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BBC Licence Fee

Volume 455: debated on Thursday 18 January 2007

With permission, Mr. Speaker, I should like to make a statement on the BBC licence fee.

Over the past three years, the public, industry and Parliament have all contributed to a national debate about the BBC, its future shape and its funding in an unprecedented exercise in public involvement. I am now in a position to announce what the funding will be over the first part of the new 10-year charter period. The settlement will be for six years, with annual nominal increases in the licence fee of 3 per cent. for the first two years, and 2 per cent. in years 3, 4 and 5 of the settlement. There will be an increase in the sixth year—2012-13—of up to 2 per cent., depending on a further review nearer the time. I have written to the BBC Trust today setting that out. Those are cash increases.

The price of a colour TV licence will rise from its current level of £131.50 to £135.50 from 1 April this year, reaching a figure of up to £151.50 in 2012. Based on the Treasury forecast of the consumer price index—the Bank of England’s inflation measure—that will either be above or in line with inflation for each year of the settlement. That will enable the BBC to deliver its new public purposes, which we set out in the new charter. As digital technology transforms the media world, it will enable the BBC to take a leading role in making the most of such technology. Investment in high-quality content—the driver of creative industry and what audiences value most of all—will remain high. The settlement will enable the BBC to do that. It will also allow the BBC to move key departments, including children’s programmes, sport, new media and learning, to Salford in the north-west of England. I, like hon. Members in all parts of the House, will welcome the trust’s confirmation, due later today, that that will happen.

This is a vital opportunity for the BBC to widen its geographical spread and relevance, and make better use of the creativity and talent that exist right across the United Kingdom, bringing huge benefits to the regional economy, estimated at £1.5 billion and 15,500 jobs. Through greater efficiency, the settlement will allow the BBC to maintain all its current services and provide up to £1.2bn for investment in new activities.

The people of the United Kingdom spend more of their money on the BBC than any other country in the world spends on public service broadcasting, except Germany. So the new BBC Trust must ensure that licence fee payers get the best possible value for that investment. We expect the trust to ensure efficiency in the BBC. On the basis of independent evidence from the consultants PKF and others, we believe that the BBC can realise up to 3 per cent. cash-releasing savings annually from 2008. A separate report published today by the National Audit Office confirms that our judgment is based on adequate evidence. It will be the trust’s responsibility to set specific targets and hold the management of the BBC responsible for meeting them.

On digital switchover, the BBC has been given a leading role in the delivery of this revolution. In particular, the licence fee settlement will fund the £600 million scheme that we are putting in place to help elderly and disabled people make the switch to digital, as part of our commitment to universal broadcasting and to ensure that no one is left behind. The Government’s expectation is that the BBC will lead the delivery of the scheme. We respect the independent status of the trust, and clearly there are details of the implementation of the scheme still to be discussed. The Government will retain responsibility for the policy, including helping with procurement and determining eligibility for the scheme.

The BBC will also pay for the £200 million public communications campaign being run by Digital UK to ensure that people are properly prepared and properly informed about switchover. Those sums will be ring-fenced within the settlement and so will not form part of the BBC’s baseline at the end of the settlement. We have made it clear that carrying out these responsibilities will not impact on the BBC’s core services and budgets. We are giving the BBC a 12.5 per cent. increase in its borrowing capacity to help deliver this commitment. We will ensure that the BBC’s services are protected from any cost increases in the help scheme, above our existing estimates.

In last year’s White Paper on the BBC, we noted that Channel 4 was likely to face major financial challenges from digital switchover. Ofcom is assessing the potential scale of those challenges. We said at the time that we would consider potential forms of help, including asking the BBC to help towards meeting Channel 4’s capital switchover costs, and possible access for Channel 4 to some of the BBC’s digital TV capacity. As I said, Ofcom’s review of Channel 4 is looking in detail at its financial prospects and is expected to report towards the summer. I am therefore keeping open, within the licence fee settlement, the possibility that we may require the BBC to contribute to the first six years of Channel 4’s switchover costs. This will be no more that £14 million in total.

