Thompson: "Times have changed"

On Sunday 4 July Andrew Marr interviewed the Director General of the BBC, Mark Thompson.

Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used.

BBC Director General, Mark Thompson

ANDREW MARR:

The BBC has had some big hits recently: everything from major sporting events - Wimbledon, the Formula One and the World Cup; unparalleled popularity for much-loved series like Dr Who; and its well reviewed coverage of the General Election. But it's been under a lot of fire as well, about how much it pays its stars, executive pay, and indeed whether it's simply too big. Now for those of you who think this is a bit too much like naval-gazing, talking about the BBC, all I can say is that a lot of these issues - pay, pensions, possible strikes - are going to affect much of public sector Britain; not just the BBC. Anyway, the man at the top of the BBC is the Director General, Mark Thompson, and he joins me now.

MARK THOMPSON:

Good morning.

ANDREW MARR:

Welcome, good morning. Let's start with perhaps the most sort of sensitive issue just at the moment, which is stars' pay.

MARK THOMPSON:

Yeah.

ANDREW MARR:

Sir Michael Lyons, running the BBC Trust, has said that this should now be published at least in bands. Not long ago, he was saying the opposite; and he does say he's changed his mind. Have you changed your mind about this issue?

MARK THOMPSON:

No, and I don't think you're really expressing what he said fairly. The BBC is trying to find the right balance between on the one hand the public's absolute legitimate right to have a sense of what the BBC spends on on air talent versus a broadcasting industry where confidentiality is the absolute norm, is the expectation, and in some cases the contractual right of the individuals involved. We absolutely accept the idea of publishing in bands. We've already published it once. Tomorrow, in our annual report, you'll see bands not just for top talent as a whole, but also for top talent, and you'll see that the amount of money that the BBC's spending on top talent is now coming down. Last week Sir Michael made it clear that we're going to accept the Culture, Media and Sport select committee's recommendations of much narrower bands, so again people will be able to track year on year each of the different levels of talent. Now we've historically always said, however - and I continue to believe - it would be wrong and it would be damaging and destructive to the BBC and its ability to get the top stars …

ANDREW MARR:

(over) Why?

MARK THOMPSON:

… to actually publish individual salaries.

ANDREW MARR:

Why?

MARK THOMPSON:

Because we're in competition with other broadcasters in an industry where no other broadcaster publishes this information.

ANDREW MARR:

So other rival broadcasters would then simply cherry-pick people they wanted?

MARK THOMPSON:

And the danger is that you begin to hobble the BBC's ability to compete and also you can potentially get a cycle where in the press and elsewhere it becomes an enormous talking point. In Italy, the government is proposing that the public broadcasters, top stars should have their salaries put out in the end credits of each programme, and it's been seen as a naked attempt to damage the public broadcaster. Now what Sir Michael went on to suggest last week is perhaps we should publish a list of the top … the highest paid, above some level; and that's an attempt I think to strike a balance, to find the right compromise between the confidentiality of individual contracts, but the public's right to see this top list. And what we're going to do is … Sir Michael's written to me. We're going to look at that and we're going to look at the practical, the contractual, the commercial considerations, and then we'll advise the trust on the best way forward.

ANDREW MARR:

Of course the BBC lives in a world which is at least half commercial and reflects all of that.

MARK THOMPSON:

Much more than half, probably three-quarters commercial in the UK.

ANDREW MARR:

And times are tough in the private sector and it does seem to a lot of people as if the BBC's mood when it comes to top stars has changed quite radically. Whereas a few years ago some top star comes to you and says, "I want this and I'll walk if you don't give it to me", now it's likely you'll just say, "Well in that case, go". I mean we're thinking of Christine Bleakley and Adrian Chiles and other people.

MARK THOMPSON:

Sure, sure. Well I think two things have happened. One, the market's changed and actually there's a little bit less competition in some areas than there used to be. But, secondly also, the BBC, like every other public institution, faces some really big challenges around driving value for money, around reducing overheads, about trying to make every pound of the licence fee really count. And so we've been looking over the last few years at everything the BBC does - at its overheads, at numbers of staff, numbers of senior managers - but also we're looking hard at those top talent salaries.

ANDREW MARR:

Because these people I mentioned - Christine Bleakley and Adrian Chiles - were home-grown talent, after all. I mean they were pretty much people the BBC had brought to the screen and so on, and then they went over to other channels. And I just wonder whether that's a bleak prospect for the BBC, for you - losing people that you've been growing?

MARK THOMPSON:

I think there's always been some of that in broadcasting, and I think it's a good thing that the BBC constantly is having to find new talent. I think one of the ways that the BBC can help broadcasting in this country as a whole is by finding new people, new stars, new talent, and accepting that after a while they may go and work for ITV or for somebody else. And I think that that's one thing the public look to the BBC - to be a real nurturer of talent. So in a way although it means it's challenging if you're the Controller of BBC1 or you're running let's say you know The One Show, it's pretty challenging and sometimes rather annoying when key talent moves on, it also forces us to think really hard about where are the next big stars going to come from.

