Order for Second Reading read.
I beg to move, That the Bill be now read a Second time.
As the hon. Member for Teignbridge (Richard Younger-Ross) said, this is the substance of the day. It is also a highly topical subject, notwithstanding the fact that I gave notice about 10 months ago of my desire to debate this subject on this day, the last day on which Members have a chance to discuss potential private Members’ legislation. Obviously, because it is the last day on which private Members’ Bills can be discussed in this Session, the Bill has no prospect of reaching the statute book. Even if it were to conclude all its stages in this House today, it would not have time to be considered in the other place. So this debate is more along the lines of the debates that we used to have on Fridays when I was first elected—on a subject of a Back Bencher’s choosing with a motion at the end of the debate. The removal of that opportunity from Back Benchers was a backward step, because there are several issues of concern to them that may not necessarily be of such concern to Front Benchers, or they may be nervous of initiating a debate on such issues for fear of misrepresentation.
We have the prospect today of having an excellent debate, and I shall begin by welcoming the Minister who will respond to it. This debate is about abolishing the television licence fee, which is more accurately described as the television tax. It is not about abolishing the BBC. One can be a friend of the BBC—as I am—without being a supporter of the licence fee, although the lengths to which the BBC sometimes goes to defend the licence fee often create enemies.
I count myself with those who consider the World Service to be the best that the BBC produces—impartial, informative and often entertaining, with the ability to separate news from comment. It is all funded by direct taxpayer grant via the Foreign Office, which last year amounted to £264 million. That money was raised from the taxpayer on the basis of ability to pay. The World Service encapsulates the best of BBC values and is a living demonstration of the fact that those values do not depend on the licence fee. Let us hope that during this debate no one is tempted to resort to that tired misrepresentation that only the licence fee can protect BBC values.
In a recent MORI poll, to which I shall refer again later, it became clear that the public do not believe that the protection of BBC values is dependent on licence fee funding. Last week, I was present when Michael Grade, now the boss of ITV, addressed a breakfast meeting organised by the Royal Television Society. In commenting on Ofcom’s public service broadcasting review, he described the “seismic shifts” under way in broadcasting and called for “a new settlement” to sustain the health of British broadcasting. He said that that was needed urgently and had to be implemented before the end of 2012. That date coincides with the requirements of my Bill—that the licence fee should be abolished no later than 31 December 2012, by which time the digital switchover will be completed. So, what is wrong with the licence fee at the moment? It is a tax on almost every household in the land, irrespective of ability to pay.
For the most part, the hon. Gentleman is making an interesting case. How would he respond to the large number of my constituents who do not possess television sets and are therefore persecuted by the licence fee authorities? Perhaps we might return to that subject later. Under his proposal, those people would end up paying tax for a service that they do not want to receive. They would therefore be worse off than they are now, as long as they are not further interfered with by the authorities.
The hon. Gentleman’s point is fair. I am concerned, as he is, about those people who feel that the licence fee is an impost. They do not want to watch television and they certainly do not want to watch BBC television, yet they find themselves having to pay the fee. If we funded the public service element of the BBC output in some other way, whether by subscription, direct grant or a mixture of advertising and sponsorship—all those options have been proposed by different organisations—the burden that the hon. Gentleman says would fall on his constituents through direct taxation would not be anything like the burden that is faced by those who have to pay the licence fee.
The situation would be more analogous to the situation with the Arts Council. The Arts Council is funded directly by the taxpayer to the extent of about £500 million a year, and it decides how to reallocate those funds between different deserving causes that promote the arts in accordance with Arts Council principles. My Bill does not address the issue of what to put in place in terms of funding for the BBC, but it would prompt a big debate about alternative funding. I hope that the hon. Member for Cambridge (David Howarth) agrees that the Arts Council model in relation to public services for the arts might be a valid one.
The hon. Gentleman has just reached the point that troubled me about his Bill. Basically, this is a very anarchist approach to funding our public service broadcaster. He wants to sweep away the existing method of financing through the licence fee and has only the vaguest idea of what to put in its place. The Bill should never have seen the light of day. It does not in any way, shape or form deal with the fundamental issue, which is worthy of debate, about the funding of the BBC. It simply sweeps away what exists now and provides nothing in its place. If the Bill were to be approved by the House—technically and theoretically, it could go through all its stages today—the consequence would be that the BBC would close down tomorrow.
That is not correct. It is not incumbent on legislators to impose any alternative solution. There are already powers under the relevant legislation for the Government to fund the BBC in ways other than through the licence fee.
I commend my hon. Friend for his Bill. It is wonderfully short, so I am surprised that the hon. Member for Hendon (Mr. Dismore) has not read clause 2(2), which states that were the Bill to be enacted, it would come into force on 31 December 2012. The idea that the BBC would shut down tomorrow is simply not true.
And it would not even shut down then. All that the Bill would do is ensure that the despised compulsory impost of the BBC TV licence fee would be removed from the statute book.
Apart from the fact that the hon. Gentleman seems to have misunderstood the question from my hon. Friend the Member for Cambridge (David Howarth), he also seems to think that it is perfectly acceptable to impose a requirement on the BBC to generate advertising revenue. Does the hon. Gentleman have any idea of the financial strictures facing ITV and the other commercial elements of the broadcasting sector? What exactly would he do for ITV and the others by way of compensation for removing hundreds of millions of pounds from the BBC and requiring the BBC to compete on a level footing with that sector while advertising revenue is diminishing?
I do not know whether the hon. Gentleman was present at the Royal Television Society breakfast at which I was present, but he would have heard Michael Grade explaining ITV’s predicament. ITV has a public service broadcasting obligation, in terms of the licences under which it operates, and Michael Grade estimates that in the next couple of years a lot of the ITV companies will go into deficit in meeting that public service broadcasting objective. That is why he, Ofcom and others are arguing that we need a central fund of taxpayer-funded resources that can be drawn on by those who provide public service broadcasting for use in that particular type of broadcasting—not in general entertainment broadcasting.
I am even more confused now. The hon. Gentleman is suggesting a central taxpayer-funded pot for public service broadcasting. I would be interested to know whether that would come from general taxation, in which case he will be taxing people who do not watch television. Alternatively, does he have some other plan for a form of taxation to provide the PSB requirements? We should also bear in mind that Michael Grade, who is a great man, had a very different point of view when he was at the BBC.
I shall not comment on whether Michael Grade had a different point of view when he was at the BBC. The hon. Gentleman’s point about having to fund public service broadcasting from general taxation and the idea that that would be an impost on those who do not benefit from that service are true, but the same is also true of funding for the Arts Council. If general taxpayers do not use any of the Arts Council sponsored or subsidised services, they could say that they were contributing to the Arts Council but not getting anything in return. The same is true of a host of other generally publicly funded services. Obviously it is true of the health service. People without children contribute to the cost of education through their taxes, although they do not see any direct benefit. Other people opt out of the system and end up paying twice. People opt out of the health service and those who are in good health pay without needing it at the moment.
If we start suggesting that all taxpayers’ money should be allocated on a hypothecated basis, that is anathema to the Treasury and to many other policy makers. I must say that I disagree with the hon. Member for Montgomeryshire (Lembit Öpik).
The hon. Gentleman tried to make a comparison between funding for the BBC and funding for the Arts Council, but surely that is like comparing chalk and cheese. The Arts Council has a specific remit within a limited field. The BBC provides arts programmes and educational programmes, and is required to produce public broadcasting for the general good, but it also provides a good deal of general entertainment. In some cases, the comparison is more like going to the cinema than the Arts Council. If people go to the cinema, they pay when they go through the door.
That would be so if I was suggesting that all the BBC’s services should be funded by such a body. I am talking about those services that can be described as containing a public service element. In a few minutes, I shall come to the comments made recently by a member of a body that has argued strongly in favour of setting up such an organisation. David Cox is a member of the Broadcasting Policy Group and that body has suggested that a new organisation should be set up to disburse public money for public service broadcasting.
He says that enthusiasts for public service broadcasting, such as him, want as much money as possible but recognise that there would have to be some constraints. In his article, he gives an estimate of how much he reckons would have to be raised in that regard.
The hon. Gentleman has focused on television, but the BBC provides our national radio services, which are also funded from the licence fee. How does he propose that radio services should be funded? Is “Today in Parliament” to be sponsored, or subject to advertisements? If so, how will we ensure proper political neutrality in such advertisements and sponsorship?
The hon. Gentleman perpetuates a myth put forward by the BBC that we need £3.5 billion a year to fund BBC Radios 3 and 4, which cost about £50 million a year. In so far as they have a public service broadcasting element, they would be eligible, under my system or some of the systems being proposed, for taxpayer funding through a central grant. The suggestion that we need to spend £3.5 billion raised through the licence fee to ensure that the hon. Gentleman can listen to “Today in Parliament” or “Yesterday in Parliament” is a complete myth. Although the programme may be popular among Members in the Chamber today, I am not sure that many people outside this place listen to it—certainly not unless it is more entertaining and less intense than this debate is becoming.
I thank the hon. Gentleman for graciously giving way again. If the Government are the body responsible for setting the tax level that the BBC receives, and given that they have had arguments with the BBC over some of the programmes that were to be broadcast and that the previous Conservative Government also had arguments with the BBC—a certain gentleman famous for telling people to get on their bikes was prone to attack the BBC—is there not a danger that Governments would use the threat of cutting the taxes as a way of trying to control the BBC’s output?
The best answer to the hon. Gentleman’s latest intervention is from Greg Dyke, the former director general of the BBC. In a recent article, he wrote:
“The argument against is that it would further endanger the BBC’s political independence. But how can it be worse than last year when Gordon Brown intervened personally to limit the size of the BBC’s licence fee increase? The advantage of giving the BBC a direct grant—and I’m sure all sorts of political safeguards can be attached to a new system to make it more robust than the current one—is that you would save the cost currently paid to collect the licence fee”.
That cost is about £120 million a year. He points out that such changes have already happened in the Netherlands and in some Scandinavian countries. Indeed, earlier this week, I was at a parliamentary meeting in Estonia and discussed such ideas with a parliamentarian from Belgium who told me that the same system had been adopted in Flanders and was likely to be extended to the rest of Belgium shortly.
Greg Dyke notes in his article that he is not sure that he will be loved by the BBC for making his comments, but he thinks there is great logic in scrapping the licence fee. He says that it has
“always been an unfair tax—the rich pay the same as the poor—and…it will be increasingly difficult for the BBC to collect the amount they collect now. In the age of internet TV, how can you insist people continue to pay a licence fee? A licence fee for what? Already you don’t need to pay the licence fee to watch most of the BBC’s programmes if you watch them on your computer via the iPlayer”.
I pray in support of my Bill, Mr. Greg Dyke. Although in the end he did not have the opportunity to become Mayor of London I am sure he might find favour with an incoming Conservative Government as a potential candidate to oversee an independent body or board to distribute resources in respect of genuine public service broadcasting.
One of the biggest arguments against the licence fee is the duke and dustman argument, which was used extensively against the advocates of the community charge. However, students had to pay only 20 per cent. of the community charge. Under the licence fee, they have to pay the full charge even though they may live in a shared house and watch no BBC television at all, merely having a TV card on their laptop. In that respect, the licence fee is worse than the community charge in terms of its impact on those who are less able to afford it. Indeed, it is said that more than one third of adults watch less than five hours of BBC television a week and more than one in eight watches less than 15 minutes a week. At least one could argue that the community charge was used for the collection of refuse and everyone contributed because they needed that service, but even that justification is not available for the BBC licence fee.
The hon. Gentleman made a pertinent point about some of the people who are asked to pay the licence fee, and some consideration should perhaps be given to how student households are affected. I remember that elderly people in my constituency thought the community charge unfair and found it hard to pay, but TV licences are free for the over-75s and many people qualify for concessions; for example, the blind concession reduces the cost by 50 per cent. I do not recall that blind people had a concession on their community charge. People who live in residential care may be entitled to a reduced-fee TV licence under the accommodation for residential care concession and so on. The hon. Gentleman may be distorting the concessions that were made under the community charge.
There is a limit to how far one can draw the analogy between the community charge legislation and the BBC licence fee.
The hon. Gentleman started it.
I started it, but where I think I am on to a winner is that, just as when people started to think about the community charge they became hostile towards it, particularly towards its perceived unfairness, so there is increasing hostility towards the unfairness of the BBC licence fee. Earlier this week, I was talking to the hon. Member for Sunderland, North (Bill Etherington), who is much exercised by the unfairness of the licence fee and would much prefer the public service element of broadcasting to be funded by a progressive tax rather than a regressive one.
I am grateful to the hon. Gentleman for giving way at that point because I have just heard him support arguments for a local income tax, which I never thought I would hear from him.
The hon. Gentleman will not draw me into that debate. I shall not comment, except to point out that I have never been persuaded of the case for a local income tax. Taxes are too high and should not be increased. The consequence of a local income tax would be that everybody would pay much more income tax and have less money to spend on their own priorities.
To answer the hon. Member for Teignbridge, it is not as though there is no cost associated with the concession for the over-75s: the taxpayer pays £520 million a year for it. It is presented as an act of generosity by the Government, but if the Government have £520 million to spend on the over-75s, they should give them the money in their pocket, so that they can spend it as they wish, rather than handing it as a proxy payment, made on their behalf, that goes toward the funding of the BBC. The redirection of that taxpayers’ money—£520 million—would be another side benefit of the enactment of the Bill.
The March 2006 White Paper “A public service for all: the BBC in the digital age” contained a justification for the BBC licence fee, stating:
“Consultation and research…has demonstrated support for the licence fee to continue as the ‘least worst’ way of funding the BBC.”
That is hardly a ringing endorsement.
The hon. Gentleman may not think that that is a good justification, but surely the inescapable logic of that statement is that every other form of funding would be worse?
That was the assessment at the time of the White Paper, but one of the problems is that so many of the alternative forms of funding have been the subject of misrepresentation such as we have heard from some of the diehard defenders of the licence fee in the Chamber today.
The White Paper also quoted Ofcom, citing
“public support for a flat fee, on the basis”—
this is one of the most spurious and specious arguments that I have heard—
“that television, unlike other public services like healthcare and education, is something of a ‘luxury’.”
