20
Examination of witnesses
Lucy Frazer and Susannah Storey.
Q1 The Chair: This is the Communications and Digital Committee. We are very pleased to welcome today the Secretary of State for Culture, Media, and Sport, Lucy Frazer, and Susannah Storey, the Permanent Secretary from the department. This is a one-off accountability session, and we will cover a range of policy areas which are relevant to this committee's work, particularly what we have been looking at over the last 18 months.
During the last 18 months, there has of course been a machinery of government change and some of our inquiry work is now more relevant to DSIT than it is to DCMS. None the less, there is still a lot for us to get through. We will be looking at the media Bill, the BBC, creative industries, online news and SLAPPs, and in some areas there will be an opportunity for us to draw on work which might now be more directly relevant to DSIT but is still very much of interest.
We are very pleased to have you here. Towards the end, one of the things I want to explore a little is how the relationship is working between DCMS and DSIT, how you see that impacting the effectiveness of DCMS and the areas that you are most concerned with. We are going to get started straight away on the media Bill, and I am going over to the Lord Bishop.
Q2 The Lord Bishop of Leeds: The draft Bill was published and met with a lot of approval in many quarters and with some suspicion and concern in others, particularly in relation to minorities. The broadcasting sector has been waiting quite a long time for many of the Bill's provisions, such as those on prominence. What priority does the Bill have in the legislative agenda, and can you assure us that progress is being made towards introducing it?
Lucy Frazer: The answer is, yes, absolutely. It is one of my priorities, and it is something the Prime Minister is very interested in. As you say, we published the Bill in draft to show our commitment to taking this forward and also to make sure we got it right. My department has been having a significant number of conversations to make sure that, when we bring the Bill forward, it is in as good a shape as possible with a huge amount of engagement. We will, as you know, be bringing it forward as soon as parliamentary time allows, but it is absolutely one of my priorities.
The Lord Bishop of Leeds: Does that mean it is likely to be in the King's Speech?
Lucy Frazer: As you know, these things are not in my control and are subject to the parliamentary business managers, but I can assure you that it is one of my priorities, and I know that the Prime Minister is very keen on ensuring it comes forward.
The Lord Bishop of Leeds: Where does the media Bill sit in relation to other legislative priorities that your department has?
Lucy Frazer: I have two legislative priorities in terms of primary legislation. The other one is the football regulation.
The Lord Bishop of Leeds: One of the things that came out in response to the drafting of the Bill was that elements concerning radio and audio were introduced very late on. Has any further work been done on those, and what changes are we likely to see when the Bill is actually introduced?
Lucy Frazer: We have published those in the draft Bill so that we can engage with industry on them. I must say, they were something that the radio sector was really keen to have in the Bill, and therefore I was keen to include them. They are strongly supported, so we have done engagement on those aspects as well. We are keen to bring the Bill forward as soon as parliamentary time allows.
Baroness Fraser of Craigmaddie: Secretary of State, I need to declare an interest: I am on the board of Creative Scotland, and I am the Scottish board member for the British Library, so it will not surprise you to hear that I am really interested.
We welcome the media Bill in Scotland. We welcome a more flexible regulatory framework for PSBs, but there are concerns about how they will be able to be identified. What distinguishes PSBs from commercial operators? In Scotland, for example, STV is our version of ITV, so there is that opt-out. Someone said to me, “The only Scottish voice on ITV is Lorraine Kelly”. Where is the representation across the regions and across the different languages? I know that you have had endless representation from S4C and BBC Alba, for example. How will this new regulatory framework reflect the lives of the different regions of the UK and how will it reflect the different commercial landscape? One of the things we are worried about is paying for prominence on Amazon. If Amazon is demanding 30% of a regional company for prominence, where does that sit?
Lucy Frazer: The question about distinctiveness and the importance of the regions is really important. We are really clear that public service broadcasters must maintain their distinctive element, and whilst we are enabling them to have a wide range of programmes, the remit of public service broadcasters will remain to ensure that they have a distinctive role in the sector.
In terms of the regions, that is an important part of the distinctiveness: that we reach everyone. You have talked about public service broadcasters and the BBC, but it is also a discussion that we are having in relation to Channel 4 and the importance of having the regional element that Channel 4 has in terms of paying for programmes. In terms of prominence, we need to be fair to both sides, but nobody should be paying for ensuring that they are prominent on a particular platform.
Baroness Fraser of Craigmaddie: Thinking of how you establish this, will we still be talking percentages? We can all understand percentages, but there is a fear that things might be watered down in that respect.
Lucy Frazer: We will ensure that the distinctiveness remains and that the regions are absolutely represented.
The Lord Bishop of Leeds: I have a very quick follow-up question: there are some areas like science and religion, which are not exactly clickbait. If you are not measuring these by the number of hours—which for the BBC has hitherto been the way of measuring—how will you measure?
Lucy Frazer: This is something that Ofcom will also look at. As an independent regulator, it will have increased powers in relation to ensuring that the PSBs comply with their obligations. We want to make sure that distinctiveness is retained, but we also want to give the public service broadcasters a little more flexibility. I understand what you are saying, and the issue is not just in the areas that you mentioned. I am particularly interested, for example, in the new public service remit in relation to children's programming, and we have included this within the obligations as to what needs to come through from the PSBs.
