 Good morning, and welcome to the 28th meeting of the committee in 2018. I would like to remind members and the public to turn off mobile phones and any members using electronic devices to access committee papers, should please ensure that they are turned to silent. Apologies have been received today from Clare Baker MSP and Stuart McMillian MSP and Neil Finlay MSP is here as a substitute for Clare Baker. Neil, do you have any relevant interests I wish to declare... Dedechreuwch. OK, thank you very much. Our first item on the agenda today is an evidence session with the ambassador of the Republic of Austria to the United Kingdom of Great Britain and Northern Ireland, who currently holds the presidency of the Council of the European Union. I'd like to welcome the ambassador, his excellency Michael Zimmerman, and invite the ambassador to make an opening statement. Ddod yw'r fawr, maeddem Cynwyner, mae'n ddysgwys iawn o ddiddordeb gyda'r Parlyfyniad a'r ladys yng Nghymru. Mae hwn yn gwneud hynny ffasgfaig i ddiddordeb gyda'r pethau o'r ysgolodaeth yma'r hynny, ond wedi bod eisiau wedi'n bwro gyda'r ddiddordeb gyda'r parlyfyniad, ond mae'n fawr yn gwybod ydyn nhw'n ddiddordeb gyda'r Parlyfyniad, ac i ddiddordeb gyda'r ddiddordeb yw'r ddiddordeb. The Austrian presidency comes at a very special moment for Austria. It is a year of anniversaries in 2018. anniversary is good and bad. In 1848, a revolution swept over Europe and started land reforms, legal reforms, constitutional reforms and opened Europe to the societies that we have now, but at the same time 1848 was also the beginning of defined nationalism. In 1918, almost to the day today, the Republic of Austria was founded. The German speaking remains of the Austro-Hungarian monarchy, and I think the interesting point here in the Scottish Parliament is that the Republic of Austria was founded by the lender, the region, the regional states. It was not a top-down creation, but the lender came together on their own and decided to set up the Republic of Austria. And this foundation on regional identity, on regional history, on regional culture is something that influences Austria until today. At that moment came 80 years ago, again almost to the day, in 1938 after Austria was annexed to the German Reich, unfortunately with the assistance of not a few Austrians, and the resulting events and tragedies have been a major factor in our, in our self-conscious until today. We are aware of the responsibilities and I think it's something that also influences our EU presidency. 1948 and the Universal Declaration of Human Rights, 1968, a revolution in Czechoslovakia. 1998 and our first EU presidency, today we have our third one. And now 20 years after the first one, I am very happy to be here and talk about the third Austrian EU presidency. In the normal course of events I would not be here, because in the list of EU presidences the UK would have been slotted in in 2017. So we were quite relaxed about preparing our presidency which was not due until next year. But then of course after Brexit it was decided that the UK should not take up its scheduled EU presidency and the other countries moved forward by six months. So that's why I'm here today and not next years. We are very aware also because of the referendum in the UK that somehow in many countries the link to the citizens has been lost over the last years or maybe even decades. And that it is necessary to link with the people again, to listen to the people and to put their concerns first. In any EU presidency the range of issues that can be decided by the presidency itself is not very wide. Most of the topics and projects have been going on for many years. We try to further them. We try to conclude them. But there is a certain leeway for bringing in your own priorities. And with regard of the concerns of the citizens we have made our first priority a Europe that protects. The migration crisis in 2015 was a watershed in the history of the EU. People have lost their confidence in many places that they are states that the EU is able and willing to protect them. And we will try to convince the people that the EU is willing and able to protect the citizens. Within this motto Europe that protects we have three priority areas. One is the fight against illegal migration. Second is protection of prosperity and standard of living and competitiveness through digitalisation. And the third theme is for us geographically logical is the stability in the eastern part of Europe especially in south-east Europe and the Balkans. The European project is still unfinished. But there are countries that could rightly belong to the European Union but for a number of reasons are not there yet. And we are very much interested in helping them to join the European Union and to extend the sphere of stability and prosperity throughout south-eastern Europe as well. As far as migration is concerned I think we have been talking for a long time about the EU's external borders. But in 2018 we were not able to protect or control these orders. It was on one hand what was the sheer scale of the migration in 2015 that really caused concern. On the other hand it was the feeling that the rule of law was lost. And if a border cannot be protected if citizens see that the authorities, be it the national or the European authorities are not able to enforce the rule of law then the loss of confidence hurts everyone. So the fight against illegal migration, the future of the protection of the external borders, and also the fight against illegal activities in connection with migration, especially the people smuggling and other organised crime activities on the fringes and around illegal migration are one of our many concerns. The future should see strengthening of front-ex of the European agency that actually does border control. It's of course vastly understaffed to protect the sea, especially the sea borders in southern Europe. Europe is a huge task but we have to start and we have to get somewhere. Europe will need to keep up in the development of new technologies. I think the economic future of the European Union will very much depend on competitiveness with regard especially to Asian countries. So we have to lay the basis for an efficient use of technologies, but also I think we are very much aware of the pitfalls of new technologies, of the problems they can create for citizens of cybercrime. Copyright of data protection and it's one of our aims to find the right way between the advancement of technologies and the protection of citizens rights. Also of course the question that is also discussed in the EU is the taxation of the internet giants. These are topics that will be very important for our citizens in the future and we try to keep Europe at the forefront of competitiveness. The level playing field in the digital economy is of great importance. Europe is characterized by small and medium enterprises and we have to find ways to preserve their competitiveness faced with international giants. For the stability of our neighbourhood we must be aware that tensions are never far away. There has been progress made over the past 20 years after the dissolution of Yugoslavia but not enough progress. There are still underlying animosities. There is a lack of economic and civic progress because of ethnic and political differences and we will continue to work hard on this topic. It's an area where Austria has a lot of know-how and competence and that's why we focus on this part of Europe. With this huge number of questions we have to ask ourselves where can we start, where should we start. Our Chancellor's motto is that the EU should tackle the large topics and leave the smaller things to where they belong to the local, regional and national level. The topic of subsidiarity is quite important for us, not least as I mentioned before because we live in a country where our decisions are being made bottom up and we will have a conference in Austria next week. I think it is in 1516 trying to further the principle of subsidiarity within the European Union. Austria tries to act as an honest broker in the presidency. The topics we chose are not for our national advancement but we try to work for the better of Europe. This broker or to a certain extent is what we can also bring into the Brexit debate. The structure of the negotiations and the structure of the procedures does not allow a lot of activities on the national or presidency level but our Prime Minister has been very active in advancing the negotiations or in convincing the parties to find solutions. At the beginning of the presidency he was in London and on Thursday and Monday I think he had a telephone conversation with the Prime Minister. We are doing what we can of course our scope of activities is limited. I think so far most participants are happy and I must also say that for example the Salzburg summit which was really a quite important event in Brexit was not meant to discuss Brexit at all. Our Prime Minister opened the summit to the Brexit discussion originally it was planned only for migration and security purposes but of course we tried to use the opportunity to have the heads of state and government in Salzburg to talk about Brexit as well. So these are the little things that we can bring into Brexit. So far there's any number of ministerial events that have taken place I think mostly in a very constructive atmosphere and the pace will continue. We will have a high level forum between leaders of Europe and Africa in Vienna in December which will try to tackle the migration question in cooperation with those who are the countries of origin or countries of transit and try to work out solutions with them. One thing I want to point out at this stage is that we are the presidency of the 28. It's not the EU against the UK. We are trying to work for Europe for all 28 as long as we are 28. We have pointed this out to the UK government. I do not see us in different camps. We are one at least until the 29th of March 2019. I know that a number of members have questions that they wish to ask you so if it's all right if I stop you there and move on to questions. You talked about your president's visit to London. I understand that the Prime Minister Theresa May has visited Austria, I believe the foreign secretary, and some other ministers have visited Austria. That has been seen as an attempt by the UK government to lobby Austria as an individual member state and also as the current presidency to influence the course of the Brexit negotiation. How successful has that been for the UK government? I think we do not interpret the motives of the UK government when they visit us, visit Austria and talk to us. We are very happy about these meetings. We gain a lot of important information. The structure is very clear. Michel Barnier is negotiating. He has a clear mandate. The mandate is adapted by the European Council article 50. There has been no change in that. There are no bilateral tracks. The committee met Michel Barnier about a year ago. As now, he was very clear that the four freedoms of the single market could not be tampered with. Is that something that you are in agreement with? I think that it is fully the position of the Austrian Government as well. Annabelle Ewing I thank you for your opening statement. We indeed live in interesting times. At this stage, there are so many unknowns to coin a phrase that it is very difficult to have a rational discussion. I appreciate from your perspective as an ambassador that it may not be within your particular knowledge in detail. It was adopted during the Austrian presidency, which I had not been aware of. That was a new European travel information and authorisation system, ETIAX, the acronym. That is to apply to visa exempt third country nationals. They will need to obtain a travel authorisation before their trip via an online application. For each application, the applicant will be required to pay a travel authorisation fee of seven euros. I do not think that that is widely known amongst potential travellers in the UK. At this point of the year, they may be looking to book holidays next year and so forth. I am seeking some clarification as to what is the intended impact at the moment of the system on UK nationals, certainly during the transition period, whatever that may be, and obviously beyond. After Brexit, if that indeed takes place, it would be really helpful if you had any thoughts to give us this morning on that. The system itself is a major building block of European security. The regulation was signed by the Austrian presidency and the European Parliament. It has been through the whole process of the European Parliament. It will allow for much better control of who enters the EU. I think the basic fee will not change a lot because as it is, if you