Non-native speakers learning how to report what they have heard are often taught a complex set of 'rules' that involve concepts such as backshifting and the sequence of tenses. But the changes in tense, if any, that native speakers make in reporting speech are natural and logical.
Clause by clause they use the tenses that represent their interpretation of what they have heard and its current validity. This is why, for example, the words: "I have no money!" could be reported as:
John says he has no money.
John said he has no money.
John said he had no money.
The past perfect is used in indirect speech by native speakers for the same reason they use it in other constructions; namely, if it is necessary to make the time relationship between events clear or if they wish to emphasise that time relationship. For example:
- (necessary) When I had written the email, I went to lunch.
- (for emphasis) After I had written the email, I went to lunch.
In the present example, John says the words "While I was watching the television, the light went out" and Mary reports this as:
John said that while he was watching television, the light went out.
This accurately represents the situation that John described, a past event interrupting an ongoing action in the past. There is no need for the past perfect to clarify the time relationship.
The past perfect would be necessary, however, to report John's words: "I've been watching television all day" >> John said that he had been watching television all day.
Of course, if Mary is reporting John's statement (e.g. by phone to John's mother) shortly after John says it, then she will report it as: John says that he has been watching televison all day. This brings us back to the point made earlier; namely, that clause by clause reporters "use the tenses that represent their interpretation of what they have heard and its current validity".
The sequence of tenses 'rules' should simply be regarded as common reporting patterns. They may be helpful for learners to know about, but learners should not feel bound by them.