Oral evidence: The work of the Department for Digital, Culture, Media and Sport, HC 158

Oral evidence, 19 May 2022.

Witnesses

Sarah Healey and Susannah Storey.

Chair

This is the Digital, Culture, Media and Sport Select Committee hearing into the work of the Department for Digital, Culture, Media and Sport. We have two panels today: first, a very short panel, which is going to look particularly at public appointments and DCMS’s handling of them, and then at approximately 10.20 to 10.30 we will be moving on to the main event, which is the Secretary of State. Joining us on our first panel are Sarah Healey, the Permanent Secretary at DCMS, and Susannah Storey, the director general at DCMS. We did have a further panellist, but they have dropped out, so it is Sarah and Susannah. Thank you very much for joining us this morning. Are there any interests to declare before we start our session, in relation either to this or the next panel? I declare that I have received hospitality from Manchester United football club and also recently from Solihull Moors football club.

Kevin Brennan

I am chair of the all‑party parliamentary group on music and a member of the Musicians Union and the Ivors Academy.

Clive Efford

I am chair of trustees of a charity in my constituency.

Julie Elliott

I am vice‑chair of the all-party parliamentary group on women’s football.

Jane Stevenson

I have received hospitality from the Premier League.

Giles Watling

I am chair of the all-party parliamentary group for theatre and the all-party parliamentary writers group.

Simon Jupp

I am chair of the APPG for hospitality and tourism, and a former BBC and ITV journalist.

Damian Green

I have received hospitality from the FA.

Dr Huq

Oh, so did I. It is all coming back.

Chair

That is almost a full house, isn’t it? In fact, it has taken so long that it is now the end of the session. Thank you very much, and thank you again, Sarah and Susannah. Our first question today is from Dr Rupa Huq.

Dr Huq

Thank you, both. I am the new girl on the Committee, so I have not met you before, but I think you told this Committee in January that it is entirely within the rules to allow failed candidates to apply. I have one specific question and one general one. The specific one is whether it would be within the rules to exclude candidates who failed a recent interview process for the same position.

Sarah Healey

My understanding is that the Commissioner for Public Appointments wrote on this topic recently and specifically said that his view was that, because of the principle of fair and open competition being absolutely critical to public appointments, it would not be right to exclude any applicant who wanted to apply.

Dr Huq

For the same position? That is the position, isn’t it?

Susannah Storey

Absolutely, as set out in the Commissioner’s letter.

Dr Huq

Got you. What I have noticed since being on this Committee is that the recent Charity Commissioner appointment was a rebound of someone who was not there originally and who got it in the end. It occurs to me—I did a “Comment is free” piece for The Observer on this—that it feels like the diversity of the candidates who come before us is desperately low. What will you do differently to ensure that the next set of appointees that come across our desk is a bit more diverse? I think the figures were that 22% were women and even fewer, 6%, were BME. Those are the most recent figures we have, from that second competition.

Sarah Healey

On your point about the candidate for the Charity Commission who was appointed by the Secretary of State, obviously, under the code, it is permissible for appointable candidates to be appointed to a role if a vacancy arises within 12 months. It was on that basis that Orlando Fraser was appointed as chair of the Charity Commission, because the vacancy arose and he was on an appointable list of candidates from the original competition. On your point about diversity, we discussed this at the last hearing, and Gemma—our colleague who unfortunately isn’t very well today, so isn’t able to be here—ran through in quite a lot of detail the various ways in which we approach and try to encourage diversity. It is worth reflecting that this year 43% of appointments and re-appointments are made up of women, which is a 5% increase from the year before, when we had seen a really unfortunate drop in the number of women appointed, and 21% of our appointments and re-appointments were made up of people from an ethnic minority background, which is well above the Cabinet Office 14% target and, again, a 5% rise on the previous year. It is certainly the case that we have a lot more to do to increase the diversity of our chairs, and we would certainly like to see more women and more ethnic minority candidates being appointed to chair positions, because it is lower than we would like. To run through the various things that we do on that, there is a Cabinet Office diversity action plan on public appointments. They set the targets, and we take those very seriously and report against them. We have a public appointments network that we work with actively to ensure that understanding and knowledge of what appointments are available is disseminated through lots of networks so that it is not just dependent on somebody going to a website and finding something out or hearing by word of mouth. Since we spoke last time, we are about to add tracking socioeconomic data for appointees in order to be able to test ourselves about how well we are doing on that. We have introduced new questions to appointment processes, which have been approved by the Social Mobility Foundation, to try to make the process more open to candidates who might not have been through a similar process before, and we are working on some demystifying explainers. Sometimes the language used in these advertisements is a bit hard to understand if you haven’t previously been involved in a public appointment, and that discourages new candidates from coming forward, so we are doing some work on demystifying explainers to ensure that that is clear and open to people. We disseminate opportunities through a range of methods to try to ensure that we get greater diversity. As I say, particularly among our chairs, it is not where we would want it to be, but we continue to work to try to improve that.

Dr Huq

Hopefully this will not happen again, but the last chap did not get it because of bullying allegations. It was remarked that the set of applicants was depressingly un-diverse the first time around. You could do a fresh application. You have mentioned the 12 months, but isn’t there an argument—you have pointed out that they are not very diverse—for not going back to the same pool?

Sarah Healey

Ministers were really pleased with the quality of the list. On that occasion, there was a substantial number of appointable applicants. We discussed at the last Committee the fact that there was a far higher number of appointable candidates than is often the case. Considering the strength of that field, it did not seem to be in the interests of the Charity Commission, who had been without a permanent chair for some time, to rerun the competition, but to appoint from that appointable list.

Giles Watling

I am interested in the trailing of names—when the name of a candidate comes out and it is trailed, or rather leaked, beforehand. You made a comment about how there would be a measure of invalidation. Could you expand on that?

Sarah Healey

I said there would be a measure of invalidation?

Giles Watling

Yes, you said: “That is not something that it is appropriate for me to comment on, there being a measure of invalidation.”

Sarah Healey

When we discussed this at the last hearing on appointments, I think I reiterated what Ministers—and, indeed, the Appointments Commissioner—have said about this, which is that it is not helpful to have public speculation about candidates when you are trying to run a competition. It is not helpful while the competition is open and not helpful in advance of the competition because it can discourage people from applying. We work very hard in the Department on our document security with regard to appointments to try to ensure that only those who need to see that information see it, and we therefore minimise the risk of any leaks.

Giles Watling

Do you have any evidence that people did not apply because they were put off by the trailing of names?

Sarah Healey

I do not have any firm evidence, because we haven’t done any surveying, but I believe that is what the Appointments Commissioner thought might have happened.

Giles Watling

Right. Do you think this was a breach of process by the Minister?

Sarah Healey

When you say “Minister”—

Giles Watling

The Minister who trailed the name.

Sarah Healey

I have no idea. I couldn’t possibly speculate about how that got into the public domain.

Giles Watling

That is fair enough. Can you ever envisage asking a Minister or for a ministerial direction to appoint a candidate?

Sarah Healey

No, I don’t think so, as long as the process had been done under the governance code for public appointments.

Giles Watling

That is fair enough.

Chair

Just to follow on, if you found that a Minister from your Department had been trailing names to the press about appropriate people, what would you do? Would you confront that Minister with their actions?

Sarah Healey

This is totally speculative. I have no idea how these things get into the press—

Chair

Forgive me, Permanent Secretary. You just said it was inappropriate and not the right thing to do, and then you are saying it is speculation and you wouldn’t know. Surely the thing to do would be to challenge that Minister.

Sarah Healey

I said it was damaging—potentially damaging—and agreed with something that the Appointments Commissioner had said. I can’t really envisage a circumstance in which I would discover, except via perhaps a leak inquiry, that somebody had been responsible. Fundamentally, the decision about Ministers’ behaviour sits with the Prime Minister and doesn’t sit with me.

Chair

There are strong suggestions that it was No. 10 that was leaking the names. On the chair of Ofcom, we wrote you a letter on 23 February asking how many people had applied when applications for the chair of Ofcom were reopened for a week in January. What would have been wrong about giving us the number, rather than saying that you wouldn’t do an ongoing commentary?

