Skip to main content

Television Licence Fees

Volume 885: debated on Wednesday 29 January 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.

With permission, Mr. Speaker, I will make a statement about the broadcasting licence fees.

The current licence fees of £7 for black and white and £12 for colour have stood unaltered since July 1971. The British Broadcasting Corporation has applied to the Government for an increase in the licence fee to meet rising costs.

In reviewing the BBC's forecast of expenditure over the next few years, the Government have had to bear in mind different and to some extent conflicting considerations. First, there is the need to ensure an effective and soundly based system of public service broadcasting. To starve this system of funds by failing to make some reasonable provision for rising costs would entail cuts of such severity as to damage the whole balance of services which the corporation has achieved and which are a national asset as well as an important part of individual amenity. But here is another factor. As a country we face a period of exceptional economic difficulty. No sector of our public life can be exempt from the stringency which this entails. In addition, the Government had to bear in mind the incidence of the fee, particularly on those who live alone on small incomes.

We have sought to balance all these considerations and have reached the conclusion that, while an increase in the licence fee for both black and white and colour is inevitable, the BBC must recognise the need for some economies and the public for some limited reduction in the level of the services that the licence fee sustained in 1974. The Government have, therefore, decided that with effect from 1st April the licence fee should be increased from £7 to £8 for black and white and from £12 to £18 for colour television. I believe it right that the rate of increase for black and white, which will he 14·3 per cent. over three and a half years, should be kept as low as possible. The necessary regulations will be laid early next month.

The House will want to consider all the implications of the Home Secretary's statement. May I ask him three questions?

First, is the right hon. Gentleman aware that we on this side of the House welcome the Government's evident rejection of a direct subsidy from the Exchequer, and will he confirm that, whatever problems inflation brings, the independence of the BBC will be preserved?

Secondly, is the right hon. Gentleman aware that we agree that the BBC, like everyone else, cannot be exempt from the present stringency and the need to make considerable economies, and that any increase in fee will be sorely felt by people living on small incomes?

Thirdly, can the right hon. Gentleman say for how long, at present inflation rates, the proposed increases will keep the BBC afloat? Will they be enough to last until the Government decide on the results of the Annan inquiry?

I am firmly in favour of an independent British Broadcasting Corporation. If there were to be any method of changing the finance, this should await a recommendation from the Annan Committee. To change it in the meantime would involve pre-empting an important part of the work of that committee.

What the hon. Gentleman said about the need for a stringent approach on the part of the BBC underlined what I said in my statement.

On the question of the time scale, it is hoped that this settlement will last for three years, which would see us quite well over the period of the report of the Annan Committee, leaving some time for implementation. But inevitably, with the rates of inflation which have prevailed under successive Governments for the last year or so, it is difficult to make predictions. The settlement must last for at least two years, and if there were to be any earlier review—before that year—it would be for the BBC to make a case in relation both to its own economy and to the external circumstances with which it was confronted.

I am glad that the Government have not given a direct grant in aid, which would have interferred with the independence of the BBC. However, is my right hon. Friend aware that I believe he has given the absolute maximum possible in view of the grave economic crisis and the minimum possible to preserve any hope for the economic viability of the BBC? It is right and proper that the BBC should share hardships with all of us, but it is wrong that pensioners should suffer hardship. Therefore, will my right hon. Friend have consultations with his ministerial colleagues with a view to making a special grant in aid for old-age pensioners?

I am grateful to my hon. Friend for what he said in the early part of his remarks, which indicated that he thought that, in a difficult situation I had got the matter, if not about right, then not too far wrong.

I am aware of the difficulties confronting those who live alone on smaller incomes, many of whom are retirement pensioners. But the arguments which have prevailed hitherto—and they are substantial arguments—against dealing specially with this matter as opposed to keeping pensions as high as can reasonably be done continue to prevail. On the question of black and white—

If my hon. Friend will keep quiet, I shall endeavour to answer my hon. Friend the Member for Stoke-on-Treat, South (Mr. Ashley).

While I do not regard the position in 1971 as ideal, the pension rate in April, when the proposed licence increases come into force, will be 130 per cent. above the rate then prevailing, whereas the increase in the black and white television licence I am proposing is 14·3 per cent.

I recognise that there have to be cuts in the BBC, but does the right hon. Gentleman agree that it would be unfortunate if they fell most on radio and regional developments rather than on the more lavish areas of BBC expenditure? Does he realise that there will be a sense of injustice in areas which do not have a full range of service and therefore feel that they are paying the full licence fee for less than a full service? Will he consider the anomaly whereby concessions in the cost of the television licence are made to blind people but not to deaf and other handicapped people, with a view to making concessions to these other categories of handicapped people?

In reply to what the hon. Gentleman has said about the provision of services, the cuts will not involve any retardation of phase 1, which lasts until 1978, of the UHF programme, which is of crucial importance in relation to television coverage.

If one believes in the independence of the BBC, detailed matters about where the cuts should be made are bound to be matters for the BBC and not for me. I am sure that the hon. Gentleman would not wish me or the House to instruct the BBC on exactly what it should do.