are looking especially at countries who need visa for the EU, they have to pay anyway. The seven euros will not make much difference. As far as the application of this during the transition period is concerned, I do not have any concrete information, but I am pretty sure that it will not be used against the UK citizens or against the movement between the UK and the continent. We would probably wish to seek some clarification, because that is an important practical consideration. In terms of the broader intention behind the system and you mentioned security, it is very important. I take it therefore that implicit in a system of authorization, albeit at its full sort of a visa system, but implicit in a system of authorization is presumably the possibility that, in certain circumstances, authorization will not be granted. I guess that we have to find out more information about the practicalities of applying for the lead-in time, the time that it takes to make it for the authorization to come through and so forth, because with many of these systems it is not exactly instantaneous for obvious reasons. This is yet another area of concern to individuals in Scotland, I am sure, that results from the whole Brexit burrach, as they say in certain parts of Scotland. As far as entering your data is concerned, when I travel when I fly to the UK, when checking in I have to put in my personal data. Yes, absolutely, but my point is that an authorization system by the nature of the word authorization presupposes that, in certain circumstances, perhaps authorization would not be granted. I think that we need to get to the bottom of what that would look like. Thank you very much, I appreciate that that was perhaps between you and the spot. Thank you very much, Tavish Scott. Thank you, Mr Ambassador, firstly. Thank you for your remarks at the new opening remarks to the convener. Some of us met your colleague Franz Fischler many years ago on fisheries matters. I don't know what Mr Fischler is doing these days, but he was certainly a robust character when it came to fisheries policy some years back. You are very diplomatic, if I may say so. The question I actually want to ask was about the transitional period and your perspective in convening the presidency of the union at this time. Where do you guess that transitional period will extend to? What time period? We are being told that the current thinking is 18 months, but do you foresee circumstances where that could be extended, given the complexity of what may have to be discussed and arranged from March of 2019 onwards? I'm afraid that this is far beyond my level, even to give any personal assessment. It will be a crucial point in the final negotiations. That's kind of a point. It will be decided that detail, you think, will be concluded in those final negotiations. Could you imagine that it's one of the points which constitute the final agreement? So individual member states, in your case, the presidency, very much leave that matter, as you said earlier, on to the convener, to Michel Barnier in terms of the detail. I think that we would go a long way to support a solution of the question. Okay, but my apologies for asking a long question. Okay, thank you very much Neil Findlay. I notice the governing coalition in Austria has members of the far right and powerful positions. You mentioned the fight against migration has been a priority. What impact are the far right partners in the coalition having on Austrian politics, but also the presidency? Our Chancellor Sebastian Kurz, he was foreign minister for four years, foreign minister during the migration crisis, but he started his working government as state secretary for integration matters, which means that he has been with this topic for six or seven years now. He is really someone who has the experience, who has the outlook, who has the know-how to tackle these questions. He is also the minister with overall responsibility. In a coalition government, naturally, the views of all coalition partners come in, but decisions are taken by the council of ministers, and that way you have one government position. The question of migration is a question that does not even only concern the parties in government, but all the other parties as well. Any decision taken by the government now reflects the result of the elections, reflects the will of the electorate. If you are talking about concrete questions, we can look into it, but in general it is one government policy. In relation to the issues around migration, we see every year thousands of migrants dying in the Mediterranean, drowning in the Mediterranean. Is it the view of the Austrian Government and the President saying that that is just a consequence of having a secure EU border? Is there no acknowledgement that there is an absolute failure to deal with the whole issue around migration when we see thousands of poor people drowning in the Mediterranean? It is clear that the measures that had been taken in the past years were not sufficient to prevent tragedies like that, but as far as the cause of these tragedies is concerned, we are also looking very hard at the criminal networks that actually caused them. The tragedies in the Mediterranean have a business component in terms of criminal business. If you tackle the problem as a whole, you must also tackle that problem. Does the Austrian Government support freedom of movement within the EU? Absolutely. But not freedom of movement one inch outside the EU? No, that is definitely not our position. There is movement and there is illegal movement. There is a wide range of regulations that allow further and extends legal movement, but there is also a point where you come into the area of illegal movement. If illegal movement, as defined by laws, takes place, the Governments have the duty to stop that. Thank you very much, Jamie Greene. Thank you, convener. Good morning, Ambassador. Thank you for coming. Can I continue the thread given that in your opening statement you said that one of the three key priorities for the Austrian presidency was the issue of migration on the European continent? Can you comment on and appreciate in your role, I am not asking you to comment on domestic political matters, those are matters for domestic politicians, but I think it is important because I think the domestic politics of the country which holds the presidency can influence its neighbouring countries. The reason I say that is that, as you will be aware, Austria has decided not to sign up to the Global Compact for Migration, the UN's scheme, alongside some of its neighbouring countries such as Hungary, Czech Republic and from what I can read in the news this week, perhaps Croatia as well and Poland. So I think that regional influence or that cluster of regional countries which has a certain view on this accord seems to be a theme which is coming through. To quote from the Austrian vice chancellor, he said that migration is not and cannot become a human right. I wonder if you could just elaborate what he perhaps meant by that. First, the regional aspect in this context is not, there is a context because the countries you mentioned were all hit by the migration crisis. There is no sort of bilateral consultation about that. These are the decisions that are really taken by the individual governments, not as a group or not in an organised matter, plus you have other countries like the United States of America which will not sign the compact. I think in the light of the events of the last years, people were going very hard over every detail of the compact and there is a number of points, concrete points in there where we feel that they, in the current context, are going very hard. The current form do not reflect what our government expects from the compact. It's not a general question, there are 15 or 20 single questions where we do not feel that the compact gives a satisfying answer or makes the difference between legal and illegal migration. Has that decision been influenced by the make-up of your domestic government? If so, has that affected the stance that your country has taken on that accord? In one hand, the narrative with regards to your presidency is about tackling and helping migrants but on a state sovereign level not signing up to some of the schemes that may do just that. There seems to be a conflict of user there. Maybe one of the lessons of the past years was that the sort of the political, the abstract political declarations should not float away from real life or the feeling of the opinion of the population and to enshrine something which you know, that it might not be kept or that it might not be able to implement is in a way dangerous. If you're not fully convinced of something, that's the view of our government. If you're not fully convinced of something like the compact, if you're not fully agree with the provisions, it's better to say that at the right moment and not regret it a few years later. I can perhaps move off of the issue of migration on to another of your important subjects. The convener will allow me and that stabilisation of Eastern Europe, the Balkans and even perhaps an extent the Baltic states as well with their proximity to our neighbouring Russia. What is the Austrian presidency's views on how robust it will be with Russia specifically or how the EU should deal with that issue? I say so in the context that many European countries rely on Russia for large sums of energy, particularly gas. Austria, for example, imports huge amounts of gas from Russia over 9 billion cubic metres in 2017. That's a 50 per cent increase. 2018 already has superseded that. With that reliance on the state of Russia, how confident are you that the Austrian presidency will be robust with Russia? First of all, we fully support the EU sanctions and EU policy against Russia. As far as energy imports is concerned, yes, the numbers you mentioned are right, but in terms of dependence, it's far less than some of our neighbouring countries. Increase and decrease reflect changes in prices. It's a market question, but some southeastern and eastern European countries are really dramatically dependent on Russian energy. That means that these countries have to be stable and prosperous enough not to be intimidated. That's why we want to take them in the EU, that we are looking very strongly into reverse flow gas pipeline systems to really enable countries like Hungary, Serbia and others to decrease their dependency on Russian gas. Energy dependence and Russian influence is only one of the problems in southeast Europe. It's a fairly recent problem. Ethnic and religious tensions in southeast Europe go back 600-700 years, which is a long time even by UK standards. You really have to create the civic coherence, the feeling of one society in these countries parallel to practical questions like energy dependence. Yes, energy dependence is an important factor, but I think the real problems lie deeper still. Russian influence or Russian politics is only one aspect of the stabilisation of southeast Europe. Thank you very much for that. Do you think that Turkey should or will ever join the European Union? As far as we see it or we judge it, no. Thank you very much, Ross Greer. Thank you, convener. Very conveniently, that falls on exactly from Jamie Greene's final question. During the course of your presidency, your relationship with Turkey has become increasingly strained. That did not start with your presidency, it's been happening for a number of years now. Turkey jails more journalists than any other country on earth. It has continuously and consistently attacked its own democratic opposition. Many MPs are now in jail. There is a widely held perception that Turkey has held back effective European action against it on the basis of the agreement that was reached for pushbacks of refugees trying to reach Europe through Turkey. I was wondering if you could explain a little bit what action your presidency has taken to ensure that European values around a free and open democratic society are being respected in terms of our relationship with Turkey. Thank you very much. Actually, over the past year, our bilateral relations with Turkey have improved. They have been worse. But our government doubts the wisdom and the ability of Turkey to join the European Union. We see Turkey as a very important factor in European politics and for European future. But the previous concept of Turkey marching towards full EU membership for us at the moment does not seem to be the right way. Turkey, through its size, through its geographical position, through its NATO membership, still has a lot of leverage towards Europe. The migration crisis of 2015 brought that to light. We have to work with Turkey step-by-step on various questions. But yes, the development of the domestic