Sarah Healey

I took the view that since the competition was ongoing, and considering the level of speculation about different names that, considering you would receive—

Chair

Well, it was either your own Department or No. 10. What is wrong with parliamentary scrutiny?

Sarah Healey

I am absolutely not speculating at all about how that information came into the public domain. It is not my business to do so. My view was that there had been enough commentary about this on an ongoing basis—there was a longlist and we had been through a shortlisting process—and therefore it was better to wait until all of the information was complete, and share it with the Committee then, which obviously we did.

Chair

Is parliamentary scrutiny frankly a bit of a pain to you in that respect? We have a responsibility in this area. It is our duty to follow through and make sure that processes are right. When we write to the Department, we expect the Department to come forward with correct answers, not to hide behind egregious errors in other parts of Government when it comes to leaking in order to, basically, not come forward and put on the record the facts as they stand. Do you not see that as perhaps looking very disrespectful to this Committee and to Parliament more generally?

Sarah Healey

We take the role of the Committee very seriously. We obviously provide you with the information that is set out in the pre-appointment process. On this occasion, I felt that, considering the level of scrutiny of this and considering that the Committee receives that information at the point of the pre-appointment process, that would be the appropriate time.

Chair

You could have written to us with those numbers. We were very concerned about the chair of Ofcom, obviously, because of much-trailed news stories and so on. You could have written to us and asked us to keep it confidential. I would certainly take that away with you for the future. It does not help, not just in terms of the relationship, but in terms of how your Department is perceived within Parliament—our role is scrutinising your Department—if you do not come forward with very important information like that in a timely fashion in future. Now that we are through the process, can you explain how the numbers and the diversity of candidates changed with the additional week? During that extra week, how many more people applied as a result and how diverse was that candidature?

Sarah Healey

You might have this information better than I do, Susannah.

Susannah Storey

No additional candidates applied. The reason it was open for a bit longer was that it had been through the Christmas period. In terms of diversity, I think you have that in your—

Chair

So no additional candidates applied in that extra week.

Sarah Healey

The overall number of candidates applying did not change.

Susannah Storey

Yes, that’s right. It was 32.

Chair

So the overall number didn’t, but did any candidates drop out and others come in?

Sarah Healey

Yes. Two dropped out.

Chair

So two new ones came in during that time. Was one of those new candidates the one who got the job in the end?

Susannah Storey

No, Lord Grade had applied in November.

Chair

That’s good. Did you know when speaking to us on 11 January that you were planning to reopen the applications on 26 January?

Sarah Healey

No.

Chair

When was the decision made and what conversations led to that extra week being granted?

Sarah Healey

I believe Ministers were given advice, as they are, about the nature of the application numbers and took the view that they wanted to test the market a little further.

Chair

We’ve mentioned the Charity Commission and the issues there. Obviously, Mr Thomas resigned a few days into the post. We have discovered—I have to say that I was dumbfounded at the time—that no references were taken for Mr Thomas. When we raised this with you, you said that you would be looking to assess the use of references across the civil service. Have you done this?

Sarah Healey

Yes, we have done that. In fact, we undertook to speak to all our departmental colleagues, who do this in different ways across Government. There was no consensus on the use of references. Some Departments use references; some Departments do not. In fact, one Department used to take references, but they have ceased to do so, on the basis that they didn’t find it provided them with helpful additional information about candidates. Obviously, the Commission reflected on whether the use of references in this instance would have made a difference or brought this information to light and didn’t think it was certainly the case that it would have done so. Obviously, as I said to you last time, what we did reflect on was that, because this was the Charity Commission appointment, it would have been sensible to check, as had been done at times in the past, with the Charity Commission whether they had any reports on any of the charities that the particular appointee candidate was associated with. And we did do that in the instance of the candidate that has now been appointed.

Chair

Are you going to take more references in future, after this experience with the Charity Commission?

Sarah Healey

We have not changed our policy on character references. What we did discover through the process of engaging with other Departments is that some other Departments use certain kinds of vetting or security checks for their non-executive and trustee appointments. And we reflected that we ought to introduce that as part of our process of appointment, so we are now moving to baseline personnel security standard clearances. They are not character references, but they provide basic information about the right to work, identity, and criminal records.

Chair

Would you know if someone had resigned due to misconduct allegations?

Sarah Healey

No, that wouldn’t reveal that information. But we don’t believe that a referencing process would have revealed it, either.

Chair

If you were taking an employment reference, they would be legally bound to tell you if anyone—this isn’t the case in Mr Thomas’s case—was suspended due to misconduct. They would be legally bound to tell you that—

Sarah Healey

They would if their name had been given as a referee.

Chair

It seems to be very strange. Obviously, this is a failing across many areas, not just DCMS, but it does seem very odd that you seem to rely on the candidate to give you a couple of references, rather than actually checking out with former employers. I personally would always contact a former employer and ask them to provide an employer reference. I think that would be for my own protection and that of my staff, frankly.

Sarah Healey

In employment processes, you have to take references from the names given to you.

John Nicolson

To pursue that for a moment, why do you think public appointments are so often a mess in the Department? Do you think it’s a civil service problem or a political leadership problem, Ms Healey?

Sarah Healey

I obviously don’t really agree with the premise of your question. We do the highest number of public body regulated appointments across Government. We have 41 bodies with public appointments that are regulated, and a total of 435 roles to fill. That means we are doing around 90 on an annual basis.

John Nicolson

But we have already heard about Martin Thomas of the Charity Commission. Orlando Fraser failed to attract the support of this Committee. There was the ongoing saga of Ofcom, and we have ended up with an elderly peer who doesn’t use social media, which seems extraordinary in 2022. And now the search for a chair of Historic Royal Palaces has ended up as a mess because you can’t attract a diverse enough field.

Sarah Healey

Obviously, there are some instances, particularly of some high-profile appointments, which have not gone as swiftly or efficiently as we would like—

John Nicolson

That’s an understatement! Sarah Healey:—over the course of the last couple of years, but I don’t think that undermines the absolutely excellent job that my appointments team do of getting through 90-plus appointments every year, most of them without any issues whatsoever.

John Nicolson

But this is yet another important, high-profile post and the appointment process is a mess. Some wonder whether you are just running out of Tory donors to give plum jobs to. Let’s move on to the question of civil service cuts. The Prime Minister said he wants to see 20% cuts—it is a huge number. The Government are obviously not going to cut, I don’t suppose, the national health service in the aftermath of the pandemic. The defence services are not going to see cuts, I don’t imagine, because of the war. The Home Office is a mess. They are not going to want to cut there, given the mess of the Passport Office. That all rather suggests that your Department might be asked to take an even bigger cut than 20%. How will you react if you are asked to do that?

Sarah Healey

We have yet to see exactly what options we will be asked to model. Susannah and I would both say that our job as civil servants is to come up with advice for Ministers about how we can work in the most efficient way, meet targets that are set for us and find a sensible way of continuing to deliver Ministers’ priorities within a reduced headcount.

John Nicolson

Do you think 20-plus per cent. is a sensible target for your Department?

Sarah Healey

I don’t have a view about that.

John Nicolson

You must have a view.

Sarah Healey

We haven’t done the work on it yet. We always work on becoming as efficient as we possibly can.

John Nicolson

So you are over-staffed at the moment?

Sarah Healey

We were already reducing our workforce by about 5% to 10% during the course of the spending review period. This way, we just need to look really hard at other alternatives. We will do that work when that request comes out.

Susannah Storey

Also, when you look across the portfolio that the Department is delivering, it feels like there is a huge amount going on, and people are working incredibly hard. We will do whatever we are asked to do, in good faith, obviously. We have just gone through the previous spending review, and we are waiting for more information on the Prime Minister’s objectives.

John Nicolson

If you are working incredibly hard, that suggests that your staff aren’t sitting around wasting their time.

Susannah Storey

I am really proud of all my staff.

John Nicolson

I am not surprised. That makes the idea that you would have to absorb a 20-plus per cent. cut extraordinary.