The last point raised by the hon. Gentleman is not primarily a matter for me. I shall look into it, but I cannot say that it will be possible to meet it.

We welcome the positive element of discrimination between black and white and colour licences, but does my right hon. Friend accept that there is evidence that this can be only a very short interim measure because the pressures on the BBC are so great that unless a complete refinancing project is rapidly undertaken it will not be able to carry on and the discrimination against women's and children's programmes in the afternoon and local radio will be great? There is some evidence that the BBC is using these as counters, including the threat of redundancies among staff, as means of obtaining more money. It will not work for any length of time.

The BBC knows what the position is. There is no question of a bargaining position remaining, if it ever existed. My hon. Friend slightly exaggerated the extent to which it did. The BBC has been told the position, and, what is proposed, although not exactly what it would have liked, goes a long way to meeting its request. To have gone further would have been incompatible with subjecting the BBC to what I described as the degree of stringency appropriate for all public institutions.

Will the right hon. Gentleman confirm that the proposed increases will not enable the programme cuts to be restored and there will have to be further cuts? How would they affect BBC2? Would there be economies of staff or economies of artistes? The Minister responsible for the arts is looking anxious. The arts financed through the BBC are to be curtailed. Will the hon.

Gentleman be allowed a quid pro quo in his efforts to maintain the tailing standards of the Arts Council?

I am dealing with the BBC and not with the Arts Council. The limited cuts which the BBC has introduced in the past few months will not be restored. There may have to be some further limited cuts and further economies, but there is no question of BBC2 as a separate channel being put in jeopardy.

Will my right hon. Friend note that once again an opportunity has been missed to remedy the injustice between those who live in accommodation with warden services and those who have to pay the full licence? Does he realise that there will be great dissatisfaction with his announcement and much impatience for a change?

I am aware that there is a real problem here, and I do not seek to deny its existence. As I think my hon. Friend recognises, it is easier to outline the problem than to propound a satisfactory solution. The increase in the black and white television licence is a very limited increase in view of the length of time involved. It would not have been possible to solve this problem without holding up a solution to the BBC's problems in a way which would have done grave damage to the corporation and provoked a great deal of rightful agitation from the House.

Is the right hon. Gentleman aware that my constituents and others who get programmes in the Welsh language which they do not understand will not take kindly to the increases? Will he at least ensure that, as these people have to pay the same increase as everyone else, a higher priority is given to those parts of the country such as my constituency where the service is inadequate?

I have already indicated that the UHF programme will continue at the planned level. As to the possible implementation of the Crawford Committee's report in relation to language broadcasting in Wales, the financing of these developments will need to be considered separately, and a working party is looking urgently at that matter.

Is my right hon. Friend aware that politically there is never a good time for raising the licence fee, and that the careful way that the Government have approached it will be much appreciated and applauded? What will now be the position, as the BBC will be deprived of at least E1 per monochrome licence of what it said was the minimum to carry it through the next few years? Will it not mean a shortfall of £25 million over the three years before the Annan Committee reports? Is my right hon. Friend satisfied that the cuts which will, therefore, have to be made will be across the BBC as a whole if it is to live within its new means and will not be made simply in the programme services?

I am grateful for my hon. Friend's earlier remarks. I take it that he means a total cumulative shortfall of £25 million and not an annual shortfall during the period.

With respect, that is a little difficult to predict. The immediate shortfall, compared with giving the BBC the full amount it requested, which was £9 on black and white and £18 on colour, will be about £10 million at an annual rate, but that will not persist in the probable development of events because as time goes on the fee from the colour licence will become proportionately more important. To that extent, the balance which has been struck, as well as having advantages on the ground of safeguarding to some extent the less well-off members of the community who depend not exclusively but to a great extent on black and white television, will also have the advantage that as one moves forward in the period more revenue will become available to the BBC.

As to where the cuts will fall, that again is a matter for the BBC and not for me, but I should think it appropriate that the BBC, applying what I hope will be a reasonable economic approach, will regard the cuts as applying over a wide range.

As I had to buy a television set at the insistence of my children, this proposal affects me. Is the right hon. Gentleman aware that it will be difficult for my hon. Friends and me to support the regulations which he is to bring before the House unless there are considerable improvements in the BBC's services? Is he aware that it is impossible to get proper coverage of BBC services in many parts of Scotland? Some may say that that is an advantage.

Secondly, is the right hon. Gentleman aware that we are becoming increasingly concerned about the low calibre of the programmes because of the low budget available to the BBC in Scotland, and that we hope that some of the money will go towards improving the quality of output? Is he also aware that we shall expect a corresponding increase for the independent companies, which have also suffered from inflation and which, in the opinion of many people, do equally as good a job as does the BBC?

Televsion coverage is essentially a matter of continuing with the UHF programme, which I have said will be continued without any retardation. That is the important point. I note the hon. Gentleman's hesitation about supporting the regulations unless he gets a better service. I assure him that if he were successful in not supporting the regulations he would get a much worse service. The choices are between having a much worse service, doing what we propose—which is reasonable—or going for a substantially higher fee, which I do not think would be reasonable in present circumstances.