Susannah Storey: Just to add what I think is a really important point, as the Secretary of State said, through the media Bill we are trying to ensure a vibrant ecosystem for our PSBs. We have been updating some obligations to ensure we still keep the distinctiveness. Ofcom will be keeping a close eye as regulator, and it could impose quotas for underserved content areas if need be in due course.
The Lord Bishop of Leeds: I fully understand that, and flexibility is always a virtue in these things, but how will you measure the number of hours that are dedicated or guaranteed for a particular area? If it is not percentages, then what measurement will be used? I understand flexibility, but that is just an empty space now.
Lucy Frazer: These are things that Ofcom will look at closely. As Susannah mentioned, there is a power in the Bill to introduce additional quotas if needed. This is something that Ofcom will keep a very close eye on.
The Lord Bishop of Leeds: Will quotas be percentages then or number of hours?
Lucy Frazer: That is something that Ofcom will look at.
The Chair: Thank you. We will move on.
Q3 Baroness Harding of Winscombe: I would like to move on to BBC funding. This committee published a report in July 2022 into the future funding of the BBC. One of our recommendations was that the BBC should set out its own strategic vision, with options for future funding and how the BBC was thinking about it. Do you agree that the BBC needs to do this? If you do, what have you done to encourage the BBC to conduct such a review?
Lucy Frazer: Let me first say that I think the report that you published is extremely informative, as was your report on creative industries, which I am sure we will come on to. I found it really helpful. It is one of the first things that I read when I came into office, and I read it again over the summer and reminded myself of how detailed it was. I just want to thank the committee for its really important work in that area. It has been very informative to my thinking on this matter.
I know that you have asked the BBC to think about its vision. I know it is thinking about that in some detail. I had a meeting with Tim Davie and other members of the BBC last week, and they shared with me where they are in relation to that. It is something that they are thinking about at the moment.
Baroness Harding of Winscombe: Is the Government intending to launch its own review into the funding of the BBC?
Lucy Frazer: I have said on a number of occasions that we need to look at the BBC funding. The BBC is a fantastic institution, which I have also said on a number of occasions. It comes into everyone's home, and at the moment people are paying £159 a year for it, and that is no small amount, especially as we have cost of living issues. We want to make sure that funding is fair. We are also conscious that we are seeing a hugely changing media landscape, and we want to ensure that the BBC is fit for the present and whatever the future holds.
The BBC is also a key part of our creative industries landscape and the sector as a whole. I hope you will have seen it has been my priority, as I set out in the sector vision, that we grow that economy. I have set out amounts by which we will grow it, and obviously the BBC is a significant part of that. The short answer to your question is, yes, we are looking at this area. It is really important, for the reasons that I set out.
Baroness Harding of Winscombe: Can I just press you, because I am not entirely sure I understand what you said? Thank you for the praise; obviously, it is very lovely to hear, but fundamentally, I think I heard that we agree that this is very important, but I did not hear whether you are or are not going to conduct a review into funding.
Lucy Frazer: As a department, we have already started to look at this very closely, and we are going to continue looking at it. We will be assessing what the funding situation should look like into the future.
Baroness Harding of Winscombe: Is this within the department or in public?
Lucy Frazer: We are already looking at it in the department, and we would like to call on experts for particular matters. There are some very technical issues that this raises, on which we would need external assistance. Of course, the BBC has a huge amount of information to share as well, so that is the way we will be taking it forward.
Baroness Harding of Winscombe: To probe one final time, how will that interact with the timetable for the charter review? You will remember from our report that something we are worried about is that the pace of development of digital streaming services does not follow the parliamentary timetable or the timetable of BBC charters. There is a real risk that, if we are too slow to engage in exploring the options, and consulting really widely and publicly about the different options, by the time it gets to the charter review there will be no alternative options. I am saying we feel quite strongly that you need to get started.
Lucy Frazer: This is why we have already started looking at it. We are very conscious of the charter review timetable, and I want to ensure that my department does the work so that we are ready for the next charter review and to make decisions bearing in mind the charter review dates.
The Chair: In terms of vision, the BBC has been working on this for quite a while. We published our report over a year ago, and it was working on its vision then and is still working on its vision now. When Tim Davie was before us in July, we were told that there should be something before the end of this year. It is so fundamental that there is clarity as to the role of the BBC going into the future, to inform whatever decision you want to make about how to fund it. Without that clarity from the BBC, it makes any other decision very difficult to make.
I am keen to get some sort of assurance that you are not allowing the BBC to keep telling you that it is working on a vision, and that what you are expecting from it is not just how it is going to carry on doing what it is doing, but is its purpose into the future going to be different from what it has been before because of this change? How fundamental is it that you are trying to get the BBC to focus on and deliver for you?
Lucy Frazer: I have asked to be updated at every stage in relation to their thinking, and I have already had a couple of meetings aimed at understanding their timetable, how we are going to get updated, and who we can talk to as well within the BBC. I think you need to talk to the BBC about exactly what it is looking at.
The Chair: We do, yes. It only responds to pressure, because it is in its interests never to tell us what it thinks it should be doing in the future.
Lucy Frazer: The BBC knows that we are doing a funding review. I have shared with it that it is in its interests to feed into that funding review, because we are doing an analysis of what the future looks like in relation to funding for the BBC. I am sure it appreciates that it is important for it to feed into that and engage with us to get to the right answer. One of the things I am particularly interested in is the commercial side of the BBC, so I will also be liaising with it to understand that part of the BBC, which I know it is looking at as well.