Sarah Healey

It is worth saying that this is partly in response to the fact that we have been through extraordinary times in public expenditure terms, and it is right that the civil service and others look to work as efficiently as possible in order to reduce the burden on the taxpayer.

John Nicolson

I imagine the hearts of staff will sink at that answer.

Chair

Do you think there is a bit of a war against the civil service at the moment? Obviously, there is talk about civil servants staying at home and so on. I was in your Department the other day and I was expecting there to be tumbleweed, but actually I found the desks to be very well stocked indeed, with people working beyond 5 o’clock and so on. You have faced criticism in the Daily Mail, I think, for being an aficionado of the Peloton. As a civil servant and someone who has worked in government for many years, do you think this feels a bit unfair to you and your colleagues?

Sarah Healey

My job is to ensure my Department is as productive as possible in supporting Ministers to deliver their objectives. That is what I am thinking about, and that is what the staff in my Department are thinking about. They are inspired by the Department’s portfolio and they enjoy working with our ministerial team, and that is what I am focused on.

Chair

The Secretary of State has been quite supportive of the culture of working from home at DCMS, and has stood up in the press against colleagues in the Cabinet who have suggested that this culture is awry in Whitehall. Are you grateful for the support of the Secretary of State in allowing people to work at home in your Department?

Sarah Healey

Just to pick you up on some of the terminology there, we don’t have a culture of working from home at DCMS. We worked at home during the lockdown and during the pandemic, as was consistent with the work at home order that was made. I believe one was in place when we were together to discuss appointments. What we have is an approach that is focused entirely on using our desk capacity to its best degree, ensuring there is use of the office. We think there are huge advantages for staff in being in the office. I was particularly concerned during the pandemic about the young staff in DCMS, who were working in sub-optimal circumstances. I think that working in the office fosters a sense of community and belonging to the Department. Some remote working is built into our business model, but it is not the way you describe it, and I wouldn’t want it to be the way you describe it. The Secretary of State has been really supportive of all the Department’s work, and she is really appreciative of the quality of the advice she gets. We like to hear that, because that is the purpose of our work.

Chair

Has there been a marked increase in the number of people working from the office in recent weeks since this criticism has come to light?

Sarah Healey

We changed our advice following the lifting of the work from home order to encourage staff back into the office. We have seen a steady increase. It has gone up in recent times, when we reiterated the need for people to follow those guidelines.

Chair

So you have had to chase staff to get them to come back into the office.

Sarah Healey

Over time, people have started getting used to working in the office again. We have seen a marked increase, and we are really pleased about that.

Chair

Forgive me, but “reiterate” would suggest that you had to chase them to come back into the office. Is that correct?

Sarah Healey

No, we had had a period of time, it was the Easter holidays, and then we focused on it again.

Chair

Reiterated at that point. Thank you. That concludes this panel. We will now take a very short adjournment as we set up the second panel, which will include the Secretary of State. Examination of Witnesses

Witnesses

Nadine Dorries and Sarah Healey.

Chair

This is our second panel as part of the Digital, Culture, Media and Sport Committee’s hearing on the work of the Department. We are joined once again by Sarah Healey, the permanent secretary, and also by the right hon. Nadine Dorries, the Secretary of State. Sarah and Nadine, thank you very much for joining us this morning. Our first line of questioning will be on Channel 4, and the first question is going to be from John Nicolson.

John Nicolson

Good morning, Secretary of State. Can I ask why you refused to go on to “Channel 4 News” to answer questions on why you want to privatise Channel 4?

Ms Dorries

It is my right to do so.

John Nicolson

Is that answer finished? Of course it is your right to do so—that goes without saying—but accountability is something that we expect of Cabinet Secretaries, and you would rather think that the pretty important audience to whom you should explain your policy and what you want to do would be the very audience who will be most affected by the decision.

Ms Dorries

I have had a number of media interviews on Channel 4. I think I have explained my position on Channel 4 quite clearly. I am here to be scrutinised on the decision for Channel 4, and I am very happy to answer any questions that anybody has, but which media outlet I choose to appear on is my choice.

John Nicolson

That, of course, is a truism. Let’s examine some of your justifications for privatising Channel 4. It’s profitable, as we know, and you often compare it, and say that you want it to compete, with Netflix and Amazon. Do you know how Netflix’s share price has performed in the last six months and what has happened to it?

Ms Dorries

I don’t actually say that I want it to compete with Netflix and Amazon, because that is not the case. I am very aware of what has happened to Netflix’s share price. I am also aware that Netflix itself has discussed various ways of adapting Netflix to its market now that it has reached market saturation. Of course, one of the ways Netflix is looking at doing that is by taking on advertising. That probably leads me to the point as to one of the reasons why I have taken the decision that I have on Channel 4, and that is because Channel 4 is dependent on one stream of revenue, which is advertising. As we know, the pool of advertising budget has reduced considerably. Advertisers have a linear graph for advertising that is only going in one direction. Advertisers now have far more choice—many more online streaming and other outlets—where they can spend their advertising revenue, and indeed are choosing to do so. I would imagine that Netflix will be a very popular choice for advertisers to spend their advertising budget.

John Nicolson

Secretary of State, I have heard you say that you want Channel 4 to be freed up to compete with Netflix and Amazon. The answer to my question is that Netflix’s share price has dropped by over 70% in the last six months. Amazon is owned by a trillion dollar company; it is a loss leader. Netflix has racked up billions of dollars in debt. How do you think these are appropriate role models for a profitable, well-run UK success story like Channel 4?

Ms Dorries

I am not trying to say that Netflix, Amazon Prime, Disney+ or any of the many streaming organisations that are coming online—which have, by the way, transformed the broadcasting landscape since the days when we had the choices of 1, 2, 3 and 4—are role models. I am trying to say that this is a market in which various organisations and owners, both public service broadcasters and privately owned broadcasters, are competing for market share.

John Nicolson

But these are unsuccessful companies by any standards. They are financially unsuccessful and heavily subsidised. Amazon and Netflix are also subscription models, and Channel 4 is not, and Channel 4, as you know, is the UK’s biggest free streaming service. One of your colleagues, a Minister in your Department, Julia Lopez, said on the Floor of the Commons, that in any privatisation Channel 4 will not move to “a subscription model”. Do you guarantee that?

Ms Dorries

As both I and Minister Lopez have made very clear, and as you may have read in the broadcasting White Paper, Channel 4 is a public service broadcaster, and any sale of Channel 4 will require it to continue to be a public service broadcaster.

John Nicolson

Will that be written into the sale?

Ms Dorries

It will be part of the sale condition, absolutely.

John Nicolson

But for how long?

Ms Dorries

I am not going to discuss that, because a sale process, which is being designed now—I am not going to discuss what the details of the sale will be—

John Nicolson

So you are not guaranteeing that it will be a non-subscription model in the long term. Will it be sold to a UK investor or will foreign companies be allowed to buy it?

Ms Dorries

The market will be open and those organisations that want to bid for Channel 4 will be able to do so, but we will be examining any bid very carefully. As you will have seen in the broadcasting White Paper, part of our requirement will be that Channel 4 continues to make distinctive British content. After all, it was Channel 4 that brought us “Derry Girls”, “Gogglebox” and other programmes that are distinctly and uniquely British.

John Nicolson

I agree that it is a triumphant success as it is.

Ms Dorries

I didn’t actually say that.

John Nicolson

No, but I am saying that. You conducted a privatisation consultation that generated a very impressive 56,293 responses according to the White Paper. What percentage of those responses supported privatisation?

Ms Dorries

Sorry, the 96% of?

John Nicolson

There were 56,293 responses when you asked people about privatisation. What percentage of those 56,000 supported privatisation?

Ms Dorries

I think the figure was about 96%—

John Nicolson

That supported—

Ms Dorries

I would like to finish answering the question if possible. Forty-six thousand of those respondents were from a politically motivated organisation called 38 Degrees, which actually rewrote the consultation question in a far more leading way than was in the consultation. Also, a similar amount, 96%, stated that there were no challenges facing Channel 4 at the present moment—I think those were the words—which is completely untrue. A more important figure is that, in public polling, 53% of the public were not aware that Channel 4 was state owned; they thought it was already owned by a private company.

