Forum with Gavyn Davies

The BBC has come under intense political scrutiny as it releases its annual report and accounts.

The corporation came under fire from a Parliamentary select committee, when Labour MP Chris Bryant said BBC governors did not include "a single word of criticism" in an eight-page assessment of its performance over the last 12 months.

The annual report reveals a net debt of �74m but an increase of �346m in spending on programmes.

It also announces BBC executives will be paid lower bonuses than last year.

Has your licence fee been well-spent? Will BBC bosses accept lower pay rises?

Transcript

Nick Higham:
Hello and welcome to this News Interactive forum, I'm Nick Higham. The BBC's just published its annual report and accounts which detail the corporation's performance over the past year. This morning senior BBC executives, along with the chairman, Gavyn Davies and two other governors, spent the morning being grilled about the document by MPs on the Culture and Media Sports Select Committee of the House of Commons.

Normally this question and answer session is rather an unexciting ritual affair which produces few surprises - not this year. One Labour MP, Chris Bryant, called the document complacent - that was at the very beginning of the hearing and rather set the tone for what was to follow. He said the report contained no criticisms of the BBC and read more like an Enron annual report than a BBC annual report. The BBC's director general, Greg Dyke, reported that he thought it was a disgraceful remark to make and demanded an apology. Things went on from there.

While MPs had their chance to put their questions to the BBC this morning, now it's your turn and I'm joined from Westminster by the BBC's chairman, Gavyn Davies. Mr Davies, thank you very much for joining us. I suppose I ought just to put to you first of all that Enron jibe which is, I think, likely to get quite a lot of coverage in tomorrow morning's newspapers. What did you think of Chris Bryant's remark?

Gavyn Davies:
I said I thought it was wild and extremely idiosyncratic and I understand my office has now received an apology from Mr Bryant. He clearly realises that he really shouldn't have used those words. To call, of all things, a report and accounts about the financial performance of the BBC over the last 12 months, in any way analogous to what Enron's accounts were - which were fraudulent documents, deliberately fraudulent - is just absurd. And Chris Bryant has recognised that, though I have to say, we're pretty annoyed by it.

Nick Higham:
Yes and you suggested at a press conference a little later after that select committee hearing, that he would do well not to repeat the remark outside the House of Commons, where of course he's privileged and immune to being sued for libel.

Gavyn Davies:
He has parliamentary privilege inside. The remark is clearly libellous. You can't say this - my finance director was sitting two on my right - you can't say things like this and expect people to just nod and carry on as if nothing has happened.

Nick Higham:
Several MPs on the committee though clearly were somewhat unimpressed by the report and the committee chairman, Gerald Kaufman, at one point talked about "the euphemistic phraseology", which he said pervaded the report. I think what they were suggesting was that it was a bit of a whitewash really - that there didn't seem to be much criticism from the BBC governors, who are supposed to be the BBC's regulators, of the way the executives had been running the place.

Gavyn Davies:
You've got to bear in mind that there isn't a huge amount to criticise. I'm not saying the BBC is perfect - clearly there are things we can do better and will do better in coming years and we make it absolutely clear in this report that that will be the case. But we do have to be fair to the BBC and its executive, both in terms of its audiences, and in terms of audience appreciation - I mean in audience ratings and numbers, but also in terms of the amount that they appreciate what the BBC is doing. This has been a very strong year and we've managed to see increasing audiences actually against enormously increased competition with much richer fare in general I think on television.

Nick Higham:
Nonetheless, this isn't a new allegation. Darryl Beresford of Chesterfield has e-mailed us to say: Why does the BBC never accept criticism? Whether on Points of View or from the Government, the BBC always defends itself and its position. Is the BBC really always right?

Gavyn Davies:
No, the BBC's not always right. Recently the Conservative Party criticised the BBC for a programme on the local election results which they thought was running with an agenda - perhaps biased - and the director general said immediately and he said it again today on the record, that that was not the best programme the BBC had ever made, it wasn't public service broadcasting at its peak. We said the same two days after 9/ll - when we ran a Question Time programme which the director general immediately said was not best judged.