Lord Hall of Birkenhead: I have a quick question, Secretary of State. When you look at funding for the BBC, is the idea of finding more progressive ways of funding the BBC—the poorer would pay less; the rich would pay more—of interest to you? Do you think that would be useful?
Lucy Frazer: I said that I have read your review. You have a number of different funding options, and I want to investigate those that are available. Within that, there are a number of sub-questions. I appreciate this is a really complex area, which we have not really touched on, and it depends on a range of things that we do not yet know, such as: how is technology going to develop? What will the media landscape look like? I set out that the licence fee is currently £159. We know that 400,000 people stopped paying the licence fee last year; 1.7 million stopped paying it over the last few years. What will streaming look like in the future? What is fair?
These are all quite complicated issues in and of themselves, and then to consider them all at the same time is going to be quite complicated. I am sorry I am not giving you a direct answer to your particular question, but it is difficult at this stage to say exactly what we think the outcome is going to be. All I can say is that I am an evidence-based politician. I will look very carefully at the evidence. We want to collect evidence as to all those things, and I can assure you that my department and I will look at it all very carefully.
The Chair: All right. We are going to stay on the BBC but move to questions around governance.
Q4 Lord Lipsey: Throughout my adult life, the BBC has had periodic governance crises. Thinking back, there was Iraq and the weapons of mass destruction, there was Jimmy Savile, and more recently, we have had the chairman and Johnson’s loan, and obviously, Huw Edwards. In each case, a review has taken place. People have taken it seriously, as they should, and two chairs of the BBC have actually resigned because of this process.
Is it possible for BBC governance to be changed in such a way that it is more resistant to this kind of incident? Or is it just a part of life that, from time to time, these things come along, and you can make the governance as good as you like, but at the end of the day they come along, they have to be dealt with, and then they are forgotten?
Lucy Frazer: The governance of the BBC is really important. It is really important that it has the right structures in place and that it is taking on board key issues which matter to the public. The licence fee costs £159 a year, and it is important that it provides good value for money. That is why we have been doing the mid-term review. It will look at some things I am sure you are interested in, such as editorial standards and impartiality, complaints, commercial governance and regulation. That is what we in the department can oversee: the structures that the BBC operates within. Obviously, we cannot interfere in the particular issues that arise that are an operational matter for the BBC, but, hopefully, if we have the right structures in place, those issues will occur less regularly and will be handled well.
Of course, in all companies, in all institutions, people are human, and not everything goes well all the time. We just need to make sure that the overall structures are right, and that is what we are working on.
Lord Lipsey: The structure is important, but so is the management of the structure. I sit here as somebody who has made a complaint to the BBC and six weeks later I have had no reply. It is important that staff should be managed in such a way that they are efficient in dealing with these kinds of things, as well as having a set of abstract rules.
Lucy Frazer: That is absolutely right. One of the things that we are looking at in the mid-term review is complaints and the BBC First system, and how does Ofcom interplay in that system, whether the structure is right within the BBC, and whether those on the board of the BBC have the right resources to be able to look at those issues. We are very happy to update you on our conclusions, which we are nearing, when we are in a position to do so.
The Chair: Are you able to tell us who is conducting this review?
Lucy Frazer: The mid-term review?
The Chair: Yes. The terms of reference have been published, but we do not know anything about who is carrying it out. It is not being done outside the department, or, as far as we know, by anybody who is independent of the department.
Lucy Frazer: We are conducting the review within the department. We have published the terms of reference, we have liaised with the BBC, my department has liaised with a significant number of stakeholders as well, and then we have re-engaged with the BBC.
The Chair: Is it just a senior official within?
Lucy Frazer: I would say it is the BBC team within the department who are conducting the review and advising and working with me and obviously my junior Minister, liaising with the BBC and with stakeholders as well.
The Chair: It looks like the Permanent Secretary wants to add to that.
Susannah Storey: Yes, only to say that the royal charter gives the Secretary of State the opportunity to do this mid-term review, and, as you have alluded to, there is a lot of change going into this charter in terms of governance and regulation. What we have been trying to do is engage, as the Secretary of State says, with all the relevant parties, and it is being done out of our media and creative industries team. Different parts of it have been, of course, done by different people. For example, on governance, we did a series of conversations and interviews, some which I did when I was director-general. It is being done across the team and I hope you will see, when it comes out, quite how thorough it is.
It is certainly true that there has been a lot of change already through this charter, and we have tried to be very mindful of what Ofcom, the regulator, has said about its reflections on the BBC so far.
The Chair: Has the commercial sector had, or will it have, an opportunity to feed into it?
Susannah Storey: The main engagement has been with the BBC and Ofcom and then a series of stakeholders, and it has followed the areas outlined in the terms of reference. Going back to the point earlier about BBC First and the timeliness of the way in which the BBC handles complaints, obviously, some areas like complaints are probably more of a conversation in order to understand what Ofcom thinks, what it does elsewhere and then what people's reflections have been.
Lucy Frazer: Can I just come in on that? The team have engaged with the BBC, Ofcom, the devolved Administrations, industry stakeholders, experts, and academics.
The Chair: One of the reasons I raised this was that, when we did our BBC review last year, one of the issues raised by the commercial PSBs and the commercial broadcasters was around governance. For them, issues arose from the new structure: they felt that they did not have the same opportunities to raise concerns about market impact in the way that they would have had in the past, because Ofcom adopts a slightly more hands-off approach. In their view—and I am just saying what they said—there was no clear place to go within the BBC to raise any concerns because there is now a unitary board, as opposed to something that is separate.