situation in Turkey gives concern to us as a government, as a EU presidency. There are a number of Austrians who are children in Turkey at the moment. It is one of the big European questions. In addition, Turkey's NATO membership is becoming an increasingly key issue in the Syrian civil war and geopolitical relations. For what other reasons than Turkey's NATO membership and the refugee push-back deal are there any other reasons than those for Europe's considerably constrained criticism of Turkey's actions in comparison to incredibly similar actions by Russia, for example? I think geopolitics is a factor. Turkey is a pretty convenient car drive away from Austria, Germany. There are big Turkish communities in Germany, Austria especially, Switzerland as well. Business is important. Trade is important. Turkey cannot be ignored or cut off. It has to be a question of continuous dialogue, which is not really being facilitated by the Turkish government. We have to work with Turkey. We do work with Turkey and I hope for this situation. The situation will improve at some stage. On what levels of co-operation are appropriate, should Europe respect arrest warrants from Turkey that are issued on the basis of what we would consider to be purely political motivation, arrest warrants for their internal democratic opposition, but particularly for Kurdish activists who are not Turkish citizens, a number of Kurdish political activists from Syria who travel around Europe advocating for their cause, the democratic revolution in the north of Syria have had arrest warrants issued by Turkey that have on the whole not been respected. That is a question for the respective courts. As you mentioned, they take their decisions. At the moment, it is very much a judicial decision that does not fall within the remit of the European presidency. It is still on the issue of human rights, but with regard to Poland and Hungary, how concerned is Austria with the situation in both Hungary and Poland where authoritarianism seems to be growing? It is very simple. Austria supports the article 7 procedures within the EU, no ifs and buts. Thank you for that clarification, which I think is important to have on the record. One of the issues with regard to Brexit is, of course, that the UK's financial contribution to the European Union means that it is going to be at a whole in terms of the budget. I am just wondering what the view of the Austrian Government is on that, whether nations such as Austria, which is already a net contributor, should increase its contributions or there should be a reduction in the payments that go to eastern neighbours, which we have just mentioned, including those in the western Balkans. What would the impact that would be on relations within the European Union between richer nations such as Austria and less prosperous ones such as, for example, Bulgaria? One of the topics that I could not mention in my opening statement was the multi-annual financial framework, which is, of course, also one of our big topics on the technical level. I think our government is very much aware of our net bear, net contributor position, and the shortfall because of the lack of UK contribution will be a major topic also for the elections for the European Parliament. How will the shortfall be made up? At the moment, I think we don't know yet what the real shortfall will be and when and what stages and to what extent it will actually then influence the EU budget. That is very much open at the moment and has not reached, I think, fully the political level. It is still on the technical level. Do you feel that next European elections may be an issue between populist parties? Do you want to increase the budget in those who feel that with regard to continue to use solidarity for poorer states that should? That is definitely one scenario. We will see how our Governments decide to look into that. You probably are aware of Sonia Puntia-Rijkman from the University of Salzburg, who is written in the UK on a change in Europe in a publication called Negotiating Brexit Where Now. She has pointed out some of the issues that Austria wishes to address during the presidency. One of the issues was a restart to an EU debate about what policies should be EU and what should be domestic. She is saying that, while a task force was settled by Jean-Claude Juncker on subsidiarity, Ms Rijkman has said that so far it has produced a few results. Is this an element that has caused some frustration for Austria? How do you feel this should be taken forward? I think it's not yet on the level of frustration because we're not that far. The discussion is still going on. I think there are productive discussions. The major step will be the conference in Braggant next week. Our Chancellor is very much aware of the importance of subsidiarity. The task force has produced a report. It's going step by step. It's one of the fundamental questions and a question which is treated differently in each country. We are very comfortable with subsidiarity because of our history. I do expect or we do expect that next week's conference will take us a step forward. Do you feel that a disaster in government feels that there should be greater subsidiarity or there should be a deepening of relationships within the European Union and more powers to the centre or more should be devolved or as a balance is about right? Depending on the task, Sebastian Kurz has said that the big task is security for Europe on the European level and small tasks on the appropriate level. Do you feel that the level is tilting too far one way or the other? What is the Austrian Government doing? It's hard to say because there is also the question of the level playing field coming into play and the competitiveness of small and medium enterprises. There are very complex questions on the level of individuals, individual companies and individual businesses. I think that has to be looked into and the consumer level because the consumers deserve protection and notwithstanding where they live. It has to be treated matter by matter but I think that our government would rather have the EU not occupying itself too much with detailed questions that can be solved on the local level and really concentrate on the big ones. Ahead of your presidency, there was a real expectation that Austria would be a major player in some of the negotiations. That hasn't really transpired to being where you are now. What kind of impact on your work in the presidency has the leaving of the EU had? The impact that your work as the presidency has had with the effect of the EU leaving because initially there was a talk that you would be a major player in some of the negotiations in that process and that hasn't happened. You have been a minor player in that process during your presidency. I think that that is only natural and appropriate. I think that it is important for the presidency not to try to put itself too much into the foreground. We have respected that during our two previous presidencies. It still is a matter, do you wait to be called or do you call somebody and I think we are ready to make these calls. Our ministers, our prime minister or our chancellor are ready to make these calls to try to restart things but within the European and the formal framework. During the presidency, you are discussing the renegotiation of some of the funding processes that will take place from 20 to 27. The cap, the horizon Europe and the structural funds. Can you give us some impact about what's happening with those? We are working within the competitiveness topic on the single digital market. It is very important for us to clean energy package. Environmental questions are really close to our hearts. Banking union, capital markets union to continue to position Europe as a financial player as well. There have been minor successes like fishing quota and the Baltic Sea. The whole question of the trade-off between ecology, agriculture, consumer protection. These are topics that will be on the detailed level to try to advance politics and advance topics. We'll now briefly suspend to have a change-over of witnesses. I'd like to thank his excellency very much for coming to answer our questions today and for his opening statement. Our second item of business today is an evidence session with the BBC. I would like to welcome the witnesses and Billford, deputy director general of the BBC, Dan Alda MacKinnon, the director of BBC Scotland and Steve Morrison, a member for the member for Scotland on the BBC board. I would like to invite Steve Morrison to make a short opening statement. Good morning. Thank you for inviting us here today, convener. I hardly need to make a few introductions, but for those of you who haven't met us, I'm Steve Morrison and I'm the member for Scotland on the BBC board. I've worked in television for 45 years, predominantly for Grenada, where I was the chief executive, and then I've found it all three media, which became the largest independent group of television production companies in the UK, and currently has 20 companies around the world. I'm joined by my colleagues who have appeared before you before, and Billford on my right, who is the deputy director general of the BBC, and Ann is responsible for, among other things, finance, HR, operations, design and engineering, marketing in audiences and much more. Of course, you all know Dan Alda MacKinnon on my left, who is the director of BBC Scotland and is responsible for the strategic direction and the programmes and services that are produced in Scotland. The role of the Scottish member on this new BBC board is to ensure that the views of the Scottish population are represented and reflected in the BBC's output and to engage with stakeholders and licence fee payers in Scotland to ensure that the BBC assesses and meets the needs of our diverse community. As a member of this board, obviously I'm also involved in discussion and decision making on the global issues facing the BBC and also sits on the main BBC board. I chair the Scotland committee, which oversees and monitors BBC Scotland's strategy and output. I also believe that it's part of my role to help BBC Scotland wherever I can to encourage them to be bold and ambitious in growing their output, both in Scotland and to the UK and the wider world. Before I was appointed, the BBC director general Tony Hall announced plans for significant growth in the BBC's output in Scotland. With a new BBC Scotland channel launching next February, which will create 900 hours of original content a year and an enhanced BBC Alba with new weekend news and an ambition to create an additional 100 hours of original programmes. Notably, after February, Scotland will be the only nation in the UK with two of its own dedicated BBC channels. That growth will bring significant new jobs, 80 extra roles in journalism, 50 already appointed, another 88 new jobs in digital and engineering by the end of March 2019 and with additional posts to support the new channel and growth in other parts of the BBC in Scotland. That will take us to around 270 new posts by the end of March, including 10 trainee journalists and 10 apprentices. That also includes the BBC funding of 21 local democracy reporters who work on local newspapers around Scotland. When I was appointed, I was struck by the new charter responsibility for the BBC to help grow the creative industries in the nations and regions. Consequently, I have played a part in engaging with Creative Scotland and encouraging it to strengthen its television and screen content strategy and to form a successful partnership with the BBC. A new memorandum of understanding between the BBC and Creative Scotland is nearly ready to be introduced, and I was pleased to see the Scottish Government put an extra £10 million into Creative Scotland's budget to help drive this new strategy. At the same time, as you know, Channel 4 is setting up a new hub in Glasgow, and the national film and television school Scotland has been set up in Pacific Key with help from the BBC and the Scottish Government. Speaking as I do as the national film school's first graduate, I'm delighted about this new development and you'll hear more about it from Denalda. Overall, I'm very proud to be the board member for Scotland at this point, the point of its biggest investment in programmes and services for Scotland in a generation. Thank you, convener. Thank you very much, Steve. I take this opportunity to welcome you to your position on the board, and thank you for that very comprehensive opening statement. You will be aware that this committee has raised the issue of the amount of the BBC licence fee that is spent in Scotland. We have raised it in our most recent report into the screen sector in Scotland, where we say that it is too low, and we have raised it repeatedly when the BBC comes before us annually to talk about their accounts. This year, the amount of the licence fee that is spent in Scotland has fallen on last year, and it remains way behind Wales and Northern Ireland. 