John Nicolson

Yes; I think that is quite a vulnerable issue for you since my colleague had to explain it to you at the last session. The answer to the question is that 96% opposed privatisation. Channel 4 has been a huge success. The public do not support privatisation; Channel 4 does not support it; and Pact, the trade body for the independent sector, predicts a £4 billion loss for the sector over 10 years if Channel 4 is privatised. How come they are all wrong and you are right?

Ms Dorries

As the Government, we have to take a long-term view. Sorry; I just want to answer an earlier question. We are putting a timeframe in for ownership as a public service broadcaster. I just want to confirm that the number of years is 10 years.

John Nicolson

Thank you, Ms Healey, for that.

Ms Dorries

Well, that is why Ms Healey is here. Could you repeat your question?

John Nicolson

Yes. I gave a list of all the experts who oppose privatisation and asked why you think they are all wrong and you are right.

Ms Dorries

As a Government, it is our responsibility to take a long-term view. After all, we own Channel 4; those organisations do not. We have to take a long-term view regarding the future of Channel 4. Of course, a number of factors have come into play in our decision. I have already highlighted the decreasing spend on advertising revenue, and the fact that Netflix and other online streamers are now considering and are very likely to take on advertisers, therefore decreasing their budgets. It is very bad practice, I would say, for any CEO of any organisation to be totally dependent on one revenue stream in a decreasing market. Many other considerations have also come into play in the decision. One of the most important, and I think the most relevant to where we are today, is that any issue with Channel 4 moving forward, were it to move into difficulty, is offset against the public debt because it is of course state-owned. It is offset against the Government’s balance sheet. If Channel 4 does get into difficulties, the Government does not have the money; the Treasury does not have the money. It is taxpayer’s money, and it is the taxpayer who will be liable for any problems Channel 4 may encounter. Also, Channel 4 itself has said that it requires investment; it wants to raise funding. It has produced a document called, I think, “The Next Episode”, in which it talks about wanting to raise investment, wanting to raise borrowing, because there are many things that Channel 4 wants to do. We want Channel 4 to—

John Nicolson

One thing that they do not want is to be privatised—

Ms Dorries

Again, if I could just finish answering the question—

John Nicolson

That was quite a long answer, Secretary of State. The one thing Channel 4 does not want is to be privatised. You say that it is state-owned. Of course, it is a public service broadcaster, but it is funded, as Mr Green explained to you last time, by advertising. A lot of your colleagues think this is about revenge, because you think Channel 4 is not sympathetic to the Government project, and because you are particularly hostile to “Channel 4 News”. That is a view held not only by Opposition politicians, but by many of your colleagues, one of whom called this “payback time”.

Ms Dorries

I am not responsible for comments made by my colleagues. What I can say is that Channel 4 cannot make and sell its own content under its licence. It recognises itself that it is totally dependent on the decreasing advertising budget. Channel 4 wants to raise investment. We cannot allow it, as an organisation—the Government owns Channel 4—to raise investment. We cannot allow Channel 4 to raise investment, because the taxpayer will be liable for the debt of that investment.

John Nicolson

It is making record profits.

Ms Dorries

It is a great time to sell. That is why we are selling now, at a time when we are seeing great profits.

John Nicolson

Unlike Netflix.

Ms Dorries

I will not have time to go into the details of it, but while it is in the position it is now, it is a good time for Channel 4 to go to the market. It is a good time for Channel 4 to raise investment. It is a good time for us to balance Channel 4 and the value of Channel 4 today against what is happening with the independent production sector—the boomed independent production sector. Let us not forget: that independent production centre only earns 7% of its revenue from Channel 4. It is the right time to sell Channel 4 and for the Government to receive a creative dividend from that sale, which we can invest back into the independent production sector. Margaret Thatcher set up Channel 4 40 years ago to stimulate and help grow the sector—right down to grassroots funding of independent production in the UK. That job has been done. It is now time for us to have reinvestment in the skills and expertise we need.

John Nicolson

And Harold Macmillan said not to sell off “the family silver”.

Chair

In terms of the finances of Channel 4, you are correct to identify that they are effectively tied to a diminishing pot of advertising revenue. Is there not an argument, therefore, that in the future, at least in part, a privatised Channel 4 should consider some form of subscription—perhaps through the All 4 brand or by joining forces with the likes of the BBC and ITV, and putting forward really good, historic content that they could then charge people for?

Ms Dorries

That is a decision for whoever buys Channel 4 to make. What I will say is that the sale of Channel 4 is happening. It is in the media Bill, which will be coming forward to Parliament very shortly. We will begin the sale process, and there will be many options that many prospective buyers would like to put forward. All those issues will, I am sure, be discussed, but it will be a public service broadcaster. Therefore, it will be free to air. It will have to remain a public service broadcaster for a period of 10 years. It will have to make distinctive British content. There will be many criteria within there. Personally, I think Channel 4 is unique. We love Channel 4. I watched “First Dates” a couple of Saturday nights ago, and on one of the dates, somebody was from our gaming sector. It produces unique, British content. I am excited to see it achieve greater ambition. I have said to Channel 4, “Go and dream. You can raise the investment and the capital.” Channel 4 can do what it does now, and it can do it even better, but in the future it will be a public service broadcaster, free to air.

Chair

I am always disappointed that “First Dates” these days only pays for drinks. It doesn’t pay for the meal. They are a little bit tight. Maybe that is to do with advertising revenue falling. First of all, I am interested in your answer that you are not ruling out the potential that down the line, so to speak, at least part of the content at Channel 4 could be paid for by subscription as a means by which to bring in revenue with the new owner.

Ms Dorries

As a public service broadcaster, that is not on the table. It is not on the cards at all.

Chair

So it is not going to happen?

Ms Dorries

No. I cannot see a scenario where that would happen.

Chair

You mentioned to John about the consultation. You are correct to identify 38 Degrees and the email it sent around—

Ms Dorries

And the rewriting of the consultation question.

Chair

We could be here all day talking about 38 Degrees, but what I would say to you is that there was a deliberate policy, seemingly, right at the top of Channel 4 to fight the concept of privatisation from the outset. Do you hold the management of Channel 4 responsible, effectively, for that campaign, and do you think it is appropriate for a public service broadcaster—state owned—to go out, basically, to try to go against the will of the democratically elected Government, in terms of looking at privatisation?

Ms Dorries

We all fight for our teams, don’t we? If somebody attacks DCMS, I am immediately on the front foot to defend DCMS. I understand, exactly, the management and the board of Channel 4, which is a great, fantastic public service broadcaster; I understand their loyalty and their commitment. I understand their passion for what they do at Channel 4, and how vulnerable and under threat they probably feel—so, of course you would go out and fight.

Chair

So you are perfectly comfortable with their approach, in terms of PR? There is no issue, at all, with the management that Channel 4 was—

Ms Dorries

What I would say is that they have been campaigning—obviously, that is what organisations do—to try to prevent the sale happening because they are passionate about what they do. However, I would say to Alex and the board at Channel 4 that now is the time for us to work collaboratively to make sure that we get the best deal, and the best future for Channel 4, together. I want to work with Channel 4. I have to say, I hugely admire Alex Mahon. We are lucky to have her in the UK; she could go anywhere she wants, and I think we are very lucky to have her here at the head of Channel 4. I think she can take Channel 4 up to the next level, and as I have said in an interview that I did previously, it is time for Channel 4 to dream. I know—Alex has said herself—she wants to raise investment; she wants to raise capital for Channel 4. What I would say is, we are cutting you free to do that; we are cutting you free from the shackles of the state to be able to raise whatever level of funding you want, and to have the business model that you want within the public service broadcaster remit. You are free to do that, but work collaboratively with us to do it, because I want to work with you—you work with us too, and then we can make this process really the best outcome for Channel 4.

Steve Brine

Hello, Secretary of State. I am guessing that you watch Channel 4 news. What do you think of its output, in terms of a news broadcaster?