Listening to this now, it just occurred to me that they would have views on a review of BBC governance, and I wonder whether they have the opportunity to feed those views into the review that is being done.
Lucy Frazer: Industry stakeholders have been consulted, so I am sure those views have been fed in, and if not, I am sure we will hear from them.
The Chair: I am sure they will not be shy in coming forward.
Just before we move off governance, can I ask something specific? One of the things that we emphasise a lot about the BBC is that it is not a state broadcaster; it is a public service broadcaster, and that requires us to be very mindful of any kind of actions that could call that into question.
The Huw Edwards issue has not yet been resolved, but during the weekend when it was most in the news and it was not even clear who the broadcaster in question was, it was notable that you were rightly concerned as to how the BBC was handling something which was getting so much media attention. You were quite public in making your contact directly to the director-general to establish what was going on, as opposed to the chairman, who is the person you appoint, and the Government appoints.
I just wondered whether, having had the chance to reflect on that, you would still go to the director-general or whether you would consider it more appropriate to go to the chairman?
Lucy Frazer: I have spoken to both the chairman and the director-general about this issue, and I have been updated by both of them on this subject. It is important that the Secretary of State has a constructive relationship with both the chair and the director-general on a range of issues, and it is the chair who will continue to take the primary role in updating me on how she and the board are holding the executive to account on this issue. However, it is important for me to liaise with both the director-general and the chair.
The Chair: I agree that it is important for you to have good relations with both, and there are clearly appropriate things for you to be dealing directly with the director-general about. It was just that, in that moment, the real body that should have been holding him to account for actually meeting the expectations of licence fee payers was the chairman and the board. You, as Secretary of State, went directly to the director-general. It was not something that would have been standard in those kinds of situations.
Lucy Frazer: It was a very serious issue, and it was important that the Government made their views known. As I said, on this issue, and many others, I have spoken to both the chair and the director-general. I have set up a regular meeting with the chair to ensure that on this, and other issues, she continues to hold the executive to account.
The Lord Bishop of Leeds: Just very quickly, do you think that the board ought to be more visible in issues like this? We understand the difference between board and management, but it is a fairly blurred area in relation to the way you communicated on this, particularly on Twitter. Should the board be more visible?
Lucy Frazer: You put these questions to the chair of the board, and she put forward her position quite clearly. How she deals with the board and her role is for her to answer, but on reading her evidence I think she said she had been quite visible but that was not always picked up by the media.
I can tell you that I have already met with the chair on a number of occasions. I think it is really important we have that relationship. I have set up regular meetings with her going forward, so I can tell you that, from my perspective, I feel I have a relationship with the board and that Government can liaise with the board through her.
I have also spoken to members of the board on a number of issues where they have particular expertise. As I mentioned, I want to speak about the commercial operations of the board, and I will be setting up meetings with the chair of the commercial board.
I feel that as Secretary of State I have sufficient engagement with the BBC board and that they are doing their job properly, but in terms of visibility, those are questions that you have to ask her directly, which I think you have.
The Chair: Let us move on to the creative industries.
Q5 Baroness Featherstone: Secretary of State, I am very pleased that you enjoyed our report, and you seemingly used that very good advice in the creative sector vision, so we are pleased about that.
We both agree that it is a growth area, but one of the things we highlighted in our report was that this growth was at risk because of policy incoherence. With the creation of DSIT, obviously the concern is that that policy incoherence is going to increase. So the question on this first part is: what are you doing to ensure policy coherence, both across Government, and even more particularly with DSIT?
Lucy Frazer: The machinery of government changes have an advantage in that my department can put a significant amount of focus on to the creative industries as well as the other sectors in my department: tourism, sports, charities, and everything else. The Prime Minister and the Chancellor have recognised that the creative industries are a growth sector, and the machinery of government changes allow us to put significant focus on that. From that perspective, you, who oversee the creative industries and are interested in them, and the creative industries sectors themselves, should be really pleased with the machinery of government changes.
Of course, most things across Government are siloed into departments, but the world does not operate like that, so what we need to do as a department is to make sure that we have good cross-governmental working. Whatever it is, whether it is digital or something else—my department crosses into health and a whole range of other things like work, DWP and many other departments—we need to make sure we have that collaboration in place. I want to give you the reassurance that we do. Not only do we have a joint Minister at a junior ministerial level who is currently doing both the digital work and the creative industries work, it just so happens that our Permanent Secretary was a DG in DCMS, holding that digital brief, so she is hugely familiar with the work that is going on in DSIT and has indeed just come from DSIT as a director-general there. Obviously, the current Secretary of State for DSIT was the Culture Secretary, and I work very closely with the Secretary of State for DSIT. We liaise regularly, as I am sure the Permanent Secretary does with the DGs underneath her.
What I want to say is that we understand the issues, we are working cross-departmentally and as it happens, at the moment, you have significant understanding across the board.
Susannah Storey: We could not be closer, in a way. As the Secretary of State says, we have the formal sectoral responsibilities, which are clear, and we have a lot of informal relationships. On things like the Creative Industries Council—which is one of the main ways in which DCMS, the business department, and sometimes DSIT work together with these sectors—you will often see collaboration and different departments joining, so we both feel very confident about this issue.
