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Concessionary Television Licences

Volume 764: debated on Monday 6 July 2015

Statement

My right honourable friend the Chancellor of the Exchequer will be making his Budget Statement on Wednesday, but in the light of the news reports on Sunday, I want to take this opportunity to confirm details of the agreement that we have reached with the BBC.

The Government have reached agreement with the BBC that it will take on the cost of providing free television licences. This will be phased in from 2018-19, with the BBC taking on the full costs from 2020-21. Having inherited a challenging fiscal position, the Government are pleased that the BBC has agreed to play its part in contributing to reductions in spending like much of the rest of the public sector, while at the same time further reducing its overall reliance on taxpayers.

As part of these new arrangements, the Government will ensure that the BBC can adapt to a changing media landscape. The Government will bring forward legislation in the next year to modernise the licence fee to cover public service broadcast catch-up television. In addition, the Government will reduce the broadband ring-fence to £80 million in 2017-18, £20 million in 2018-19, £10 million in 2019-20 and zero in 2020-21.

The Government will consider carefully the case for decriminalisation in the light of the Perry report and the need for the BBC to be funded appropriately. No decision will be taken in advance of charter renewal. The Government anticipate that the licence fee will rise in line with the CPI over the next charter review period, subject to the conclusions of the charter review in relation to the purposes and scope of the BBC and its demonstrating that it is undertaking efficiency savings at least equivalent to those in other parts of the public sector.

The commitment made in the Conservative manifesto that all households with an over-75 year-old will be eligible for a free TV licence will be honoured throughout this Parliament. As requested by the BBC, it will take responsibility for this policy from then on. Charter review will include an opportunity to consider wider issues relating to the purposes and scope of the BBC, and we look forward to using that to engage on the full range of issues with the public, industry and this House. I will make an announcement about the process for the review in due course.

My Lords, five years ago a private deal was done over the funding of the BBC. The licence fee was frozen. The BBC took over funding of the World Service, BBC Monitoring and S4C, and picked up other costs. Together that amounted to a 16% cut in the budget. Here we are again: another back-room deal pre-empting the open consultative process that we have been promised on the BBC charter. However, what is different this time is that the Government are blatantly requiring the BBC to take on responsibility for a matter of social policy that is nothing to do with its main charter responsibilities. Surely if the Government want to maintain free TV for over-75s, as they said in their manifesto, they should fund it. Are we to believe that the Budget later this week will ask the bus companies to assume responsibilities for free bus passes for pensioners? If not, are we not entitled to see this agreement for what it is—a politically inspired attack on the BBC, ahead of and ring-fenced from the charter review process?

Where is the BBC expected to find this money—from the World Service or from S4C, or by cutting channels or reducing programme quality? The Chancellor in his interview mentioned the BBC website. If the Government have views about the social policies the BBC should be pursuing, perhaps they also have views about content. Can the Minister tell us what is now expected of the BBC, since the relationship no longer seems to be at arm’s length? Finally, when this matter was raised in 2010, the then trust threatened to resign if the Government went ahead with their proposal. This time, we are told that the BBC Trust has agreed with the proposal. Does that not raise questions about the trust itself and its capacity to safeguard the vital charter responsibilities of the BBC now and in the future?

My Lords, the noble Lord made a number of points but he specifically asked about the input on charter renewal discussions. There are 18 months until the current charter expires, and the Government are committed to a thorough and open process where all aspects of the BBC will be up for discussion. That debate with the public and with the BBC will continue as planned, and an announcement on how charter review will be run will be made in due course. The noble Lord mentioned Channel 4. There are no current plans to privatise Channel 4. He mentioned S4C. The Government are committed to the provision of minority language broadcasting. This settlement for the BBC will mean it has to make some choices about how the licence fee funds are spent.

