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Last Updated: Monday, 10 July 2006, 18:55 GMT 19:55 UK
BBC 'risks causing pay inflation'
Mark Thompson
Mark Thompson's pay rise has angered staff
Pay rises for BBC chiefs and multimillion pound deals for presenters risk triggering media "super inflation", say the Tories.

Shadow culture secretary Hugo Swire told MPs that reports of the pay deals risked damaging public support at a time when the BBC wanted more money.

He was speaking as union officials said 10,000 BBC staff were to vote on striking over pay and pensions.

Culture Secretary Tessa Jowell said the BBC enjoyed strong public support.

But she said it was for the corporation, not the government, to decide on salary levels.

'Pay leader'

The BBC's annual report last week showed director general Mark Thompson was paid 619,000 last year, even after declining his bonus.

In the Commons debate on the BBC, several MPs also questioned the reported 6m deal signed with presenter Jonathan Ross.

Earlier on Monday, BBC Chairman Michael Grade said the executives' pay rises had come because salaries had fallen way behind the middle range of the market.

But Mr Swire said a government-backed report by consultancy PKF said average BBC costs per employee were towards the higher range of average earnings.

And between 2002 and 2004, Sky, ITV and the average top 100 radio and television companies were paying less than the BBC.

"Rather than catching up with the market as has been suggested, the BBC is increasingly the market leader in pay," he said.

Mr Swire went on: "At a time when the BBC is cutting staff and asking for more money from the licence fee payer, the public will be concerned not only at the pay increases of senior executives but at multimillion pound deals for presenters."

'Poll tax'

The corporation is asking for its licence fee to be raised to 180 by 2013.

Mr Swire urged Ms Jowell to realise that "eye watering" rises in the licence fee could damage public support for the BBC.

Tory former Cabinet minister John Redwood said: "How can you defend a poll tax on the poor and not very well off to pay huge increases in salaries to top BBC staff, to pay very large fees to certain performers and to undermine private sector competition which would otherwise be much stronger?"

Labour's Paul Farrelly said the salary rises were a "public relations gaffe".

'Creative tension'

Ms Jowell said it was for the BBC alone to decide what to pay staff.

She rejected Mr Redwood's poll tax analogy saying the government was committed to universal "free to view" broadcasting at the BBC, funded by the licence fee.

There was public affection for the BBC - but it needed to keep adapting in a changing world to retain people's confidence, she said.

She tried to quell fears that the BBC was unfairly "crowding out" competitors, particularly with its online services.

The BBC helped bring new technology, such as digital broadcasting, to all parts of the media market and ensured "creative tension", she said.

She said the new BBC Trust, which will replace the governors when the corporation's licence is renewed, would represent licence fee payers' interests.

The current charter runs out in December and its replacement - which will be finalised later this year - will run until 2016.

Tessa Jowell and opposition MPs debate the BBC

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