So we do admit when we make mistakes it's quite right that we should admit it. But let me say this, we are under more attack as an institution - the BBC is - than almost any other institution in this country. Most of the attacks - and I don't mean this from licence payers - but most of the attacks from competitors are actually driven by the fact that they are competitors. I don't mean that about licence payers - licence payers have every right to criticise every minute of every day on BBC television.

Nick Higham:
You've come under a lot of attack recently also of course from the Government and particularly from Alistair Campbell, the Government's director of communications, over coverage of the Iraq war and in particular over Andrew Gilligan's supposed scoop about the "sexing up" of Government dossiers on intelligence in the run up to the war. Charlie Courtald of Cheshire says: What would elicit an apology from the BBC that you got the Andrew Gilligan story wrong? If the "source" for the story is shown to be unconnected with the drafting of the dossier, will you apologise?

Gavyn Davies:
The director general said today that if it is shown on the basis of clear evidence and with the unanimous support of a committee of MPs like the Foreign Affairs Committee, that the Gilligan report was wrong, then the BBC will not only make that known to its viewers and listeners, but will also apologise for it. But that is certainly not something that has so far happened. Now let me make it clear. I don't actually know the identity of this source but the director general, the director of news, know the identity of the source and are entirely satisfied that the Today programme acted responsibly in making the broadcast that it made and that that was in the public interest. We the governors - the chairman and the governors of the BBC - have no evidence at our disposal at the moment to doubt that conclusion by the director general.

Nick Higham:
I should just say that even as we're talking the man the Government claims was the source - David Kelly - is actually giving evidence to the Foreign Affairs Select Committee of the House of Commons. But we don't obviously know what he is saying.

Steve Hale, Munich, Germany has just sent us this e-mail: Is this backlash by the Government a way of punishing the BBC over its reporting of the Iraq war situation generally?

Gavyn Davies:
Well one of the reasons that I was very troubled by what Alistair Campbell said in the Foreign Affairs Committee about two weeks ago when he made the original allegations - they weren't primarily actually or solely certainly about the Gilligan report. A lot of what Mr Campbell said that day, was a systemic attack, root and branch, on everything the BBC did in the war - the coverage of the Iraqi conflict, the coverage of the debate in the political system prior to that, the coverage since then. He said the BBC has been running an agenda across all of its programmes and I think that was a central attack on the BBC and its integrity which the governors had to stand up and say was wrong.

Nick Higham:
Is the danger of you doing that that the governors identify too closely with the management of the BBC and that you compromise your ability to act as regulators of the corporation?

Gavyn Davies:
Well you know last year people said that I as chairman was too closely identified with the Labour Government. So I'm quite used to getting attacked for being too closely identified with people. The governors have really no interest in being aligned with the management. They are totally independent people - they have made their careers, they are not looking for a leg-up in their careers, they are not looking for money - they are independent people. And one of the great things about this system of governance that we have, is that the 12 people who are ultimately in charge of determining the impartiality of the BBC, don't have any axes to grind, they don't have any connections that they have keep happy. And when they say something in a united way - in a way that actually was unanimous last Sunday then that does carry weight and that's why the system makes sense.

Nick Higham:
You mentioned your own past associations with the Labour Party, Howard Davies of London asks: The recent controversy over the Gilligan source of "sexing up" a dossier has been admirably handled by the BBC. But do you feel that having a chairman who is closely identified with a political party may compromise the BBC in future?

Gavyn Davies:
Well you are asking the wrong person to say yes to that aren't you. I think that I am totally disconnected from politics - I've never been in politics actually. I was a member of the Labour Party prior to becoming chairman of the BBC and resigned on becoming chairman. It is entirely normal for chairmen of the BBC to be appointed from the political system or from having had connections to the political system. But the key point is, that once you walk through the front door of Broadcasting House and you become chairman of the BBC, that you become entirely immune from the favouritism and otherwise of politics and I believe I am.