I welcome the BBC’s conclusion that, in principle, it can make available some spare digital terrestrial capacity, amounting to a TV slot in England and three radio slots, at switchover. Under the BBC agreement, I can direct the BBC to make capacity available to another public service broadcaster, where it is in the interests of public service broadcasting in the UK. I shall decide whether and how to use that power in the light of the Ofcom review.

The settlement that I have set out for the BBC provides stability and certainty over the crucial period of digital switchover. The sixth year will, in effect, also form the first year of the following settlement. It will allow us to undertake a further review of the licence fee level in the run-up to the mid-charter point, taking account of the wider review of public service broadcasting, consistent with our commitment in the White Paper.

A strong, independent BBC, accountable to its licence payers—its paymasters—and providing the highest public value: that has been our fundamental goal throughout this long process. It is now complete, and the BBC, along with other broadcasters, can plan and prepare for digital switchover, the next great revolution in television, ensuring that the most vulnerable are protected and that the founding principle of public service broadcasting in this country, universal access, is secured. I therefore commend the settlement to the House.

I thank the Secretary of State for her statement and for allowing me prior sight of the text.

As is so often the case with the Government, the House is the last to know the details. The licence fee settlement was not announced in today’s statement by the Secretary of State. It was leaked by Treasury officials to Channel 4 News two days after Parliament rose for Christmas, and in a series of subsequent leaks to the media. Will the Secretary of State therefore apologise to the House for the shameful way in which it has been treated over the announcement?

Is not the real point that the statement is the Chancellor’s announcement, not the Secretary of State’s, and that it is as much a defeat for the right hon. Lady as for the director-general of the BBC? Not for the first time, the Secretary of State has had an unfortunate collision with the great, clunking fist.

None the less, we are grateful that the process of negotiating the licence fee has at last drawn to a close. There have been three years of what the Secretary of State would call consultation, which has in fact been dithering and indecisiveness on her part and the part of the Government. Time and again, the Secretary of State let it be known that an announcement was imminent, and time and again she was forced to postpone it—first, last summer, then the autumn, then Christmas. Finally, a decision has been reached, and months of damaging uncertainty may at last be coming to an end.

The Opposition fully support the important contribution that the BBC makes to the lives of the British people. The BBC is clearly one of our greatest organisations, and one of the most effective global ambassadors that we have. Of course we wish to see it appropriately resourced.

The Secretary of State was originally convinced by the BBC’s inflation-busting argument. We were not. We argued that, at a time of falling advertising revenue, no other media business could expect such a substantial guaranteed income stream over the next seven years. We believe it is right that the BBC should be asked to live within the realities of today’s rapidly changing media environment. This is a more realistic settlement.

The settlement, combined with greater income from household growth, means that the BBC will receive substantially more money than it does today—something that none of its competitors can hope for. However, no other media organisation has been asked to take on the huge new responsibilities that the Secretary of State has foisted on the BBC. The BBC is now responsible for digital switchover. At least the right hon. Lady said in her statement that the Government’s expectation remains that the BBC will lead the delivery of the scheme. Perhaps she could take the opportunity to clarify whether the BBC Trust has agreed to deliver on targeted assistance on the terms that she articulated.

Not only that, the BBC is expected to move a large part of its organisation to Salford—a move that will cost at least £400 million. Those two new obligations will cost the BBC about £1.5 billion over the next four years—money that will have to be taken out of the licence fee. According to the Library, the cost of targeted help for digital switchover— £600 million—would, on its own, add £7.20 to the cost of the licence fee. Does the Secretary of State believe that those new obligations can still be met under this settlement? Can she assure us that programme quality will not be jeopardised? That is certainly not what the director-general, Mark Thompson, is on record as saying this afternoon.