ANDREW MARR:

And to be clear, people who are expecting to see individuals - the Graham Nortons or indeed anybody else - with a figure beside their name, they're going to be disappointed in that, are they?

MARK THOMPSON:

My view, as I say, no other broadcaster in this country provides that information. And the danger is we typically are getting our top stars to work for the BBC for rather less than other broadcasters pay. We're very competitive and I believe we drive very good, hard bargains.

ANDREW MARR:

(over) I suppose the difference is …

MARK THOMPSON:

(over) And the danger is, the danger is you release all this information and there's a kind of field day for the tabloids and enormous fun is had by all. Actually the danger is the price goes up. And what's interesting in the phonecalls we've had over the last few days and the emails, it's by no means clear that you know this is … The public have got very clear views about this, which is the thing that matters most to them is they get outstanding news, entertainment and other kinds of programmes from the BBC and they want the best stars. And by no means everyone out there is clamouring for this kind of very detailed information about individuals.

ANDREW MARR:

Because I mean the counter argument is that no other broadcaster is paid for by the licence fee and that's what makes the BBC different and, therefore, people do have a right to know.

MARK THOMPSON:

(over) Of course, and we recognise that the BBC has to across all of its operations be far more transparent than any other broadcaster. And we are. And you know for top managers of the BBC, everything's out there. I mean …

ANDREW MARR:

(over) Well absolutely …

MARK THOMPSON:

… expenses, restaurant receipts, my diary every day. Everything I do is there for the public to scrutinise, and so it should be.

ANDREW MARR:

And you and other top managers have taken not enormous but, you know, fairly substantial cuts in your pay. Jeremy Hunt, the Culture Secretary, said you were paid too much. Is this you directly responding to him in a sense?

MARK THOMPSON:

I believe … I mean my pay is set by the BBC Trust and it's probably best for others to comment on that. But I believe that the way we pay our senior managers, our public … our senior salary policy is the right policy. We pay a lot less than other broadcasters. Typically a senior manager at the top of the organisation is paid between between 50 and 80% less than they could expect to get in the outside world. Clearly though, compared with other public institutions the pay looks big. Now what's happened in recent months is we've frozen directors' pay for three years. Other senior managers have also had their pay frozen. We've suspended bonuses. That, taken together for an executive director, means probably 14% less in a year than they had. We've now … The executive board of the organisation, really in recognition of the scale of challenge being faced not least by other people in the BBC who face real issues around both pay and pensions, we've decided to forego a month's salary for each this year and for next year. And that means that in real terms you're looking at about a 25% reduction. And that's not really, that's not saying that we think we've been paying ourselves too much. What it is saying is the BBC …

ANDREW MARR:

(over) That times have changed.

MARK THOMPSON:

(over) Times have changed.

ANDREW MARR:

The mood is different. Let's …

MARK THOMPSON:

Times have changed. And, as I say, we've got thousands of colleagues inside the BBC who are facing really big challenges. And outside the BBC, the people who pay for the BBC across both private and public sectors also face enormous challenges.

ANDREW MARR:

You're still paid, I mean and other people, about four or five times what the Prime Minister is. I mean I don't know what you feel about this new multiple - x number of David Camerons - but it's …

MARK THOMPSON:

All I would say is you know we're looking currently for a new Controller of Radio Four. We're often out there. And in the nicest possible way, the politicians don't apply for these jobs and you know we're looking …

ANDREW MARR:

And wouldn't get them if they did.

MARK THOMPSON:

We're looking … We look typically for these jobs in if you like private labour markets. We look you know inside the BBC but also outside - newspapers, other broadcasters - and we have to be realistic about what pay levels are for the best talent in the world. The public want the BBC to be the best broadcaster in the world, and I think at least part of that means having the best people to lead it.

ANDREW MARR:

Let's look at the majority of people who are paid nothing like these kind of salaries in the BBC. And, as I said at the beginning, there's lots of other people in the public sector who are going to go through the same sort of process, but there are an awful lot of people who came into the BBC a long time ago, maybe now in their forties and so on, fifties, who've been working very hard and had an expectation of what their pension would be after all this time, and they're now learning that their pension's going to be considerably lower. And that is a very tough message.

MARK THOMPSON:

I think it is.

ANDREW MARR:

People thought they'd signed up for one thing, and they're getting something different and they're very upset.

MARK THOMPSON:

I think, I think it's really tough and it's by far the toughest thing that we've had to do in recent years. But, firstly, look across the UK. Look at final salary and defined benefit pension schemes. They're shutting everywhere - certainly in the private sector - because they're no longer affordable. Here at the BBC, we have a pension deficit - not because the scheme's been badly run, it's been well run - but the financial realities are that we're looking at a deficit which will end up being between one and a half and two billion pounds. If we don't take really quite strong action to reform our pension arrangements, the danger is the proportion of the licence fee that the public pay which goes to the BBC's pension scheme will grow and grow. It's currently 3.5%. It could very credibly in a couple of years become 10% of all the money the BBC has. And so what we have to do is accept the reality and make sure we've got pension arrangements, which I believe will still be very competitive, will still look very good compared to other broadcasters and to many other institutions …

ANDREW MARR:

(over) But will people will get less in their hands, won't they, than they thought they were?