If that is true, why are the Government funding the licence fee—providing a luxury—for the over-75s? In fact, most people regard having access to television receiving equipment or possessing a mobile device that can receive television as essential, just as they regard having a telephone as essential. The question then arises about the use to which the equipment is put, but to describe having television receiving equipment as “something of a ‘luxury’” is to be out of touch with today’s reality.
Recent polls have provided quite a lot of evidence of people’s concern about the BBC licence fee arrangements. On 18 August, The Guardian published a MORI poll showing that 47 per cent. of respondents disagreed with the proposition that the BBC licence fee provided value for money, and only one in three agreed with it. I suspect that a closer look at the figures would reveal evidence to suggest that the BBC is in breach of its duty under the charter to provide value for money.
I do not want to be drawn into a debate on what is causing people to think that the BBC does not provide value for money. One of the reasons they are saying that might be that they never watch or do not have access to BBC programmes, but another reason might be the very high salaries that the BBC pays to some of its top managers and the very large number of managers in the organisation.
As my hon. Friend obviously knows, leaving aside the people on the board, the BBC has 744 senior managers. Of those, 672 have salaries in excess of £70,000 a year; 343 have salaries in excess of £100,000 a year; 172 have salaries in excess of £130,000 a year—I cannot remember whether we have passed your salary scale yet, Madam Deputy Speaker—83 have salaries in excess of £160,000 a year; 39 have salaries in excess of £190,000; and 13 have salaries in excess of £250,000 a year. These people are not the great artists but the managers. I shall not even talk about the £195,000-a-year pension payable to Jenny Abramsky.
Such salaries create a feeling among the public, who have to pay the licence fee, that something has gone wrong in getting value for money. Whenever the BBC is challenged on the topic, it denies that there is a problem, but parliamentary scrutiny should include bringing in the National Audit Office to audit properly what goes on in the BBC. I am sure that my hon. Friend the Member for Wantage (Mr. Vaizey) supports that proposition.
The people who are concerned about the BBC but who also have the BBC’s best interests at heart include Antony Jay, the creator of “Yes Minister” and a man who knows his way around television broadcasting very well. In a recent article, he states his belief that, for lovers of the BBC, the best thing to do is to get the BBC to face up to the reality that a different system from the present one is needed. He says:
“BBC1 and Radio 4 between them cost about £1.5bn.”
On where the money would come from if not from the licence fee, he says it would come
“Partly from the profits of BBC Worldwide. Currently these run at about £100m a year”—
although he thinks that that could be increased if the BBC became more professional in its marketing. He also thinks that there are opportunities to fund the BBC in other ways, including the equivalent of an Arts Council budget. He does not want to see the BBC fade away, but does not think that the present system is sustainable. He thinks that a mix of alternative sources of funding, perhaps including viewer subscriptions, is the way forward.
The total amount of taxpayers’ money already being put into public service broadcasting, in addition to the amount that people pay through the licence fee, is not far short of £1 billion a year. There is £264 million for the World Service and £508.4 million for the free licences for the over-75s. A significant sum—we do not have exact figures—is required to meet the costs to the Ministry of Justice of running the courts dealing with licence fee evasion cases. According to the last figures available, in 2006, 129,000 such cases came before the courts, resulting in 113,874 fines being imposed. All those proceedings had to be funded and were an enormous burden on Her Majesty’s Courts Service. Indeed, 24 of the cases resulted in people being sentenced to imprisonment. Those costs are obviously met directly by the taxpayer.
There are also collection costs, and another element of taxpayer funding of broadcasting has recently been revealed: sponsorship of ITV. It came as quite a revelation to people that the Government were giving us a soft sell of their policies by providing sponsorship money for various ITV programmes that were to do the Government’s propaganda job for them.
A very large sum of money going into broadcasting comes from the public purse. It ill behoves anybody to suggest that it would be anathema, and inconsistent with what goes on at the moment, to transfer some of the money needed for public service broadcasting from the licence fee to another pot of public money. Some people argue that it would be dangerous to mix public funding with advertising, but that is already happening at S4C, which has direct Government grant as well as advertising. That is relevant, too.
Are people outside the House concerned about the issue? There are, to my knowledge, several e-petitions on the subject. One of them has been submitted by David Cormack, who says:
“Independent economic research analysis and investigations by consumer protection organisations such as the National Consumers Council have consistently concluded, for many years, that the UK TV licence is a levy which is regressive in its financial impact on the poor. This gross iniquity is perpetuated in essence by the UK Government upon its most vulnerable citizens. This situation is even more outrageous in an age when the poor may receive only 5 terrestrial TV channels, for which the TV licence contributes to the cost of only BBC output, yet the more wealthy within the UK tend to enjoy dozens, or even hundreds of digital or satellite TV channels at comparatively little extra cost to them per channel. This petition accordingly urges the Government to abolish the UK TV licence and allow the BBC to make use of”
alternative forms of income generation.
Another e-petition has been organised by BBCresistance. The fact that such organisations have been set up shows the strength of feeling on the subject among ordinary people. I have also come across the Campaign to Abolish the Television Licence. Again, there is a link between its arguments and the arguments against the community charge or poll tax. That indicates that we need to think about where we go from here, and shows that the debate is highly topical.
I shall conclude, because it is important that other Members have a chance to speak. I am delighted that my hon. Friend the Member for Wantage, who is on the Front Bench, will respond to the debate for my party. He will know that, in 1971, an incoming Conservative Government abolished the licence fee for radio. I do not expect him to pledge today that an incoming Conservative Government in 2010 will abolish the TV licence fee, but I hope that he will accept that we cannot let matters rest here, to use the immortal words of our right hon. Friends the Leader of the Opposition and the shadow Foreign Secretary. Those are words relevant to the Lisbon treaty and the EU constitution, and they are equally relevant to this debate about the licence fee. The present situation is unsustainable. Public service broadcasting by ITV is in grave jeopardy and the BBC licence fee payers are in revolt. They are looking to an imaginative, incoming Conservative Government to do something about it, and I hope that they will.
It is a great pleasure to follow such a self-proclaimed good friend of the BBC. It is obvious that the hon. Member for Christchurch (Mr. Chope) has the best interests of the BBC at heart, as he said. The centrepiece of his speech was his reference to the licence fee as a tax on every household in the land, irrespective of ability to pay. I intend to try to deal with that issue. It is worth reflecting, as the hon. Gentleman himself mentioned, that he has form on the issue of taxes. He told the House, at 4.34 am in March 1990:
“Of all the alternatives to the domestic rates, the community charge is by far the fairest system.”—[Official Report, 27 March 1990; Vol. 170, c. 400.]
I am glad that, over the years, he has moved on in his thinking about the impact of those charges on the poor. The issue has to be confronted; obviously, the licence fee is a flat charge, although there are numerous concessions, both for the over-75s, as has been mentioned, and for others.
The hon. Gentleman referred to those who argue that the licence fee is the least worst system for funding the BBC. Winston Churchill said the same about democracy—that it was the least worst system of government. There is sometimes something to be said for the least worst system, and that is what I intend to concentrate my remarks on.
The hon. Gentleman has form on this issue: he introduced a ten-minute Bill to abolish the BBC licence fee just eight years ago. On that occasion, he quoted approvingly the Daily Star, which had said that
“BBC programmes are about as exciting as old wallpaper paste”.
I was waiting for him to give us examples of things that the BBC does well, but apart from the World Service I do not think that he referred to one thing that he treasured in the BBC.
I was looking at the things that the BBC has done since 2000, thinking that perhaps one of them might have tempted the hon. Gentleman to change his attitude to the licence fee—for example, Freeview, which is perhaps Greg Dyke’s greatest legacy to the nation. It brings digital TV to millions of people and is now the digital platform of choice. Perhaps freesat, a great collaborative venture between ITV and the BBC, or the iPlayer, which he mentioned, might have modified his attitude, or some of the great programmes that the BBC has produced since 2000. Programmes such as “Planet Earth” have been viewed by millions of viewers. The old argument that there was a golden age of the BBC that we have lost is deeply flawed. Programmes such as “Planet Earth” are watched by far more people than ever watched “Civilisation” in the 1970s, because of the expansion of education and BBC output.
I thought that perhaps some of the comedy might have tempted the hon. Gentleman to change his mind, albeit perhaps not the comedy on BBC3; it might not be to the hon. Gentleman’s taste, even though the channel is increasing its reach. However, some of the great comedy on BBC2 might have appealed to him, such as “The Office”. Perhaps, dare I say it, “Grumpy Old Men” might have tempted him to modify his position on the BBC. However, none of those programmes did.
As I understand it, the hon. Gentleman is chairman of the all-party pro-BBC group, and I congratulate him on the research that has obviously been done for him, but does he accept that he is effectively trying to attack an Aunt Sally? I am attacking not the BBC or its content, but the fact that it is funded through the licence fee. I hope that he will address that issue and will argue why it would not be possible to have an alternative way of funding the BBC without losing what he regards as the best parts of the BBC.
I intend to develop that argument exactly as the hon. Gentleman suggests. I accept that he has the best interests of the BBC at heart because he says so. I do chair the all-party parliamentary BBC group. We like to regard ourselves as critical friends of the BBC and I have one or two criticisms to make as I develop my argument.
The system of collection of the licence fee is fairly robust. When the BBC took over responsibility for collecting the licence fee in 1990, 90 per cent. of the fee was collected. The figure has gone up to 95 per cent. The costs of collection are £120 million, as the hon. Gentleman said, but the BBC has reduced them considerably over recent years. The present cost is only 4 per cent. of the licence fee, as opposed to 5 per cent. when we had the ten-minute Bill debate in 2000—a saving of £30 million.
Does the hon. Gentleman accept that if one takes out the lump sum that comes from the Government in respect of those who are over 75—the £500-plus million—the collection costs are 4.5 per cent. of the remainder? Does he further accept that one of the prices that has had to be paid is that the licence fee is no longer payable through post offices? That decision has contributed to the demise of a number of our post offices.
I am a great supporter of our post offices. One of the reasons I am on the Back Benches rather than on the Front Bench is that I have tended to vote that way when the opportunity has arisen in the House on motions on the Post Office. I share the vigour of the hon. Gentleman’s defence of post offices. It is a pity that the BBC licence fee cannot be paid at a post office, though it can be paid through PayPoint.
The hon. Gentleman mentioned the change in technology and posed the question whether the licence fee was undermined by the fact that content can now be downloaded from the iPlayer after the event or accessed by other means. He cited the arguments put by Greg Dyke. Ninety per cent. of households still have televisions, the overwhelming majority of which pay the licence fee. If one accesses BBC content live, whether through television or computer, one is liable to pay the licence fee.
The hon. Gentleman mentioned BBC resistance, a group that I had not heard of before and which he seemed to mention with approval. I do not detect a widespread movement of resistance to paying the licence fee, although it is right that the BBC Trust is investigating other methods of collecting the fee and reviewing whether all the ways of pursuing people to ensure that they pay are appropriate. We all look forward to the BBC Trust’s report in due course.
Does the hon. Gentleman accept that the terms of reference adopted by the BBC Trust are narrow? The review does not invite people to consider whether non-payment of the TV licence fee should be decriminalised, whether it is reasonable that there should still be imprisonment for non-payment, or whether there might be an alternative to the licence fee as a means of paying for the BBC.
Some of those suggestions go way beyond what the BBC Trust is trying to do. It is trying to fulfil its responsibilities of overseeing the collection of the licence fee. It is not up to the BBC Trust to initiate a debate on alternatives to the licence fee. The hon. Gentleman mentioned sponsorship approvingly. The BBC Trust has reprimanded management about sponsorship of the Proms and Sports Personality of the Year, thereby showing that it has teeth. Its investigation of the topic is to be welcomed.
The hon. Gentleman mentioned a range of alternatives—subscription, advertising, direct Government funding, and sponsorship. Subscription to the BBC would destroy the universality of access. It would destroy moments such as those that we all enjoyed during the Olympics a few weeks ago, when the whole nation celebrated moments of great sporting success together, and it would destroy the fundamental principles of the BBC.
President Sarkozy of France is a great admirer of the BBC. Indeed, his wife appeared on the BBC on the Jools Holland show late at night on a Friday.
I do not know whether that programme might tempt the hon. Member for Christchurch late at night on a Friday. It clearly tempts his colleague on the Front Bench, the hon. Member for Wantage (Mr. Vaizey). President Sarkozy is now insisting that the French public service broadcaster drop advertising and move in a different direction. ITV certainly would not support the BBC having advertising. An already volatile market would collapse if the BBC were funded in that way.
Sponsorship offers a limited possibility of funding. Total TV sponsorship across all the channels is less than £100 million a year and does not provide an alternative to the licence fee. That leaves direct taxation. One of the great things about the licence fee, even though it is a matter of public controversy, is that it is fixed till 2012. That is a long time in terms of public funding. It is not subject to an annual spending round. If the chairman of the BBC had to troop in to see the Chancellor every year, that would, over time, impact on the BBC and undermine the cutting edge of a presenter such as Jeremy Paxman.
KPMG did a study of public service broadcasters around the world that examined different models of funding. The hon. Gentleman’s advocacy of the system in Belgium does not offer great comfort to me. I do not know whether he can name the public service broadcaster in Belgium or assess its impact on world culture, but I imagine it is rather small compared with that of the BBC. He cited the mixed model of funding for S4C, but that is a small player.
Studies from around the world show that if we want a strong public service broadcaster that can bring programmes with high quality content to the whole nation, the licence fee model stands out as the best model. In Australia and Canada, the public service broadcasters, ABC and CBC, are far weaker and rely on the BBC for much of their programming content. If we want high quality, there is much to be said for sticking to the model of the licence fee.
Does the hon. Gentleman agree that many of the programmes that we all praise and that make the BBC what it is today are possible only because the BBC has direct access to funding that does not have to be repaid in a commercial sense? Further to that, many of the other commercial enterprises in the broadcasting sector depend on the mentoring and the tutelage of the BBC, which effectively supplies many of the staff across the board who start in the BBC and move on to the independent sector.
The hon. Gentleman makes a good point, which gets to the crux of the matter. The hon. Member for Christchurch advocated a sort of arts council of the air. There are a number of problems with the idea that public service broadcasting could be preserved if the licence fee were top-sliced or abolished entirely and all broadcasters could bid to make programmes. The fact that the BBC provides such high quality programming is something to do with the security and continuity over time of the institution. People can be creative and take risks in comedy, drama and political and news coverage.