Nick Higham:
Just before I move on from this question of impartiality, one more just very quickly - Francis D'Souza, London asks and she's reiterating or picking up here something that Gerald Kaufman and the committee also raised: Why is it that the presenters of your news shows are allowed to write newspaper columns, and then use the same opinions in reporting news rather than report the news objectively?

And Gerald Kaufman said he thought that Andrew Gilligan, in particular, who writes for the Mail on Sunday and the Spectator, had been contentious and opinionated in much of his writing in a way that was incompatible with his status as a BBC reporter.

Gavyn Davies:
Well the employment of Andrew Gilligan and the way that he is treated is entirely for the director general and the director of news. From my perspective, as chairman of the BBC, I have to make sure that the rules and regulations make sense. Now on this question of whether or not journalists should be allowed to write in the press, I think the critics have a point. And we said on Sunday a week ago in the governors' statement that we felt we should look again at these rules. Actually we did this about a year ago when there was a problem with Rod Liddell who had been editing Today and we decided to tighten up the procedures. We will be looking again over the summer after getting a report from the director of news, about whether this makes sense or whether we need to change the rules. So I have some sympathy with the critics on this matter. I do think that people will have to think about which they want to be - do they want to be a BBC employee or do they want to be a journalist in the written press. Watch this space - this may actually change.

Nick Higham:
We will indeed watch. Let's move on to something else that the MPs raised with you, which is the way the BBC is spending its money on new digital services. Lewis in Sheffield asks: Why is my licence fee being spent on digital programmes I cannot watch?

Gavyn Davies:
Well about 13% of licence fees are being spent on digital programmes - on BBCi on the web and on digital television. The answer is -

Nick Higham:
That's more than your predecessor committed to spend - he said the BBC would never spend more than 10% of its income on digital services.

Gavyn Davies:
Well I don't think he said never but he did say they wouldn't spend more than 10%. The difference between then and now though is the number of people who can access digital services has risen from probably 10 or 15%, when Sir Christopher Bland said that, to 47% now. So I think we do have to take account of the fact that basically half the population can now access these services and obviously that means that it's right to spend more on them. However, let me say this, I do think that we have to keep watching this. If the audiences on our digital services don't grow then naturally we will have to think about whether we are spending the right amount of money.

Nick Higham:
Yes, that's a question raised by Dougie Lawson of Basingstoke who wonders how you can justify the cost of BBC Three and BBC Four when they still have such minimal appeal and a severely limited audience.

And I noticed actually one surprising thing in the annual report that struck me - the cost per hour of programmes on BBC Three is actually higher than on BBC Two. That seems remarkable for a channel which is getting such a tiny audience.

Gavyn Davies:
Well a lot of people said this about BBC Two itself when it first was launched in the 1960s and about colour television. The BBC spent a lot of time and money in the 1960s launching colour services on 625 lines - it sounds like an aeon ago to most people but I can remember it - and the first audiences for BBC Two and the first audiences for colour were so small they almost didn't show up on the charts at all. So I think the lesson is that technology can change, it's not always available immediately to everybody. But as long as we can believe and take the position that it will be available to everybody pretty soon - within a period of years - then it's legitimate for the BBC to spend its money on that new technology. Otherwise we will be locked - and this I fear enormously - into old technology and become basically irrelevant.

Nick Higham:
On that question on how quickly it becomes available to everybody, the BBC set a lot of store by Freeview, the terrestrial digital way of transmission, which is of course as the name suggests free. But Keith Madden of Downham Market in the UK - which I suspect is an area which is a bit of black hole for digital signals - says: When will Freeview be available to the third of the country that is still unable to receive it?

Gavyn Davies:
We think a third is probably a little bit of an overstatement. It depends a lot on the quality of the aerials that people have. Freeview probably will not be fully available to everybody until the analogue signal is switched off. So until the regular BBC One and BBC Two signal that you get down your aerial with old fashioned television is switched off. The other thing I would say is that we taking very active steps to make it possible for people to get the same digital services through satellite. And some people who can't get Freeview will, and can today actually, go out and buy a satellite box - they don't need a card, it will work without a card, they don't need a subscription, they don't need a Sky subscription and they'll be able to get all of the BBC's services on satellite. So we're trying to infill the remaining parts of population in a way that is cost-effective. I understand that in some parts of the country people really do want Freeview - I don't think we'll get it to everybody until analogue switch off occurs.

