To ask Her Majesty’s Government what discussions they have held with the BBC about ending free television licences for those over 75 years old.
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare that I am over 75.
My Lords, the Government meet the BBC regularly to discuss a range of issues, including the over-75s concession. We know that people across the country value television as a way to stay connected with the world, and that is why the Government have guaranteed the concession until 2020. We have agreed with the BBC that responsibility for the concession will transfer to the BBC in 2020, and we have been clear that we want the concession to continue.
Is my noble friend aware that that is an encouraging Answer? Nevertheless, is it not time that the BBC faced up to the fact that it is a public service broadcaster, with a social responsibility to its listeners? Is it not a little surprising to have a consultation document of 50 pages-plus on the subject which seems to give the message that it is trying to wriggle out of that social responsibility? When it faced a not dissimilar problem for BBC overseas, when the Foreign Office removed the grant, the BBC took the decision to take advertising. We now have a situation where every hour of BBC broadcasting has three minutes of promos. Would that gap not be better used by taking advertising?
My noble friend is completely right that the BBC should pay attention to its social responsibilities, and it does. However, in the consultation surrounding the renewal of the royal charter, only 1.5% of people said that the BBC should have advertising. One of the reasons why allowing it would not be an easy solution is that all the other public service broadcasters, which do not start the year with £3.8 billion in subsidy, would find it even more difficult to do their excellent job.
My Lords, going back to the main point, this is a completely classic cock-up by the Conservative Party. It promised, in its manifesto, that this issue would continue until the end of the next Parliament—which I still think is 2022—but the new arrangements are supposed to take place from 2020. To compound the issue, the money runs out in 2020. If, as the Minister wishes, the BBC does continue to offer this arrangement, who is going to pay for it?
When the funding settlement was put down in 2015, the BBC agreed to pay for it in 2020, in return for a five-year, index-linked settlement—the first time that had ever happened. The BBC has had four years to prepare for this; it knew it was coming. That is why we expect it to live up to what was agreed.
If the Government persist in requiring the BBC, and hence the licence fee payer, to pay for the over-75s—a welfare benefit introduced by Gordon Brown and paid for by the Government—there will either have to be yet more cuts to its budget, and consequently to UK content at a time when PSBs are really under the cosh, or a rise in the licence fee which will have particular implications for lower-income households. Does the Minister agree?
The BBC is consulting on a number of options, it has made those known and the consultation finishes next month—I am sure that noble Lords will want to contribute to it. The fact is that the BBC agreed a deal in 2015. We are not asking anything sudden; it has had four years to prepare for this and that is what they agreed to do. So I do not see why it is extraordinary to expect the BBC, a £5 billion corporation, to live up to the agreement it made in 2015.
Does the Minister agree that the BBC would have plenty of scope to meet this cost if it slashed the exorbitant salaries paid to some performers and producers, not to mention their bonuses?
Would that that were so. I agree with the thrust of the noble Baroness’s question—the BBC has a duty to take seriously how much it pays senior managers and stars—but the cost of the over-75s’ concession is about £750 million, and I am afraid that even reducing all salaries to zero would not achieve that.
My Lords, is it not true that the BBC was pretty well bounced into this? It was a decision made by the Treasury and not even DCMS knew about it until the BBC was forced to comply.
If that was the case, why did the director-general say:
“The government’s decision here to put the cost of the over-75s on us has been more than matched by the deal coming back for the BBC”?
My Lords, following the principle of the noble Lord, Lord Naseby, that public service functions could be subsidised by advertising, are there thoughts within the Conservative Government that this principle could be extended further? Our police service has been quite sharply cut in recent years, for example. Does the Minister think that police cars could be encouraged to take advertising as well?
I do not know whether the noble Lord was listening to the Answer I gave to my noble friend. I said that the BBC should not take advertising.
My Lords, following on from the question asked by my noble friend Lord Dubs, does the Minister agree, on reflection, that the way the agreement—which we all have to concede was an agreement—was arrived at was, to say the least, not very transparent and did not take very long to be sorted out? It appeared to come upon everybody very suddenly and without much discussion, which suggests a bit of a shotgun arrangement.
The BBC is not a small organisation; it is a very sophisticated organisation. Up until the 2015 settlement, there was an almost permanent state of crisis because the licence fee was funded on an annual basis, so as soon as it was agreed one year, negotiations started for the next year. Partly for the benefit of transparency, the Government agreed a five-year index-linked deal to give the BBC time to organise itself so that it knew what was coming and was able to deal with the concession that it knew would come in in 2020. As a result, the Government agreed to phase in the support from DWP, which comes to an end in 2020. I think it was a reasonable deal that was agreed by both sides.