68 per cent is spent in Scotland, and that compares to 92.3 per cent in Wales and 88 per cent in Northern Ireland. Given that the issue comes up repeatedly when the BBC comes before the committee, why is the situation not improving? Thank you very much, convener. In fact, the situation is improving. In 2015-16, the percentage of the licence fee that is spent in Scotland was 65.9 per cent. In 2017-18, it will be 68.8 per cent, and in the year that we are in, which is 18-19, it will be 76.7 per cent. When the new BBC channel transmits for a whole year, it will be nudging towards 80 per cent. The reason why there has been a network drop in TV spend in 2017-18 is largely due to delayed transmissions of two programmes or deal-by-innocence, which you will remember was due to go out at Christmas, was delayed as the lead cast was delayed. It is recast and is transmitted in Easter and still game, where we didn't have as many episodes within the calendar year as was scheduled. However, our calculation is that over the three years that the DG promised until April 2019, the BBC will spend an annual average of £20 million in Scotland by the end of March 2019. It may be useful to hand over to Dinalda to give you an illustration of the kind of programmes that we are making? That might be useful, but I would rather stay on this point if you don't mind, because it is striking the difference between Scotland, Wales and Northern Ireland to repeat the figure 68.8 per cent for Scotland compared to 92.3 per cent for Wales. I can answer that very clearly. There is no real comparison between Scotland, Wales and Northern Ireland. Wales has been chosen by the BBC as a federal centre for drama, so you will know programmes like Casualty, Dr Who and Sherlock are now all produced out of Cardiff. Those programmes are not portrayal programmes about Wales. They are regular programmes, standards that the BBC has made for many years, and the BBC chose to establish a major drama production centre in Cardiff, whereas before they were made elsewhere. That is why Wales has got a disproportionate amount of spend. Northern Ireland is totally different. Northern Ireland is a much smaller area than Scotland, but it still is obliged to make local news programmes and current affairs. Those programmes cost roughly the same, whatever size of the population, and therefore it is quite natural that, in a small area, their percentage of spend would be higher. Can I just say my own personal opinion about this? I do not believe that the BBC should end up trying to invest or put on the screen 100 per cent of the licence fee in a form of quota. I believe that we are progressing towards what will probably be around 80 per cent. However, I think that the people in Scotland would appreciate big international programmes like the BBC World Service, the Commonwealth Games, the European Athletic Championships and Blue Planet. None of those things count in the funny way that all these hours are calculated, even if, as in the case of the athletics, the European Championship. Half of them were actually produced in Scotland. We have to allow for certain, if you like, central major programmes to be funded throughout the UK, and that includes Scottish participation. Secondly, this is a creative business and I think it is very important to give the commissioners some headroom so that they can commission the best ideas, the best dramas, the best comedies from wherever they come. Having said that, I think that we are all pleased to develop the percentage and increase the investment in Scotland, as I announced in my opening statement. In the end, what we all really want is a larger, sustainable, indigenous creative industry of television production in Scotland. Later on in the interchange, we should come back to that and the ways to do it, because we are all really working in the same direction. I am really surprised at what you said at the opening of your remarks there, Mr Morrison, where you said that the reason for the high spend in Wales was returning network dramas. The committee, the screen sector leadership group and just about every major commentator in Scotland has commented on the fact that there is a lack of returning high quality drama that is pushing the spend down in Scotland. I was surprised that you are using that as a justification for the figures when, in fact, the reason why the figures in Scotland are poor is because we do not have those kind of productions here in Scotland and we should have those kind of productions here in Scotland. I am all in favour of you, of us all, having more returnable dramas in Scotland. The only point that I was making was, if you take three bankers, which are Casualty, Sherlock and Doctor Who, and you put them in one place, they could actually be made anywhere because they are not particularly local to Wales, then you will get high numbers. It should be our objective to find dramas like Northern Ireland did with Line of Duty, to find dramas that are returning, as Shetland, for example, is about to go into its fifth series. It should be our objective, and I am sure it is our drama commissioner's objective, to find long-running returning series. That is the gold dust of all television commissioning. Of course, one of the things that our inquiry into the screen sector found is that returnable dramas in terms of the creative economy and employment creates many jobs. Obviously, you have an obligation now in your charter to develop the creative economies of the nations. I thought that that was quite interesting in terms of the BBC headcount as a shade of the total population of that nation. In Scotland, the headcount is exactly the same as Wales, but it is a lower percentage of the population. In terms of the population of Scotland, a much lower percentage is employed by the BBC in Scotland than in Wales. What I was explaining in my introduction is that the BBC in Scotland is adding 270 new posts. That is a very large percentage of the existing headcount and will increase it quite dramatically. The reason why Wales, as I explained earlier, has a disproportionate number is that it has a very large UK-based drama centre, which requires a lot of people working on those programmes. I am perfectly happy to share with you the objective of finding long-running successful dramas and comedies from Scotland to the UK network. That is what we are all keen to do. In fact, there has been a growth of drama coming out of BBC Scotland over the last three or four years. How about your job on the BBC board would be to keep pushing for more spend in Scotland, not justifying the disparity as you are doing just now? As you can imagine, I am quite a pushy person in Scotland in an overall context, which is very challenging. As you know, the UK Government has transferred to the BBC the responsibility for the over-75s free licences. If that concession continued, that would take up 20 per cent of the BBC's licence fee. I cannot really comment on that because we are going to go into a public consultation on it and then the board will discuss it. However, in the circumstances of the overall context, the fact is that Scotland has received an extra £40 million a year over the last three years when other nations and regions have had to cut their resources. Our percentage of the licence fee has gone down and we have raised considerably more licence fees than we do in Wales. No, it has only gone down, as I explained, through timing in this year of 2017-18. It went up from 65.9 per cent in 2015-16 to 72.4 per cent in 2016-17, 68.8 per cent in 2017-18 and forecast to be 76.7 per cent in 2018-19. We will be able to talk to you about that next year. I would like to pass on to Ross Greer. I would like to focus on BBC news and current affairs output at first. A couple of specific instances indicate a wider issue. News Night earlier this year ran a package from the Institute of Economic Affairs for members of their staff advocating the privatisation of the NHS. The IAEA is one of the least transparent think tanks in Europe. They are registered as an education charity, but there is a lot of deep skepticism about that. We do know that they are funded by big tobacco companies, for example, who advocate against public health measures and clearly have a vested interest in policies related to healthcare. We know that the head of the IAEA gave £32,000 to the now Secretary of State for Health in the UK Government. Their head of health policy claimed that all doctors are communists. They were allowed to run a package through the BBC advocating for the privatisation of the NHS. Given that there is no donor transparency at the IAEA, why was the BBC giving them a platform to do this? I did not see this item. If you wish, I could examine this item and write back to you as to the circumstances. That would be helpful, but I want to stick with this issue now, because it is indicative of a wider issue. I would like you to explain to me and perhaps I would be able to. Why does the BBC offer platforms to organisations who have no donor transparency but for which in this case there is clear suspicion that private healthcare companies who have a vested interest in what this package was advocating are in fact funding the organisation that was given the platform? What are the BBC's rules around those that it has on, either as guests or in this case as advocates when there is no transparency behind who funds them? As I said, I have not seen this item, so I cannot comment on this individual item. In general, the BBC has a very long-standing robust process for ensuring impartiality and balance, particularly in news and current affairs. We have a very rigorous system if anything comes up that goes outside those rules. I am asking you to explain to me why organisations who have no transparency behind their financial arrangements are allowed on to the BBC to comment on issues of public policy clearly related to the organisations that are widely believed to be funding them? Ross, I did not see this item. I have no idea. We are not talking about the specifics. No, I do not want to comment on the general because I have not seen this particular item. In that case, I can ask Ann to comment on the general issue. The editorial guidelines around selection of guests are an area that we can deal with in more detail. I am afraid that I am not able to comment on this specific. Our job in bringing organisations on and putting their views to challenge is an important part of what we do. I do not agree that we invite organisations on to our news programmes to be interviewed, to be given a platform. They are brought on to our programmes for their views to be challenged, to be interviewed and for what they are advocating to be brought out. If there is a specific complaint where the context of those views is felt not to be sufficiently clear and being made clear to our audience and that challenge seems in some way to be inappropriate, then we have channels to enable people to raise complaints about that and we would consider that properly. Before it gets to the complaint process, what I am asking again is why does the BBC, as a general rule, allow organisations like the IEA, like the Taxpayers Alliance, which is not a membership organisation that represents taxpayers, to just a company owned by two guys, why are those organisations, who have no transparency behind their financial arrangements, allowed to comment on issues of public policy related clearly to those who are believed widely to be funding them? Our job is to enable a range of views to be put forward and for those views to be challenged through our journalism. As I say, the very specific point that you raise, we can look at that and reply on that point. It is not an issue that has been raised with me before, but my clear understanding of what we seek to do in our journalism is to challenge not to provide platform. I do not regard that as a satisfying answer, but I do not think that we are going to get any further. To move on to a related issue but not around financing, you will be aware of the controversy around the invitation of the white nationalist Steve Bannon to a BBC EBU event that the First Minister has withdrawn from. At what point do you have to balance out what you would regard as public interest of challenging views, which I accept that those arguments have been rehearsed, with views that are simply beyond the pale of acceptable public debate, no matter how wide you try and have the spectrum for acceptable public debate? The First Minister said that the BBC's response to her described Mr Bannon as a powerful