Public Bodies Bill [HL]

My Lords, we have had another full and passionate debate today, and it is clear that this is an incredibly important issue. Once again, noble Lords on all sides of the House have demonstrated the depth of feeling and commitment that exist on this issue, and I know that the Government share that. I make it clear at the start that Her Majesty’s coalition Government remain fully committed to Welsh language television broadcasting, as I said in Committee and in response to earlier questions. We recognise the immense value that it has to the culture, economy and people of Wales and the role that it plays in preserving and promoting the Welsh language. I want your Lordships to be under no illusions about the Government’s primary objective for S4C, which is to protect Welsh language television for the long term. I repeat that: it is to protect Welsh language television for the long term. I am afraid that we beg to differ with the views of the noble Baroness, Lady Morgan, which I hope to explain further in my response. Since our last debate, in Committee on 9 March, I, along with the Secretary of State for Culture, Media and Sport, my noble friend Lord Taylor and the Minister for Wales, have met several noble Lords to discuss S4C and to listen to your Lordships’ concerns. We had a very helpful discussion and I am grateful to all noble Lords who attended for their insightful and constructive approach. Their views have been invaluable and I appreciate the frankness and sincerity of their contributions to the debate. It was clear that, while our views differed on some methods of reform, we fundamentally shared the view that S4C must be protected as an independent channel, secured for the long term. I will take some time today to try to give specific assurances wherever I can to all of the concerns that have been raised. I make no apologies for speaking at length on this issue, for it is one that the Government feel passionately about and one that merits the invaluable attention of your Lordships’ House. In doing so, I will speak to Amendment 29A in the name of the noble Lord, Lord Wigley; Amendment 34B in the name of my noble friend Lord Roberts of Conwy; Amendment 40 in the name of my noble friend Lord Roberts of Llandudno; and Amendment 41 in the name of the noble Lord, Lord Elystan-Morgan. I also clearly state from the outset that the Government intend to support Amendment 34B to add S4C to Schedule 3. I will first talk about the funding of S4C, which so many noble Lords asked about. There has been almost universal acceptance that S4C, like any organisation in receipt of public money, must operate within the economic context in which we find ourselves. Cuts to the funding of S4C are inevitable and the existing, index-linked funding arrangement is simply untenable. The cut to S4C is exactly in line with the cut to the Department for Culture, Media and Sport. Quite simply, that represents the fairest solution. As well as the funding that S4C will receive from the Government and the BBC over the next four years, it will also receive around £20 million per year worth of programming from the BBC, which your Lordships will agree is not an insignificant sum. A number of noble Lords asked for the funding for S4C to be secured for a longer period. I assure the noble and learned Lord, Lord Morris, that the Government have secured ring-fenced funding for S4C for the entire comprehensive spending review period up to March 2015. The noble and learned Lord asked for ring-fencing up to 2016, but we support it up to 2015, give or take a few months. That should be welcomed in the current fiscal climate and goes beyond the security given to many other bodies. Beyond the spending review period, the Government are committed to making certain that the new partnership arrangement will guarantee a level of funding that is sufficient to allow S4C to deliver its public service remit, as enshrined in legislation. I reiterate the Government’s commitment to have a full review of the scale, scope and funding of S4C before the end of the spending review period, once the new partnership has had time to bed in, as my noble friend Lord Grade said. The long-term performance of the channel should be determined by its success rather than by how much money it receives. That success will be defined following the review which will be shaped by the people of Wales. During our debate on 9 March, noble Lords suggested that initial decisions on S4C were taken without meaningful discussions with those in Wales who have a legitimate interest. We acknowledge that the Government moved fast on the decisions during the comprehensive spending review and were unable to consult with everyone. My noble friend Lord Roberts of Conwy stressed that Clause 10 now makes it a statutory requirement to consult before orders are brought forward, and that requirement specifies the need to consult Welsh Ministers on matters that relate to Wales. I assure your Lordships’ House and my noble friend Lord Roberts that there will be a full public consultation on the governance arrangements of S4C and that the views of the Welsh Assembly Government and other interested parties will be part of this process, as requested by my noble friend Lord Roberts of Llandudno in Committee. This is also what lies behind our support of Amendment 34B in the name of my noble friend Lord Roberts of Conwy to add S4C to Schedule 3. When the Bill was introduced, it was not clear that the powers in Clause 3 would be needed to facilitate the new partnership with the BBC. However, it is now clear that, to make this partnership work in practice, there will need to be some modest changes to the constitutional arrangements of S4C. I am pleased that my noble friend Lord Crickhowell is with us after all this evening, especially as he is so knowledgeable about and experienced with S4C. I am sure that we all wish Lady Crickhowell a swift recovery. By using the powers in the Public Bodies Bill, we are guaranteeing that our proposals must be subject to consultation and we are ensuring that any changes will be subject to the scrutiny process associated with orders under this Bill. This process, as noble Lords will be aware, stipulates that any order must be accompanied by an explanatory document setting out the findings of a consultation process, along with giving Parliament the option of an enhanced affirmative procedure, which builds in time for a Select Committee to consider the detail of the order. That represents a very real check on the Government’s power, and it provides a safeguard that, in practice, prevents the Government from delivering policy that runs contrary to the views of Parliament. In that respect, adding S4C to Schedule 3 makes the Government’s intentions clear, guarantees that consultation will be carried out and secures the requisite scrutiny of the detail when the order is laid before Parliament, as