BBC board rules out resignations over Birt tax affair: Governors make few concessions to critics as staff union leader condemns their stance as 'outrageous'

THE BBC board of governors said after meeting yesterday that resignations over the John Birt affair would not be in the corporation's interest.

In a statement, which made scant concession to critics, they said: 'The question of whether resignations would be in the interest of the BBC was discussed by the governors. It was agreed that they would not.'

The BBC would not confirm whether the discussion was triggered by an offer from Marmaduke Hussey, its chairman, to resign. The meeting was also reported to be dismissive of criticisms of its conduct by the General Advisory Committee, which on Wednesday called for Mr Hussey's resignation.

The statement did little to quell criticism of the board's stewardship of the BBC. Sir Paul Fox, former managing director of BBC Television, said Mr Hussey should go. And the BBC union leader, Tony Lennon, said it was 'outrageous'.

The board has agreed to tighten its grip on the public functions of the BBC. They will approve all decisions on matters of public interest and pay.

In future all members of the board of management should be employed on a staff basis, ruling out Mr Birt's unusual pay deal in 1987. Board committees, such as the one settling remuneration, will have clear reporting duties to the whole board. It also emerged yesterday that John Birt has agreed to a request by the board of governors to provide an indemnity against any future demands for unpaid or back tax. John Watts, chairman of the parliamentary Treasury Committee, has asked the Inland Revenue to investigate Mr Birt's affairs.

The governors' request was made when they examined in detail his controversial salary payment into a private company, John Birt Productions Ltd.

The governors and board of management yesterday also considered the hostile attack from the General Advisory Council, whose members called for Mr Hussey to go, and were critical of Mr Birt's pay deal. They were indignant at the way the GAC, whose members are appointed by the BBC, threw out top managers and governors to debate the issue in private. The BBC board says they did not wait to hear the facts from them rather than relying on 'inaccurate' newspaper reports.

The curt two-page explanation from the governors yesterday said John Birt had preferred to keep his freelance contractual arrangements when recruited in 1987 as deputy director-general.

'As was then customary with the contractual arrangements of senior staff, the rest of the board was not informed . . . In the autumn of 1992 the chairman made it clear to John Birt that as director-general his contract should be completely renegotiated and discussions began. In November 1992 Sir Michael Checkland announced his decision to leave the BBC at Christmas. John Birt at once took on urgent and widespread further responsibilities . . . he suggested that the renegotiation of his own contractual arrangements be put on one side.

'On 2 February, at a meeting of the Board Remuneration Committee, when Keith Oates (a BBC governor) first learned that John Birt was not a member of staff, Mr Hussey, Lord Barnett and Mr Oates then all insisted that the matter of John Birt's contractual status should be taken forward promptly, and that he should become a member of staff. Margaret Salmon, director of personnel, was well advanced in this process when the story . . . was leaked to the press.'.

Keith Oates, one of the BBC governors opposed to John Birt's financial deal, has disclosed that he does not pay UK tax on pounds 80,000 of his pay. He said the money, part of his pounds 400,000 salary as managing director of Marks & Spencer, is paid abroad for work done overseas and is not a tax dodge.

(Photograph omitted)