Ms Dorries

So, I get on really well with Catherine Newman. Actually, Catherine has asked me a number of times, just recently—I’m sorry, Cathy. The problem is that it is usually at very short notice. I will just correct that; she has asked me for the past two weeks to go on, and I have been on “Channel 4 News” a number of times. It’s edgy. I think it would—I’m not going to justify a news programme whose news anchor went out, shouting obscenities about the Conservative party, so they don’t themselves any favours sometimes, the news programme. I think that’s probably about as much as I have to say on that.

Steve Brine

Okay, so the 4 April tweet said, “I have come to the conclusion that government ownership is holding Channel 4 back from competing against streaming giants like Netflix and Amazon.” Maybe you have answered this already, but I would like to ask you a specific: could you see a situation where a privatised Channel 4 does not have a news output?

Ms Dorries

No, because that is part of its public service remit, which will be to entertain, educate and inform, but also part of that public service remit is to be impartial. So, I do not see a day when Channel 4 doesn’t have news, but it does have to be impartial because that is part of a public service broadcast remit.

Steve Brine

So, in many ways, that has slayed the “payback time” dragon, hasn’t it? One of the reasons that Channel 4 responded the way that they did, and inspired and encouraged the 38 Degrees campaign—can that be the last time we mention that organisation, please, in this Committee?—may be because they did not see the logic in what was being proposed. I guess the three things that I am asking myself—and a lot of constituents and a lot of organisations have written to me about this before I am asked to vote on the media Bill—are this: would the sale be in the interests of first, the audiences, secondly, the media industry that we all love so much, and thirdly, the creative workforce? Could you speak, briefly, on those three things—audiences, media industry and the creative workforce? Why is this sale in the interests of those three pillars—of audiences, media industry and the creative workforce?

Ms Dorries

On audiences, I think they are going to get a better deal. Alex is absolutely right; the board at Channel 4 are right. They need to raise funding streams and investment. They also need to have the ability to make and sell their own content, which they do not at the moment under their existing licence with the Government. Being able to make and sell their own content, and to be able to borrow and raise investment in order to do that, will be a better deal for audiences, because I think it will be more distinctive British content; edgier content, more of what they do best. They are risk-takers. Hopefully, with investment, they will feel more comfortable being able to do that. In terms of media and creative industries, I can probably answer those two together. I kind of answered the content bit in the media section, but in terms of creativity, as you on this Committee are very aware, Pinewood are opening 17 film studios next year. We made more films here in the last quarter of last year than they did in Hollywood. We have Sky and other film studios opening. We have a skills deficit in the creative industry, and the sale of Channel 4 will raise that creative dividend. That funding will be ploughed back into the creative industry sector, back into the independent production sector, because we need skilled people. If you will just allow me, part of that feeds very much into my own personal agenda in the Department, which is that there are many people in parts of the country—I don’t mean in London and the south‑east—where people do not even think they could possibly ever work on a film crew, or work in a film studio; that those jobs are for other people who come from different backgrounds than they do. I am talking about a creative dividend that will help train skills in people from those backgrounds, so that they too can partake in the creative industries, because frankly, they do not. The creative industries are very short of people from backgrounds that we would describe as working-class, left-behind, deprived backgrounds. I have a view that that creative dividend can be put to good use, both to level up and to help people from those backgrounds and get more skills into the creative industries. As I said a moment ago in a previous answer, Margaret Thatcher did it by establishing Channel 4. We want to do it—the job is being done—by once again stimulating that industry with more qualified and more skilled people, but from a variety of backgrounds, not just the normal cohorts that those people come from.

Steve Brine

Thank you; it is good to discuss this. The intellectual argument that is being put into this consultation and decision—Twitter never does convey an intellectual argument—is what the legislative process will hopefully tease out. Without what we are teasing out today, people can jump to conclusions and say that this is “payback time”; this is the culture wars. People can boil it down into glib sentences, which I would suggest is not helpful to this argument at all. Finally on this, you have said, “This is going to happen. Channel 4 is going to be privatised.” That is obviously subject to the will of Parliament; yes, the Government has a majority, but Parliament can still vote, and will still vote, on the media Bill. When is the Government going to publish what obligations, if any, will be required of any purchaser? You have talked today about 10 years as a public service broadcaster. The HQ is in Leeds, which was part of their contribution to the levelling‑up agenda. Will that information—as in, what will be required of any purchaser—be available to us as Members before we are asked to vote on Second Reading of any media Bill? Otherwise, I feel like I am being asked to sign a bit of a blank cheque.

Ms Dorries

I will go back to the first point that you mentioned about Twitter. We see a lot on Twitter relating to a lot of what we do in our Department, and I would just say that Twitter is not real life and real life is not Twitter. Unfortunately, I am not responsible for the arguments that people will put forward on Twitter. All I can try to do is, via the passage of the media Bill, is consider the detail we are working on now, which is on issues like Leeds and how many of the employees will be based outside London. I think in “The Next Episode”, Channel 4 may even have argued themselves for moving completely out of London and selling the London building. We are at the stage of working through the detail about the sale and how many people will work outside. I really look forward to holding sessions with MPs. You may be aware that I spent my entire Easter recess talking to MPs about nothing but this issue because it was announced just before the recess. Minister Lopez will be holding meetings with MPs of all parties, where we can talk through these issues. I will also add, the sale of Channel 4 is in the media Bill—I know that is big. However, also in the Bill is prominence, and that is something that Channel 4 wanted. That is something that the public sector broadcasters wanted. I know they have prominence already, but in a rapidly changing broadcasting landscape, prominence was a big deal to broadcasting.

Steve Brine

Can I just press you on the specific point about the obligations that will be required of any purchaser? I know there is a 10-year PSB, and you have said you are working through that detail. Can you see why MPs might want to know the detail of those obligations of sale before they are asked to vote on a media Bill?

Ms Dorries

Absolutely.

Steve Brine

I understand the engagement of Ministers with MPs. I have both been a Minister engaging and been engaged by a Minister as an MP. Will we have that detail before we are asked to vote?

Ms Dorries

Yes. Obviously, we would not expect Parliament to vote on a deal without knowing the details.

Steve Brine

Finally, this is a bit leftfield. I have a market town in my constituency called Alresford. It is a beautiful market town; it is not hard to reach, and it is not a final 5% rural community. It is a handful of miles from the capital of Hampshire, Winchester. However, they have some of the poorest broadband speeds in my constituency. If I contact you, will you please help me cut through that situation?

Ms Dorries

We had a drop-in yesterday on digital broadband, where we took information. What I would say is, you should contact my PPS at the end and give them the details of the town and the broadband. Seeing as 97% of the country has superfast broadband, if your market town does not have it, I would be interested to know why. Obviously, gigabit is a different issue; we are rolling it out and we are now on 68%. On the superfast, if you speak to my PPS, we can pick it up for you.

Steve Brine

Thank you.

Ms Dorries

I am here to please.

Chair

After those church notices, we have Dr Rupa Huq.

Dr Huq

I might avail myself as well. I remember asking in the Chamber about the same issue and I do not think it is sorted. One of my favourite Channel 4 programmes was “Tower Block of Commons”; I think we have chatted about it before. You were on it as a young MP on the South Acton estate, being sent to see how the other half live.

Ms Dorries

Then I later discovered that they were actually actors.

Chair

What, the MPs or the—

Ms Dorries

No, the people in the estate. It was a Channel 4 production. The parents of some of the boys in that programme contacted me and came here to have lunch to tell me that the boys were in acting school. They were not really living in a flat—they were not real. They were actually actors.

Dr Huq

That will be a headline tomorrow.

Ms Dorries

If you remember, there was a pharmacist I went to see who prepared food; she was also a paid actor as well.

Dr Huq

It was jolly good viewing, and it was on the South Acton estate. I am curious about the sequencing of decision-making of the sale of Channel 4, because it was not in the manifesto. Within minutes of that election debate, last time round in 2019, it was said that Lee Cain was seeking vengeance for the Prime Minister being replaced by an ice sculpture. Is that true? Do you want to put that one to bed now?

Ms Dorries

That is just laughable. I have no responsibility for what Lee Cain says. The ice sculpture thing is a vague distant memory from the election campaign—but no. I can promise you that the sale of Channel 4 has been something that has been reviewed and under discussion for a considerable amount of time—not just since the last election. The fact that Channel 4 is in a decreasing advertising revenue spend market, and solely dependent on advertising, is what has brought this to the fore.