desired by my noble friend Lord Roberts. The Government would also welcome continuing to work constructively with noble Lords as the partnership develops and as the Bill passes to the other place. This is a significant and sincere offer as I genuinely believe that the expertise in your Lordships’ House will be positive for the future of S4C. My noble friend Lord Grade made all that very clear in his eloquent speech and I thank him for his support. To answer the noble Baroness, Lady Gale, if S4C is not contained in Schedule 3, we may not be able to affect the whole of an agreement reached on a partnership between S4C and the BBC. Conversely, if S4C is in Schedule 3, the partnership can take place as agreed and documented as clearly as possible. The Government cannot, however, accept Amendment 29A from the noble Lord, Lord Wigley, on the extent to which Clause 3 applies to S4C. I can understand the motivation behind the noble Lord’s amendment and, in principle, the Government agree with the proposition that not all powers in Clause 3 should be used in relation to S4C. However, in practice, Amendment 29A could actually compromise the reform of S4C, the need for which has been stated a number of times during this debate. It is important that the new chairman of S4C is given full opportunity to assess the detail of what is being proposed and full opportunity to make a contribution to the discussions. I agree totally with the suggestion of the noble and learned Lord, Lord Morris, regarding the importance of choosing the new chairman. I know that the Secretary of State is taking this personally very seriously. It will therefore be some time yet before the discussions are concluded and we can say with certainty exactly how Clause 3 would be used. As regards the logo, I assure the noble Lord, Lord Wigley, and your Lordships' House that we have no intention of changing the name of S4C and we can say with some certainty that the whole of Clause 3(3) will not be used in relation to S4C. Conversely, the power in Clause 3(2)(f) to amend S4C’s governing procedures and arrangements, excluded under Amendment 29A, are likely to be required to implement changes following the conclusion of discussions between S4C and the BBC. Many noble Lords have asked whether the funding from the licence fee can be given straight to S4C without any accountability to the BBC. What we are trying to achieve is a partnership with the BBC, and such a move would undermine this. The Government are clear that the BBC Trust is the right organisation to ensure that licence fee funding achieves value for money. It is therefore right that the money, ring-fenced as it is, goes to S4C via the BBC. The proposals set out in the licence fee settlement letter make it clear that there must be a genuine partnership with S4C and the BBC, mutually agreed by both the BBC and S4C. This is a critical point. The letter also makes it clear that, within this partnership, S4C must remain an independent service with independent commissioning and scheduling, and with a distinct editorial voice. This cuts to the heart of the issue. The partnership with the BBC should not be misconstrued as a merger or a takeover. No—it is a partnership that will protect the very things that noble Lords on all sides of the House are seeking to protect by having this thoughtful and passionate debate. I assure noble Lords that the editorial independence of S4C from government, the Welsh Assembly and the BBC is assured. I should also add that the BBC’s current obligation to provide programming to S4C will remain, as will S4C’s existing relationship with the independent production sector. Amendment 40 would remove S4C from Schedule 4, which would prevent us from putting S4C on a more sustainable footing for the future. Breaking the link to RPI is important from a financial perspective, but creating a partnership with the BBC, and in turn securing S4C’s funding via the licence fee goes, hand in hand with this, and we need to do it all to secure a strong future for Welsh language programming. If the Government were not able to use the Public Bodies Bill to change S4C’s funding arrangements, S4C would not be able to rely on the security of licence-fee funding. As many noble Lords, including my noble friend Lord Crickhowell, said, S4C will benefit from this security, particularly as the Government are determined to break the link with RPI. Amendment 41, tabled by the noble Lord, Lord Elystan-Morgan, would require any changes to S4C made under Clause 4 to be preceded by an amendment to the BBC charter. The Government agree with the motivation behind this amendment—that there is absolute clarity about the governance structure for S4C within the new partnership. The only difference between us is the mechanism by which we secure this clarity. It is more appropriate to codify the terms of the partnership in a dedicated agreement between the Secretary of State and the BBC, a document laid in Parliament, which enshrines the governance structures agreed with S4C and will set out exactly how S4C will remain an independent service. It would be inappropriate to amend the high-level BBC charter outside of its 10-year review cycle. Several noble Lords, including the noble Baroness, Lady Morgan, have raised the issue of governance under the partnership, and I can confirm that the BBC will not have a majority on either the S4C board or the S4C executive. Furthermore, the BBC representatives need not necessarily be BBC Trust members but could be individuals nominated by the BBC Trust. I cannot guarantee, as some noble Lords have asked, that there will be no BBC appointees under this new partnership. But let us not forget that these terms will have been agreed during negotiations between S4C and the BBC. It will be S4C itself which will have negotiated the terms of this partnership. It was suggested that the payment of money by the BBC to another body would make that body a subsidiary of the BBC. This is absolutely not the case. Neither is there any intention of removing S4C as a statutory body, nor merging it with the BBC. S4C’s current public service remit, as enshrined in legislation, will remain and the Secretary of State will continue to exercise powers of appointment over the chairman and the S4C authority. The relationship will be on the basis of a partnership and not of a BBC subsidiary. Finally, I suggest again that protecting S4C as an independent service, with independent commissioning and scheduling, and with a distinct editorial voice is absolutely at the heart of this coalition Government. It is a challenging market and savings must be made, but be under no illusions. This Government will do whatever it takes to protect S4C for the long term. These changes have been proposed for the benefit of Welsh language television. This is the goal that we all share and so I would therefore ask the noble Lord to withdraw his amendment.