On digital switchover, given that the Secretary of State has said that the money will be ring-fenced, will it appear as a separate item on the licence fee so that viewers know that they are meeting that cost? Where will any extra money come from if the cost of switchover exceeds the Department’s estimates? Will it come from the licence fee or from the Treasury? Once switchover has been accomplished, will the level of the licence fee be reduced accordingly?

Even after today’s announcements, there is still a huge degree of uncertainty. The reason is clear. The Chancellor, who cannot resist interfering with anything and everything, could not resist the chance to meddle with the licence fee. He has loaded it with a stealth tax and forced obligations onto the BBC that it did not want. Future licence fee settlements must not be negotiated in that way. Under the next Conservative Government, it will be for Parliament to debate the role of the BBC in a rapidly changing, technologically driven media world.

The Secretary of State cites the National Audit Office, yet the NAO has not seen the books. As an organisation in receipt of more than £3 billion of public money, it is surely right and proper that the BBC should be subject to independent scrutiny and that the results should be debated properly here in Parliament. Will she at least allow the NAO full access to the figures outlining how the BBC spends £3 billion of public money?

This licence fee settlement has been subject to superficial consultation and grubby, behind-closed-doors negotiations. The right and proper place to debate the future role of the BBC, the future of public service broadcasting, and the right level of the settlement is here in this Chamber, and we will make sure that that is the case in future.

As usual, we have had a diatribe from the Opposition about process, but we are none the wiser about what their policy on the BBC would be. It is extraordinary that they are so contemptuous of the three-year consultation process, a process that recognises the fundamental point that the BBC does not belong to Government—it belongs to, and is paid for by, the people of this country, and it is therefore to them that the BBC should ultimately be accountable. I make no apology whatsoever for inviting people of this country to participate, for the first time, in the consultation on the charter review and the future of the BBC. The unprecedented level of participation was a measure of the importance that the public attach to the BBC—an importance that the Opposition ride over in a rather arrogant and slipshod way.

This is a timely settlement. The last licence fee settlement was not reached until the middle of the February before the new licence fee level came into effect at the beginning of the following April. That is an important lesson. I hope that when the next Labour Government negotiate the licence fee, time will be allowed for consultation with the licence fee payer.

Let me deal with the couple of specific points that the hon. Gentleman made. I have underlined in the statement, and to the BBC, the ring-fenced nature of the moneys that will be raised from the licence fee to pay for targeted help and the costs of switchover. That money is ring-fenced subject, on the Government’s decision, to very clear protection of the BBC’s major function, which is to put high-quality programming on to people’s screens. That ring-fenced sum will ensure that the BBC’s role in running the targeted help scheme and leading on the digital switchover will not be detrimentally affected by other considerations.

Those costs will be levied on the licence fee payer specifically for the period of switchover. If the hon. Gentleman had listened to the statement—he continues not to listen to my answer to his question—he would know that they will not form part of the BBC’s baseline. That means that at the end of the switchover period the BBC Trust will be able to return those moneys to the licence fee payer or, in consultation with licence fee payers, to make judgments about how else they might be used.

I welcome my right hon. Friend’s statement. Does she agree that the strongest case for the licence fee is that it helps to maintain standards across British broadcasting and ensures that the BBC acts as a bulwark against the descent into junk journalism that we are witnessing in other parts of the televised media?

As regards Channel 4, may I put it to her that the case for public subsidy of any sort is rapidly diminishing with every day that passes, and that the vulgarity currently arising from the “Big Brother” programme is a classic example of the case against any kind of public subsidy to Channel 4?

I thank my hon. Friend for his comments. I entirely agree with his observation about the importance of the BBC’s role in maintaining standards of journalism. That is not something that the BBC merely discharges—it has an absolute responsibility to honour its obligations in terms of accuracy and impartiality. The people of this country have a very clear understanding—much clearer than they are sometimes given credit for—of the difference between opinion and the vociferous comment of newspapers. That is partly because when they turn on BBC television, they know that they can expect the news and information that they receive to be accurate and impartial. It is a heavy responsibility and one that licence fee payers expect it to discharge.

