Tessa Jowell - BBC Charter Review White Paper Oral Statement to Parliament

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14 March 2006

With permission Mr (Deputy) Speaker I should like to make a Statement. I am today publishing a White Paper on the future of the BBC entitled A Public Service for All: the BBC in the Digital Age. It does exactly what that describes.

We live in an era of change. In broadcasting, new technologies are leading to vastly more television and radio channels and new media services. The BBC's Charter, shortly due for renewal, needs to create a BBC strong enough to thrive in the new environment and flexible enough to adapt to new challenges. The BBC is a driving force to enrich our public realm. It is the embodiment of the public realm as one of those places that brings people together as equals.

Over (70%) of households now have digital television. As digital delivers ever more choice there are some who describe the BBC as an anachronism. The Government disagrees. More importantly, the British people disagree. Our unprecedented engagement with the people of this country in the development of the White Paper (10,000 of whom wrote to us) has shown that people right across the country want a strong BBC, independent of Government (and Parliament), responsive to public wishes.

The Government hopes that the new Charter gives the public the BBC they want.

The Reithian principles 'inform, educate and entertain' will be maintained. But we will give audiences and competitors greater clarity about what this means in practice. The BBC will have six new purposes:

sustaining citizenship and civil society
promoting education
stimulating creativity
reflecting the identity of the UK's Nations,
regions and communities
bringing the world to the UK and the UK to the world
and Building Digital Britain – where the BBC will act as a 'trusted guide'

There was strong public support for this. At the same time, licence fee payers told us it all sounded a bit worthy. What they cared about most was getting BBC programmes they wanted to watch and listen to.

So the White Paper makes entertainment central to the BBC's mission. The BBC should continue to take fun seriously, engraining entertainment into its services. This isn't about writing the BBC a blank cheque or chasing ratings through copy-cat programming. It is about ensuring that the BBC deliver what licence fee payers deserve: quality and distinctiveness.

But the BBC's governance structure has become anachronistic. The BBC needs a new form of accountability to licence fee payers, as the BBC's shareholders. Our new arrangements will make the BBC closer to the people who pay for it and more accountable to them.

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In a step change for the BBC's governance, we will abolish the BBC Governors and replace them with two new bodies – the BBC Trust and a separate Executive Board.

The Trust will be the licence fee payer's voice. It will act as a proxy for the BBC's shareholders, making it the first public interest body on this scale the country has ever seen. There has been nothing like it before.

The Trust will oversee the Executive Board, whose own job will be to run the BBC's services. There will be clear separation of responsibilities between the Trust and Executive Board. Although the Trust will be the sovereign body of the BBC – its word will be final – the new Charter and Agreement will prevent it from doing the Executive's job: this is critical to maintaining the objectivity required to generate public confidence.

This is truly a step change in the governance and regulation of the BBC. It is a unique solution for a unique organisation in unique circumstances.

An important part of getting the best programmes to the screen is competition for quality programmes. The White Paper requires the BBC to operate a commissioning system which encourages greater competition between in-house and independent producers, but maintains a critical mass of in-house production. This new 'Window of creative competition' should result in the independent quota of 25% becoming genuinely a floor, not a ceiling.

I repeat our welcome in principle for the BBC's proposals to move a significant amount of production to North West England, helping to ensure that the licence fee is used as venture capital for the whole nation's creativity.

The BBC will continue as the cornerstone of public service broadcasting. We are equally committed to sustaining a dynamic commercial sector. We are putting in place a 'triple lock' system to ensure the highest standards of accountability:

First, The Trust will issue licences to the Executive Board for running each BBC service
Second, BBC content will have to have distinctive characteristics, such as being original, of high quality, challenging or innovative
Third, a 'public value test' will be applied to all new BBC services or significant changes to existing services.

Responding to concerns raised on the Green Paper, I am happy to clarify that whenever the Trust carries out a 'public value test', Ofcom will provide the market impact assessment to guarantee rigour and ensure wider public confidence.

We will also put in place:

a new duty on the Trust to have regard to competition issues
'ex ante' codes in specific areas that have the potential to raise competition concerns
an overhauled fair trading regime and
a fair, transparent complaints system.

The White Paper also confirms that the BBC will be fully licence fee funded for the next Charter. There will be future reviews into the scope for other methods of funding the BBC beyond 2016 and the possibility of distributing public funding – including licence fee money – beyond the BBC.

The process of deciding the next licence fee settlement has started. Licence fee payers and industry will help form our conclusions. We will expect the BBC to achieve a large part of its funding through 'self-help' and the Trust will need to make tough decisions about how resources are allocated within the boundaries of the settlement.

To help the Trust exercise stewardship of the licence fee, the relationship between the BBC and the National Audit Office will be strengthened within the existing arrangements.

Despite past predictions, public service broadcasting, led by the BBC, remains the bedrock of today's media.

We are optimists about the long-term future of the BBC. But it can't take its position for granted. It must develop its role over the next 10 years, strengthening its accountability, bringing in new generations of viewers and listeners and building a consensus around the value of its place in Britain. The White Paper gives it the means to build that national consensus and I commend it to the House.

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