BBC supremo Lord Hall to back external regulation

Tony Hall is to become the first director general of the BBC to argue for full external regulation.

In a speech tonight he will call for a regulator that "holds our feet firmly to the fire on distinctiveness".

But he will speak out strongly on the need to safeguard the corporation's stability and independence, warning that it has been eroded over the past 20 years, and calling for future substantive changes to be subject to a vote in Parliament and by licence fee payers.

In a speech to the Cardiff Business Club, Lord Hall will highlight the contribution the creative industries make to "UK plc" during these challenging economic times.

He is expected to say that the BBC is a home for distinctive quality and creativity, supporting the best talent and brightest ambition, and is a driving force behind the UK's "extraordinary global competitiveness in the creative industries".

He will argue that strengthening the foundations of the BBC's independence in the next Charter is vital to securing that "growth dividend" for Britain.

He says he would welcome a regulator that reviews the BBC's performance and has the power to impose remedies if it fails to meet its purposes - but it must not stifle creative freedom.

"Some think that the BBC should only be able to produce what the market doesn't. That our creativity should begin only where others fail, always second-guessing the market and backing away from the most promising ideas," he says.

"Some want every part of the country to have an exact proportion of the licence fee spent on it, regardless of where the best ideas are found. Or they want to choose how to ring-fence our spending. Or even simply reduce our audience, regardless of whether - as in the last Charter - we got there by becoming more distinctive.

"Regulation must be effective, but not prescriptive. And it must not become paralysing."

He will say that when he was working in news and current affairs in the 1990s, the independence of the BBC was protected by a set of quiet customs and traditions.

"Back then it was Willie Whitelaw who'd provided us with the certainty of a 15-year Charter, underpinning our independence by allowing us stability through the political cycle," he will say.

"When I returned to the BBC as director general, I was struck by a major change. The foundations of the BBC's independence had become weaker. The traditions and informal arrangements which protected it had been eroded.

"Politicians had not done this deliberately - it happened under all parties.

"First, the licence fee was spent on things that were not directly to do with broadcasting. On digital switchover. On rural broadband and local TV. Then twice it was settled without a full process.

"Now the era of fixed-term parliaments has brought the BBC's five-year funding reviews firmly into the political cycle. Some have even suggested - though not the Government - that the Charter Review should follow the same rhythm.

"The truth is that a five-year Charter would effectively dangle a Sword of Damocles over the BBC's head - calling our future into question at every election and stopping the corporation from planning or investing in any long-term, sustainable way."

He will argue that the corporation should be taken firmly out of the electoral cycle by moving to an 11-year Charter period.

And there should be a "dual lock" to stop fundamental changes taking place without reference to the public.

He will argue that there should be a resolution of each House of Parliament, with two-thirds majority, as is already the case for changes to the new Press Charter, and an online vote from the people who ultimately own the BBC: the licence fee payers.