Nick Higham:
Let me just ask you one other question about new services, there is something that annoys a lot of people about the new digital channels and that is that they always have this little logo in the corner, telling you what you are watching and sometimes getting in the way of the pictures. There is indeed a campaign for logo-free television and I suspect they've been sending us quite a lot e-mails about today because we've had several. Steve Potter of Orpington asks: When is the BBC going to bow to public opinion and remove those permanent on-screen logos?

Gavyn Davies:
Well this is one of those things that really does split viewers. Some viewers are very agitated about this and believe the logos spoil their enjoyment of the programmes. And often they say the programmes are wonderful but why have a logo. Other viewers - and to be honest I think this is the overwhelming majority - say that in a 200 channel universe, it's very, very helpful to have a logo that tells you what you're watching. Increasingly - and I regret this even when I do it myself - people are watching television by flicking the remote control through hundreds of channels and in that kind of world, at least until people familiarise themselves with what's on where and where to find things on the satellite guide etc. - on balance, we think it's a good thing to put the logo on the screen. Although I agree there are quite a lot of people who really don't like that.

Nick Higham:
Let's finish by talking a bit about the licence fee which is always a potentially controversial issue. Andrew Gaghan has e-mailed to ask: Can the BBC continue to deliver without raising licence fees beyond the rate of inflation?

And of course for the next few years, the BBC is not going to get licence fee rises ahead of inflation is it?

Gavyn Davies:
Well I think the current situation is acceptable from the BBC's perspective. ITV and other private television companies have had a tough time lately and the current licence fee is perfectly liveable with from the point of view of the BBC. However, I have to say, if you look at the long-term here, the main thing that is changing is that Sky is building its revenue very, very rapidly. Sky is a fantastic consumer product in my opinion and they are finding new ways of getting more money out of their existing customers, very skilfully. When I look at this over a five or ten year view going forward, I think to myself - people say the BBC is dominant today, it's not dominant today - Sky has come from nowhere to be as big as BBC in the last ten years. In the next five or ten years, Sky will generate a huge amount of spare cash and it's going to be more and more difficult for the BBC to compete with that. We will try to do it - we'll try to do it through efficiency savings, we'll try to do it through more commercial revenue - but I can tell you that isn't going to be easy. The idea that the BBC is the kind of dominant player that's the biggest elephant in the jungle is pretty soon going to be proven wrong, I think.

Nick Higham:
One last question about the licence fee. This is from P J in London - why should he have to pay �100 a year for television he doesn't watch and radio he doesn't listen to he asks. I suppose one answer to that is he's obviously using the interactive services because he knows we're here and he knows he can send us an e-mail. But do you have a more general defence of the licence fee that you can offer?

Gavyn Davies:
I think my general defence is that 92.5% of the population is using our services every week on a pretty consistent basis and I believe that the vast overwhelming majority of the population is getting value for �116. If we were to eliminate the licence fee, I think people would end up losing what they really value about BBC and I think that would be an extremely bad bargain for Britain.

The great thing about the BBC is that it's universal, it is available to everybody, it's available, once you've paid the licence fee, free - you can use as much of our services as you want. And I continue to believe that its one of the real bargains available to UK citizens. More and more people are coming to me and saying, now that we can see what television costs by looking at the subscription cost for Sky, for example - although they're a wonderful consumer product, they're more expensive than we want to pay and it makes us grateful that we've got the licence fee. So I think it still has public consent. There are some people who don't want to pay but there are some people who don't want to pay income tax and it's just one of those things that you get when you sign up to be a UK citizen.

Nick Higham:
Death and taxes, both inevitable. Gavyn Davies thank you very much for joining us and that's all we have time for in this Interactive forum. My thanks not only to Gavyn Davies, but also to all of you for sending in your questions. Goodbye.