will drive your businesses and, to some extent, our policies.
So we’ll need to keep in mind these scenarios as providing context for the significant work planned over the coming years – Ofcom’s work on Channel 4 and PSB, the Future of Radio review, children’s TV review, progress with switchover and our funding reviews later in the new Charter period.
This is a debate which we all need to engage with now.
I cannot, and should not, be too prescriptive at this stage about Government policy in each area.
But I can say what the enduring principles are that will guide a Labour Government’s approach through the challenges ahead.
These include:
- Ensuring the universal availability of public interest content – especially free, impartial news - preferably from a number of different suppliers, and in forms which people find convenient to use.
- Maintaining a legislative and regulatory environment that encourages innovation and creativity across the sector.
- The potential for this is shown by the tremendous growth of the independent production sector following the 2003 Act.
- Helping to ensure the highest standard of content reaches the highest audiences.
- Protecting citizens and consumers - with roles for legislation, industry and, increasingly, individual responsibility.
- And, in that context, helping to foster a ‘media literate’ society – able, in the age of Wikipedia, to discern fact from opinion.
These are our guiding principles, to help us as a country ensure that the UK remains at the top of the tree in the world of television and communication.
Second only to the US globally per capita, our television industry has produced some of the greatest successes of all our creative industries.
The Digital Age challenges all aspects of that industry to renew itself, to continually assess its business models and ensure that viewers continue to enjoy an excellence of content they have come to expect.
It is important that, at the heart of our digital media and public service provision, we have a strong, independent and properly-funded BBC.
That much I have worked to secure throughout the Charter Review process, now at an end.
And, while it may seem odd, having only just signed off on one licence fee settlement, to immediately start thinking about the next one,
I and the Government, like this industry, and all the UK’s industries in today’s global economy, cannot stand still.
And I can assure you that we do not intend to.
Thank you.
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