On Channel 4, the decision about whether to provide assistance will be heavily informed by Ofcom’s regulatory assessment of the justification for doing so. Of course, every public service broadcaster has a particular obligation to maintain the trust and confidence of the public who pay for them.

For more than 80 years, the BBC has been the envy of the world and has had the reputation of setting the gold standard for TV and radio. Does the Secretary of State acknowledge that based on realistic, not Treasury, estimates, this is a below-inflation rise in the licence fee, and that that will put the BBC’s reputation at risk? Surely the only person who will cheer her statement is Mr. Rupert Murdoch.

The Secretary of State accused the hon. Member for East Devon (Mr. Swire) of being contemptuous of consultation. Does she not recall a survey that she commissioned that demonstrated that the vast majority of licence fee payers are willing to see a modest real-terms increase in the licence fee in return for improved quality? Why is she ignoring her own research?

Surely it is the case that for the equivalent of buying only five copies a year of Radio Times, licence fee payers could have what they wanted—a modest increase in the licence fee in return for improved quality and more services. Perhaps the hon. Member for East Devon put his finger on the problem in that the Secretary of State should not be entirely blamed because the statement has “Treasury” stamped all over it. It means that, for the period of the settlement, the BBC will have £2 billion less than it said that it needed to deliver the Government’s White Paper vision. Even if the BBC estimated its costs wrongly and underestimated the amount of income that it can make, the shortfall means that it will have to slash its plans for new services and investment in new programming.

The settlement confirms that the licence fee payer will pay for the Government’s policy of targeted assistance to help vulnerable people switch to digital. Surely the Government should pay for that. Will the Secretary of State answer the question that she has still not answered and say whether she has confirmed such a scheme with the BBC? What will happen if the cost is higher than the £600 million that the Government predict? Will she pay the extra or will the BBC have to cut its programme budget?

The Secretary of State offered warm words about the BBC’s future, but they are not backed by the reality of her announcement. Against the wishes of listeners and viewers, and in response to Treasury demands, the BBC has to face a real-terms cut in its income, bear the risk of inflation and fund the cost of the Government’s policy of digital switchover out of its programming budget. The Prime Minister tried to bully the BBC over Iraq, but his likely successor appears to want to destroy it.

I thank the hon. Gentleman very much. It is a great pity that he did not listen more closely to what I said.

No, the hon. Gentleman did not. Had he listened, he would have realised that many of his points were clearly answered in my opening remarks. A good decision has been taken across Government and the Opposition are trying to create a story that is a travesty of the truth. The decision will not put the BBC at risk.

The hon. Gentleman misrepresents the research about the public’s willingness to pay the licence fee. A third of those surveyed wanted to pay less; a third were content with the current licence fee, and a third were willing to pay more. However, the class and ethnic make-up of those willing to pay more was marked. Seventy-five per cent. of those surveyed said that any new services that the BBC offered should be funded not by the licence fee but by subscription. The hon. Gentleman—unusually for him—misrepresents the facts of the case.

The cost of digital switchover is a broadcasting cost and that is why the licence fee should cover it. The only alternative is raising the money through taxes. We know that the Liberal Democrats bravely play fast and loose with public finances and unfunded tax commitments, but it is right that the licence fee payer should meet a broadcasting cost.

Does my right hon. Friend agree that when the BBC made its declaration for an increase of 2.3 per cent. above the rate of inflation, many of us—including me—thought that that was outrageous? I am pleased that the Jowell-Brown combination has come up with something much more reasonable. If the BBC finds difficulty in managing its books, it should consider some of its programmes. I do not fall for the nonsense about the wonderful journalism—the starry-eyed views that I had when I first came here have changed over the past many years. I would sack Andrew Neil and all his cronies on “The Daily Politics” programme and fire Nick Robinson—another Tory who works for the BBC. If any more savings are needed, what about telling Jonathan Ross that he gets too much money? Finally, the BBC should be told that if it is going to help Channel 4 with its switchover costs, that station had better drop crap programmes like “Big Brother”.