Dr Huq

Do you know when it was decided? Neither that nor the freeze of the BBC licence fee were in the manifesto. When were those plans hatched?

Sarah Healey

On the first, the decision was announced in the broadcasting White Paper. The decision was made post the consultation. The question of Channel 4 ownership has been a live one for some time—indeed, from not long after it was created—so it is not surprising that Government decided to look at it again, because they do that periodically. As the Secretary of State has set out, there are particular reasons to do so when the media market has changed so radically. The decision about the licence fee is made in a time period set out in the BBC charter. It would not appear in a manifesto because it is a decision for the Secretary of State of the time at the time set out in the charter.

Ms Dorries

That comes up next in 2027, but we are going to have a review on the licence fee before then. In fact, I will be announcing that very shortly.

Dr Huq

Following on from Steve Brine’s questions, I know you have not set out the total criteria for nations and regions and that kind of thing. We know Channel 4 spends more on nations and regions than any other commercially funded broadcaster—it spends twice as much as ITV. If you can put that in your stipulations, that would be great.

Ms Dorries

Well, actually, Channel Five—

Dr Huq

According to what I’ve got here, it is six times more than Channel Five.

Ms Dorries

No, I don’t think that is correct. I call Channel Five the levelling-up broadcaster because it spends particularly in Yorkshire. It does very well in the regions.

Dr Huq

It says here, “spends six times Channel Five’s external nations and regions budget—”

Ms Dorries

Well, perhaps in terms of budgets, but not as a percentage of total budgets. In terms of what gets spent in the regions, Channel 4 may do so because it has a head office in Leeds and what have you. However, in terms of funding going into the regions, Channel Five is definitely lighting the way on that. Have you watched “The Dogfather”?

Sarah Healey

Either way, the main issue is that, as the Secretary of State set out, in “The Next Episode” Channel 4 itself made some proposals about further moves out of London. We are at the process where bids are assessed and we are looking at what commitments bidders might like to make about production outside London, as well.

Dr Huq

According to what I have been provided with, the Government have confirmed that, in the event of a new sale, the new owner will not have any obligations for training and skills. Is that something you can write into the—

Ms Dorries

That is the kind of detail we are working through now.

Dr Huq

Okay. They are significantly investing in all this. On the Netflix thing, it is a bit scary that, in the last day, Netflix has announced lay-offs of 150 employees because of falling profits and growth. It is not necessarily one to aspire to.

Ms Dorries

I think that for people to even try to paint a picture that Netflix is unsuccessful or struggling is probably slightly over-egging the pudding. Netflix has done what many businesses do: it has reached the point of market saturation. That is a good thing for Netflix. However, it is going to have to revise its business model. It will probably revise it in a way that will make life much more difficult for public service broadcasters, which rely on advertising revenue. I have always thought that Netflix has an incredibly generous system, because account holders can allow other people to watch on their account. My mum has access to my account, as do my kids. I have Netflix, but four other people can use my Netflix account in different parts of the country. I think it is probably going to change its model.

Dr Huq

I have just learned something.

Ms Dorries

I am not supposed to do that? [Laughter.]

Sarah Healey

I don’t know.

Ms Dorries

It will probably change its model and take on board advertising.

Sarah Healey

So many people watch it in my house that I have to pay for the more expensive one.

Dr Huq

It has just gone up, as well. The last thing I wanted to ask you about was kids’ TV. Obviously, “inform, educate, entertain”—it’s always been there, since the 1950s. You funded the young audiences content fund in 2019, which was pretty pioneering. For the £27 million put in, it has made far more back—nearly twice as much. It has lots of pioneering shows. Children’s broadcasting generally seems to be on a slippery slope. From 2006 to 2017, CBeebies and CBBC—again, I used to rely on them a lot as an electronic babysitter, back in the day—decreased by 40% in funding—

Ms Dorries

An electronic babysitter?

Dr Huq

Well, in my day, you only had children’s TV at 5 o’clock for an hour, or something. It was “Blue Peter” before the 6 o’clock news. It was different when I was a young mum. It is informative and entertaining—all that stuff. We know that CBeebies’s budget dropped by 40% between 2006 and 2017—that is the last figure I have—but the young audiences content fund has provided things on Channel 5, such as “Milkshake!”. It has done a lot of good stuff and you are pulling the plug, Secretary of State. I have a constituent who works in it and who is heartbroken. Most of its young life was during covid as well. Given that now we are leaving this pandemic and normality resumes, surely you could throw a lifeline to them and extend it a bit longer.

Ms Dorries

I am new to children’s TV as a viewer. Having an eight-month-old granddaughter, I have to say that—

Dr Huq

You don’t look old enough to have a granddaughter. It’s not possible.

Ms Dorries

Thank you very much—I’ll take that. My house is full of “CoComelon”, “Peppa Pig” and the jetters—that is all that is on my TV at the moment.

Steve Brine

“Go Jetters”.

Ms Dorries

“Go Jetters”—is that what it is? I am learning all my nursery rhymes again through “CoComelon”. My house is full of it at the moment. There was a tax relief introduced for children’s TV, and I think it has delivered £622 million since 2005, but I do take the point that there are criticisms around children’s TV at the moment. Obviously, these are discussions that we will have, particularly with public service broadcasters and the BBC, leading up to the charter renewal. But I will take that point away, because you are not the first person to have raised children’s TV as a criticism. I think it is something we need to go away and look at.

Sarah Healey

That particular fund is a fund that came to an end at the end of the spending period—it was not included for the future. I think it had done good work, but other things, such as the tax reliefs, have obviously had a really major impact on the quality of children’s television. It is obviously for the BBC to determine where it spends its budget, but I think we all would agree, and I am sure the BBC would agree too, that quality children’s television is a critical part of public service broadcasting.

Dr Huq

Then don’t freeze the licence fee.

Chair

Okay. Thank you. Secretary of State, you just referenced the review of the BBC, and I know that you have stated before that you would be setting out a timetable for a review of the funding model. Is there anything that you can tell the Committee today in terms of what form you envisage this review taking, and what can you tell the Committee about any such review?

Ms Dorries

As Mr Brine mentioned, social media distorts perceptions of what we are doing, the reasons why we are taking certain steps and what is happening, so thanks for the opportunity to talk about the review. Obviously, the charter renewal is in 2027, so people have been quite confused about why we are discussing it now. Surely it is not something you discuss until 2027, which is when the licence fee comes up for renewal. But I think we are in a position with the licence fee at the present time—as you know, it has been frozen for two years. That is something that we did for households, particularly with regards to the cost of living. It was something that had to be done. But we are in a situation with the licence fee whereby 74% of those convicted for non-payment of the BBC licence fee are women—criminal convictions that deter them from job opportunities in the future and distort their future life path. Some 30% of women’s convictions are for non-payment of the licence fee. They are pretty stark figures. I know that one argument is to decriminalise the licence fee, but that does not change the fact that they will still be pursued and other issues around that, so we have come to a point where discussion about the future funding of the BBC is imperative now. I find it very difficult to understand why people feel that having women account for 74% of all convictions for non-payment of the licence fee—or the 30% figure, which was quoted in the media at the weekend—is acceptable or even defendable. Rather than wait until 2027, I am going to announce very shortly that we will start the review of the BBC licence fee and how it should be funded in the future. I know that there are people who are saying, “Well, you are going to move to a subscription model”. I am completely hands-off as to how that review will look and what will happen in that review in the future. The BBC will be part of that review. Right now, if anybody knows of an independent chair who would like to chair that review, please let me know because I am on the hunt for an independent chair to chair that review: someone who is wholly independent, who could examine—[Interruption.] Mr Nicolson just put his hand up. I hope that was not a snub at the chair of the independent review.

John Nicolson

I am volunteering.