Baroness Featherstone: Okay, but there are issues where there is, in a sense, a competition between those departments, for example on text and data mining. We are very glad that was paused because, from the creative sector side, intellectual property, copyright, all those things are mega, and this is in one of our prime growth areas. The concern is that things like proposed exceptions for any purpose would totally undermine the creative copyrights and authorities.
My concern, and I would really welcome your opinion on this, is that when you look at it from afar, your department, Secretary of State, has not always been at the forefront of the Government push in terms of agenda. With DSIT being siphoned off, first, what is going to happen on text and data mining? Secondly, my concern is that there is a lot of love for DSIT and not as much love for your department.
Lucy Frazer: I am going to totally refute that.
Baroness Featherstone: I knew you would.
Lucy Frazer: I understand why you have that concern, and I do not want to diminish your concern in any way, but I do not think you should be concerned. The fact that we have been given our own department shows a huge support for the creative industries sector, and the Prime Minister has identified the creative industries as one of his top five sectors.
Baroness Featherstone: He has now but originally did not in the Statement; he added it.
Lucy Frazer: What you have is a huge acceptance at the very highest levels within Government about the importance of this sector, from the Prime Minister and from the Chancellor, who indeed was the Culture Secretary, as indeed was the Deputy Prime Minister. So, around the Cabinet table, you have a significant understanding about the importance of this sector.
Talking about cross-government working earlier, I was with the Foreign Secretary in Australia, who came to support Australia and the women's team, and who was talking to me about the importance of the creative industries and soft power. I was talking to the Health Secretary the other day about the importance of my department in social prescribing. I totally think that the Government understand the importance of this sector to the economy as a whole, and not just the economy but to the health of the nation and our soft power. That is understood across the Cabinet table and, as I said, at the highest levels.
Secondly, I think the fact that we got to the right answer on text and data mining is exactly why you should have confidence that the view of the creative industry is taken into account. I can assure you, because I have spoken to the Secretary of State for DSIT on this and other related issues on a number of occasions, that she completely understands and supports the concerns of the creative industries sector in ensuring that we protect rights holders.
Baroness Featherstone: Will we see text and data mining coming back?
Lucy Frazer: Well, we have our position in relation to text and data mining.
Thirdly, I am working very closely with DSIT and the IPO to make sure that we get the right answer on the Code of Practice, and I have had a number of meetings with Ministers from DSIT and the IPO in relation to that. I see this as very much joint collaborative working. I do not see it as one department pitting its interests against another, because, as a Government, as a whole, we need to get to the right answer for everybody. Sometimes that involves compromise, but I cannot express enough how we and DSIT are working together in relation to these areas.
Baroness Featherstone: That is good to hear. I cannot express enough how important that is for the creative sector as a whole. It is massive.
My last question is about your vision, the creative sector vision: how are you doing on your three goals?
Lucy Frazer: We are doing well. I am very excited that we have set the ambition: £50 billion extra, 1 million extra jobs, and a creative pipeline of talent, all by 2030. Just to bring this into how the Government view this, we had the launch of that vision a few months ago, and, in a tight fiscal environment, we got £77 million for the industry—which will obviously leverage private finance—and the announcement in relation to the clusters, as well as money for London Fashion Week, which I was supporting yesterday, and London Film Festival. I am really confident that the Government as a whole recognise the importance of the sector, not just because of those people around the table, but I hope you can see that in the actions of the Government over the last few months.
I have been in the post for six months now. The first thing we got in the creative industries was our tax reliefs, and, a few months later, we got the Creative Industries Sector Vision; we are now implementing all that. We announced a number of programmes, you will see, and they are coming forward in terms of launch, whether that is the CoSTAR and the collaboration we have in relation to clusters, or the Games Fund. We will shortly be announcing how we are spending the £2 million that we gave to London Fashion Week. I could go through them all, but we are launching all the things that we announced; they are in progress, I can assure you.
Susannah Storey: Your point is something we are keenly aware of, and the Secretary of State obviously will hold us to account on delivery. At this stage, the vision was launched in June, a whole series of things have happened, with more coming throughout the autumn. Chapter 4 of the vision was all about the monitoring and evaluation of delivery, so the teams are also working on that framework to make sure we can be clear where we are. Once we are more than a couple of months in, we will be very happy to update you.
Baroness Featherstone: I am sure we would appreciate that. Thank you very much.
The Chair: Just a couple of follow-ups from me before we move on. It is all very good; we were pleased by the creative sector vision that came out and definitely want to put that on record. I am pleased that our inquiry into the creative industries did have the influence that it had on assisting the department, and, more importantly, assisting the industry itself in getting that kind of prioritisation and attention.
So I am clear, are any of the three goals in your creative sector vision a higher priority than the others? Do you think you are going to be able to meet all these before the election? I just wanted to get a better sense of what is the top priority here.
Lucy Frazer: I am working on them all simultaneously and want to deliver on them all. In the next few months, we will launch the expanded Create Growth Programme; we will very soon launch the expanded UK Games Fund; we will announce the second wave of the Creative Industries Clusters Programme; the IPO will publish its code of conduct; we will publish a cultural education plan by the end of the year, and we will make further announcement on skills. I will work on all three aspects of that plan, simultaneously pushing.
Some involve working with other departments. I am very interested in skills, which we have not touched on; I have done a round table with the Secretary of State for Education on apprenticeships and T-levels—I have made sure the industry is getting their voice heard in relation to that, trying to come up with a plan as to what we could do to make apprenticeships slightly more flexible. It was raised by the industry with the Chancellor at a creative industries breakfast that I went to the other day. So, yes, everything is in progress, and you can hold us to account as we monitor it.