If every programme had to be bid for in some sort of arts council of the air, as happened in New Zealand, quality would deteriorate. It would hardly be good for Channel 4 if the licence fee were top-sliced and it had to be publicly accountable for the licence fee in the same way as the BBC is. Would “Big Brother” or “Dispatches” be supported by the licence fee? We have to look for other models of the BBC supporting the rest of public service broadcasting, rather than top-slicing the licence fee and breaking the link between licence fee payers and the BBC.
Will the hon. Gentleman give his view of what should be done, in the light of the Ofcom review, to promote competition among regional news channels, for example? ITV regional news will die as a public service news organisation unless it receives money from somewhere. At the moment, the BBC is enjoying a monopoly of public service revenue. Should that not be shared?
The hon. Gentleman has cited Michael Grade; it is a complete misrepresentation of his position to say that he wants public funding for ITV. I shall come to suggestions about how we can preserve more of our public service broadcasting, but the last thing Michael Grade wants is the licence fee. He made that perfectly clear in his remark at the breakfast.
Today’s debate is important. I like to consider how the different Front-Bench and Back-Bench members of the modern-day Conservative party view Polly Toynbee. How do they react when they see an article by her in the Tea Room? I am sure that some read her avidly and are interested in the view of The Guardian on a whole range of issues, but I suspect that the hon. Member for Christchurch is not one of them. It is interesting that only last week Polly Toynbee—one of the great advocates of the BBC—wrote in The Guardian:
“The BBC stands as the only truly admired emblem of Britain; trusted, envied and valued, a gift to the rest of the world.”
I am interested that the hon. Gentleman has brought up Polly Toynbee; the Secretary of State has also done so. The hon. Member for Selby (Mr. Grogan) likes to give the impression that the Labour party is an uncritical supporter of hers; if it supports her views on the BBC, does it also support her view that the Prime Minister should resign immediately as he is a lame duck?
I was going on to say that I would not endorse all of Polly Toynbee’s views. I hasten to add that, in recent months, I have been an enthusiastic supporter of the Prime Minister when some others were not.
There is something that encourages me about the modern-day Conservative party and its reading of Polly Toynbee—and I mean this most sincerely, as someone used to say on ITV. The Conservative party has had at least as much to do with the BBC and its development over the years as the Labour party. The Conservative party created the BBC and created not its current charter, but its previous two. I was encouraged to hear the Leader of the Opposition say recently to his Scottish party conference:
“Another institution we can all be proud of is the BBC. The British Broadcasting Corporation was founded by a Scotsman and is the most prestigious broadcaster on earth. People around the world tune into the BBC for news they can trust. The BBC also reminds us of our common culture. Programmes like Doctor Who and Mastermind aren't English or Scottish—they’re British.”
It so happens that I have read one of Polly Toynbee’s articles on this subject. Does the hon. Gentleman agree with her statement that
“no BBC employee deserves more than the prime minister’s £187,000”?
There is an argument for that; those who are leading at the very top of the BBC must recognise that they are going to earn less than they would in the private sector, although I do not want to name a particular figure. The BBC clearly has to pay for top talent, because it is a complex organisation to manage and it needs top talent to appear on our screens as well. However, such people should recognise that their terms and conditions will involve a little less pay than they would receive in the commercial sector. Nevertheless, the BBC should pay decently those who manage one of our most valued and cherished public institutions.
As the hon. Gentleman knows, BBC staff accept that they effectively take on a financial penalty for working at the organisation. However, its culture is so strong and the working environment there is so attractive in respect of creativity and what they can do, that they accept that cost. Is that not one of the most powerful testimonies of the benefits of the BBC as it is now structured and a reassurance to the public that paying for the licence fee does not mean paying through the nose for BBC staff?
The hon. Gentleman is right; clearly, every penny of BBC expenditure has to be scrutinised, and the new system of the BBC Trust under Sir Michael Lyons is doing that job better than the old Government system. The BBC Trust is a relatively new form of governance, but it is stressing value for money. I hope that we will hear from the Opposition strong statements of support for the BBC in line with the solid Tory tradition to which I referred. The BBC is not the property of any particular political party; it belongs to the nation. Of all British institutions, it speaks to the world; Polly Toynbee was right on that, and I hope that Conservative Front Benchers share that view—the Leader of the Opposition seems to. The BBC is a global institution of which Britain can be proud, along with premier league football and some of the songs of our most popular bands, which are renowned in popular culture throughout the world.
I am grateful to the hon. Gentleman, who has been very generous in giving way. To what extent does he think that Mark Thompson’s salary of £816,000 a year is an underpayment?
Order. I remind hon. Members that we are discussing the television licence fee, not the salaries of individuals.
Madam Deputy Speaker, Mr. Thompson’s salary of £816,000 is directly paid by those who pay the licence fee; that consideration was behind my intervention.
I realise that, but still think that the general thrust of this debate is whether the television licence should be abolished.
Thank you, Madam Deputy Speaker; obviously, I shall follow your ruling.
Madam Deputy Speaker, I hope that I am in order in saying that my earlier point was that the BBC tends to pay less than the independent sector for the same level of staff. Does the hon. Gentleman agree that, far from being expensive, BBC staff are extremely good value for money, and that it is inappropriate—
Order. I have already made a ruling on this matter.
Thank you, Madam Deputy Speaker; I shall follow your ruling to the letter.
We are having this debate at a timely moment. Over its 80-year history, the BBC has been too centred on London. This week has been dramatic, with lots happening in the world economy and so on. The House may have missed a speech by Jana Bennett, director of BBC Vision, who announced much more ambitious targets for moving BBC production out of London to the nations and regions. By 2016, a third of all BBC production will come from the English regions, up from 26 per cent. now. Scotland, Wales and Northern Ireland will account for 17 per cent. of the production of all BBC programmes by that stage—nearly a tripling of their output. As Jana Bennett said,
“there is no substitute for being there.”
It has taken the BBC a long while to learn that lesson. It will be simply fantastic when Manchester can boast BBC Radio 5 Live, 5 Live Extra and the two children’s channels. A lot of BBC commissioning has gone to Manchester through BBC Learning as well. In answer to the question put by the hon. Member for Christchurch about what more the BBC can do to assist other public service broadcasters, I should say that the sharing of facilities is one of them. The BBC management have suggested that they could share some of their local and regional news output and some of their research and development with the commercial sector; they have already co-operated with ITV on issues such as Freesat.
In the coming months, it will be interesting to see how BBC management can monetise that sharing of resources, how they can be more specific and what suggestions they make to Ofcom and the Government about how they can do that. In the meantime, there will be a revolution for viewers and listeners in the voice of the BBC and where the programmes come from.
The Welsh newspapers were saying a couple of days ago that Auntie is becoming Welsh. “Crimewatch” is moving to Wales, as, possibly, is “Casualty”. I think that Members on both sides of the House will welcome that move because, as the hon. Member for Christchurch said, there is a danger that ITV’s regional heritage and tradition is weakening, which means that there is even more merit in the BBC becoming stronger in the regions.
Sport on the BBC is one of the joys of the nation. It is tremendous to be able to watch great sporting events without the interruption of adverts. The BBC was the only major public service broadcaster in the world to stay after the Olympics to cover the Paralympics. During the Olympics and the Paralympics, it delivered the red button service—a product of Freeview, Freesat and technology that the BBC has developed over the years. That was a tremendous bonus for a sports fan. I am glad that the Government are reviewing the list of sporting events that must be made available to free-to-air broadcasters at a reasonable price. It would be nice to see added to that the Ashes series, the last day of the Ryder cup and the home nations’ qualification matches for the World cup and European championships. The BBC is still the world’s biggest terrestrial broadcaster in terms of sport. Ten per cent. of the output of BBC1 and BBC2 is devoted to sport. It enriches the lives of many people who could not afford to pay subscriptions for Sky TV and Setanta. Our national life would be much diminished without BBC Sport’s contribution to it.
The BBC licence fee still has a lot of life in it. It is the least worst system of supporting a BBC that still reaches 93 per cent. of people in the nation every week. Eighty-four per cent. of people—a figure that is slightly up on last year—watch one or other of the BBC TV channels each year. More than 50 per cent. of our radio listening is done via the BBC. Our local radio stations enrich communities across the length and breadth of our land. Above all, the BBC produces programmes of such quality that they are the envy of the world. They inform, educate and entertain. Because of the BBC, people switch on their radios or television sets, things catch their eye or make them prick up their ears, and they become interested in things that they would never believe they could be interested in. It is still true that, in the words of Dennis Potter, one can tune in, switch on and marvel. It gives me great pleasure to oppose this Bill and to support the BBC licence fee.
It is a great pleasure to follow the hon. Member for Selby (Mr. Grogan), who has been a vocal supporter of the BBC during his 11 years in this House. It is rumoured that his time here may be coming to an end, but I am sure that he will re-emerge outside in some form or other as a continued supporter of the BBC.
I congratulate my hon. Friend the Member for Christchurch (Mr. Chope) on using his opportunity in the ballot for private Members’ Bills to promote this Bill. It is important to make two points at the outset. First, as my hon. Friend said, to propose the abolition of the licence fee—or, to put it more kindly, to propose an alternative way of funding the BBC—is not to launch an attack on the BBC. One can be a friend of the BBC and still suggest that it might be alternatively funded. Secondly, no one in this House, whatever their views of the BBC or the licence fee, should be afraid to debate whether the licence fee is the best way of funding the organisation. Since I entered politics, I have found that it is always extremely dangerous to muse, debate or think outside the box. I want to put it on record that I am a firm supporter of the licence fee, as is the Conservative party. Nevertheless, no one should be afraid to rehearse the arguments about whether the licence fee is the best funding mechanism.
Having been tutored by you on many occasions, Madam Deputy Speaker, it is important to emphasise that this is essentially a debate about the mechanism for funding the BBC, although it wandered slightly, but effectively, during the remarks of my hon. Friend and those of the hon. Member for Selby, on to other aspects of public service broadcasting and the merits of the BBC.
Let me focus on some of the proposed alternative methods of funding the BBC. I say to my hon. Friend—in all humility because he is an extremely experienced parliamentarian and former Minister—that his arguments against the licence fee might have been strengthened if he had put forward a clear and cogent alternative. I echo the hon. Member for Selby in saying that although the licence fee has some imperfections, it is probably the least worst mechanism for funding the BBC.
I must confess that I was horrified to hear my hon. Friend propose what amounted to an arts council of the airwaves. Knowing as much as I do about his firm principles and views, I was appalled by the idea of setting up a terrible quango of the great and the good to distribute public money to make programmes that, if I could put it this way, people like us would like to watch. I can confidently predict that were he to get his way and have that arts council established, he would be back in this Chamber within a year or two proposing its immediate abolition having seen some of its output. To be fair to Ofcom, which has been criticised for proposing an arts council of the airwaves, that is no longer being seriously considered as an option. What is being seriously considered, however, is the idea of top-slicing, which in effect shares the BBC’s licence fee with some of the other main public service broadcasters.
On the other proposed alternative arrangements for funding the BBC, first, there is the obvious method of subscription. Intellectually speaking, particularly in a digital age, there might be no problem with a subscription service. However, the trouble would be that it would immediately narrow the BBC’s audience base. It would also betray a fundamental misunderstanding of the BBC’s purpose in terms of its role as a public service broadcaster and its place in the ecology of public service broadcasting and broadcasting as a whole, because its audience would be segmented and severely diminished.
Similarly, some public service broadcasters are supported by advertising—Channel 4 is the most obvious example, but that also applies to ITV and Channel 5, if we want to include them in the family of public service broadcasters. Indeed, to some extent, the BBC plays fast and loose with advertising. For example, there is advertising on BBC Worldwide, and the BBC adopts forms of sponsorship, which, in my book, come close to advertising. However, in the current climate, the idea of the BBC suddenly entering the marketplace to compete for advertising is unrealistic. Again, the BBC’s ecology and the public’s wishes favour a BBC that is free from advertising and directly funded. That is the way forward.
What is the hon. Gentleman’s perspective on the fact that the independent sector is concerned about the prospect of the BBC’s having to resort to advertising? It feels that the pot is already under great pressure, so although we may argue about the best way in which to fund the BBC, there is no appetite in any part of broadcasting to require the BBC to make its domestic output dependent on advertising revenue.
The hon. Gentleman’s point is spot on—I should have made it myself. If the BBC competes for advertising, that would inadvertently cause severe damage to commercial broadcasters. It is the last thing that those broadcasters want. Most do not want direct funding from Government, either—ITV and Sky adamantly oppose top-slicing and receiving a subsidy from the Government to produce what is known as public service broadcasting.
We are essentially debating whether the BBC should be funded by a licence fee, which individual households pay, or general taxation. Before concentrating on that argument, let me accept the challenge from the hon. Member for Selby to say something nice about the BBC. Given that he quoted the Leader of the Opposition saying something nice about the BBC, it would obviously be in my interest, too, to say something nice. However, I can happily cast self-interest aside and speak genuinely of my love and adoration for the BBC. I believe that it is fantastic and that most people in this country regard it as a great organisation and as family. The family analogy is important: we give the BBC the nickname “Auntie”, and, by and large, we like the BBC, but we also feel free to criticise and have rows with it. Sometimes, those rows are incoherent—rows for the sake of having a row, as most of us have in our own families.
We constantly talk about public service broadcasting, but one of the frustrating aspects of those discussions is that we always end up talking about an individual programme. I can be more specific: we always seem to end up talking about “Blue Planet”. At some point in the debate, somebody will mention “Blue Planet” as the justification for £3.5 billion of taxpayers’ money.
You have just done it.
Indeed—I win the bingo prize for mentioning “Blue Planet”. However, the BBC as a public service broadcaster is much more than “Blue Planet”. The BBC, like all publicly funded organisations, is always desperate to prove its economic worth, so it publishes worthy papers—probably wasting licence fee payers’ money in the process—to show that it contributes more to the economy than it takes from it. The latest report—from Coopers & Lybrand, or some other such auditor that probably failed to audit a commercial bank—pointed out that, for the £3.5 billion we give the BBC, we get back approximately between £5 billion and £6 billion. I have no doubt that those figures reflect to some extent the fact that BBC puts back more than it takes from the licence fee payer.