and influential figure promoting an anti-elite movement. He promotes a pro-white movement. He is a white nationalist. At what point is someone beyond the pale? You would not have someone who would advocate Holocaust denial. Steve Bannon has associated with Holocaust deniers. Where does the line get drawn? First of all, Mr Greer, we respect the First Minister's decision not to participate in the news exchange conference. It was reported in the press that BBC Scotland had invited Steve Bannon. That is not the case. The conference, as you rightly pointed out, is an EBU, a European Broadcasting Union conference, and the BBC is a member. There is a committee of news exchange that extends invitations to a variety of speakers and panellists. It was decided that Steve Bannon, as we know, was an adviser to the president of the United States. It is really important in a conference that is absolutely about journalism that we go to the heart of our journalism and our journalistic practice, which is about holding people to account, which is about interrogating, which is about scrutiny. It was felt by the committee who invited Steve Bannon that it was right to do just that, and that is why he will be there. Do you recognise the concern about that, not just on Mr Bannon's history as a white nationalist, but the long history of the platforming of those of extreme far-right views, under the guise of challenging them for those views, which has resulted in the absolute opposite? Is there a solid century's worth of evidence of that being the case? I recognise the concern, but, again, it is not our intention, in the BBC, to offer platforms to people who have particularly extreme views. It is about holding them to account, interrogating, scrutinising and explaining to others what they are about. That is not the game that they play, and I think that you are being played in this case. Annabelle Ewing. I am sorry, but I just wanted to ask a supplementary on that particular point. It was just to say, is it not the case that Nick Griffin's appearance on question time ultimately led to the effective destruction of that political party by exposing his ludicrous views to the rest of the United Kingdom, who perhaps were not directly aware of them, and the party went into a precipitous decline as a result of that? I am not sure if that was a question or not. I think that I should move on to Annabelle Ewing now. On the subject of BBC Alibah, Mr Morrison referred to that in his introduction to say that there is going to be a new weekend news programme or plans of some description. There will be additional 100 hours. I do not know if that is 100 hours over what period. I do not know if that is a one-off 100 hours. Obviously, in terms of the report that we have before us, we can see that, in fact, over the last year, in terms of number of hours, there has been an overall decrease in genres such as drama, comedy, entertainment, music and art of 8.6 per cent reduction in hours over the last year. As far as children programmes or related programmes, there has been a reduction over that period of 8.6 per cent. Perhaps we could hear why that is. Secondly, if the plans that Mr Morrison referred to are just bringing you back to where you were, it seems that that is quite a considerable drop in terms of those particular genres. I am going to ask Dan Alda to talk more closely about BBC Alibah, but I just wanted to say that over the last three years we have increased our investment in BBC Alibah from £5.5 million a year to this year, which is not in your current brief because we are looking at last year. Last year, we spent £7.9 million, and this year we are in. We are going to spend £9.1 million. I recognise the two things that you referred to, which are the weekend news and the extra hours of programming, particularly children. I think that what you are saying there is a fluctuation in the number of repeats of programmes in the genre that you identify. In any given year, you will have a fluctuation in the numbers of programmes in the areas that are transmitted on BBC Alibah. As Steve has just said, we have continued to increase our investment in BBC Alibah. We did, in fact, introduce weekend news on television and, indeed, on Radio Nigel on Saturdays and Sundays to coincide with the BBC Alibah's 10th anniversary in September. I am delighted to say that we are working very hard to ensure that, as I said when I appeared here over a year ago, we would do everything in our power to try to ensure that there was read across from the new investment into BBC Alibah in the shape of what I intended, which is another 100 hours. Margaret Meadie-Murray, who heads up. I can just clarify, so I have to interrupt. Is that 100 hours? If we use terms of 100 hours, what does that actually mean in practice? 100 hours to 100 hours? I don't know. What could you explain what 100 hours means? Is it a week, a month, a year? Broadly speaking, it might have more hours than one week than another, but it is essentially over a year. 100 hours over a year, so that is like four days in a bit over a year. Is that right? I have got my arithmetic. Two hours a week. Is that right? Please continue. Just to put it in some sort of context. It is significantly increasing the amount of origination on BBC Alibah, which has been something that has been a worry and a cause of concern for the Galaxy speaking audience who want to see more originated programmes as opposed to repeats. We have also been working very hard with others across the BBC to extend the value of what we do elsewhere. With our children's department, for example, which is based on software, we have just recently, again to coincide with the 10th anniversary, introduced new children's programmes, new originations, which will come up in the figures next year. They are not there yet, but we are looking at roughly six years a year of additional children's originations and then, over and above that, some reversion in that area. It has also been a strategic ambition for BBC Alibah to concentrate on children and young people given the growth of numbers of speakers in that area. In terms of the reference that Mr Morrison made to the overall budget increase that we have not yet seen the figures for over the last year of some £2 million or so, that represents, I would imagine, possibly around a couple of years' salary for some of the BBC's highest paid presenters and executives. I am just concerned about the potential impacts on the screen sector in Scotland and all the excellent potential technicians and so forth, all the production team. What analysis does the BBC in Scotland carry out in terms of making decisions about outputs and so forth? In this instance, we are talking about BBC Alibah and, at the same time, the potential impacts on the screen sector in Scotland. Currently, for BBC Alibah and, indeed, for the new Scotland channel, we are working with the new Scotland channel around about 75 different companies. I think that that will ensure a lot of job creation in the market over and above the job creation that Steve mentioned in terms of what we do within the BBC. Also, for BBC Alibah, the BBC Alibah commission is about 75 per cent, sometimes more than that, of its output from independent production companies. Aside from the spend on the actual programmes, then again, there is the multiplied effect. For every pound, that translates into at least £2 of value. I think that the investment is significant and I do think that we are encouraging skills, new... We have lots of training schemes. We have, aside from the NFTS, which Steve mentioned, we've also got apprentices, we have journalists and trainees, we've recruited about 51 new journalism positions of the 80 that we are to recruit for the new service, for the new... One of the first things I was very fortunate to do when I was appointed was I was taken by Margaret Mary Murray to Inverness and Sky and in Sky they were making in the Gaelic speaking further education college the Gaelic drama Bannon, which has actually been very successful and for the size of that channel was quite a very significant undertaking, much more expensive than you would expect. We hear what you say today and obviously the proof will be in the pudding, so again we look forward to see where we are next year. A lot of members wish to come in, Alexander. Thank you. You talk about being ambitious and bold and we've already heard that there are a number of occasions where there seems to be a decrease in some areas and especially when we're looking at the local content, there has been a decrease in that. Can I ask why that has been prioritised in that way? The local spend for this year is £0.9 million down from 2016-17 in 2017-18. In 2016-17 the figures benefited from two series of two doors down, which transmitted in the financial year compared to one series in 2017-18. The cost of comedy is such that not having a series of comedy would easily take up that kind of sum of money. In addition, the transmission of still game series 8 crossed the two financial years with two episodes transmitting in the 2018-19 financial year, which is not the year that you're referring to, but it's just an accident of timing and the availability of talent that just pushed two episodes out of one financial year in 2017. There's no intent here to reduce the local spend quite the opposite. You talk about the availability of talent. I think that one of the biggest issues that the BBC has faced of late has been the gender pay gap. That has rocked the BBC, shocked the community at large and it has damaged the reputation of the BBC. Can I ask how BBC Scotland is tackling that issue to ensure that we here in Scotland are seen as managing that crisis that you now face? Can I ask both Anne and Dinalda to respond to this, because they both have very strong responsibilities in this area? In terms of the gender pay gap overall, what we reported in the financial year that we're looking at here is a reduction in the gender pay gap across the whole of the BBC from 9.3 to 7.6, which is not where we want to be. We're working to drive that down further, but it represents some good progress in the year. The gender pay gap in Scotland was a bit lower when we reported in the previous year. We don't collect an audit and take the gender pay gap right down in every part of the organisation because it's a statutory reporting mechanic at a point in time. The gender pay gap in Scotland was a bit lower than the overall BBC one, based on our internal estimates, and it similarly came down over the year. That's the position on the gender pay gap. A lot of the gender pay gap, the vast majority of it, like many organisations, comes through from structural issues. By that, there are two big drivers. One is that there is an imbalance of women in senior leadership. Overall, a representation of women in the BBC is about 48 per cent, but representation in senior leadership groups is lower at 42 or 43. The second structural issue is about not enough women in some of the higher paid jobs, in particular in STEM-based technology jobs. We have that challenge along with everybody else. One of the things that I think is very encouraging about some of the new jobs in Scotland is the jobs that Steve referred to at the start of the session. Towards 90 of those are in technology, which is great because that's part of the BBC that's growing in new technologies, in digital technologies, and something like 40 per cent of those roles that have been recruited so far have been to women, which is a really good feeder improvement. The BBC is working very hard on all issues of driving the gender pay gap. That structural issue about what we need to do to encourage our women to progress and to move through the organisation into more senior roles and into those areas of the BBC where they're underrepresented in some cases where they're higher paid, was really at the heart of the career progression study that Danalda led here from Scotland, but on behalf of the whole of the BBC. That was one of five studies that we did with our staff, consulting widely about barriers to progress. We've completed similar studies around disability, which was published earlier this week, which I led. Social inclusion led by my colleague Alan Davy, who runs Radio 3. BME led by Tim Davy, who is responsible for BBC studios on the main board with me, and also LGBT, which we looked at. But I think pertinent to your question, the most important is actually the work undertaken very successfully by Danalda. I don't know if you'd like to talk about that and maybe some of the local initiatives in Scotland on progression. As Alan said, I undertook that piece of work on behalf of the BBC, so consulted widely across the BBC, not just within this country but around the world. We came up with 33 