Baroness Fraser of Craigmaddie: All this is wonderful and warmly welcomed, but can you reassure me on creative excellence? I noticed that dance, for example, was not mentioned in the sector vision, and that troubled me because we have the world's best ballet companies in the UK. I just want to be reassured that we are not assuming we are a leader in the cultural sector because of excellence; I worry that we take that for granted in the focus on jobs and skills, or health and well-being. Can you reassure me that you are supporting creative excellence?
Lucy Frazer: On a few occasions I have publicly said how important creative excellence is to me, and I am very pleased to have the opportunity to say it again. We are world-renowned and world-recognised in a number of areas; we lead the world on a number of things, and it would be a shame if we did not continue to promote those so that we retain our position. That is one of the reasons I fought quite hard to ensure that we did get funding for London Fashion Week and for the London Film Festival; both iconic, both recognised in the world, both told me they needed some support. I did that because London has creative excellence in those fields, in this particular example, and I wanted to ensure that I supported that.
I am sure anyone could go through the document and say, "You have only mentioned X three times, and you have mentioned Y 150 times; therefore, do you think this Y is more important?" But it is not; where there is creative excellence in any region, I am the champion of it and I will support it. Of course, that is not to say that we do not want to ensure there is excellence across the country; it is not to say at all that we should not ensure that everybody across the country gets equal opportunities.
I was very pleased to be in Leeds last week, which has fabulous opera, theatre—which I was visiting—fantastic gaming industry, ballet; it is really great to see those things across the country, but I absolutely do not want to dumb down the excellence that already exists.
The Chair: I just wanted to come back again to the competing demands from tech and the creative industries. If DSIT and DCMS are on the same page about this, why has the IPO not been able to come out with its code of practice, which was promised in the summer and has not yet emerged?
Lucy Frazer: Because it is a really complicated area in which there are a number of different competing views. As I said, in July, I met with Viscount Camrose—who is the Minister for AI and IP—together with the IPO; that was my second meeting with them. The industry is complicated; I know they are working through the issues, and I am sure they will reach a resolution, but that is why it is not easy. As a Government we are doing what we can: we are heavily involved in this space; I will support my sectors. Obviously, the Secretary of State for DSIT is interested in AI more broadly.
I am really encouraged that the sector is also coming up with its own solutions, and, where we can support those and facilitate them, we are very happy to do so. But we have seen some progress in the music industry, and the industry is getting to grips with answering these very difficult, complicated issues themselves, as well.
Q6 Baroness Harding of Winscombe: You have made a strong case that you are working very collaboratively with the separate departments; there is friction in that, in comparison to being one department. Another area we have not really touched on is the complexity of separating: creating two different departments, not just doing everything together; there must be some value in doing that.
I just wanted to follow up on the questioning that Baroness Featherstone was leading on, on the trade-offs. I wondered if maybe the Permanent Secretary could share how much time it is taking from you and your senior team to manage the separation and the creation of two departments rather than one, and how much of a distraction that actually is in the operational reality?
Susannah Storey: Just to re-emphasise the point, the Media and Creative Industries team in old DCMS still exists in exactly the same form; it has not been affected by the split; it has the same relationships; it is completely the same resourcing as before.
In terms of the separation, there is always some complexity. I have been through a previous machinery of government change before; you are right that there are a number of administrative things that have to happen after the announcement, particularly around our corporate services and so on. Actually, thanks to my predecessors, while I was at DSIT, DCMS quite quickly got clarity about our own financial position. There are one or two areas of transitional services being provided from DCMS to DSIT—for example, my old teams are still in the same building—but it has not been a huge distraction to us. I certainly do not think it has affected the policy agenda; we obviously have governance, as you would expect, in terms of a transitional board that reports into our executive board and so on.
From DCMS's perspective, I really do think we have the policy focus and coherence; as the Secretary of State says, we have a greater spotlight on our sectors now. That is actually really important in some complex areas like AI, where, obviously, there are going to be interfaces. We feel confident about where we are, but obviously it is something I will always keep a keen eye on.
Lucy Frazer: I am just thinking aloud; there is an advantage in the creative rights holders having their own advocate. You say there is a competing interest, but that position, if held by the same individual, still has to consider different competing interests within his or her own department. The answer is not settled by having everything together in one pot; the answer is settled by having evidence-based policy analysis where you engage with your sectors, you understand what is needed, and you try and find the right solutions.
The Chair: That is a fair point and it is quite interesting. If you look at where creative industries featured in the Chancellor's priorities between the Autumn Statement and Spring Budget, it is actually quite an illustrative point. In the Autumn Statement, he was talking very much about tech as opposed to creative industries, and there is a danger that tech always wins. Tech is the shiny, sexy stuff, and the creative industries can feel that they are overshadowed by the shiny and new. When they are together in one area, that area can say, "Oh, yes, well, you do get a mention, because we mentioned tech, and you are part of media and tech".
The pressure is on you, as Secretary of State, and the department, to be the real champion for them and make sure that their status as a real growth engine is not lost, but there is no easy answer to this. The separation of DSIT from DCMS in the practical sense causes people to be somewhat concerned because of how much time and attention might be absorbed by just managing the separation, as you have just described.
Let us move on to online news intermediaries. Baroness Healy.