Ms Dorries

We are looking for an independent chair as immediately as possible to start the work on the review. We will be taking information. It will be open, wide and extensive. It is important that, however the BBC is funded moving forward, it is fair, because the situation with the licence fee at the moment is unfair. I want fairness to be at the heart of the review. My only requirements are fairness and sustainability. That is where we are at the moment. We will soon be announcing the call for the chair and the review, but if anybody knows of—

Chair

You are going to have a public appointment of an independent chair. When will the review start? Who pays for this process, which, as you said, is expensive? Do you think the BBC should pay for it?

Ms Dorries

No, because that will almost certainly be a conflict of interest, so it will come out of our budget. I think we have put a cost on it of around—I probably don’t want to say what we have cost it at.

Chair

Please do say.

Sarah Healey

It is a team of officials supporting the secretariat and some external engagement.

Chair

When is this going to start, and how long is it going to take?

Ms Dorries

I anticipate that it will take about six months, and I want to get it started as soon as possible. We will be announcing the terms of reference of the review very shortly.

Chair

You say “very shortly”—are we expecting that before the summer recess?

Ms Dorries

Yes.

Chair

So there is going to be an announcement in Parliament before the summer recess of an independent chair.

Ms Dorries

I would say considerably before the summer recess.

Chair

Okay, thank you very much for that. Simon Jupp wants to come back on Channel 4, and then Damian Green wants to come in on the BBC, but before they do that, can I ask whether you personally still want to abolish the licence fee—yes or no?

Ms Dorries

Yes. The licence fee is an unfair method of funding the BBC. I think I have explained the reasons why.

Simon Jupp

Good morning, Secretary of State. You said that you want to see more distinctive British content in Channel 4. As you negotiate the sale and your team work on that, how will you ensure that the operating model that has made Channel 4 what it is today and has brought us some fantastic programmes over the years is retained?

Ms Dorries

We will do that via the public service broadcasting licence. The requirement for distinctive British content really speaks to that. In the broadcasting White Paper, we put in prominence and the Ofcom code, which will level the playing field for Channel 4. It is about Channel 4’s ability to raise its own investment and make distinctive content. It that operating model that makes the Channel 4 that we know successful. That is what has made it reach the point where it is ripe for sale. It is like any business: I cannot imagine any buyer looking at Channel 4 and saying, “We’re going to buy it and completely change how it operates and everything it does.” They may as well buy something else that does it completely differently.

Simon Jupp

Will the commitment be firm in Channel 4’s licence operating remit that it has to continue to power a lot of the independent production sector? Personally, I don’t care who owns it; I just want the distinctiveness of the channel to continue.

Ms Dorries

We agree with you. Actually, it doesn’t power an awful lot: it provides only 7% of revenue to the independent production sector. They are in a very tight labour market at the moment because the independent production market in the UK is booming. Channel 4 provides only 7% of independent production revenue, so it doesn’t power a lot of the independent production sector at all—I just want to make sure that is clear—but it is unique, edgy and a risk-taker. There is a market for that, and anybody who is looking to buy it will obviously want to retain and grow that. The details we are putting in as the conditions for sale are being worked through at the moment, but we have to retain Channel 4’s riskiness, edginess and uniqueness, and its distinctive content like “First Dates”, “Derry Girls” and “Gogglebox”, in the public service broadcaster, because that is what people want to watch.

Simon Jupp

Earlier on—forgive me if I misheard—you said public service broadcaster, but you also mentioned a timeframe of 10 years for that. Is that something that will change after 10 years?

Ms Dorries

The detail of the conditions of sale is something that we are working through at the moment. That is what we have had in a discussion—that whoever buys it would have to put a plan in place for 10 years, to keep it as a public service broadcaster for 10 years.

Simon Jupp

After 10 years, what happens then? Does that mean coming back to the Department to have another discussion about it?

Ms Dorries

No, it will be privately owned. It will be up to owners.

Simon Jupp

So it could be, for example, this proud, distinctive British product for the next 10 years, but after that, it becomes a repeater of naff American programming.

Ms Dorries

I cannot imagine any circumstances where an American streamer would want to buy a British public service broadcaster. They would—

Simon Jupp

It is not about American streamers. I am making a wider point.

Ms Dorries

Or an American production company. They would find it impossible. Could you imagine an American production company making “Derry Girls” or “Gogglebox”? It would be anathema to them.

Sarah Healey

It is important to be clear that any change in the remit would have to be agreed. We would want to sustain its remit as a public service broadcaster—

Ms Dorries

Because it is a public service broadcaster.

Sarah Healey

And that is the nature of public service broadcasters.

Simon Jupp

So there would be a review—an engagement—at 10 years.

Sarah Healey

It is very important that the obligations that are placed at the point of sale as the remit are the obligations that are placed, and that does not change unless we are happy for it to change.

Ms Dorries

This is the detail officials are working through right now. The broadcasting White Paper was only released two weeks ago now. This is the kind of detail officials are now working through, as to how that will look, how the sale process will work, and what the requirements and obligations will be on a purchaser. Hopefully, by the time we next come before this Committee, we will have all that detail for you.

Chair

I am a little bit bemused by the idea that we would not have an American company buying a public service broadcaster, because of course Paramount Global owns Channel 5, which is a public service broadcaster.

Ms Dorries

Yes, that is true, but Channel 5 does not make the kind of content that Channel 4 does. Channel 4’s is particularly distinctive.

Chair

I quite like Channel 5, to be honest.

Sarah Healey

It is really important to emphasise that any owner would have to stick with the remit, wherever they came from.

Chair

The remit was deliberately kept light by the current management of Channel 4, if you remember—by Alex Mahon. She made a point of that. That potentially makes it much more open to interpretation. The parameters are much less strenuous when it comes to whether or not they would stick to what we would call traditional public service broadcasting.

Sarah Healey

I think Channel 4 would contend that they have stuck with a distinctive remit with distinctively British content and that is what makes it a successive broadcaster, and that is what we anticipate any buyer would want to sustain.

Damian Green

I want to ask about the BBC consultation, but I have a last thought: you have just described whether the remit is going to be imposed for 10 years or more as a detail. That seems to me to be a hell of a lot more than a detail. If I want to buy Channel 4, I want to know whether I am committed to this quite onerous remit for 10 years or am I committed to it for forever, because that is going to make a huge difference to the sale price.

Sarah Healey

Obviously, that is something that needs to be absolutely explicit at the point where we ask for bids. As the Secretary of State has said, we are working through the detail of that now and we will be saying more about that as we move into publishing the media Bill and taking it through Parliament.

Ms Dorries

We would not be asking MPs to vote on a media Bill and a sale without having that degree of detail, which is why we are working through it now.

Damian Green

Or selling it to anyone, because, as I say, it will make a colossal difference to the sale price.

Sarah Healey

Obviously, we could not sell it until the legislation was passed anyway.

Ms Dorries

Because no one would want to buy it.

Damian Green

Well, nobody can buy it, legally. There are clearly many discussions to be had. I want to move on to the BBC, partly as a result of what happened over the Channel 4 consultation. I am fascinated by what you have said this morning. You said that you have decided that the licence fee cannot carry on, but now you are going to consult on whether the licence fee should carry on or not. Doesn’t that make the consultation a complete sham?

Ms Dorries

No. What I have said is that we are looking at a review.

Damian Green

No, you didn’t. You said the licence fee is unfair and it cannot carry on.

Ms Dorries

Yeah, but it is. That is my position—in this modern age, of a rapidly changing broadcasting landscape, which is changing at warp speed, the BBC licence fee, which was introduced in—was it 1945?

Sarah Healey

My goodness, you are testing my general knowledge on this one.

Ms Dorries

Even you and I aren’t that old, Damian. The licence fee was first introduced a very long time ago. When we only had one, two three, or four channels, I am very sure that it was the right model at the right time. To sit here all these years later, in the broadcasting landscape that we are in now, and say that the model for funding the BBC all those years ago is still applicable and appropriate, at a time when 74% of all convictions for non-payment of that licence fee are against women, is almost antediluvian. We are at a point where we have to wake up and smell the coffee and realise that the times are changing rapidly in the broadcasting landscape. It is time for a more effective, more modern and fairer way of funding the BBC. I do not have an opinion of what that is, but I imagine everybody, particularly in Parliament, will want to contribute to the debate and the review. I am sure the review will be robust and that there will be, for the first time in a very long time, a full exploration of the licence fee and how it works, and what the options are for moving forward. There are many other public service broadcasters in other countries that work in other ways. We need to explore them as well.