recommendations, loosely falling under three themes. One was how we support career progression and how we do that. We had to identify in the first instance why there was such attrition at particular levels or at times in people's careers. Usually it would be around when women were having children and leaving from a turn to leave and then either not returning or indeed not applying for senior leadership positions. We are also recommending that leadership training and management training are offered at every level. The other theme was flexibility and flexible working. We wanted to offer flexible working not just to women but to men as well and to make it the default position across the BBC. On that, we have a particular opportunity in Scotland now, I believe, to experiment and pilot in terms of how we go about recruiting. With colleagues elsewhere in the BBC who are also looking at this, we have undertaken with all these new positions to increase our targets in terms of all the protected characteristics that are referred to there. However, particularly as far as gender balance is concerned, so far in our news recruitment we have 52 per cent of women appointed to the roles. Somebody asked me the question recently, were we in some way in danger of harming quality or recruiting low-right people if we were making these kinds of interventions? Can I just say that this is absolutely within all kinds of quality legislation adhering to that but also that we are sourcing excellent women who will be brilliant in the jobs that they have been appointed to? I think that you have identified that you are tackling that issue and you have been late to the table in some respects in comparison with some other organisations and structures around. You are learning from other organisations what you can achieve and how you can progress that. How will that eventually be audited and scrutinised to ensure that we will see a trait coming through? It is not just a blip in the system or you have attempted to support some mechanism to enhance it for a short time space? We have already set our targets for 2020. There are a few levels. First of all, the statutory pay gap is published annually and is audited, so that is a hard thing. Secondly, our disclosure of the highest paid people from the licence fee is another measure that is monitored and we can speak more about that if that is helpful. In addition, what the executive board will have is the specific recommendations for each of the studies and a consolidated view of them so that we can monitor on a regular basis progress against those actions and the BBC board can take additional insurance on that as needs be. Ultimately, the measure will be that the targets that we have set for representation are achieved. We have a supplementary on that topic. I think that we would all be curious to know how many women in BBC Scotland are paid less than their male counterparts for doing effectively the same job, and that is across the BBC as a whole. What is the scale of the problem in terms of the actual pay gap at BBC Scotland? The gender pay gap in BBC Scotland is around 7.4%. We are talking about individual people's salaries, how many women are affected by that. The position in terms of looking at pay and questions of equal pay, which is of course different from the gender pay gap, which is at the heart of your question, as I understand it. We have undertaken fundamental reform of the way in which we manage pay in the BBC. I have listened to that and I think that that is all positive, although it should be speeded up. I am asking the question, do you not know how many women are affected at the moment as we speak at BBC Scotland? I can tell you how many women have outstanding questions with us about their pay, which we have not yet worked through. At the moment, we have 12 women in BBC Scotland who have asked us to look at their pay in a way that we are seeking. Our mechanic with this is that we audit, we check, we look and if we find issues, we correct them. That is at the heart of the reform of our pay and conditions that we have undertaken. In addition to that, anybody across the BBC, men and women, can raise questions about their pay, name comparators and ask us to look at those. We have had very many queries come up across the whole of the BBC about that. The vast majority of them are very straightforward, please check my pay. Some of them are very much more serious questions of equal pay, which date back over many years as everyone will be aware. We deal with those questions as they come up and seek to resolve them. At the end of last week, and I look at progress on cases every week in an effort to progress and speed up, I want these cases dealt with as quickly as possible just as everyone else does. When I looked at those figures at the end of last week, there were 12 people in Scotland. I believe that they are all women who have asked us to look at their pay and look at it through that informal resolution stage. I do not know whether some of those will result in pay increases, either forwards or backwards until that work is complete. There are four women in Scotland who have asked us to move on to the more formal grievance stage where there is an independent person sitting along the BBC case manager from outside of the division looking at the case. That does not answer your question because I do not know the outcome of those cases, but those are the cases where the question has been raised right now. We will wait and see what happens. Obviously, it is a shame that the BBC has taken so long to deal with the muddle that has been created. Just to clarify, there are 16 in all. There are under review at the moment. Thanks very much, Jamie Greene. At different stages. I know that you want to move through the agenda. Just to be clear, when we are speaking about informal resolution, we are not talking about something that lacks rigor. That is a serious piece of work with HR professionals and legal advice taken where needed to consider the issues carefully. However, the question is framed. Then, when it moves on to a formal stage, that is the BBC's internal formal grievance policy where there is also an independent person brought in to look at the questions raised. Jamie Greene. Thank you, convener. Good morning, panel. Can I start, first of all, by saying that the value for money that UK audiences get from the licence fee is tremendous? I don't think that's said enough. I subscribe to a whole manner of commercial content providers, Netflix, Sky, Virgin etc. I think that £150 for the wide breadth of content that we get is excellent value. That being said, OFCOM and others have criticised the BBC for its inability to reach out to new younger audiences. In fact, one in eight young people in the UK access no BBC content whatsoever, yet presumably are still liable for their share of the licence fee. I appreciate that there have been developments for BBC Three. I appreciate that there is a targeted push with new technical developments such as the Sounds app, but these in isolation do not address the fundamental problem or the existential problem that BBC has, is that younger audiences are shifting to commercial content providers. What are you doing to address that? The main board was the first organisation because we get monthly audience reports to begin to examine and we announced in our annual report that, as you say, this was now one of the biggest issues that we were considering and working out how to correct. The first thing is that we agree with you. We think that dropping off of young viewers is a very important challenge to the future of the BBC. Whilst one says that, the BBC is actually the first media organisation that gets the most time spent by young viewers, so we are losing viewers but we are still retaining viewers. Last week, we took the Scotland Committee to Dundee and, after the committee, we had an audience engagement session with about 25, 18 to 34-year-olds asking them why they were not watching the BBC. What turned out was that they were watching certain individual programmes that either they'd forgotten or had absorbed and liked but maybe were not necessarily watching them on a BBC screen so they might be watching them on a Netflix screen or a social media screen. So there is a question of attribution involved here where some people don't know they're actually watching. Presum that that would be BBC worldwide content that's sold on a commercial basis so it isn't really part of the public sector delivery? No, it is public service programmes which have been transmitted but are then transmitted on another screen. My view is that we have to take quite a bold view of this and the board has discussed what are the options available to us to capture more younger viewers. If there are basically two categories of programmes that are affected, there are the mass popular programmes which have a large quotient of young people within them which are effectively on BBC One and there are targeted programmes which are designed for young people with smaller audiences but get through to that age group. At the moment they are largely seen online so what we have to do is to examine the relationship between our television service and our online service to see how we can make more famous these programmes so that they're caught by younger viewers. For example, Killing Eve, which was a BBC Three programme, premiered on BBC One on a Saturday night and created a sufficient degree of fame that it got a huge response from people wanting to see it on the iPlayer. We have tasked our executive, including our marketing and our content and our audience management, to come up with options as to how we could address this problem and garner more young viewers. I think you raise a question we consider all the time and there's a relentless focus on it. I think it's important to set it in an overall context in that 75% of young people that we speak to support the BBC's mission and 70% of them believe we do it effectively. There's a great deal of support for the BBC amongst younger audiences still. We are, as Steve said, the largest media provider for young adults still. So for 16 to 34s they're still taking eight hours a week from the BBC and that's well ahead of the next one. Nine in ten young people visit the BBC online in a given month. The other thing that's very interesting, and we picked this up through qualitative discussions such as the session that Steve just referred to, is when something happens young people still come to the BBC for their news to feel confident about it. Trust scores for the young for the BBC are well above 50% versus low single digits for example for Facebook. Our view of it is that there isn't a single answer to it. We have to work on everything and think about youth. So that's casting, that's tone of voice, that's how we manage through the schedule breaks, how we reach out to the tone of our programming. At the heart of it is also using BBC online services and the signing mechanic and the opportunity to personalise and direct material that we think is going to be right for audiences from the whole of the BBC's catalogue in a very, very focused way. So we now have 33.5 million signed in users, very many of those are young people and there's an opportunity there to mark it's not a word we use a lot but to mark it and to show them the breadth and the range that we have in the BBC and to encourage them to come to us. Alongside all of that, one of the other areas that we've redirected resources is into children's programming and to increase focus there and allow this balance between investment in linear and investment in digital services to encourage children to come to the BBC so that they know us and love us in the way that previous generations have. Over all, Jamie, if I may address you such, we are with you on this. We are looking very, very hard at providing more space and making that space more visible and more famous for young people. I appreciate your warm words and actions on that and I do wish you the best of luck as a competitive environment to operate in that audience. If I could move on to it, I think one of my colleagues is going to talk about the new channel but if I could open up that discussion by just asking a short question on it, one is a technical one and that's why is the BBC taking the decision not to broadcast that channel fully in HD on digital terrestrial and chosen only to deliver it on an evening slot. I presume that it's due to availability of capacity on the transponder of the multiplexes but is that because there is simply no more capacity available or because you've taken a financial decision that's too expensive to do so? That's the first question and I'll park that. The second perhaps is to Mr Morrison or Steve, if I may. That's the fact