Q7 Baroness Healy of Primrose Hill: Amongst your many priorities that you have already explained, do the Government have concerns about the plurality of online news? If so, what are the Government doing to address these? As we know, people are now getting their news much more through online sources and not the mainstream media. I wonder if this is a concern to you, and, if so, what are you doing about it?
Lucy Frazer: I am in favour of media plurality. I am in favour of making sure that we live in a democracy, and we have a free press, and it is fantastic if we have different voices within that. You will know there is the Digital Markets, Competition and Consumers Bill, which is obviously looking at some issues that actually sit with DSIT, but we are constantly looking at online and how to keep up with changes that are taking place within technology to make sure that we have fair, equal systems in place.
Baroness Healy of Primrose Hill: Are you worried about a growth of misinformation through online news that might impact on the nation's health, for instance, or civic society and democracy?
Lucy Frazer: Yes, of course; with opportunities come challenges. With the opportunity that everyone has a voice and everyone can say anything to anybody anywhere in the world very quickly, there are challenges, and misinformation and disinformation are part of those challenges.
Baroness Healy of Primrose Hill: I know that Ofcom is going to report in 2024. Will that be the time that you might then look at further regulation?
Lucy Frazer: Misinformation and disinformation really sits with DSIT.
Susannah Storey: Ofcom is also doing work on online news intermediaries, and we are really interested to see its evidence base; our understanding is an increasing amount of people—particularly young people—are reaching news through social media, so it is certainly something we want to look at when that comes out.
Baroness Healy of Primrose Hill: Would there be a case that new legislation might be necessary?
Susannah Storey: We should see the evidence first. The Secretary of State said she is always very evidence-based, so we will be very interested to see that. We are all keenly aware of the extraordinary, dynamic nature of this market and the way in which people's habits are changing; in making policy we need to be mindful of that evidence base, so we will wait for Ofcom's work.
The Chair: I get the point about waiting for the evidence, but are you very mindful of the urgency about news intermediaries, in terms of the way people are consuming news, in the context of other areas? For instance, your department has an interest in the digital markets legislation that is now sitting in DSIT; your Online Safety Bill is now almost passed. But that concern also relates to AI, about the control and power that the big tech, US-based firms are going to have in controlling news and what British people are seeing or able to access in terms of the different viewpoints; is this something that—
Lucy Frazer: This is obviously a major issue, and we are addressing it through the Digital Markets, Competition and Consumers Bill. It is obviously something that we absolutely need to keep a close eye on. As the Permanent Secretary mentioned, Ofcom is looking at a couple of areas in this space, which we will keep a close eye on, and continue to engage with industry. In order to have a free press and democracy, you need to make sure people get accurate news.
One of the challenges with AI is how you say where things have come from so that people know the sources of the news, for instance. Those are all things that we are looking at. I am very happy to keep you updated. We have had a number of round tables about AI and news and working closely with industry to see what more we can do. If we need to take action or support the industry or work internationally, those are absolutely things that we will do.
The Chair: In what context are you looking at AI in news?
Lucy Frazer: Well, I am holding a round table with journalists later this month to understand the challenges and opportunities that they face, to understand more about what we can be doing to support them with opportunities or help them with the challenges.
The Chair: Do you want to add anything, Permanent Secretary?
Susannah Storey: This is a huge area, is it not? Like everybody, we are really trying to have a good sense, as it comes, of the extent to which AI this decade might change the media news online landscape. In some scenarios, one might see a lot more synthetic information; it might be harder to authenticate things. As the Secretary of State says, at the moment what we are trying to do is understand from the front line of those sectors how people are finding it so we can then work out what, if any, additional policy might be needed.
The Secretary of State has already referred to the Digital Markets, Competition and Consumers Bill, which is going through Parliament. As you know, in that Bill there are some areas where there is a fallback power for the regulator if you have an asymmetry of power between the tech platforms and the publishers. So we are already acting in some areas, but we want to keep a very close eye on it across this whole context.
The Chair: We will stay on news to some extent and move to SLAPPS. Lord Hall.
Q8 Lord Hall of Birkenhead: SLAPPs are strategic lawsuits against public participation, if people are watching and wondering what a SLAPP is. Thank you very much for the letter to the Chair. You know we have been looking at this over a period of time and the relationship has been good; there has been some really good change for the benefit of everybody, so thank you for that.
Can I just look at two areas? Probably up to 70% of SLAPPs have to do with economic crime; it may not be quite as high as that, but there is no protection for journalists and others facing non-economic-crime-related SLAPPs. Your letter says you are completely aware of that—of course you are—and you will move on that as and when you can. I just wondered whether you could say any more about how you see the importance of the non-economic related issues around SLAPPs and when there might be some progress on that.
Lucy Frazer: Thank you very much for your interest, which I very much took on board in relation to this area. I am sorry that my letter took a little time responding to your letter on this subject, but I was considering and trying to take action. The answer to your question is we have already taken action. I have announced a task force; its first meeting was yesterday, which I went to. The task force will look at what more we can do in the non-legislative space, either on areas that are not covered by the legislation or what we can do globally in relation to all areas including economic crime.
I am open to coming up with other suggestions, but I think the task force should be looking at three things: monitoring the evidence to make sure we know what is actually happening, where it is happening, who to, and how much; how we support journalists, what information they need; and how we educate the judiciary on cases that are coming before it as to what exactly is happening before those cases reach the court so the judge is aware of the practices in individual cases. The task force is made up of representative organisations for journalism and key players within the legal system.
