CB: You and I both would have fired him, so he wouldn't be paid anything.

DJ: Should all these salaries be published?

CB: They should be published, and that will bring a sense of reality which the BBC hasn't caught up with. The market has changed: the squeeze on ITV and Channel 4 has meant that the BBC are stronger and don't have to pay as much as they thought they had to.

CM: Christopher makes a very good point that if you simply said that the BBC could collect advertising then you'd just be creating this massive business with a privileged position. 

DJ: Like BT perhaps?

CM: Yes! This argument about why the BBC is so marvellous is very much the same as the rubbish you used to hear about national champions in industry in the 1970s — "You've got to have a massive motor industry, British Leyland" etc. By the way, the Tories are extremely cowardly on this subject because they're frightened of being attacked by the BBC, which again shows why the BBC's a bad organisation.

CB: You're such a terrible cynic. You're quite wrong. The Tories think the BBC, for all its faults, is the best broadcasting organisation in the world.

CM: No, I know this for a fact. They decided that in order to get back into power they had to get on the side of the establishment. They had to be considered house-trained and not be constantly mocked, excluded, derided by everybody on the BBC. So they had to be nice to them. And that's the strategy they pursued, and very successful it's been.

CB: I think actually that they believe in the BBC in a way that you do not.          

CM: Well some of them do, some of them don't. But suppose for example — just as a way of testing reality, rather like what happened in the 1980s when industries prepared for privatisation — that the BBC was just told the licence fee was going to be halved. That would concentrate minds, and then the BBC would have to think about why they exist. Something like that might be quite a good, crude way to do it, in which you force reality upon it.

CB: Yes, it's like forcing reality upon a prisoner by cutting him in half, and seeing how he likes that. Maybe you should just chop off his arm, and then at least he has a chance of survival.

DJ: The public sector generally is going to have to cut itself a lot.   

CB: Absolutely, and I agree that the BBC will have to too. I don't think the BBC's level of funding in absolute and relative terms is sustainable over the long term, given the squeeze on public expenditure everywhere. Because the BBC has a seven-year agreed licence fee. It wouldn't be fixed at that level, today. 

CM: If you're thinking of it as what the BBC is really for, and you did have to make these choices because you only had half the money — I'm just playing my game — then you need to ask what is at the core?