Well, I take that as a contribution to debate. I am sure that they are quaking in White City.

The BBC’s original bid was an opening bid in what became a negotiation. The outcome that we have reached is considerably more sober and realistic. The licence fee payer has to fund that fee. In the House and—arguably more important—among the wider public, there was much adverse comment in the summer about the salaries that the BBC paid for talent.

Let us remember that we expect the BBC to run the scheme that will ensure that the poorest and most vulnerable in our country are supported, helped and guided in switching to digital. That is an important function and an important public role for our major public service broadcaster to play.

Order. Brief, single questions would be helpful. I also remind hon. Members about the careful use of parliamentary language in posing those questions.

Will the Secretary of State confirm that although the licence fee may not be increasing in real terms, the total amount of money available to the BBC is likely to do so because of household growth? Will she give the House any estimates that she has of the BBC’s future total income? Will she also answer the question that my hon. Friend the Member for East Devon (Mr. Swire) asked about whether the money that licence fee payers have to contribute towards the non-BBC costs of digital switchover will be separately identified on the licence fee bill?

I thank the hon. Gentleman, who, as Chairman of the Select Committee on Culture, Media and Sport, has followed the matter closely. He is right that household growth means that increasing numbers of people are paying the licence fee. That has been factored into the settlement. We estimate that, over the period of the settlement, the money available will be £600 million.

As I have made clear, we have ring-fenced the costs of digital switchover and we shall consider whether they should be explicitly and separately identified in the licence fee bill. I believe that that is in the spirit of transparency, which is important.

I welcome my right hon. Friend’s statement on the BBC settlement. I especially welcome this afternoon’s statement by the BBC Trust that it remains committed to the move to Salford. However, I am slightly surprised that the increase in the borrowing powers is only 12.5 per cent. My back-of-an-envelope calculation suggests that that increases the borrowing powers to £225 million. The original borrowing powers were set at £200 million in 1990.

Most of the cost of the move to Salford will be up front, although that transfer will save money in the long term. Is my right hon. Friend satisfied that the level of borrowing is high enough? Will she consider increasing it to help the move? Those of us in Manchester and Salford do not want be left in same position as people in Edinburgh in the early 1980s. They were promised a move to Edinburgh by the BBC in 1976, but the signs promising it were taken down in the early 1980s.

I thank my hon. Friend for that point, and for his advocacy and that of my right hon. Friend the Member for Salford (Hazel Blears). They have given enormous support to the decision to move part of BBC operations to the north-west.

The estimated cost of the move to Salford over the relevant period is approximately £190 million. We have obviously looked closely at the BBC’s capacity to fund both the move and the targeted help scheme. The additional borrowing provision that I announced will be specifically linked to the scheme, to provide additional flexibility over the period when demand for the scheme—and, therefore, the cash flow to meet the cost of the scheme—will be at its greatest. We have also agreed that we will be prepared to keep the matter under review, should significant difficulties arise. In answer to my hon. Friend’s question, yes I am satisfied that the cost of the move to Salford—which will, as he rightly says, save money in the long run—can be met within the existing borrowing limit for the BBC’s main operation.

If the Government are serious about asking the BBC to drive down its costs, why have we not seen a proposal for a salary review board such as the House has? Is it not the case that regional journalists such as those working for BBC Radio Shropshire or on the BBC’s “Midlands Today” have to live on pretty low five-figure salaries, while those working in different parts of the United Kingdom—particularly here in the capital—have six or sometimes seven-figure salaries? Is it not time for the Government to take a closer look at the salaries that senior broadcasters earn in London?

That issue periodically gives rise to public concern and media headlines, and information on it deserves to be made publicly available. However, it is extremely important at a time like this to recognise that the licence fee settlement is setting the financial framework for the BBC. I do not think that anyone in the House would support the idea of a BBC with reduced independence or reduced freedom to operate within that broad framework.