Lord Hall of Birkenhead: The Solicitors Regulation Authority and the Bar Council are also part of that task force. The agenda is very clear, but your letter was suggesting that you would attach something to some legislation at some point that would help journalists with the non-economic-crime-related SLAPPs; that is probably the Justice Department rather than you.
Lucy Frazer: It is, and they are keen to bring forward some legislation on the other areas. Obviously, there was a Bill that was suitable. Listeners might not know, but you will know how the parliamentary system works; it is possible to do it in that space. I know they are keen to do it, but they hold the pen there in relation to legislation in this area. We will obviously support them in bidding for any legislation.
Lord Hall of Birkenhead: But is it something that we could look forward to reasonably soon if there is that amount of interest in it?
Lucy Frazer: The Ministry of Justice is keen to bring forward the legislation, and we will support them, but they would take the lead on that.
Lord Hall of Birkenhead: Thank you very much; that was really clear. As a committee, we recommended a SLAPPs defence fund, financed by fines levied by the courts or the regulator. What consideration might that be given? Is that the task force? What do you think of that idea?
Lucy Frazer: It is something that we are considering alongside other possible interventions. Of course, that would not just sit with my department only; that would be something that we would have to engage heavily with the Ministry of Justice on.
Lord Hall of Birkenhead: It is very interesting that you said you have been at the first task force meeting. Do you intend to keep going to them because you think this is a really important issue and you want to make sure you have a grip of it and are steering it?
Lucy Frazer: As I mentioned before, I am very keen on evidence; the key job of the task force is to gather that evidence and to think amongst itself about what we are doing and how we should do it. I am really keen to get the results and fruit of that. They are probably better served if I do not turn up to every meeting, but I will keep very much engaged; it is an area I am very interested in.
Lord Hall of Birkenhead: Are you hoping they will open themselves up to getting evidence from journalists, who are really on the sharp end of this?
Lucy Frazer: Definitely. I would like them to invite journalists to really hear what is going on and how widespread it is, and therefore how we should take it forward.
Lord Hall of Birkenhead: Actually, there will be almost a call for evidence.
Lucy Frazer: I am afraid I cannot tell you exactly how that evidence gathering will take place, but I very much desire that they ensure they are fully informed of the landscape.
Q9 The Chair: We are very pleased about the action that has been taken on SLAPPs so far, and I was pleased that we were able to see some movement in the Economic Crime and Corporate Transparency Bill. As you know, we have also applied quite a bit of pressure on the SRA as well, so we have come at it from different angles and hope very much to see the rest of the lacunae that still exist addressed legislatively.
Coming back to a couple of things that we have already touched on, before we finish, on the legislation and what DCMS is bidding for in terms of the King's Speech, you have the football White Paper, A Sustainable Future - Reforming Club Football Governance, and the media Bill. I am sure you want both. Are you worried that you might be forced to choose?
Lucy Frazer: I am confident that these are priorities of the Government, but you will know, Chair, that I cannot commit to anything. These Bills will be put forward when parliamentary time allows, but I am confident that we will be bringing them forward.
The Chair: As we have already said, the media Bill has been a long time coming.
Lucy Frazer: Yes, and we have drafted it, so it is ready to go. We did the White Paper for football regulation and published a response to that last week. I know it is not a major concern of this committee, but we have done significant engagement on that, as well as on the media Bill. They are both key Bills, and I hope to see them both.
The Chair: Clearly, a lot of work that has come out of the department over the last 18 months and since you have been there as Secretary of State has been directly relevant to the work that we have been doing too. We have been very pleased to see the progress you have been able to make in the time you have been Secretary of State, and we are very grateful to you for that and for coming here today and answering questions about it.
We will continue to be watchful over the machinery of government changes as far as the separation with DSIT. But, as we touched on earlier, we can see the case for that new department. The emphasis on that and our concern for DSIT is that it has sufficient firepower to deal with the cross-government digital issues that we have looked at in our various inquiries, which no longer sit squarely in your department. One of the things we have seen generally is that there is not sufficient convening, co-ordination and coherence when it comes to the digital aspects of some policy that we are all having to grapple with at the moment from the Government. Again, this is not in your area, but our digital exclusion inquiry was very illuminating on where things are breaking down.
We are pleased, none the less, that at DCMS there is a focus on the creative industries and the media sector, and it is critical that you are able to give great voice and priority to those sectors and industries, and make sure they are not overlooked in any way. We are pleased to hear from your evidence today that that is clearly what you are making sure does not happen, so, on that basis, we are grateful to you both and wish you continued success. I am sure we will continue to seek more evidence from you on the various issues that are of interest to us.
Lucy Frazer: Let me just say that we are very lucky to have Susannah—who held the digital brief before—as our Permanent Secretary for that very reason. It is very helpful to me to understand what issues are being considered by DSIT and the detailed knowledge that she has. I hope you see the benefit to the sectors that we have under our care and responsibility, and the progress that we are making in them. We have talked about the creative industry sector; it already had two significant announcements. I am absolutely going to keep pushing that forward.
Finally, I just wanted to say thank you to the committee because your reports on those areas we have mentioned—particularly the creative industries and the BBC in the context of the funding review and the work that you highlighted to me in relation to SLAPPs—have been really valuable. Thank you for the work that you are doing; I am very happy to continue engaging.
The Chair: Thank you very much.