I keep using the rather amorphous term “ecology”, but I believe that the BBC is embedded in our culture. It gives the arts tremendous support, for example, through the Proms. It helps numerous other arts organisations, but one barely hears about that. A few weeks ago, because I did not think that the BBC had made enough of a point about it, I flagged up the fact that it was giving singing bursaries to young singers. People may argue that that is beyond the BBC’s remit, but I want to emphasise that the BBC is involved in so much more of the public realm than simply switching on BBC 1 or BBC 2 or listening to Radio 4, Radio 5—or, indeed, Radio 1, to which I occasionally listen—suggests.
As a public sector organisation, the BBC is surprisingly innovative. The hon. Member for Selby mentioned Freeview, freesat and the iPlayer, which are important innovations. The great thing about Freeview is that the BBC got stuck in and created a platform that is open and available to all, and ensures that there is no monopoly of platforms provided by subscription service television. That was an extremely important innovation—I am not going to say that it is as important an innovation as the invention of television, but I suspect that we will look back on it as incredibly important.
The hon. Member for Selby mentioned the recent speech by Jana Bennett, the director of BBC Vision, which was a welcome statement by the BBC on the redoubling of its efforts to ensure that it has a presence in the regions. “Crimewatch” is moving to Cardiff—don’t have nightmares—although I could not quite understand the row about “Question Time” moving to Glasgow, because as far as I am aware it is produced by an independent television company based in Hammersmith. I do not think that anyone is going to make David Dimbleby live in Glasgow, but anyway, that is beside the point.
I hear what my hon. Friend the Member for Christchurch said about the need for the BBC to provide value for money. Many executives in the BBC are extremely well paid. The director general of the BBC, who went to my college at Oxford—incidentally, Merton college also produced Jeremy Isaacs and the right hon. Member for Rotherham (Mr. MacShane), who is relevant to this debate because he is a Labour Member who wants to abolish the licence fee, which he sees as a regressive tax—forwent his bonus. However, it was a wake-up call to learn that the bonus that he forwent was equivalent to my annual salary, so he is pretty well paid.
So the hon. Gentleman says, implying that I am not worth it. That just goes to show hon. Members that sending somebody a letter of congratulation on their elevation to the Front Bench will not earn them any quarter at all in the Chamber.
We should be careful about saying that the BBC should cut costs and introduce value for money, because it is a standing joke in the BBC that the part that produces the least value for money is the BBC Parliament channel. In terms of viewers per buck, as it were, the Parliament channel is the least economic channel that the BBC provides. I was told yesterday—this may be entirely wrong; if so, I will come back to the House and correct it—that BBC engineers are constantly trying desperately to reduce the picture size of the Parliament channel, because apparently it will then take up less spectrum.
When we admonish the BBC for its excessive salaries and expenditure, we should remember that the easiest way for it to save money would be to close down the Parliament channel. But then, I gather that Parliament itself is being closed and that we are moving to the Lords quite soon so that the hot water can be fixed, and this in a week when we have given the banks something like ten times the BBC’s annual budget.
I also agree with my hon. Friend the Member for Christchurch that it is extremely important that the BBC should be audited by the National Audit Office. It is extraordinary that the BBC would seek to dictate terms. In the new climate of transparency that is sweeping across all public sector organisations, including Parliament, the BBC would do well to open up its books and allow the public to see how much it costs. This is a personal statement, albeit from the Front Bench, but I would like the BBC to publish the salaries of everyone whom it employs. The BBC will not tell us, for example, how much Jonathan Ross is paid, citing commercial confidentiality.
The implication is that the BBC is in competition with the commercial broadcasters and therefore cannot possibly publish the salaries of its top talent. My answer to that argument is that if the BBC is indeed in competition with commercial broadcasters, it is already fighting with one leg up, because it is guaranteed an income of £3.5 billion a year that the commercial broadcasters are not and which would slightly level the playing field.
One aspect of the wider debate is how we secure public service broadcasting. Those issues are for another debate, but we look forward to the Minister’s boss, the Secretary of State, bringing forward proposals in January about the future of public sector broadcasting. As everyone knows, the options on the table are pretty clear cut, including top-slicing, changes to the regulations that constrain Channel 4, and increasing the commercial exploitation of intellectual property and programmes provided by the public service broadcasters. To be fair to the BBC, BBC Worldwide has done an incredibly effective job in that regard, and it is bringing money back into the BBC.
When we talk about the licence fee, it is also important to acknowledge that it might be time limited. That is a dangerous thing to say; I said it at a fringe meeting recently and got myself tied up in knots. However, it is important to acknowledge that technology is changing at an enormously rapid pace. The prerequisite for paying the licence fee is that someone has a box sitting in a room, and the BBC and the collection agencies can check to see if they have such a box. In a time scale that I would hesitate to predict, however, that box might no longer sit in the corner of a room. It could be inside a jacket pocket, on a mobile phone, on a computer on a table, or on many other kinds of device, some of which we have not yet imagined. In the spirit of musing, I suggest that that might well provide a challenge to the licence fee. As far as I am aware, students are charged a licence fee on their laptops, as a way of getting round the fact that many students now watch television—or the iPlayer—on the internet on their laptops without having a television in their rooms.
These changes will provide a challenge to the licence fee, but at the moment, the Conservatives are certainly committed to the licence fee as a way of funding the BBC. Ultimately, this will come down to a choice between direct funding by the Government—the money has to come from somewhere, and, in theory, that would involve a rise in general taxation—and funding through the licence fee.
Greg Dyke has a lot of experience to bring to the table. He can hardly be blamed for saying that the licence fee does not necessarily give the BBC the independence for which it is vaunted. He was director general when the Labour party came knocking, sent in its attack dog, Alastair Campbell, and succeeded in ousting him. I would recommend that Members read Greg Dyke’s excellent autobiography. While it does not give us general principles about the BBC, it does show that there are valuable lessons to be learned about how an organisation should learn to stick together, stand by its principles and stick to its guns when one of its leaders is under attack.
There is some merit in the argument that the licence fee gives the BBC independence. It is set for a number of years, and is therefore not subject to the vagaries of public expenditure that we might well see in the next few months or a year because of the credit crunch. It does not necessarily give the BBC a fixed income, because its income is based on its ability to collect the licence fee. Indeed, the BBC’s income has gone up as more households have been created in this country.
To echo the comparison with the Arts Council—which I have rejected as a way of funding public service broadcasting—the licence fee establishes the important principle of the BBC operating at arm’s length from the Government. There is a big difference between sitting down with the Chief Secretary or the Secretary of State to debate a grant from the Government and sitting down with them to debate the level of the licence fee, which it is down to the organisation to collect and use efficiently.
My hon. Friend will have seen from Greg Dyke’s article that he is concerned that, unless something is done, 90 per cent. of all public service programming will be on the BBC. As the Conservative party promotes competition and choice, does my hon. Friend think that we should be supporting such an outcome?
Absolutely not. My hon. Friend has slipped under the Deputy Speaker’s radar and mentioned the issue of the future of public service broadcasting, which is not the same as the future of the licence fee. I should like to put it on record, however, that we believe in plurality in public service broadcasting. We are looking as keenly as are the Government at Ofcom’s proposals to support public service broadcasting in the new media age. I would also recommend a supremely good consultation document that we published on www.shadowdcms.co.uk, called “Plurality in a new media”—
Order. I have allowed the hon. Gentleman some leniency, but he must now return to his brief.
I put that on the record. What I was saying was important, but it is not the same as arguing whether the licence fee or direct Government funding is the best way to fund the BBC. As I was saying before the intervention of my hon. Friend the Member for Christchurch, the licence fee is a different issue, as it applies the necessary arm’s length principle to the BBC and to a certain extent supports its critical ability to be sceptical of the Government and politics and to provide an objective viewpoint.
Does the hon. Gentleman agree that there is a direct relationship between the licence fee and public service broadcasting because it gives the BBC the opportunity to consider the primary requirements for PSB? The BBC has acted to some extent as a beacon for the entire sector in respect of how the news and topical programming, for example, are covered. In that sense, perhaps ironically in view of the interventions of the hon. Member for Christchurch (Mr. Chope), it provides the BBC with the latitude to define what public service broadcasting should actually be—not just for itself, but for the independent broadcasters, too.
That is right. The licence fee gives the BBC the freedom to innovate, which is an extremely important point. If the BBC were to sit down and negotiate a direct grant, strings would be attached—something for which I often criticise the Government. Those strings may not necessarily be sinister, as it were—that may not be the Government’s intention—but the Arts Council analogy comes into play again. Although the Arts Council is meant to be an arm’s length body, it receives a direct grant from the Government. What happens then is that the Government, perhaps perfectly laudably, say: “If you are receiving money from us, you had better ensure that you increase access and that you do this, that and the other”. The Arts Council thus appears not to have the freedom to innovate and plough its own furrow.
Although my hon. Friend the Member for Christchurch may object to the phrase, the fact that the BBC can, as it were, “see the licence fee and licence payers’ money as its own”, gives it the freedom to innovate. As I suggested earlier, among public sector organisations, the BBC is, uniquely, a very innovative body. I thank the hon. Member for Montgomeryshire (Lembit Öpik) for helping me to make that point with greater clarity.
In conclusion, however, freedom to innovate is not confined to the BBC. I do not believe that the BBC can ever rest on its laurels—nor should it seek to. The hon. Member for Selby mentioned BBC Sport and others have mentioned BBC News. I think that the BBC has improved its broadcasts in those spheres because of the fierce competition from Sky, which, as a private company with no subsidy from the taxpayer, has been fantastically innovative in sport, as well as through its introduction of 24-hour news—now a loss-making element provided effectively as a public service—which has completely revolutionised how news is presented on television.
As I said in my opening remarks, it is entirely appropriate for my hon. Friend the Member for Christchurch to bring this Bill forward. It is entirely right, as he said in his opening remarks, for this debate to be conducted in the spirit—not too often seen—of debating a matter of principle. To countenance the abolition of the licence fee is not the same as to countenance the abolition of the BBC. Those who support the licence fee do so with an element of humility when we say that it is the least worst option. I think that our debate has teased out some of the specific reasons why the licence fee is so important, the most central of which are the maintenance of an arm’s length between the Government and the BBC, the maintenance of the BBC’s independence and the means of conferring on the BBC the freedom to innovate and create.
I begin by echoing the praise bestowed on the BBC by the hon. Members for Wantage (Mr. Vaizey) and for Christchurch (Mr. Chope) and by my hon. Friend the Member for Selby (Mr. Grogan). I am glad that, on a day on which the truce seems to have broken down outside the House, a degree of cross-party consensus remains, at least on this issue.
Particularly in this day and age, when we seem to be deluged by cheap reality TV programmes—I mean cheap in terms of production costs and artistic and educational merit—there is certainly a place for publicly funded television that maintains certain standards. I am afraid that the hon. Member for Wantage has somewhat stolen my thunder, or at least accused me in advance of being rather predictable, as at this point I want to pay tribute to the BBC’s natural history unit. It has been based in Bristol since its inception in 1957, although sadly not quite in my constituency. As has been said, it has produced fascinating and ground-breaking programmes such as “The Blue Planet” and “Life on Earth”, and it continues to do so.
In some respects, however, I would question whether the BBC is making best use of licence payers’ money. That relates to the point raised by the hon. Gentleman about the fact that the licence fee gives the BBC freedom to innovate. In one area, I am particularly concerned that it is moving into pastures new, which might not be the best approach. I understand that Ofcom and the BBC Trust are examining proposals from the BBC for a massive expansion of its website services.
I have nothing but praise for the national and international news on the BBC website, and we have only to look at it to realise that it is used not just by expats, but by many people from other countries who want an insight into what is going on in this country. However, the BBC intends to expand into much more local video news, sports and weather, and I understand that there are plans for three daily bulletins for each, which will be updated three times a day. That will be rolled out in 60 different geographical areas from 2009-10 onwards and will cost about £68 million over three years.
Putting that in context, last year, the natural history unit’s annual budget of some £37 million was cut by a third, which has meant a reduction in some series that are being produced and a staff cut of a third. Is that really where the BBC should be heading? There is concern that the plans will affect other providers of local news services, which I would argue do the job an awful lot better because they are based on the ground and understand their market. For example, local newspapers are setting up local websites, which run the same stories while catering for a slightly different audience.
The concern is that the BBC—by, in effect, using licence fee payers’ money to park its tanks on the lawns of local newspapers—will increase the pressure on a sector that is already hard pressed and struggling for advertising revenue in days when the property and jobs markets are perhaps experiencing a downturn. Should the BBC be doing that or sticking to what it is best at?
My other concern was mentioned by my hon. Friend the Member for Selby, and I would have leapt to my feet to intervene had I not been about to mention it in my speech. He referred to the speech made by Jana Bennett on the regionalisation of services. Generally speaking, I do not have a problem with that, and it is obviously good that the BBC is not London-centric and that it is moving some programmes outside London, but one proposal has dismayed people in Bristol. The BBC is moving “Casualty” to Cardiff.
I accept that basing 5 per cent. of BBC production in Cardiff may well be a good move, but “Casualty” has been filmed in Bristol since 1986. It is the world’s second longest-running medical drama and the longest-running emergency-based hospital drama. It paved the way for programmes such as “ER” and “Chicago Hope”. Last year, it won best continuing drama at the British Academy of Film and Television Arts awards and has been nominated for many other awards.
For me, “Casualty” and Bristol are inextricably linked. The programme is based in the fictional city of Holby, but everybody knows the landmarks, such as the Clifton suspension bridge, and the accident and emergency sets are based in warehouses in my constituency. A recent programme was filmed in Arnos Vale, a restored Victorian cemetery in my constituency. Relocating “Casualty” to Cardiff would be akin to relocating EastEnders to Trafalgar square instead of Albert square. It just would not be the same.
To what extent has the hon. Lady, as a Bristol MP, been consulted by the BBC on this issue? Does she share my concern that this is another example of how although the BBC receives the proceeds of what is effectively a tax from the licence fee payer, it is not accountable for the way in which it spends it?