Damian Green

It is a perfectly arguable case that the licence fee has had its day, but I am making a different point: if you are consulting about future funding, you, representing Her Majesty’s Government, have already come to a very firm conclusion. That consultation is not going to mean anything because one of the potential recommendations is already ruled out of court by the Government. It is almost a process point about democracy and consultation. As I say, I am not arguing about the substance—

Ms Dorries

I understand your point completely. If the review came back to me and said that the only fair way to fund the BBC was with the licence fee, it would have to have a very robust case for doing that, given how unfair the licence fee is. It is a regressive tax. It does penalise women and the poor more than it does others. The review would have to have a very strong case for the BBC licence fee. If they come to me at the review and say there is only one way that we can do this, and that is the licence fee, it would be hard to explain in this day and age, in 2022, why that was a fair way to fund the BBC. I would find it difficult to think that that was the only conclusion that a review could come up with.

Damian Green

Okay, but you want an independent chair. He or she will not be that independent, by the sound of it.

Ms Dorries

He or she will have full rein to come and tell me whatever the review finds. That is the point of a review. Everybody, including the BBC, will be part of that review and can contribute to it. At the end of the review they will report, as every review does, the findings to me. I have no influence and no say over what happens during the review. That is completely separate and totally independent. My view is as irrelevant as your view, as is that of anybody else who wants to express a public view in this place. The review will take evidence from everybody and will weigh it up.

Damian Green

That is not quite true, given what happened with Channel 4. Even if you strip away 38 Degrees—we all have views about organised letter-writing campaigns—the overriding majority came to one conclusion and you came to another, which is your right as Secretary of State, but your voice matters and other people’s doesn’t. If you apply that to a BBC review, it seems there is absolutely no point in that review coming to a conclusion that you disagree with. I ask very specifically because this Committee did a report on this a few months ago. Having gone into it thinking that you cannot carry on with the licence fee again, we reluctantly—I am generalising about a long report—heaved a sigh and came to the conclusion that as it stands the licence fee is the least bad option at the moment. That view is not out of court, either. I just observe that for the Secretary of State to rule out a Select Committee recommendation as not even being worth thinking about now is an odd way to start a consultation process. You made the point about convictions. How many women are in jail for not paying the BBC licence fee?

Ms Dorries

Today? I have no idea. I do not have that figure. But they still have a criminal conviction for not paying it.

Damian Green

And it is largely, as you know—

Ms Dorries

I am sorry; you cannot justify 74% women having criminal convictions for non-payment of the licence fee on the basis that they might not be in prison.

Damian Green

But it’s 74% of a happily small number, because far fewer women than men commit crimes. Women are a better sex than men in that—

Ms Dorries

You also cannot justify the fact that 30% of all women’s, all female, convictions are for non-payment of the licence fee. There is no justifiable argument for that.

Damian Green

But they characteristically are actually for debt non-payments. It will very often be combined, understandably, because these are—

Ms Dorries

Because women take responsibility.

Damian Green

Yeah. Well, because women, if they can’t pay their licence fee, are probably not paying their council tax. They may not be paying utility bills as well. It’s a much more complex situation. But the idea—

Ms Dorries

Sorry, can I just answer that point? That is because women tend to be the ones whose name is on the rent book or on the mortgage and on all household bills, because women take responsibility for families and children. That is why. It’s not because women are bad payers or women tend to get into debt more than men do. It’s because women take responsibility for family and children.

Damian Green

I completely agree with all of that. I just think—

Ms Dorries

I think you were making the case that more women are in debt because more women don’t pay their council tax.

Damian Green

No, I’m not. I’m—

Ms Dorries

That’s not the case; it’s the case that women take responsibility.

Damian Green

Absolutely not: I am making a completely different case, which is that this is a slightly bogus statistic lugged into the licence fee debate. The licence fee debate is complex. I get all the arguments against it as a regressive tax and all of that, but I think the fact that successive Governments have, for example, decided not to decriminalise the licence fee suggests that this is actually a side issue. It’s not to be counted your best point against the licence fee. There are other good points against the licence fee. But I return to my basic point, which is that you have come to a decision and now you are starting a consultation, and that’s the wrong way round, actually, for the Secretary of State. You should have a consultation and then come to a decision. One other thing is that you just said that Channel 4, as a public service broadcaster, couldn’t become a subscription model while it was a public service broadcaster. Presumably—I just want to check—that applies to the BBC as well. One of the alternative models, of course, is subscription. As long as the BBC remains a public service broadcaster, you say, it can’t go on to subscription.

Ms Dorries

The BBC is a public service broadcaster and will be remaining a public service broadcaster. The remit of the BBC is for discussion during the charter renewal. No changes will happen before 2027. So I’m not saying anything about subscription models or anything else for anybody in the future, except that—

Damian Green

But you just—

Ms Dorries

We are designing, through the Channel 4 public service sale, how that is going to look to a purchaser, what the remit will be. The licence that Channel 4 exists under at the moment couldn’t be a subscription model, and I don’t believe it would be in the future. Sarah, do you want to—

Sarah Healey

I just think that if the funding review concluded that the best way to fund the BBC in the future would be a subscription model, we would seek to amend the way—

Ms Dorries

The remit in 2027.

Sarah Healey

—the BBC operated at the charter review point. That would be the right time to do it, because that is the point at which we review the mission and purposes of the BBC.

Damian Green

I’m sorry: you are saying different things at different times in this evidence. You have just said that Channel 4, as a public service broadcaster, can’t operate on a subscription model, for the obvious reasons that—

Ms Dorries

Under the licence it has at the moment, yes.

Damian Green

So it could do then. Channel 4—you could sell it as a subscription model and still claim it’s a public service broadcaster.

Sarah Healey

It would be obviously foolish to rule out different ways of people accessing services on television in the future.

Ms Dorries

Channel 4 and the BBC are completely different. Channel 4 is funded by advertising; the BBC is funded by a licence fee. You are trying to compare two completely different public service broadcasters, two completely different licences and operating models.

Damian Green

Yes, but the point I am making is that for—one of the things about public service broadcasting is that it is universally available. One of the things about subscription models is that, by definition, they are not universally available. I agree with what you said 15 minutes ago, which was that you can’t have a subscription model for a public service broadcaster. What I am fascinated by is that both of you are now rowing back from that.

Ms Dorries

Well, universally available, but if you don’t pay your licence fee for the BBC, you can receive a criminal conviction. If you own a television and don’t pay a licence fee to the BBC, you can receive a criminal conviction.

Damian Green

Okay, but on a subscription model, if I don’t pay for it, I don’t get it.

Ms Dorries

That is a qualified universal model.

Damian Green

Oh I see. So a subscription—

Ms Dorries

So if you can’t afford to pay the licence fee—

Damian Green

No, no. I’m not talking about a licence fee; I’m talking about a subscription model, because I genuinely don’t know what your policy is and whether you can have a subscription service that you call a public service broadcaster. Are you saying that you can have a universally available subscription service even if—

Sarah Healey

As you will know, some people have contended that a future funding model for the BBC might be a partial subscription model, for instance, and so there may be ways in which we would seek to amend the way that the BBC is accessed as a result of the outcomes of the funding review. What is completely clear from what the Secretary of State said is that options are all on the table—

Damian Green

Except the licence fee.

Sarah Healey

—including the licence fee, in the sense that the Secretary of State has made clear.

Ms Dorries

That is part of the review.

Sarah Healey

If the review came back and concluded, as this Committee did, that that was the answer, the Secretary of State would have to look at that very deeply and seriously and take that into account in deciding how to go forward. Then at charter review, we would obviously want to look at the scope of the services offered by the BBC and the mission and purposes of it, as is appropriate to review at the time of the charter.

Damian Green

Thank you.

Chair

We are going to move on. The next area we will look at is levelling up, and also EU visas as well—

Ms Dorries

I didn’t hear your first comment, Chair.