that you come from an interesting background and that you've worked in the commercial production sector. Do you genuinely think that the introduction of a new BBC Scotland channel will create real opportunities in the independent production sector and so could you quantify what that may be? You are right to identify that spectrum is very expensive and to purchase it would have been, I believe, not particularly good value for money given that the BBC will ultimately want to migrate to internet protocol transmissions. What we have secured, however, is HD on all the platforms except free view between the hours of midday and seven o'clock but it will transmit in HD in the evenings and that happened by way of CBBC forfeiting some of its HD spectrum in order to allow us to do that for which we are very grateful. Surely, with the greatest respect, does that mean that datam audiences are forced to watch the programme in HD and evening audiences, the people who are working during the day can enjoy it in HD? In a modern day age when you're trying to compete, as we just discussed with commercial operators, do you really think that people are content with HD broadcasts on big screens these days? I think that there's a balance to be struck isn't there? It also depends on the nature of the programming that's on but striking a balance between investment in distribution across multiple platforms which is very, very expensive versus investment in content is one of the judgments that we've had to make in looking at the setup of the new channel. The view that we took was that we wanted HD but we wanted to do that where the affordability versus the audience given what we're putting on versus investment in content works so that was the balance that we took. I think that it's pretty good and of course there is HD available over IP during the day as well. I hope that you don't think that means that nobody's going to watch during the day so it doesn't matter. To be clear, our seven o'clock to midnight so it is in the main and evening service other than when we wish to schedule First Minister's questions for example or sporting events. Three other members that need to ask questions and our time is quite limited, Neil Findlay. If Neil would allow me, could I just answer Jamie's bigger question? You're right. I have launched four channels myself over the years and launching a channel is very, very, very difficult because you have to get the public to be aware that that channel has been launched which you shouldn't assume they are aware. And to know the button, the spot on the EPG on whichever system they're watching television and then they have to feel it's a channel for them. And these are all big things. You're launching a new proposition. However, I think the progress so far suggests that the production community which you mentioned, the independent community in Scotland have responded to this very well. So Steve Carson who's in charge of the overall commissioning team has explained to us that they've engaged in programme commissions with 75 independent production companies. They've published programme tariffs and there was a lot of debate at the beginning whether these programme tariffs would be high enough and in fact the production community have responded very well to the commissioning briefs that were put out. Secondly, they are trying to include some higher cost genres which they won't be able to do all the time but to include some drama and some comedy. And in that I think partnerships and co-commissioning between that channel and other parts of the BBC or other co-producers will be very helpful because we're now in the stage where as you know you can't really produce a drama without some form of co-production. So listening to your question, we're on it and the guy running it is very confident in it and he's presented to the Scotland committee twice and we've seen the schedule develop so I have great hopes for it but we should not underestimate that we are launching a completely new channel into the ether and we shouldn't imagine that a mass audience will suddenly turn up to it. It will have to build and we'll have to give it time to build. We need to move on, I'm sorry. Not all the signs are good. Mr Morrison, we need to move on. Neil Findlay, please. Thanks and feel free to call me whatever you like. I answer too many things occasionally even in my name. Can I say that the new channel is going to broadcast? Is it five hours a day, seven to twelve? Yes. Afternoon. According to the information we have, 50 per cent of the shows will be repeats or archive programmes. How long will the nine o'clock news programmes run for? One hour. Okay, so we have two and a half hours a day is going to be unique new programming because 50 per cent is going to be repeats and hour of that is going to be news bulletin, the main news programme and there's also going to be shorter news bulletins throughout the day so maybe we could take another half hour of that. So we're paying 32 million for one hour of new production a day. The fact happened, Neil, is that in the first phase of commissioning 77 per cent of the programmes will be new. This is not necessarily going to be the same rate that is going to be the rate throughout the year. We're learning as we go. Over a piece, 50 per cent will be archived or repeated programmes. So I'm correct in my analysis that over the longer term it will be one hour of new production a day. No. Well, accordingly, if it's five hours a day, half of it's repeats. No, what I'm saying is that that was the rule or the term that Ofcom laid down. What we found in the beginning through various means is that we are commissioning more than 50 per cent of originated hours. So it may turn out that we end up with more. I don't want to say what that number will be because we don't know, but it may be that it is considerably more than 50 per cent. We have to see how the money and the programmes and how everything beds down. According to the contract, that's the minimum, what you're describing. It also funds the new sour, so you have to take the new sour out of that. But there will be 900 hours of new content a year on that new service. According to what we have and the information that we have, that will result, that will be one hour a day. If you took the archived and the repeated programmes and put them on your online service, would that not free up more money for more original materials? It's a question of how much can you reasonably spend on this new channel. And don't forget, as I said at the beginning, we're the only country where we have two national channels. Nobody else in the BBC in any other part of the UK actually does this, so we're exploring it as we go. There would be little point in taking the archive programmes, and we do actually have archive programmes on the iPlayer, but there'd be little point in taking all the archive programmes, some of which a lot of people want to see off that channel if that meant that we couldn't afford to pay the programme tariffs for the original programme. And we ended up with a lot more quantity and a lot less quality. So when you launch a new channel, it is quite normal to have that kind of balance that you described. If you watch some of the smaller channels that are available in the digital sphere, you will notice that at nine o'clock there is an hour of new original programming. Around those hours, those peak programmes, there are other kinds of programmes. Some might be acquisition, some might be things you've seen before. This channel is actually better set up financially than virtually any digital channel in the rest of the UK. Therefore, the balance of original to acquired or archive will be monitored very closely. At the moment, the original programme rate is much higher than the 50 per cent. I think the issue optimally comes down to the quality of what we're going to be watching and the lessons that we learned from STV2 where at times nobody was watching any of the programmes because frankly they were repeats of repeats of repeats. I mean what we don't want with this is that we become Dave and that we're watching the Dave channel where you watch Top Gear 24 hours a day if you're so minded. What we don't want to be watching is the singing kettle 24 hours a day. From what I've seen of the schedule, this will not be a repeat channel, this will be an originated channel. The question is how you use your £32 million wisely to get an audience and to show them original material alongside material that you know they already like. We have an opportunity now to do things that we've never done before like experiment and in the other regions of the schedule I think it's fair to say that we're trying to target a younger audience not with the earlier hours so there will be a lot of new and innovative and possibly some risky stuff at that end of the schedule. I'm confident that it will offer something for everybody. It does seem quite a gamble given that young people are watching less television and we want this to succeed. Mr Morrison, as I've said before, we've conducted a long running inquiry into the screen sector in Scotland. I think it's fairly universal that everybody that we spoke to in the industry said there's not enough money going into this channel and I think that the questions from Neil Findlay and your responses seem to suggest that. We know some of the programmes that are going to be made. There's going to be no high-end drama on the channel and that's clearly for financial reasons. What have you done in your position as representing Scotland on the board of the BBC? What have you done to argue for more money for that channel? Well, number one, we have argued with our executive and one of the most important members of that executive is sitting on my right that the channel should have a good launch and it should have adequate funds to have that launch, which I'm happy to say it has. Number two, let me finish the point that you asked me what I'm doing. Number one, the network of the BBC, both financially and in collaboration on programmes, some of which will be co-commissioned by the channel and by the network, are being extremely supportive in helping us get programmes that otherwise the channel on its own could have. Now, I can't say exactly what those are because that hopefully will be a pleasant surprise to the viewer and they haven't yet been announced, but I can tell you there will be drama on this channel, which you said there wouldn't be. I didn't say there wouldn't be. I said high-end drama. There will be high-end drama on this channel. Will it be original drama? It will be original drama. And where will it fall in the tariffs in terms of the tariffs for drama? It will be much more expensive than the normal tariff and we will have to find partners. Has it been commissioned? Sorry, I don't want to go into too much detail. I'm just asking yes or no, has it been commissioned? No, just let me answer the thing. We have persuaded our network colleagues to help us financially and help us with co-commissioning programmes to give this channel the best lift-off it possibly can. We are all the time persuading colleagues, both on the board and on the executive, to regard it as a priority to support this channel, which they are all doing. There isn't any more money. I'll move on to Kenneth Gibson. That's no doubt why it's been delayed a few months. One of the things that concerns the public is the colossal salaries that people in the BBC, from football pundits to radio 2 presenters, have been paid. Clearly, one of the ways in which they are reducing the average male salary in their further gender gap is by replacing some people like Chris Evans, for example, with females who are earning a lot less money, such as Zoe Ball. If we go into the off-com report that was published on 25 October, the report concluded that viewers in Scotland watched 13 per cent more BBC TV than the UK average, but only 52 per cent of people in Scotland have a favourable overall impression of the BBC compared to 64 per cent of all UK adults. I'm just wondering why there is this significant difference and how will the channel close that gap, this new channel? Can I divide that into two? Your first question was talking about pay. Can I ask Anne to comment on what's happening to our pay policy in the BBC? Your second question was, how can we deal with the portrayal and representation that encourages more viewers to watch the BBC and to feel good about watching the BBC? The point is that 13 per cent more people in Scotland are watching the BBC, but they've got a lower opinion of it. How do you try to close that gap in Scotland? The combination of diagnoses around that. In many ways, I do hope that the channel will go some way to address it. That is one of the main reasons for creating