My Lords, this is a surprising Statement. Does it mean that the continuance of the BBC licence fee has now been confirmed, that this is off the table and that there is no question of it being reopened in the charter discussions? Otherwise, it would seem that much of what the Minister said does not have a vast amount of meaning. He says no decision will be taken prior to the charter review. Surely a massive decision has been taken prior to the charter review, in that an indiscriminate cut of £0.5 billion is being made in the BBC budget without any thought being given to the effect upon programming and news coverage. Surely, as the noble Lord opposite said, if free television licences for all those over 75 is government policy, it should be funded by the Government and not just passed on to the BBC.

My Lords, my noble friend is well known for his interest in these matters. As I said before, providing a free licence to people over 75 was a manifesto commitment. The noble Lord made a number of other points and I am afraid I will have to write to him on those.

My Lords, will there be a compensatory adjustment to the BBC’s licence fee income as part of the charter renewal discussions to take account of this decision to switch the cost of funding free licences for the over-75s from the Government’s account to the BBC’s?

My Lords, the point the noble Lord makes will be under discussion over the 18 months of the charter renewal. The Government have said that they are committed to a thorough and open process where all aspects of the BBC will be up for discussion. As I said before, the debate with the public and the BBC will continue as planned and an announcement on how the charter review will be run will be made in due course.

My Lords, this is a truly shocking announcement. The BBC has been in existence for nearly a century. It is unique in the world for a number of reasons, one of which is that, very early on in its history, Winston Churchill tried to take it over at the time of the General Strike but the then director-general, John Reith, resisted that and essentially established its independence in a way that no other public service broadcaster around the world has managed. That independence was breached in the previous Parliament by the deal that has already been mentioned today, when, overnight, with no debate of any kind, 16% was taken outside the BBC’s budget and the Government—not the BBC—decided to use the licence fee to fund the World Service, S4C and, amazingly, BBC Monitoring, which is a very specialist service not much to do with broadcasting. This has happened again. This is taking a huge slice out of the BBC’s budget. Again, it has happened with no public discussion of any kind. This Government and the previous Government have set a very dangerous precedent.

I am afraid I cannot say a great deal more than what I have already said on this matter, except that all these matters will be up for discussion in the charter renewal.

My Lords, I entirely agree with the remarks of the noble Lord, Lord Stevenson, and my former noble friend, the noble Lord, Lord Fowler. I appreciate that the Minister is in a difficult position here in that he is speaking with his master’s voice but does he really think it is fair that a policy to give free television licences to people aged 75 and over, which is in the Tory party manifesto and has absolutely nothing to do with the BBC, simply imposes the cost on the BBC? I ask him to say what he thinks rather than what his master tells him to say.

My Lords, all noble Lords will know that I speak for the whole Government from this Dispatch Box. I repeat what I said earlier: the manifesto commitment will be retained for the whole of this Parliament.

My Lords, the BBC is a great British institution. What has been decided is quite extraordinary. BBC Monitoring has been amazingly useful over decades for foreign policy and defence—I have seen it doing that. How on earth will BBC Monitoring be properly paid for within this new construct, bearing in mind that it is not a core thing for the BBC in terms of entertainment?

My Lords, the noble Lord mentions BBC Monitoring. I repeat once again: all these things will be up for discussion in the charter renewal.

This has nothing to do with the BBC. This is an attack on people who are old and who are living lonely, isolated and unhappy lives. They depend on broadcasting more than any other segment of the community. That has been provided by the BBC for decades to the satisfaction of the older part of the population, which we know is increasing. This is a government benefit being cut and dumped on the BBC because the BBC is being targeted for political reasons by the Government.

My Lords, the noble Baroness has great knowledge of these matters. I am sure that what she says will be noted. The fact is, we have the charter renewal and all matters raised by noble Lords will be looked at.

Is the Minister aware that very considerable cuts have already been made? He will know that recently it was discovered that the BBC is already going to lose a huge proportion of the licence fee. Do the Government feel happy about seeing the squandering of a national asset through 1,000 slashes? As I say, cuts have been made and I am prepared to reveal to the House as an example—and here I declare an interest—that I was asked to take one-third of the fee that I used to get for my programme on Radio 3. I did so happily in the interests of cutting costs.

My Lords, the noble Lord also has great experience in the BBC. I and my colleagues will no doubt listen very carefully to what he has to say.