I remind the hon. Gentleman and the House that the nature of the programmes is a matter for the BBC and not for me. I do not propose to become a director of the BBC, and I do not believe that any hon. Member in the House would wish me to do that. The programmes would probably be a great deal worse were I to do so. The Independent Broadcasting Authority and the companies with which it is linked are not publicly financed and, therefore, cannot be subject to the announcement which I made.

I understand the need for an inrease in income to save BBC 2 and local radio, but is the Minister aware that there will be bitter resentment of his 50 per cent. increase by those whose only luxury is to have a colour televsion set? Is he aware that judges and low- paid workers will both have to meet the additional cost, and for that reason alone the Government should give a direct grant rather than increasing the licence fee for low-paid workers.

I do not agree with my hon. Friend. There is no alternative other than a severe cut in the service or the increase in the licence fee which I have awarded. I am not sure whether my hon. Friend dissents from the proposal being in favour of black and white television, to help the worse-off, and weighing slightly more heavily on colour television. But even on colour television during the three-and-a-half years which have gone by the increase is not very significant. It is little more—about 5 per cent. or 6 per cent. more—than is the increase in the retail price index, and in two or three years will almost certainly become significantly less than the general increase in prices. It would have been impossible and totally unreasonable to have asked the Annan Committee to consider future broadcasting, including the financing of the BBC, and then almost before it had started work to pre-empt it by a decision changing the basis. I know that my hon. Friend is in favour of the committee and is interested in it.

Will the Home Secretary consider the position of the many people in rural areas who are able to receive only one channel? The £18 is divisible into three, and it does not seem to be beyond the wit of man to provide that people who can receive only one channel should pay £6, those able to receive two channels £12, and those able to receive three channels £18, until the UHF programme reaches these rural areas.

As the fee does not finance one of the channels—the independent channel—the neat bit of arithmetic done by the hon. Gentleman is not wholly appropriate.

I appreciate the difficulties which the BBC faces and the need to increase its income, but does my right hon. Friend realise that most of my constituents have either inadequate reception or none at all? Will he urge upon the BBC the need to step up its programme of building relay stations and reconsider the position of people who have to pay twice over—for a licence and for cable?

If my hon. Friend cares to put that last question to me in detail, I will consider it. On the earlier point, it is difficult for me to urge on the BBC both economy and the stepping up of programmes. I have ensured that the UHF programme goes along without interruption. The recommendations of the Crawford Committee in so far as they relate to my hon. Friend's constituency need to be considered separately.

May I press the Home Secretary to give an assurance that the Government will seriously consider the position of rural areas in which only a limited number of channels is available? Does he realise that, even taking into account the arguments about the extra cost of bringing programmes to these rural areas, there is, in the light of the increases that he has announced today, a real case for reductions in the licence fee to be made in certain designated parishes and areas where programme reception is limited?

I understand the point made by the hon. Member and by hon. Gentlemen. It is not a new one. The situation is not new. However, it is not a point on which successive Ministers of successive Governments responsible for broadcasting have felt able to make a differentiation. I do not feel able to make a differentiation. I am extremely eager that high priority should be given to the question of the areas which have poor or deficient reception.

Will the Home Secretary obtain from the BBC, before the increases are applied, assurances that no wage or salary increases for the artistes, staff or executives will be outside the social contract? Secondly, will it be possible for the BBC to install efficiency teams within the BBC to prevent over-manning?

On the first point, as I think the House knows, we were not entirely satisfied with the BBC's handling of its wage negotiations during the summer. That is a matter which is behind us now. I believe we have set up better arrangements for consultations in the future. I think the BBC is aware of considerations which it must take into account.

As to my hon. Friend's second suggestion I am not necessarily convinced that the expenditure of money upon efficiency teams always produces greater efficiency in proportion to the expenditure. We could all find examples of extravagance in the BBC which probably we have all witnessed, but we could find them in relation to most other organisations of comparable size. I have impressed upon the BBC the need for economy, and I have reinforced that exhortation with a financial incentive—indeed, a financial imperative—by not giving the BBC as much money as it wishes to have. At the same time, I point out, in fairness to the BBC, that the more important criteria of the cost per programme hour and the output per square foot of studio space compare well with both the independent companies and, by virtue of international comparison, television companies abroad.

Is the right hon. Gentleman aware that the proposed full colour television licence charge will cost an individual the same as the cost of one first-class letter per day? I believe the viewing public think it is good value for money, especially in view of the fact that it is a lower charge than people pay for the hiring of the television sets on which they receive their programmes.

Will the right hon. Gentleman take further steps to see that the licence fees are paid by as many people as possible and that there are not too many people slipping through the net?

One dislikes any increase, and particularly one as big as that for the colour television licence. The fact remains that, compared with many other forms of expenditure, this is good value.

Evasion has been, and remains, a problem. It is one which we are extremely anxious to deal with. Compared with nine years ago, the number of licence evaders has been reduced from approximately 2 million to approximately 650,000. I think that the figure of 650,000 is too great but the two-thirds' reduction marks up progress against evasion, and I hope and intend that that will continue.