The hon. Gentleman makes a valid point. I have only been approached by the Bristol Evening Post, which is running a campaign to keep “Casualty” in Bristol, and by the Broadcasting Entertainment Cinematograph and Theatre Union, which represents those who work on the programme. As I was about to say, “Casualty” contributes £10 million a year to the local economy. More importantly, it also provides training and work experience for people who want to work in the media industries. That has attracted students to Bristol universities to study media, broadcasting and journalism. Many people have worked on “Casualty”—not only the actors and extras who are seen on screen, but lighting engineers, set designers, camera operators, technicians and writers—and used that experience to move on and set up their own production companies, to work on other programmes or go to the natural history unit. “Casualty” has given them invaluable experience. As the hon. Member for Christchurch suggests, the BBC has not talked to local people about the impact of moving “Casualty” out of Bristol on the local economy. As we experience more difficult times, such factors are important.
I do not wish to name drop, but last night at a reception in the other place I bumped into Kwame Kwei-Armah, the well-known actor, broadcaster and playwright, who just happened to star in “Casualty” for five years. He was very disappointed by the announcement that it might be relocated, and he has pledged his support to the campaign.
In conclusion, I support a publicly funded BBC and, in the absence of compelling arguments for another way to fund it, I support the retention of the licence fee. It is valid to discuss why it should be that everyone apart from those who qualify for concessions has to pay the same amount, and the increasing demonisation of people who do not have television licences, who are hounded by the licensing authorities. I was in that position myself, when I bought a flat in London but did not occupy it for three months and certainly did not have a television there. It felt as though I was being threatened with court action every other day, and that was wrong. The BBC licence people are also based in Bristol and I took the issue up with them.
There are questions to be asked about how the system operates and whether the best use is made of licence fee money, but I remain to be convinced that the hon. Member for Christchurch has come up with the ideal solution to replace it, so for the time being I shall oppose his Bill.
It is unusual for all three Front Benchers to sing from similar, if not entirely the same, song sheets. Earlier, we were predicting future legislation, and I suspect that I predicted fairly accurately in this case. The tone of the debate would be rather different if instead of its present title, the Bill were called the Broadcasting (How do we pay for the BBC) Bill. We would be arguing about the licence fee, how long it should last, whether it should be scaled down and alternatives to it. Instead, we are discussing a dramatic change in 2012, and not a more constructive approach to making progress.
Earlier, we compared the licence fee with the community charge. Does the hon. Gentleman accept that during the so-called poll tax riots, the people who were fed up with the poll tax did not say that they wanted to put a different system in its place? They said that they wanted to get rid of the existing system because it was unjust.
The hon. Gentleman might be right about the poll tax. He made that comparison earlier, not I. I merely responded to his comments in an intervention. I shall come to public opinion later in my speech, if he will give me the time and the opportunity to do so. I want to go through some of the basic arguments and to consider some of the potential consequences of not having a licence fee. For example, what would have happened if we had not had a licence fee in the past? What would we have missed? I shall also look at the programme for the BBC. The hon. Member for Selby (Mr. Grogan) mentioned speeches by Jana Bennett, which raised some interesting points that I hope to discuss if time permits.
The licence fee is £139.50 for colour and £47 for black and white. I must ask how many black and white licences are sold, if any. I know they exist, but perhaps someone will be inspired at some point and will be able to answer that question. A colour licence fee is the equivalent to about a pint to a pint and a half of beer a week. That is not a vast sum of money for what we get. We get two national TV stations, 10 free national radio stations, 40 free local radio stations, comprehensive online services and, of course, multi-channel services for multi-channel homes.
We have free access to a range of nine BBC digital TV and radio stations. Indeed, the BBC was growing so fast at one time that I had difficulty catching up. People were talking about BBC 6, and I asked, “Where do you find that? What is it?” When I found those stations, they turned out to be very fine. The BBC’s digital channels BBC 3 and BBC 4 are groundbreaking, inventive and challenging, as well as carrying repeats and other features that we welcome the opportunity to view again. As MPs, we often have surgeries on a Friday night or duties on a Saturday, and we welcome the ability to catch programmes on a Sunday when we forgot to set our digital recorder.
No one should doubt that the BBC is good value for money. It is not just about the quantity, but about the quality. That is especially important with the move to digital. The broadcasting world is changing, however. We now have films on mobile phones, TV over the internet and so on. In principle, digital switchover means more choice. In practice, we risk the cheap and the easy—more mindless, exploitive reality TV shows. Even Members of Parliament have been on them. Do we recall? We would rather not—I see grimaces round the House. Such programmes crowd out the good programmes.
Heaven help us if we were to rely on FOX News, for instance, for our information about the world, or if we moved towards narrow casting and the narrow-mindedness encouraged by placing viewers in minority interest ghettos. There would be no more of the shared experiences across the nation that we are given by the BBC and by its breadth, with the changes from programme to programme during the day. There are people who do not just get up and change channels. Some people will go from one programme to another and enjoy the experience that they accidentally come across. Some of us found at first that we would sit on the settee with the remote control, clicking from channel to channel to see what was on, much to the annoyance of our other halves. That problem was resolved in my household when the TV channel switcher was put on my wife’s side of the lounge.
There are dangers that must be resisted, because the role of the BBC is crucial. We cherish the BBC for its diversity—educational programmes, high quality drama and comedy and children’s shows—free from adverts. There is a huge range of music choice on radio. The BBC website is the most trusted in the world for news and current affairs programmes that are authoritative, accurate and, above all, impartial.
Like the hon. Member for Bristol, East (Kerry McCarthy), who is no longer in the Chamber, I must of course mention nature programmes. My interest in nature was very much inspired by some of the early BBC programmes. The Attenboroughs have both contributed to our creative industries in various ways, and I was transfixed by nature programmes such as “Planet Earth”, although sadly I saw little of it. We have other duties and life is full, but the episodes I saw were of exceptional quality.
We would be foolish to put all that at risk. The opinions of about 7,000 UK residents on the cost of the licence fee were set out in a survey commissioned by the Department for Culture, Media and Sport in 2006. The survey found that respondents were willing to pay a maximum of £138.24 for current BBC services, but that they would pay up to £162.66—I do not know how that was worked out to the exact penny—for the current service and the proposed new activities.
Will the hon. Gentleman give way?
The hon. Gentleman gave way to me so many times that I feel obliged to do so.
I am grateful to the hon. Gentleman. Does he think that people who responded in that way would be willing to make voluntary payments of £139.50 a year to the BBC if there was no compulsory licence fee?
I am sure that if the hon. Gentleman were to ask the shadow Chancellor that question in terms of whether people would voluntarily pay tax, the answer would be no. Some things have to be paid for and a mechanism has to be found to do it. If we believe that the BBC is a valued institution that should continue, the payment has to come from some source. At present, the licence fee is the fairest way.
To continue my point—if the hon. Gentleman will allow me—when people in the survey were asked what they would be willing to pay for the current services and the proposed new activities, 36.5 per cent. wanted to keep the same licence fee, 35 per cent. were willing to pay a slightly increased amount, of between £15 and £19 a month, and 11.5 per cent. were willing to pay a substantially increased licence fee. In 17 per cent. of cases, the respondents wanted the fee lowered from its then £11 a month, so only a small number—less than a fifth—wanted the licence fee lowered.
A more recent poll, carried out for MediaGuardian by Ipsos MORI on 18 August 2008, found that 41 per cent. of respondents agreed that the licence fee was the appropriate way of funding the BBC. I am not too sure where the battalions signing e-petitions have come from, but they are not borne out by a poll in which the majority of people were in favour of keeping the licence fee and only 37 per cent. disagreed.
There were criticisms, however. It is fair to say that there are concerns about how the BBC manages itself, about its relocations—as we heard earlier, some of its programmes will be relocating from Bristol to Cardiff—and about whether it is good value for money. The fees paid to some personalities give rise to concern from the general public. I do not say whether the BBC is right to pay those individuals such sums. Those are commercial considerations. The BBC is in a competitive market; it is competing with the ITV companies and Sky for people to front programmes. It is for the BBC to make judgments about what it is worth to secure not the mediocre, but the best people to front its services. There is no reason why the BBC should not have the best, albeit not necessarily for all its programmes. In that competition, the BBC sometimes loses—clearly, it has lost out on sport in the past, and it has taken action by Parliament to protect some sports events so that coverage is not subject to open bidding and they are not lost. I know that whether that protection should be extended is a matter of debate, but that is for another time.
Criticisms were made in the survey: one third of respondents agreed that the licence fee provides value for money, but almost half—47 per cent.—disagreed. Just under one third agreed that the licence fee assures the provision of quality programming and services not available elsewhere, but a significantly higher proportion—41 per cent.—disagreed. There are questions to answer, which we might consider if this were a different debate.
There are alternative ways of funding the BBC. The first is subscription, but that would result in a reduction in the BBC’s income, so that it would be unable to do all that it does now. That includes things that benefit those who never watch the BBC—the “university of broadcasting”, the technology development and the drive to digital. The emphasis would be on programmes that persuade viewers to sign up, but people are not easily tempted by the unfamiliar—a point that we touched on earlier. The adventurous, creative initiatives would suffer the most. In addition, funding by subscription does not provide a solution for radio: we are a long way from technology to raise subscriptions for radio, which uses 18 per cent. of licence fee income.
In an aside on the quality of the BBC’s output, let me say that when I worked abroad in Iraq for seven months in 1982, my sole contact with home was the BBC World Service. I realise that its funding comes from a different body, but the World Service linked into those BBC programmes with which I was familiar. Listening to the sport, including football, on Saturday night certainly helped me to keep in contact with the UK. I found the familiarity of the BBC helpful when I was living away from home and from my fiancée, now my wife, to whom I had got engaged shortly before having to work abroad.
The second alternative is to pay for the BBC via advertising and sponsorship, but other broadcasters that rely on advertising would suffer. The TV advertising pot remains static. Broadcasters are losing funding and making changes to their newscasting and regional news in an attempt to save money. Public service broadcasters that rely on advertising would demand a reduction in their public service obligation, as ITV already has. If it were reliant on advertising and sponsorship, the BBC would go only for the most popular material that attracts advertising and sponsorship. The diversity that we cherish would be lost.
Direct Government funding is another alternative that we might consider. Yes, it would be more progressive—the hon. Member for Christchurch has a good point—but the licence is already free for the over-75s. The blind receive only a 50 per cent. reduction; it could be argued that that should be increased to 100 per cent., but that, too, is an argument for a general debate on BBC funding. Furthermore, those in care homes get a concessionary rate of £7.50 a year. We could go further, because there are other groups to whom we should consider giving a free service.
Direct Government funding would reduce licence fee collection costs, although those are falling, thanks in particular to direct debit and online collection systems, but that funding method is fraught with danger. Governments of whatever hue could cut funding at a stroke if they did not like what they saw or heard. The public service broadcaster in Australia, the Australian Broadcasting Corporation, has had its income cut by 25 per cent. in the past 18 years. Significantly, there is now a campaign to reintroduce the licence fee in Australia. If the UK got rid of the licence fee, in 10 years’ time, hon. Members would be saying, “We want to bring back the licence fee, because we used to cherish the BBC, but we have lost a lot of that feeling.”
Most importantly, direct funding by the Government would make the BBC more vulnerable to subtle threats about its journalism. The BBC only just survived the disgraceful attacks made on it by Alastair Campbell and the Government during the Gilligan affair. We now know that Gilligan’s story was broadly right, yet oddly he, the chairman of governors and the director-general all resigned. In my view, and the view of my hon. Friend the Member for Bath (Mr. Foster), that was unnecessary.
Let us imagine what it would have been like if the BBC had been funded directly by the Government. We would have the Fox News problem. Some 80 per cent. of Fox News viewers in the States believed one of the following: that weapons of mass destruction had been found; that there were proven links between al-Qaeda and Saddam Hussein; and that the US went to war with the support of the rest of the world. Only 23 per cent. of viewers of PBS in the States believed such nonsense. Whom would we believe if the BBC was directly funded by the Government? We would not know what to believe. I trust its coverage. I can see that it is biased at times—we are all slightly biased in what we say—but we can take account of that, and we can hold it to account for that. We can argue with it, and I am sure that all political parties do so, from time to time.
I observe that even now the BBC regards its funding settlement with some concern because of the political threats that my hon. Friend described. If he is saying that that concern would be made many times worse if there was a direct grant, I very much agree with him. Is he saying that, from the point of view of civil liberties and free speech, the TV licence seems to be the most effective way to put space between the political pressures that the BBC feels and the immeasurably greater political pressures that it would feel if we changed the system?
My hon. Friend makes a good point. The BBC felt threatened as a result of the way in which the licence fee was negotiated last time. I understand some of those concerns, but I am not sure how much of that was manoeuvring. There were arguments on both sides about what the fee level would be, and what would be satisfactory. However, he makes a valid point: if we moved to a direct grant, there would be a significant risk. As I started out by saying, if the tone of the debate were different, we could consider how direct payments could be made and protected. We might come up with a system that protected those payments from interference by Government Ministers, acting on whim because they thought that they had been slighted, or that the Government were being attacked viciously by the BBC all the time. That might be a different issue. I am not saying that we should ever rule those issues out, but given the context of the Bill before us, they are not matters that I could argue for at the moment.
The BBC must change in these changing times. For example, it cannot be right for governors to be both flag-wavers for, and regulators of, the BBC. Some of that has changed. The rest of the world looks at us in envy, and abolishing the licence fee would risk throwing it all away. Do we want a dumbed-down, cut-down, less adventurous BBC? No. Do we want a BBC that no longer sets the gold standard for other broadcasters, helps with technological development or is the envy of the world? No. The best way to stop such a change is to vote against the Bill of the hon. Member for Christchurch. We need to consider consequences.
Let me go back to “Doctor Who” and use a time machine to look at what we would have missed if the Bill had been passed 30, 40 or 50 years ago. Would we have had “Blue Peter”? Perhaps not. ITV is having difficulty funding children’s programming, and an advert-driven BBC would have the same difficulties.
My hon. Friend will be aware that “Blue Peter” celebrated its 50th anniversary yesterday. Does he agree that the values and approach taken by “Blue Peter” is directly in line with what public service broadcasting should be? What makes it so creative is its appeal to young people. The children’s programming on the independent sector channels has largely been guided by “Blue Peter” and its ethos, including the “Blue Peter” dogs.