Salaries are a matter for the BBC, but it is a matter that is much more publicly accountable and subject to a much greater level of required transparency than has ever been the case in the past.

How long can the licence fee continue in its present form? My friend floated the idea of a computer tax a couple of years ago. With technological change, people will be able to receive television programmes through their broadband internet—indeed, that is happening at the moment. How long will the licence fee be with us?

This is the million dollar question.[Hon. Members:” Three billion.”] The three billion pound question. This is an issue that we have addressed during the charter review period. We have made it absolutely clear that, as a matter of policy, the licence fee will continue throughout the period of this charter, for another 10 years. However, we have allowed for a financial review at some point around the mid-point of this charter. Undoubtedly, from the public’s point of view, the licence fee is the least best option—

Well, it is the least best or the least worst. Nobody necessarily loves the licence fee, but they do not love any of the alternatives any better. We have to take this issue back to the underlying principle of broadcasting, which is universal access. The great strength of the licence fee has always been that it guarantees universal access to those who pay it.

I wonder whether the Secretary of State will answer the clear question put by my hon. Friend the Member for Bath (Mr. Foster) earlier. If the cost of digital switchover is greater than £600 million, who will pick up the cost? Will it be the Government or the BBC? If it is to be the BBC, what would she have it cut: “Doctor Who” or Paxman?

We have made it clear that we will not allow the cost of running the targeted help scheme to impact on the employment of any BBC presenter or on any programming. If the costs exceed the estimates that we have set out, they will not be met by the BBC. They will be met by the public purse in different ways.

The BBC does not provide local radio services in Wales. Given that the only opportunity for communities to listen to local radio in Wales is through community radio stations such as Calon FM in Wrexham, will my right hon. Friend consider allowing access to the licence fee to supplement the community radio fund, which is very small indeed compared with the sums that she has been discussing in relation to the licence fee?

Community radio is widely supported, as is the development of local news. However, those decisions are not for me but for the BBC, and I am sure that my hon. Friend will make his representation through the trust.

Given that licence fee payers are contributing more than £800 million to the cost of digital switchover, will they get their money back when the Government sell off the surplus analogue spectrum?

Brian Redhead would have turned in his grave this morning to hear the move to Salford being described on Radio 4 as a move to an “outpost”. Does my right hon. Friend agree that this move involves a mainstream part of the BBC that will become part of an important world-class media centre, which will benefit not only the BBC and the licence fee payer but private sector broadcasters and programmers?

I absolutely agree. I shall be generous and say that to describe a move that will attract £1.5 billion of investment and create 15,500 new jobs in one of our great cities as a move to an outpost is no more than a slip of the tongue. Anyone who goes to Seoul or Dubai will see that such investment in new media and modern broadcasting facilities is where the future lies, and I am delighted that the BBC has recognised that in Britain.

Will the Secretary of State confirm that the BBC Trust has agreed unreservedly to deliver targeted assistance for the switchover, or is the matter the subject of continuing negotiation?

Having just announced the licence fee to the House, we are, as the House would expect, in further discussion with the trust about the detail of the scheme. The governors—the trust has only been in existence for a couple of weeks—were certainly clear that they would be prepared in principle to run the targeted help scheme, subject to the conditions that we have agreed about ring-fencing and protecting the BBC’s main services from any detriment. Having now set out the financial framework, we will conclude the detailed negotiation, as hon. Members would expect.

Does my right hon. Friend accept that the scope, the influence on the market and the independence of the BBC are the reasons why we have so much high-quality original British programming? Given that the link has now been broken between the retail prices index and the licence fee, does she understand the concern that if—heaven forbid—the Treasury inflation forecasts were wrong, considerable financial pressure would be placed on programme budgets?

I thank my hon. Friend for his comments. He is a great and highly effective advocate for the BBC. As he will know, we recognise the vital role that the BBC plays in developing our creative industries generally, through training and independent programme making. The Government’s overriding objective in delivering the stable economic growth that has provided prosperity in this country is the control of inflation.