it. I also think to have an hour-long news bulletin at the heart of the schedule for audiences in Scotland. I would hope that we'll improve the general impression figures that we're talking about. It has long been a case that has been made by many people that an hour-long news bulletin was wanted, was required. I think that there is something also about portrayal and representation and relevance among audiences in Scotland. It's a big country. We've got a sizable population and it's diverse. I think that we have an opportunity now to address that diverse, that geographic diversity, cultural diversity in a way that we've not really hitherto had. It is also about working very closely with network colleagues to ensure that BBC One in Scotland and BBC Two in Scotland are as strong as they possibly can be. We can't replicate what they do with this new channel. I think that when we look at some of the drama that's been commissioned of late and some of the drama that's yet to appear in our screens, I think that it is fair to say. I agree wholeheartedly with the convener that a returning drama would be fantastic. You could argue that Shetland is that, but what we would really want to see is something that was perhaps on a bit more frequently. But when we do look at some of the stuff that has come through Scotland and some of it being produced by brilliant Indigenous companies, I think that it is really heartening. I think that we have the way with all now to address some of that perception that exists there, as you rightly point out. We've just transmitted The Cry, which was made by a Scottish company Synchronicity, a co-production. We've got six by 45 minutes of a drama called Clic, which is aimed at younger audiences. We've got Shetland 5 coming up. Somebody said we've got a sixth series in development. We've got Trust Me series 2, which is again four by 68 minute drama based in Scotland, shot in Scotland. And we've got another commission recently announced called The Nest, which is again six hours. These will all make a difference, I believe, just in terms of people feeling that they're seeing familiar surroundings, that they're hearing accents which reflect their reality. I think it's really important to have that critical mass, as opposed to what I'm trying to say, not just on the new channel, but on the other channels too. An inlay recruitment of the journalists for the new nine, the new news hour, they are going all over Scotland to position reporters and other journalists in different parts of Scotland. So everybody is absolutely focused on what you just described, which is how do we make a channel that reflects modern Scotland and attracts viewers from all over Scotland because they see themselves or people like themselves on it? I know you're short of time. Do you like me to answer very briefly on top pay? Viewers and listeners, when we survey expect us to have top talent on BBC programmes and they understand that we have to pay market rates for some of those people, what I think is helpful is we employ 25,000 to 30,000 on air presenters over the course of the year. The top talent list that is published, people pay more than £150,000 from the licence fee, represent 0.2 per cent of those individuals, 1.4 per cent of our overall spend, but the programmes that they present will appear on make up 40 per cent of our overall viewing across radio and TV. That gives you a sense of the job that they do. We have had a rigorous programme over recent years. It's spoken about in the annual report in the talent pay section of managing down the overall talent bill and the proportion of our talent that are paid at that highest level by bringing on more people, looking for more of a mix and indeed in many cases managing down the cost of talent over time. Mr Morrison, you said at the beginning that in Wales there was a disproportionate amount of spend from the BBC. It's 92.3 per cent of what's raised in the licence fee, but from your own figures 350 per cent of what is raised in the licence fee is spent in London, 48.9 per cent of the total, so do you agree that there should continue to be more programming made in other parts of the UK? For example, is there any reason why Scotland can't become the same kind of drama hub that produces doctors who share whatever casualty that we have in Canada? I think that we might have noticed it, but it's going to gather pace. There is an out-of-London policy within the BBC. We are now commissioning more programmes from out-of-London, establishing bases in different parts of the UK. As it happened in Scotland, we established a factual base, so I think that the next step for the Scottish industry, in my personal opinion, is to try and work out a way to build a sustainable scripted base. As Donalda said, we have some very renowned drama companies in Scotland but actually quite a small number. Therefore, in partnership with organisations like Creative Scotland and other partners, I think that it is a task to try and build up the scripted base, the indigenous scripted company base in Scotland, which because of the size of the projects would actually increase the size of the TV production industry quite dramatically. Scotland's share of BBC spend went from 10.3 to 9.1 per cent over the last year, whereas London's only went from 49.40 to 48.9 per cent. I mean quite clearly we're still in a... Having started such a policy, it literally takes years to establish a serious amount of production out of out-of-London bases. So, Salford took some years to build up, Cardiff took some years to build up. I think that there is an opportunity. Now we see that Creative Scotland is changing its strategy from more of an arts council's strategy, independent talent strategy towards a more of an arts strategy. More creative industry strategy and more money has come in from the Scottish Government. I think that there is an opportunity together with Creative Scotland, together with other partners, to build up our scripted base, which would genuinely allow Scotland to get more serious drama contributions onto the screen. As Dan Alder says, the number of drama series over the years has gone up, but I think there's quite a lot of mileage still to go. So I'm tending to agree with you, but I don't think it will happen by tomorrow. I think it will take two or three years to build this up. As Dan Alder said right at the beginning, this year we're in, we'll see 76.7% of the licence fees spent in Scotland next year when the channel running throughout the year will be nudging towards 80%. This is growing all the time. In the end, the quota system is not the answer. The answer is attracting the right kind of talented companies to work in Scotland and to present ideas which the network commissioners really want so that we end up with more things on merit and not just by quota. That's 8.8% of the licence fee you're spending in Scotland. No one's calling for a quota. Is that what I know? I think that many people will be surprised that we have actually in this committee and predecessor committees been talking about lack of scripted drama from Scotland for quite a long time. I think that this committee has been very clear in its reports that the responsibilities with the commissioners notwithstanding the pressure that we put on Creative Scotland, but the commissioners are responsible for the decisions that they make. Tavish Scott? First of all, I'll just emphasise the point that you made at the beginning about things like Blue Planet. I think that BBC should push what you're doing a little more in Scotland because a lot of these questions that you've heard today are indicative of an inability to get your point across. Frankly, all of you need to do a bit more of that about saying what the benefits of Blue Planet across Scotland. I would pay the licence fee alone on that. If you didn't match the day on in Shetland, there'd be outrage. In our household, never mind anywhere else, so all the arguments you made at the start about spend and the importance of these UK productions right across the UK are really important. Occasionally, I think you should do controller live now and again and take viewers' questions along. Eat the controller? Exactly, eat the controller. You do that thing on the news channel where someone, a senior BBC executive, goes on and says, why did Farage appear on that package about 700,000 people walking through London a few weeks ago? I mean, I may say I thought you were wrong about that. It doesn't matter. At least a BBC executive had to answer that question. So, I think you need to, if I may say, to push your own agenda so that... Maybe the end of the question light numbers are balanced by the fact that you produce all these programmes that we all want to watch. So, that's my... I'm going to get that off my chest because I get fed up listening to this argument every time we... The question I actually wanted to ask was about a documentary about your point about impartiality. Donald McKinnon's made the very same point about impartiality. BBC Scotland produced a documentary called Dark Side of Dairy, which I don't know if you saw or not. But three things about it that I think were wrong. Firstly, it did not explain the rigorous inspection and transport which protect carves and transport. Secondly, the Scottish Government vets inspect and monitor a system that wasn't explained on the documentary. And lastly, it used footage of something that happens in another part of the world but never said and instead implied that was going on in Scotland. That, for me, failed the test of impartiality to the documentary. I wonder if you've had a look at that and BBC Scotland hold up its hands and say, right, we didn't quite get that right. I'd like to give that one to Donalda because she knows a great deal about this programme. No, not at all, and I know we have had correspondence on this particular programme in which I have defended quite robustly the journalism of the programme. You will probably know that a formal complaint has now been lodged with our Executive Complaints Unit. As that process is still on going, I would rather say nothing more about it until they deliberate. Yeah, that's upstage. That'll be published against the term. Then if that isn't satisfactory, there is an option then to take it. How many formal complaints does the BBC Scotland get in an average year? Quite not that many, right? We all complain but there's a difference between a formal complaint and a warning, which you've heard this morning. It's fair to say, Mr Scott, very few. Which, again, says something about the robustness of our journalism. Thank you very much. If I could just, before we do that, ask Donalda to pick up on the points that were made about high-end scripted being not yet commissioned for the new channel, but we're told that it would be commissioned at some point in the new channel. Could you tell me what tariff rate that's going to have? I can't because it will have to, as you probably rightly identify, it will have to be a cocktail of funding in order to achieve it. There is one commission of which I know and there are ongoing discussions about it and I would absolutely regard it as high-end. Does that mean that it's going to be between £650,000 an hour? Around that. It will be, right? When will you be announcing that? We're not intending to have that for launch but possibly for an autumn launch. Finally, to go back to Neil Findlay's point about original content, you are putting an hour of news on at 9 o'clock. Mr Morrison made the point that most channels put on commissioned new content at 9 o'clock. Everyone I've spoken to in the industry says that that is a big mistake that you will not attract viewers with news at 9 o'clock at your peak time. Is there any possibility of that decision being changed? No, we have undertaken some qualities of focus group research ourselves. There is a body of opinion out there that says that they would value a news out at 9 o'clock as an alternative to what's on elsewhere, particularly among women and often parents with young children who would value their news at 9 o'clock. I think that it's true to say that we don't want to be competing directly with dramas which are on offer elsewhere. People will have the opportunity to consume these dramas via catch-up or on demand. Everything that we plan for this new channel has an element of risk to it. We don't know how it's going to work. Will we ever revise the decision when we might have to? At this stage, the intention is not to do so. The look of the news from what I've seen of it will be quite different from a normal news bulletin. It will be more like a programme than a bulletin. That's an hour, so it's hardly a bulletin. Thank you very much for coming to give evidence to us today. I'm going to go into private session.