I am grateful to my hon. Friend for that intervention. “Blue Peter” was important to me as a child and has been influential in a number of the issues that it has taken up. I remember those wonderful moments with the elephant, the gentleman sniffing, John Noakes, the dogs—what were their names?
The “Blue Peter” dogs since the inception of the programme were called Petra, Patch, Shep, Goldie, Bonnie, Mabel and Lucy. There was also a dog called Meg, but it was not an official “Blue Peter” dog. It belonged to Matt Baker and frequently appeared on the show, so including that one, there were eight dogs.
Order. That is a detail which could possibly be left for Committee.
I hear what Mr. Deputy Speaker says, so I shall not mention tortoises or other animals.
We would have had none of that or the BBC garden, which was important for introducing children to the idea of growing things.
Is the hon. Gentleman still talking about “Blue Peter”?
I am, but I could speak about “Gardeners’ World” later, if the hon. Gentleman wishes. I did not have it on my list, so I am grateful to him for mentioning it.
Watching “Doctor Who” was my introduction to science fiction and other subjects that helped stimulate me as a young man. I was not allowed to watch the first programmes, which my parents deemed too frightening for a sensitive soul, so I did not hide behind the settee for the early Daleks, because I was not allowed to watch them. However, I caught up with the BBC later with the original Doctor, William Hartnell. I confess that my favourite Doctor Who was probably the pipe-playing Patrick Troughton, whose son is an actor and who was wonderful. We would have missed all that.
The same could be said of the “Watch with Mother” programmes. A possible criticism of the BBC is that it should be doing more programmes like that, and similar radio programmes, which it used to do so excellently.
May I expand on the point that the hon. Gentleman is making? Children’s programmes can be an introduction to culture later in adult life. I recently had the pleasure of attending the David Tennant “Hamlet” in Stratford and I was struck by the number of children and young people in the audience, who had been drawn there because of his performance in “Doctor Who” and who thoroughly enjoyed the “Hamlet”.
The Minister makes a good point. Those children had seen an actor in one guise and gone on to watch him in another. I believe that David Tennant’s “Hamlet” is an exceptionally good one. One day, I might get to the theatre myself—something which, sadly, rarely happens.
I used to listen to “The Archers” as a young child. In a debate yesterday, I said that as a child I wanted to be a signalman, rather than a train driver, because I wanted to direct where the trains went. From “The Archers” I gained an interest in agriculture, and from nature programmes, an interest in wildlife. In my teens, I went from wanting to be a farmer to wanting to be a zoologist, and that all came from the programmes—primarily BBC programmes—that I had listened to and watched. However, to refer back to the point made by my hon. Friend the Member for Montgomeryshire (Lembit Öpik), I should sadly confess that I was a “Magpie” fan, so I was a traitor to the cause, but competition from the other side can be good for the BBC.
There are other popular programmes that are valuable to people, and we could have more of them. “EastEnders” might well survive if there was a downsizing at the BBC. People talk about exporting things from one city to another, but the BBC tried to export that programme to Spain and fell dismally on its face. With direct funding, some programmes would face a lot of pressure. I enjoy watching “Top Gear”, a programme whose presenters’ silly and foolish antics a number of hon. Members criticise. I would not condone some of the things that those presenters have done, but overall the programme is enjoyable and brings valuable satisfaction to many people. One can go through the list: “Last of the Summer Wine”, “All Creatures Great and Small” and “Some Mothers Do ’Ave ’Em”.
Sadly, Mark Tavener, a good friend of mine, died tragically early a year ago. He made programmes directly critical of the BBC and wrote “In the Red” and “Absolute Power”, which many of us will have enjoyed. Some of his early stuff was critical of the BBC. He had worked for the corporation at one point and was adept at poking fun at his previous employer and getting it to pay him to broadcast it. A programme that we all know and love––and a favourite of a former Prime Minister’s––is “Yes Minister”; that valuable series probably would have survived any cuts.
The director of BBC Vision, Jana Bennett, has been mentioned. On 15 October, she gave a speech to the Royal Television Society at the Commonwealth club, just down the road from here. I want to pull out a couple of things that she said. I shall not try to read the whole speech into the record, Mr. Deputy Speaker, because I am sure that you would do more than raise your eyebrows at that. I shall use just two or three small quotes.
Part of the BBC’s drive at the moment is to decentralise away from London and move out. I visited the proposed site at Salford with my hon. Friend the Member for Bath and others to see how that work in progress is doing. If we were to change the funding system as the Bill proposes, would that diversification and programme of change be able to go ahead? Would Salford go ahead if there were uncertainty about where the funding stream would come from? There would be a real danger to that programme of change. Ms Bennett said that the BBC Trust
“approved the Executive’s recommendation for a new target for Out of London of 50 per cent. by 2016. We pledged to achieve growth in the Nations from the 2007 figure of 6 per cent. of network spend to 17 per cent. by 2016, with an interim target of 12 per cent. by 2012, and in English Regions the growth will be from 26 per cent. now to 33 per cent. in 2016. We have made it clear that the 17 per cent. target for the Nations is a floor not a ceiling.”
As one whose constituency is in the south-west, I welcome more broadcasting and programme making in our neck of the woods. I am sure that hon. Members with constituencies in Cardiff, Edinburgh and other parts of the United Kingdom feel the same about their areas.
Ms Bennett talked about opening up creative opportunities and said:
“It is important that we understand that we are not starting out from Year Zero, however. We have been on this road for a while.”
That is true. She continued:
“The commitment is there in steel glass and concrete in the shape of BBC Scotland’s fantastic new digital broadcast centre…in Glasgow and the major new centre under construction at MediaCityUK in Salford”—
the site of which I visited. She added:
“Based on the Ofcom definitions, the proportion of spend outside London has increased by 4.5 percentage points over the two years to 2007, which equates to a 15 per cent. growth in spend. Last year we spent £300m outside London.”
Let me make a few final points.
Order. I hope that they will be apposite. The hon. Gentleman has been getting vaguer and vaguer in relating his remarks to the prime purpose of the Bill. I urge that in his closing remarks he is very mindful of the issue that is strictly before the House.
I always try to be mindful of that, Mr. Deputy Speaker, and I thank you for reminding me to keep to the proper course.
The BBC reaches 93 per cent. of British households every month through its television, radio and online services, at a cost of £139—38p a day, or a couple of pints of beer a week—to each paying household. That is less than half the cost of many daily newspapers, so it is exceedingly good value in terms of the news coverage that it provides.
In common with all areas of public funding, the licence fee has rightly been exposed to much scrutiny and discussion, and I am sure that the BBC welcomes today’s debate. Successive Government reviews of the BBC charter have concluded that the licence fee is the most appropriate means of funding the BBC, which is so highly valued by the public, and I am sure that the Minister will continue in that vein. She is nodding her head, so I feel that I am on fairly safe ground. The most recent research by Ofcom shows that the public continue to value the BBC at the current licence fee level or above, and that the majority do not believe that the fee should be shared with other broadcasters or organisations. That is an important point, on which I shall finish.
The Bill promoted by the hon. Member for Christchurch (Mr. Chope) is half-baked. We often discuss weird and wonderful Bills on Fridays, some of which are badly drafted, but I do not think that we have had a Bill as badly drafted as this one this year. This debate has been more like an Adjournment debate on the licence fee than a Second Reading debate on a public Bill introduced as a private Member’s Bill under the presentation of Bills procedure.
The hon. Gentleman jeopardises the BBC’s worldwide reputation with this back-of-a-fag-packet Bill. While the licence fee may not be the best system, the Bill makes no provision for any alternative. It is nihilistic and would sweep everything away with only the vaguest idea of what to replace it with. It is simply not thought through. He made comparisons with the poll tax, but that is a false comparison. The poll tax changed a system—the old rating system—that had been there for many years. It was a tax per person in a household, not, as in the case of the licence fee, a single charge per household. The licence fee has exemptions, which the poll tax did not.
The hon. Gentleman argued about cost, but we need to bear in mind the cost of the licence fee as against that of buying a new TV. Some of the expensive large flat-screen plasma TVs are extremely expensive, and the cost of the licence fee will be a tiny part of the overall total.
The hon. Gentleman referred to waste at the BBC and the number of managers and their salaries. That argument is a red herring, because any waste would still have to be dealt with however the BBC were financed, whether through the licence fee, direct subsidy from the Government, sponsorship or advertising.
The hon. Gentleman had no answer to my question about how the Bill would deal with the funding of radio, one of the BBC’s great flagships. Ultimately, he had no alternative to put forward. He vaguely talked about sponsorship, and we have heard about the difficulties involved in that. Will we see “Strictly Come Dancing” sponsored by Moss Bros or Harvey Nichols? It is simply not a viable option. He talked about adverts. We know that Channel 4, which is perhaps the commercial equivalent of the BBC and a public service broadcaster, has had great difficulty filling a gap in its revenue because of the fall in advertising income. Such a move would have an impact on commercial television generally, spread the cake more thinly and not provide an answer.
We are left then with direct funding by the taxpayer. We end up with the risk of creating a state TV channel that would grace a banana republic. There is no way that we could have a system of state funding that could provide the necessary guarantees to ensure that we did not have political interference and that the impartiality for which the BBC is famous was maintained. We could have a situation where the “Today” programme one day beats up the Chancellor through a challenging interview by John Humphrys, and the next day the Chancellor is responsible for setting how much money the BBC should be allocated. That cannot be a fair way to proceed. Even if it were supposedly impartial, no one would believe it or accept that. Not only should we have an impartial broadcaster, but it must be seen to be impartial.
The hon. Gentleman needs to come back, if he wants to go down this route, with a properly worked up Bill and with worked up proposals to put before the House. He cannot ask the House to abolish what is there without putting something else in its place. When I made that point in an intervention earlier, I was told that I was wrong to say that the BBC would cease straight away because it would have until December 2012. He would at least give the BBC a chance to broadcast the Olympics in London, which I hope it will. That is not an answer. If we are going to debate this matter, we have to have a properly worked up alternative before the House.
The Bill should not proceed today. It will not proceed today. Even if it did receive its Second Reading, it cannot become law, as the hon. Gentleman knows, but as someone who is a regular attender on Fridays, he should know better than to put before the House such a badly drafted, half-baked piece of legislation.
This has been a long and, sometimes, very interesting debate. The Bill proposes that the television licence fee be abolished, although it does not offer, as other hon. Members have mentioned, an alternative.
Let me outline the Government's position on the proposal of the hon. Member for Christchurch (Mr. Chope). The Government position on the licence fee is well established. The future of that fee and the funding of the BBC were addressed fully in the recent BBC charter review, which was completed in 2006. The review concluded that, compared to the alternatives,
“the licence fee continues to be the best funding mechanism for the foreseeable future”—
in other words, it is the least worst option. It is a very difficult subject and I fully understand why that phrase was used. Under the terms of the BBC’s royal charter, therefore, the BBC will continue to be funded by the licence fee for the duration of the charter, which is in force until the end of 2016.
I will explain shortly how the charter review reached that conclusion. As a first step, however, it may be helpful to set out why large sums of public money are put into broadcasting and not into other creative industries such as the music industry or publishing. There are two main reasons for that. First, broadcasting can contribute to society in ways that other media do not. The hon. Member for Teignbridge (Richard Younger-Ross) and my hon. Friend the Member for Selby (Mr. Grogan) illustrated that well. Secondly, as citizens, we would not get everything that we have come to expect from broadcasting if we relied on commercial providers alone.
The case for public funding of the BBC and for public service broadcasting is in general based on the benefits that it can bring to society, which have had a very good airing in the Chamber. That includes “Yesterday in Parliament”, which several hon. Members, including the hon. Member for Wantage (Mr. Vaizey), mentioned. That programme has a niche audience, but one that appreciates the time given to the subject.
The BBC has been set objectives that reflect the benefits. It is defined by its goals as a public service, not only its programming output. The 2005 charter review Green Paper, entitled “A strong BBC, independent of government”, states:
“Television and radio audiences are huge. Almost every programme on the major terrestrial channels will reach millions of people simultaneously. That places such broadcasters in a uniquely powerful position, and since the BBC was first established, in the 1920s, it has been commonly accepted that such power should be harnessed for society’s good. Audience research shows that the public agree with this principle. They want programmes to inform and educate as well as entertain.”
Like the hon. Member for Teignbridge, I find that “The Archers” fulfils those three criteria wonderfully: it informs, educates and entertains. I have listened to it for more years than I care to remember.
We recognise the positive contribution that broadcasting can make to the effective functioning of democracy. While people continue to watch television and listen to radio in such large numbers, we are determined that the public should get the service that they need and deserve, and that the BBC should retain the potential to deliver those benefits.
The hon. Member for Wantage referred to the ability to innovate that the licence fee grants. That is an important part of its benefit to the public. Audiences would not reap the full benefit of that sort of innovation or of the information, education and entertainment that the BBC currently supplies without large-scale public funding.
The Green Paper continues:
“As the scale and sophistication of pay-TV options increase, television viewers may benefit from an increased choice and diversity of different types of service. Ofcom’s review of public service broadcasting has concluded that fully commercial providers will never provide us with high quality public service on anything like the current scale.”
Anyone who has spent time in another country such as the United States, where there are a couple of good public service channels, will realise that the permeation—the mainstreaming—of the public service ethos that pertains in this country does not exist there. I would personally be sad to lose it.
We value television’s ability to interest us in new ideas and the way in which it can reflect other communities’ lives. We need to spend public money on that and we need the BBC for that.
The Green Paper goes on:
“The case for public service radio is, if anything, stronger than that for TV. Even if audiences wanted to pay for the sort of distinctive content that the BBC provides, there is as yet no price mechanism that could allow them to do so. Radio is entirely free to listen. Commercial stations do fulfil a public service role in some ways—particularly through the provision of news and local information. However, the only available commercial models rely on advertising and sponsorship and commercial stations therefore tend to cluster towards the middle ground of taste, in order to reach the widest possible audience.”
The Under-Secretary makes a valid point. Does she accept that one of the problems with commercial stations is the amount of time given to news? There is always a conflict in those stations between the journalists, who want longer news broadcasts, and the programmers, who want more adverts and music, and less information and news?