MARK THOMPSON:

Anyone who wants to absolutely secure the pension they've accrued so far can do that by moving from our defined benefit scheme to a defined contribution scheme. And at that point, everything they've built up will go up with inflation for as long as … for as long as they live. But if people stay in the defined benefit scheme, it's true that it'll be much more constrained in its growth than it has been in the past.

ANDREW MARR:

And as a result of that, the staff of the BBC - including lots of people who have you know never said boo to a goose in their lives - are extremely angry, contemplating strike action. Are you going to be able to keep programmes on the air?

MARK THOMPSON:

What I want to say is, and what I'd encourage all of my colleagues to understand, is first of all we recognise this is painful and it does mean a change from past expectations. But look outside the doors of Television Centre and Broadcasting House at the rest of the world, at the public sector. Times are tough for everyone. Pension arrangements across the public sector are going to be looked at very hard over the coming months. Already we're seeing massive changes in the private sector. Pay for the people who pay for the BBC, licence payers, their pay is very constrained as well. And in a way I would say that although I think it is a difficult and tough time, it's no different than it is in many other institutions and in a sense everyone in the BBC's got to recognise that we can't be exempt from a fundamental change in the British economy and in the expectations of the public.

ANDREW MARR:

Do you think that all of this contraction that you've been talking about could be matched by a smaller licence fee?

MARK THOMPSON:

I believe that the current settlement runs for another couple of years and the government have signalled they don't want to turn to the subject of the future licensing for at least a year. Not until 2011 do they even want to begin the conversation. I think the right thing to do is to ask the public about what they think about our services. In tomorrow's annual report from the BBC, you'll see that actual public attitudes to the BBC are very positive. Many of the quality and approval measures have gone up over the year. Value for money's growing.

ANDREW MARR:

They might be even more positive if the BBC handed something back to the licence payer.

MARK THOMPSON:

Well the thing you have to balance here of course is the public's willingness and ability to pay the licence fee, but also what the BBC does. And we reach 97.5% of households every week in this country …

ANDREW MARR:

Well I started off by saying, I mean the BBC has had a very good year.

MARK THOMPSON:

It's been an astounding year. And, as I say, the public confidence in the BBC, trust, approval - these measures are really strong, and in many cases they're growing. Pride in the BBC - 79% of the British public saying they're very proud of the BBC. And of course the other thing about the BBC is at a time when a lot of commercial media is really under pressure, the licence fee is an enormous source of investment in the creative industries, which this government believes …

ANDREW MARR:

(over) But that is part …

MARK THOMPSON:

(over) … is one of the most important ways in which this country can begin to grow again.

ANDREW MARR:

This is part of the problem, however, isn't it - that the harder times are outside the BBC, the more criticism there is of the BBC sitting there atop its licence fee with its royal charter having a good time? I mean if Rupert Murdoch's experiment with putting a pay wall around its journalism - The Times and the other newspapers, journalism - if that doesn't work, then the BBC is going to feel some of the backwash of that.

MARK THOMPSON:

Well I mean you know some of our critics …

ANDREW MARR:

I put it to you.

MARK THOMPSON:

Some of our critics are never happy. We've had a fabulous opera season across BBC television and radio, and I saw a headline in The Telegraph recently saying 'too much opera on the BBC'. So I mean there are some critics you can't ever satisfy. The public, however, do seem satisfied. I believe that the public having access to really high quality news, free at the point of use, and other really great programmes, which any household can access - you know whether they wish to have an expensive ……...?? I believe the public still want that.

ANDREW MARR:

Okay.

MARK THOMPSON:

And I mean I would say if pay can be made to work for newspapers, no-one will be you know happier about that than we would be. I mean having strong newspapers with strong, effective business models still able to invest in journalism here and around the world, we're all in favour of that.

ANDREW MARR:

Except they think we're undermining, the BBC's undermining that part.

MARK THOMPSON:

Look at countries where there's no BBC. Newspapers are in every bit as much difficulty in the United States as they are in the UK. It's a bit of a canard to imagine that it's uniquely the BBC which is causing these problems.

ANDREW MARR:

One final question. Radio 6 music. Great campaign to save it. A lot of people appear to love it. It was on your list of cuts. Is it coming off the list?

MARK THOMPSON:

Well we're going to hear interim conclusions from the BBC Trust on our strategy, putting quality first. We're going to hear that tomorrow, so let's leave that for then. What I would say is one of the things that this debate, including I absolutely would accept the very strong and loud and passionate campaigning around 6 Music, is we've got big questions about the future of digital radio and I suspect one of the things the trust are going to say is let's look at the whole future of the digital radio - let's talk to government, lets talk to commercial radio - and make sure that we've got a portfolio of radio stations …

ANDREW MARR:

(over) So digital radio is back on the table as well. Alright, thank you very much indeed Mark Thompson for that.

MARK THOMPSON:

Thank you.

INTERVIEW ENDS

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