I am very grateful for that support. Given the rapid growth in multi-media that the Secretary of State alluded to a moment ago, will not the licence fee be increasingly difficult to justify in the years ahead? Given that, is it not essential that we make absolutely sure that we are getting best value for money? And given that, why are the Secretary of State and the BBC still resisting calls to allow the NAO full access to the BBC’s books, just as it has to those of any other public body?

The debate about the future of the licence fee will go on. We have settled that debate for the next 10 years in the interests of stability and of people being taken smoothly into and through digital switchover. Yes, value for money is a stringent requirement of the BBC Trust’s stewardship on behalf of its licence fee payers. We sought the NAO’s advice in relation to the BBC’s efficiency target, and I have today set out the outcome to the House. We have had exhaustive discussions—I have still not persuaded the hon. Gentleman, but there we are—about why we have agreed with the NAO that form of scrutiny of the BBC.

Does my right hon. Friend agree that the move to Salford is good news for the whole north-west in terms of jobs, as well as for universities such as Central Lancashire that concentrate on media degrees? Students in the region will now have real opportunities without having to move to London. The move to the north-west is about redressing the balance, and I hope that it will ensure that the region continues to be a media centre.

I thank my hon. Friend for the support that he has given to this policy. He is right: the changes to the north-west’s economy over the past 10 years demonstrate the important contributions made by the creative industries and the scope of such growth for boosting the economy further.

The Secretary of State says that she retains responsibility for the switchover policy. The BBC’s original pitch was for free digital boxes for the elderly and disabled. Will she confirm that that is still the case? If so, what is her definition of “elderly”?

Over 75, as it is in relation to a number of other schemes. Yes, the targeted help scheme will allow for the distribution of free set-top boxes to elderly, disabled and blind and partially sighted people who qualify.

The next few years are crucial for the BBC. It cannot just stand still if it is to maintain its reputation as the best programme producer not just in the UK, but in the world. It must meet the demands of the digital multi-channel environment, the costs of the welcome move to Salford, and the £600 million costs of the digital switchover—surely it is the Government’s policy to pay for the switchover, as they do the cost of free TV licences for the over-75s. Even without all those extra costs, the settlement represents a below-inflation cut over the next six years. Is the Secretary of State content to take the bullet for the Chancellor’s cuts, and to go down in history as the person who undermined the BBC, perhaps fatally?

That contribution verges on the ridiculous. The Government have made a settlement, and I am the responsible Secretary of State. In government, as the hon. Gentleman is unlikely ever to discover, one negotiates with colleagues in the best public interest. The settlement is in the public interest and in the interests of the BBC.

The Secretary of State will realise that licence fee payers do not expect their money to pay for air time to be given to racists, Nazis, Taliban and other supporters of terrorism at home and abroad. Will she build on the excellent and encouraging answer given by the Leader of the House earlier today, and state whether she has made representations to the BBC about the opinion expressed on 28 November by the head of BBC news that such views should be accorded equal respect to those of democratic representatives? Alternatively, does she agree with the Minister with responsibility for community cohesion, who rightly regarded any such shift as dangerous?

The Leader of the House answered the hon. Gentleman’s question clearly, and I entirely agree with him. Let me underline that the policing of accuracy and impartiality is a job for the BBC Trust, but it does it on behalf of the wider public, who want just that—reliable accuracy and impartiality.

I welcome the Secretary of State standing up to those bleating voices at the BBC and their Lib Dem allies who ask for a wholly unrealistic increase in the licence fee. Given the reduction in revenues for the BBC’s competitors, it might be argued that the settlement is overly generous. How did she come to the perverse decision that the means-tested, targeted support to be provided for poorer, disadvantaged groups when switchover happens should be paid for by the licence fee payer rather than by the Treasury?

I came to that view because, as a broadcasting cost, it is legitimately paid for by broadcasting income.