That is a problem. The 30-second soundbite that politicians are traditionally allowed on the perhaps less pressured stations tends to be reduced to 20 or 15 seconds on commercial radio stations in my area, which is the eastern region and Hertfordshire. One tends to get a great deal of music, quite a lot of advertising and not much information, but people like to have that information.
The Green Paper continued:
“Whereas average audiences for the BBC’s main television channels are falling as digital competition increases, in radio, digital development has yet to have a significant effect on audiences, which remain relatively stable for the larger, well-established stations.”
Hon. Members might be interested to learn that the annual percentage share of BBC 1 fell from 30.8 per cent. in 1997 to 22 per cent. in 2007 and that the annual percentage share of BBC 2 fell from 11.6 per cent. in 1997 to 8.5 per cent. in 2005.
The Green Paper continued:
“In the last decade, the BBC has moved beyond broadcasting into online and interactive services. Such services do not generally have the same sort of mass impact as television or radio programmes—the internet is a more personal, one-to-one medium. Nevertheless the internet is an increasingly important source of information for millions, and the BBC has established itself as a central, trusted presence in the online world. BBC Online is the most popular site in the UK. In this context, the independent review of BBC Online…identified some clear purposes for BBC Online that place it alongside the BBC’s television and radio services—sustaining social values and providing high quality, innovative and accessible content for UK users.”
I know that the BBC ticker runs constantly across the top of many hon. Members’ television screens in the House and on those of their staff. Indeed, it is often how we are alerted to breaking news.
The Green Paper continued:
“In addition, that review noted that BBC Online plays a valuable role in the development of the web itself: using the BBC’s position as a trusted guide to bring new users to the internet; encouraging users to try new interactive technology; and setting a benchmark of innovation and creativity. The BBC’s internet presence also offers valuable support to its traditional TV and radio programmes”.
For instance, the BBC broke new ground in its coverage of the Olympics in 2004, by backing it up on the internet and the radio. Indeed, that has now become usual for television and radio programmes. For instance, we can now go online and watch the “Today” programme in action in the studio, which is an innovation.
I hope that hon. Members were as impressed as I was with the BBC’s extensive coverage of this year’s Olympics games and of Team GB’s triumphant march through London yesterday. The Beijing games were the first time that viewers could watch the Olympics in high definition, on the BBC HD channel. I understand that all in all there were about 300 hours of coverage.
In looking at options for funding, the Green Paper came down unequivocally for public funding of broadcasting. The charter review did, however, consider options other than the licence fee for funding the BBC. They included direct funding from the Government, commercial funding for a free-to-air service through advertising, sponsorship and commercial funding for a pay-TV service through subscription.
Many hon. Members have given the issue some thought, just as the charter did, too. However, let me quote what the Green Paper said about direct Government funding:
“Government funding could be considered fairer than the licence fee in that it would be progressive”,
which would address the point that my right hon. Friend the Member for Rotherham (Mr. MacShane) has made about the licence fee tending to be regressive. The Green Paper continued:
“each individual would in effect only contribute according to his or her income. This would make the BBC an area of Government spending like any other public service. The objections to this arrangement are made on the grounds that the BBC is a public service like no other, and it is feared that direct Government funding might threaten”
Why does the Minister think that that argument does not apply to the £250 million of funding that goes each year to the BBC World Service?
I am glad that the hon. Gentleman has mentioned the BBC World Service. As someone who has been a consumer of it quite often, I find it very good, but not as in depth as some of the services that we get here. We can see some of the commercial considerations at play there, particularly in countries with quite a high level of advertising. For example, outside Britain, we can see BBC World with advertising.
I think that the hon. Lady misunderstood me. I was not talking about BBC Worldwide; I was talking about the BBC World Service on the radio, which is funded directly by taxpayers’ money.
Yes; in fact, that funding comes through the Foreign Office. I am sorry that I got the two confused. I think that, because it is a smaller, niche programme with a particular aim, it is possible to fund it in that way, but the best model that we have at the moment for a public service broadcaster is the one that we are currently using.
I listened to the BBC World Service a great deal when I worked in Iraq; it was very important to me. I was in Iraq in 1982, during the Falklands war, and I remember the then Conservative Government putting pressure on the BBC World Service because of what they perceived as its biased reporting of that conflict, although from my position, sitting in Baghdad, I thought that its reporting was very fair. There have been pressures ever since then, in Government circles, in regard to that budget. The hon. Member for Christchurch does not make a good point, because the budget has been at risk in the past.
The Green Paper felt that the BBC’s independence would be threatened
“if the Government held the purse strings”.
That is precisely the point that the hon. Member for Teignbridge has just made. It also felt that the BBC’s “stability and security” would be threatened, were it
“to be subject to reviews of its funding through the biennial Government Spending Review process.”
The present review process allows it to plan forward in a way that other beneficiaries of public funding cannot.
The Green Paper went on:
“These objections appear to be supported by public opinion. The public told us they wanted less scope for Government interference in the running of the BBC and nearly two-thirds of them supported the licence fee in its current form as the best method of funding. Ofcom’s audience research found there was significant opposition to Government funding—partly because people wanted to keep the Government out of television and partly because they saw a distinct difference between the ‘luxury’ of public service television and the ‘right’ to other forms of universal public service such as the NHS.”
On the case for funding the BBC through advertising and sponsorship, the Green Paper stated:
“The case for allowing advertising on the BBC is a difficult one to make. There was quite vehement opposition expressed to the idea…in the course of our public consultation and research. 60 per cent. say it interferes with their enjoyment of programmes (31 per cent. disagree). The lack of advertising is therefore felt to be a key distinguishing characteristic of the BBC—it was the third most frequent value spontaneously attributed to the BBC by contributors to our quantitative research.
The BBC would certainly attract advertisers if it were allowed to, particularly to its mainstream services. However, modelling of the advertising market suggests that the effect of such a move would be to push down prices, since the total amount of money spent on advertising would not rise significantly but many more ad ‘spots’ would become available.”
In other words, there would be more space available for advertising.
“That would almost certainly reduce the income of both the BBC and existing ad-funded broadcasters (including other public service broadcasters such as ITV and Channel 4)”.
The Minister will know that the amount of advertising revenue received by Google during the first half of this year was no less than £50 million. Does she not think that if the BBC had advertising on some of its internet programmes, it could get back some of that money going to Google?
It might well be able to, but if people value what the BBC provides as a service without the intrusion of advertising, I think that we should take that into account. I certainly value the fact that when I go on to BBC Online, I am not pressed to buy something that I do not need, which, sadly, is too often a characteristic of today’s world.
The Green Paper continues:
“Advertising would also create conflicting incentives for the BBC—the requirement to fulfil public purposes would have to be weighed against the need to generate revenue.”
We need to think of the effect of putting specific adverts on BBC Online or in other programmes; it would remove some of the BBC’s freedom. It continues:
“The character of programming might drift towards the middle ground of taste as a result. Ofcom has pointed out that such a conflict of incentives already exists for ITV1, Channel 4 and Five, and that it will be increasingly difficult to regulate in future as commercial competition intensifies. 52 per cent. of those we surveyed said they thought the BBC would lose its independence if it relied on advertising or sponsorship.
The long-term trends in the TV advertising market are anyway uncertain. New digital technology—particularly Personal Video Recorders—increasingly allows audiences to skip through advertising breaks. It may be unwise to increase the dependency of public service broadcasting on advertising at a time of such uncertainty.
There are probably fewer concerns about allowing the BBC to take sponsorship for some programmes. There would still be questions to answer, however, about a potential conflict of incentives and the commercial impact of such a move. Viewers and listeners may feel it detracted from their experience of the BBC if commercial messages were attached to their favourite programmes”.
Just think what “The Archers” would be like if we had to listen to advertisements for animal feed throughout the programme! It continues:
“although our research suggests that people would prefer it to advertising… sponsorship alone would never deliver sufficient income to sustain the BBC without some additional source of funding.”
Will the Minister comment on the relative popularity of Radio 3 and Classic FM, the latter of which has advertising whereas the former does not?
The latter is extremely good and I enjoy listening to it, as I enjoy Radio 3. However, if I want to listen seriously and at length, I tend to turn to Radio 3; if I want news or weather information, I tend to turn to Classic FM. We have that choice, and I would be very sad if I lost the Radio 3 side of it and was left only with the Classic FM side. That is the point: we need to cater to both markets.
Funding the BBC through subscription was another option considered in the charter review. On that, the Green Paper said:
“The BBC’s own ‘willingness to pay’ research suggests that some people are willing to pay significant amounts for access to BBC services—42 per cent. say £20 per month and 19 per cent. say £30 per month. If services were put together in differently priced packages, with premium programmes available at different prices depending, for example, on their newness or exclusivity, audiences would have more freedom of choice and some argue that the BBC might retain a sustainable level of funding. This sort of model would raise significant issues of principle. The chief argument against subscription as a funding method is that it would undermine the principle of universal access—BBC content would no longer be free at the point of use. It can be argued in response that the existing licence fee is in anyway a form of ‘compulsory subscription’. Services are only ‘free’ once a bulk licence fee has been paid.
But if people choose not to subscribe then prices might have to rise for those who carried on paying, and some low-income viewers and listeners who wanted to subscribe might be priced out of the market for BBC content. If that content were not universally available, its potential benefit to society would be reduced.
In the short term, there are also significant practical problems. In mainstream radio, no subscription facility exists, nor does one look likely to be available for some time.
While a television subscription service could function in satellite and cable homes, for most terrestrial viewers (including most digital terrestrial or Freeview homes) there is presently no way of controlling access to individual channels. New subscription technology (code-protected cards for ‘conditional access’) of the sort used in satellite and cable homes would need to be included in most, if not all, digital terrestrial equipment before any subscription service could function for the BBC.”
The conclusion from the Green Paper was that the licence fee should remain. We shall see why that was described as the least worst option:
“When compared to the alternatives, we feel the licence fee continues to be the best funding mechanism available for the foreseeable future. That is a conclusion endorsed by Ofcom and the Culture, Media and Sport Select Committee, as well as by licence fee payers. While some people show interest in the alternatives, in all strands of our research work there was more support for the licence fee than for any other mechanism. 63 per cent. of those who mentioned funding in responding to our consultation accepted the principle of the licence fee. Many respondents argued that the licence fee provided unparalleled value for money, and one of the most common arguments made in its support was that it binds all households together as equal stakeholders in the BBC.
Audiences want the BBC to remain a universal service. They also see that the value of the licence fee is that it should keep the BBC at arm’s length from Government but should bring it closer to the public who are footing the bill.”
For those reasons, it was decided that the television licence fee should remain as the main method of funding the BBC for the period of the BBC’s current charter.
In supporting the case for the television licence to continue, it is worth—particularly in the context of the Bill introduced by the hon. Member for Christchurch—revisiting some of the research on which the conclusions of the charter review were based. The Government relied on evidence from various sources, including independent research commissioned by my Department. We commissioned Cragg Ross Dawson to undertake qualitative research, which it completed in April 2004. Its report noted:
“The main perceived advantage of the licence fee system was that it allowed the BBC to operate in the absence of commercial pressures. Only those with the most negative opinions of the licence fee did not appreciate this benefit at some level.
Most recognised it at a superficial level as the lack of advertising. They saw this as a ‘cosmetic’ advantage that the BBC had over commercial broadcasters, without considering more fundamental effects it might have on programming. Most did not like having their programmes interrupted by advertising (or indeed their films interrupted by the news).”
The report continued:
“In this context, many complained about the amount of advertising on other UK channels and stations, and some mentioned US television, where there was said to be”—
my own experience suggests that this is nearly true—
“almost as much advertising as programming.
When asked which aspect (if any) of the BBC made it a better broadcaster than its competitors, respondents often answered ‘the lack of advertising’. This fact alone seemed to be enough to justify the licence fee to many.
Only a minority considered the effects of freedom from commercial pressures more fully than this. They tended to be most appreciative of the BBC’s output, and the most in favour of the licence fee as a method of funding.
There was a belief that the absence of commercial pressures helped the BBC to stay ‘independent’, although understanding of this varied, with some feeling that the influence of government outweighed the potential influence of business.”
The report went on to say:
“A number also felt that it helped to keep the quality of programmes high and the range of programming wide. Again, there was uncertainty about why this might be the case—some were making a comparison with what they saw as the inferior quality of commercial broadcasters.
Other advantages of the licence fee system were mentioned by those who thought carefully about the issue. Public-service broadcasting commitments (such as niche and minority interest programming)”—
“Yesterday in Parliament”, perhaps—
“were imagined to be easier to meet under a system which provided an overall income rather than funding linked to the success of individual programmes.”
On the income aspect, the report said:
“Some also felt that a degree of external control over income was good for the quality of the BBC’s output. They believed that the corporation received its income on condition that all profits were ploughed into programming, unlike commercial broadcasters who were expected to turn in a profit for their shareholders.”
Another important piece of evidence commissioned by DCMS was a report on deliberative research undertaken by the Corr Willbourn research and development agency and published in 2004. That report found that
“ultimately, the vast majority—regardless of their degree of consumption—could see no better way to fund the BBC. The majority of participants recognised that if the BBC were to be funded by other means, given the long history of its non-commercial status, it would almost certainly lose its essential character. Overall, supporters of an advertising-free BBC outnumbered those who resent paying the licence fee.
To sum up, by the end of the deliberation the great majority felt that the licence fee, although far from perfect, was to date the best, or more accurately the ‘least worst’, way to fund the BBC.”
Further research, which was compiled from about 5,000 pieces of correspondence from the general public, mostly responses to an eight-question consultation issued by the DCMS, found that the majority felt that the BBC was the
“greatest bargain in the world”.
The report stated:
“Generally, respondents compared the cost of the BBC services very favourably with the comparable costs of a subscription to Sky; very rarely, respondents made the contrary assertion that the Sky packages represented better value. One respondent made the observation that ‘when the cost per head in the average UK household is approximately 8p a day, for 10 television channels, 50 radio stations and a top-notch website, you have to wonder where the argument against the licence fee can be made.”
Will the Minister give way?
Yes, happily. [Laughter.]
I am reluctant to intervene in the Minister’s long and dogged analysis, but has she considered the fact that the BBC’s audience share is 30 per cent., and that the figure is falling, not increasing? Her argument would suggest that the figure should be going in the opposite direction. Many of her arguments date from several years ago and the caravan has moved on.
My arguments date back because they were part of the research that was done for the general charter review. One reason that there has been a fall-off in audience for a great number of things is the huge variety of outlets that are available. A particular example that is cited in relation to younger people, particularly younger men, is the availability of computer games and other calls on people’s time. What I am trying to do—I agree that it is dogged—is to prove to the hon. Gentleman that we looked at the funding of the BBC in every way possible. We have concluded that the current system is the best, and public research backs that up.
The Minister makes a point, but the reality is that the way information is conveyed is changing rapidly. We have the internet, Sky and all the other means by which people can view, and all TV companies under pressure at the moment, and ITV in particular, have fewer viewers. Another consideration is the fact that the BBC has followed the example of Sky and others and now broadcasts for 24 hours, which places greater pressures on its budget.
The hon. Gentleman is completely right. Television has changed and is changing almost as we are standing here. We must take the final point about why people like the licence fee: it is seen as a way of guaranteeing high quality public service broadcasting. There are good and bad public service broadcasters, and I think that the BBC is second to none. We get an excellent service from it, which is partly based on the fact that the corporation’s annual income is unaffected by commercial factors and economic fluctuations.
Let us imagine what would happen if people had to rely on subscriptions from some of the firms that are facing an economic downturn. We would definitely suffer.
Is not one of the BBC’s advantages the fact that it knows where its funding comes from and knows that that funding is there for a certain period? That allows it to plan in a way that others cannot, and that is an advantage in enabling it to produce high quality public service broadcasting.
It also allows it to broadcast programmes such as “Yesterday in Parliament”, which can be seen as loss-leaders, to appeal to a niche market. If that ability is removed, there is a danger that the situation could end up like that with the buses, where only the popular routes are served. That can be very dangerous.
I forgot earlier to correct something that the Minister said. I was not talking about “Yesterday in Parliament”. I was talking about the Parliament channel, the broadcasting channel on which we appear live at the moment. I am an enormous fan of “Yesterday in Parliament”, particularly if this soundbite is used on it later.
I do so hope that it will be, for the hon. Gentleman’s sake.
Was that the commercial break?
One respondent noted
“that the future is bleak if the fee is abolished”.
A considerable number of other respondents expressed similar sentiments. The licence fee is viewed as a necessary evil, justified by the benefits that it funds, and considered by the majority to be the only viable means of ensuring that the BBC continues to have such a high standard.
People who favoured the licence fee had a strong affection for the BBC. The hon. Member for Wantage touched on this issue. The BBC is family. I am probably the only one in this room who can remember almost when it first started broadcasting, I am that old. Muffin the Mule played a formative part in my life.
The Minister should be aware that the BBC started broadcasting in 1936. I know that she is older than she looks—she looks a lot younger than she is—but she cannot be that old.
I am sorry. In my enthusiasm I forgot to mention that it was BBC television that started in 1955—[Hon. Members: “No, it didn’t”.] I have obviously got my dates muddled, so I shall return to what I remember very well, which is “If it ain’t broke, don’t fix it”—the common mantra of a significant number of respondents. Their strong support for the licence fee was secured by the belief that the current system was tried and tested. The House can imagine the response if in these economically turbulent times we suddenly announced that we would change the way in which we set the licence fee. People would say, “Why don’t you just leave it alone? It’s working well enough.” One respondent said:
“I have yet to hear a convincing argument for an alternative to the licence fee, and cannot conceive of one emerging before or after 2016.”
However, if the hon. Member for Christchurch can think of another method, I am sure he will find Ministers who will listen. There has been examination and elimination of alternative funding methods, but most people were concerned that they would result in the dumbing down of what the BBC offered.
Senior researchers at the Work Foundation studied people’s willingness to pay and found clear recognition of the public value of the BBC. Most agreed that
“the BBC makes a moderate contribution to British life”,
and enjoys strong support among British people by providing impartial news and being a global UK brand.
It was valuable to hear the BBC’s support for retention of the licence fee. As a contribution to the charter review debate in 2004, the BBC published “Building public value”, which set out its views on its future. The document stated:
“The licence fee has many advantages as a way of paying for the BBC. That is because, in broadcasting, there is a direct connection between the source of funding and the nature of the broadcaster.”
That is an important point. As long as the British public want the BBC to be an independent, universal broadcaster, committed to serving everyone on equal terms and to delivering quality and originality, the licence fee will remain a powerful and effective means of paying for its services. It is the BBC’s licence fee funding that enables it to focus solely on serving the British public. It gives the BBC the time, breathing space, freedom from commercial pressure and stability to take risks and to aim to serve the widest possible range of audience needs. The first obligation of commercial broadcasters is to their shareholders.
As competition intensifies over the next decade, the divide between culture and commerce in broadcasting will inevitably widen. Cultural, political and economic considerations all support the conclusion that licence fee funding is the best way of paying for the BBC.
First, I shall look at the cultural considerations.
I hope I can be helpful. As the Minister has been speaking for 40 minutes and is obviously frightened that I might win the vote if the matter came to a Division, it might help her for me to indicate that when I have the chance to reply I shall seek leave to withdraw my Bill. That may enable her to make her remarks briefer.
I thank the hon. Gentleman. Fear does not come into it, but his remarks are indeed helpful.
I shall finish my speech by considering the BBC’s views about why the licence fee is the best way of funding the service. The UK’s culture, society and democracy benefit greatly from the universal availability of high quality broadcast services that create public value. Licence fee funding confers on the BBC an obligation—a responsibility to treat everyone in the country fairly and equally, ensuring that they receive the high quality programmes they want, even if the audiences are not always large. That direct connection between the BBC and the British public has conditioned the way the BBC behaves and the programmes it makes. Because rich and poor, old and young pay the same, the BBC treats all the same. In the words of a Member of the other place, Lord Puttnam:
“The licence fee remains the most effective and equitable form of funding that has ever been created for a public body.”—[Official Report, House of Lords, 21 April 2004; Vol. 660, c. 325.]
The second consideration is politics. A conundrum in public service broadcasting is how to ensure that a publicly funded broadcaster can remain independent from political influence, given the old saying, “he who pays the piper calls the tune”. Licence fee funding solves that conundrum by ensuring that it is the British people who pay for the BBC, and not the Government, who control its output. Although the Government set the licence fee at regular intervals, the BBC’s finances do not form part of their annual spending reviews or budget setting. The licence fee is therefore an important pillar of the BBC’s independence.
The final consideration is economics. Broadcasting has unusual economic characteristics. Like street lighting and public parks, it is a public good: one person consuming it does not prevent others from doing so. Without intervention, public goods tend to be priced too high and to be under-supplied; as a result, some people who could have consumed the goods at no additional cost go without. Those welfare losses represent a market failure, in the sense of an inefficient allocation of society’s overall resources. The effect is compounded by the tendency of private providers of public goods to become monopolists. Licence fee funding for the BBC recognises the public good characteristics of broadcasting and ensures a low price and universal availability.
There are other advantages. Because it is independent of the economic cycle—that is extremely important at the present time—the licence fee enables the BBC to behave counter-cyclically, ensuring that investment in the UK’s creative economy, training and technology is maintained, even in times of downturn. It also supports the BBC in taking longer-term risks.
In May 2005, the BBC published its response to our Green Paper. Its findings include the following:
“In broadcasting, there is a most effective and equitable form of funding. The licence fee is a distinctive funding mechanism that underpins the unique identity and mission of the BBC.
Licence fee funding enables the BBC to focus solely on serving the public. It is a universal way of paying for what is essentially universal provision, while at the same time safeguarding the BBC’s independence.”
The document continues:
“The public understands that the BBC’s distinctive method of funding leads to a distinctive service. Research commissioned by the BBC showed that over 80 per cent. of people are willing to pay the current level of the licence fee to continue receiving BBC services and on average, people value the BBC at twice that amount.
The fundamental strengths of the licence fee will persist in a fully digital world. While the spread of new technology may make it possible in future to change how the BBC is funded, this does not mean that it would be in the public interest”—
despite what the hon. Member for Christchurch says—
“to do so. A BBC funded by subscription or advertising would be an entirely different BBC. The interests of audiences would need to be balanced against the interests of advertisers, or against the need to drive subscription revenues.”
The BBC is an important public service—one of our most important. Its programmes are designed to deliver real social, cultural and educational value. Even after digital switchover, the market alone will continue to under-supply programmes with merit, good qualities and positive externalities. Advertising funding would creative conflicting incentives for the BBC. It would have to balance the requirement to deliver on its public purposes with the need to generate revenue in the marketplace. Over time, it would broadcast a less rich range and balance of programmes than it does today.
On a point of order, Mr. Deputy Speaker. I understand that the Minister, notwithstanding my intervention, is continuing to speak because there is a problem on the Government Benches, in that the Minister who is to reply to the debate on the next Bill is not yet here. Mr. Deputy Speaker, is there any way in which you might indicate your willingness to allow the next debate to commence without the Minister being present? It would be unusual, but not perhaps without precedent.
That is not a point of order for the Chair. The Chair can only preside over the present proceedings. I have no power to reshape Government business in that way.
I am sorry to have lost the interest of the hon. Member for Christchurch. I am trying to respond as fully as possible on his Bill, taking into account every point of view.
Moving to subscription funding would result in the permanent loss of one of the main sources of the BBC’s public value: its universality. Research, again commissioned by the BBC, showed that as a subscription service, the BBC would need to charge £13 a month to maximise revenue, which was 30 per cent. higher than the licence fee in 2004. As a consequence, it is estimated that a significant number of people, including some low-income viewers and listeners, would be priced out of the market for the BBC content that they value. Over and above that, the UK population would lose £300 million-worth of consumer welfare every year. In conclusion, the Government and the BBC, having considered the numerous alternatives, cannot agree with the hon. Gentleman that the television licence fee as currently constructed should be abolished.
First, may I congratulate the Minister on being a great team player? I am sure that that will do her no harm in her future ambitions. Her response could be summed up in that throw-away line, “It’s a necessary evil.” That seems to be the Government line—that the BBC television licence fee, which 37 per cent. of people are against, is just a necessary evil. I may be the only radical present, and the only person fighting against the outbreak of conservatism with a small “c” in the Chamber, but I know that I have the support of other radicals in promoting the ideas in the Bill. Earlier, I quoted Greg Dyke and Anthony Jay; an increasing number of forward-looking opinion-formers will not let the matter rest. They think that we have to find an alternative to the despised licence fee.
Will the hon. Gentleman give way?
No. The Minister seemed to be saying that the BBC is an island and that what else is going on in the economy does not really matter, but I suggest to her that the BBC is not an island. That was made very clear by Michael Grade in his speech to the Royal Television Society. I quoted part of it before, and I shall now quote a different bit:
“The critical point is that the costs and benefits of being a PSB”—
that is, a public service broadcaster—
“have to be brought back into a stable equilibrium–and before it is too late.
Since the system is broken, it must either be radically reformed, or replaced completely. There is simply no point in trying to prolong the life of mechanisms whose economic foundations have been washed away.”
The Minister will be familiar with the arguments that Michael Grade put forward in that speech. They are all related to what has been happening in the real marketplace, to the threats to the future of competition in the provision of television news services in this country, and to the possible demise of independent television news services.
Will the hon. Gentleman give way?
No. We need to bring matters to a conclusion as quickly as possible.
The Minister referred to the report that the penetration of BBC 1 and 2 into people’s homes has gone down to 30 per cent. and is still falling. She explained that that is happening because there is a greater diversity of alternatives. Of course there is, but what organisation would be able to put up its charges at the same time as experiencing a fall-off in demand for its services—what organisation other than one that was protected by a monopoly funded by a captive audience of taxpayers who, if they do not pay the tax, are brought before the magistrates court, with the ultimate sanction of imprisonment?
One of the best contributions in a long debate was that from the hon. Member for Bristol, East (Kerry McCarthy), who expressed her concern about extra funding going into website services at the expense of the natural history unit, and explained that the regionalisation of services involves the transfer of “Casualty” from Bristol to Cardiff. All that is being carried out without consultation with her or with her constituents. That is one of the problems with the present structure. There is no such sense of accountability.
The Minister praised the BBC internet services. If Google can raise £50 million a year in advertising from its services, I see no reason why the BBC could not get some advertising revenue from its internet services. Even more important, it is wrong that on its internet services the BBC does not allow a relationship to be developed with other non-BBC services. That is an abuse of a monopoly position, which I hope the Minister will address, even if not the other points that have been raised during the debate.
The hon. Member for Teignbridge (Richard Younger-Ross) made a number of points, going back to all those years when the BBC was a monopoly funded by a licence fee. But things have moved on. He argued that the BBC should be free to compete for the best people. I have no argument with that. My argument is that the managers in the BBC are in a bubble of immunity and seem to be getting much larger salaries than the marketplace would suggest they are worth. I hope the BBC will look into that. As was pointed out by Polly Toynbee, the very high salaries being paid are, in a sense, a poisoned chalice for the BBC.
Let us not forget that my Bill would not prevent people who wished to continue supporting the BBC voluntarily from doing so. Instead of public service broadcasting in the present format, it might, at some time in the future, become a charitable objective. The BBC could obtain charitable status and donations from its supportive public could benefit from Gift Aid and tax relief.
I am not keen on prescription. For that reason, the Bill does not set out in detail the alternative forms of funding, but what is common to all those who criticised the various forms of alternative funding is that they put each one in a silo and suggested that that would be the only alternative form of funding. What I suggest is that the best way forward would be a basket of several different alternative forms of funding, depending on the nature of the service being funded. That argument has not been addressed in the debate.
I am grateful to my hon. Friend the Member for Wantage (Mr. Vaizey) for his comments. As he said, at present the Conservative party is committed to the licence fee. However, reading between the lines of what he said, I am sure that those Conservative and Labour Members who believe that the licence fee is an unsustainable form of BBC funding in the medium and longer term will, in the end, be vindicated.
This is the last private Members’ Friday. As there is no point in trying to proceed with this Bill, because it would not be able to get on the statute book, I beg to ask leave to withdraw the Bill.
Order. I should say to the hon. Gentleman that to be procedurally correct, he needs to withdraw the motion.
I stand corrected, Mr. Deputy Speaker. I beg to ask leave to withdraw the motion.
Motion and Bill, by leave, withdrawn.