TELEVISION LICENCE FEE (INCREASE)

HC Deb 02 March 1954 vol 524 cc1012-7

The Assistant Postmaster-General (Mr. David Gammans)

With your permission, Mr. Speaker, and that of the House, I should like to make a statement about television licence fees.

As the House will know, the present broadcast licence fees were fixed in 1946, but since then the B.B.C.'s costs have risen continuously and rapidly and they are still rising. The Corporation drew attention to their financial position in their last annual report and they pointed out that they were working at a heavy loss, which they were financing out of reserves. Since that report was issued, the Government have approved extension of the Corporation's television system by 14 additional stations and will also shortly authorise the Corporation to make a start on providing V.H.F. stations to improve their sound services.

With these additional responsibilities, the Corporation's reserves will be exhausted in a year or so and the Government have decided that, if proper provision is to be made for the maintenance and development of the B.B.C.'s services, it is no longer possible to avoid an increase in the television licence fee. They therefore propose to increase this fee which, of course, includes that for sound, from £2 to £3 a year from 1st June next; the licence fee for sound only will remain unchanged at £1 a year.

The Government have carefully reviewed the question of distribution of broadcasting licence revenue. They have decided, having regard to Budgetary needs and the freedom of broadcasting from Entertainments Duty, that the licence revenue must not only cover Post Office costs for collecting fees and dealing with interference but also continue to make a contribution to the Exchequer. The Government have, however, agreed that this contribution to the Exchequer should be stabilised for the next three years at the present level of £2 million a year instead of rising in proportion to the licence revenue.

I estimate that if the present arrangement had continued the contribution to the Exchequer by 1956–57 would have amounted to just over £3 million a year. By stabilising it at £2 million it would be possible, without reducing the amount that would otherwise accrue to the B.B.C, to provide £750,000 a year for the new competitive television authority from the date it starts broadcasting. This arrangement is designed to meet a suggestion strongly urged in the debates at the end of last year that the new authority should have at its disposal certain funds independent of revenue from advertisements. A proposal on these lines is being included in the Television Bill which will shortly be presented to Parliament.

Under these arrangements I estimate that the B.B.C. share of the licence revenue will be increased from £12.6 million in the present year to £17 million in 1954–55 and up to £20 million in 1956–57. This increase is partly due, of course, to the steady increase in the number of licences which has taken place.

Mr. H. Morrison

There are a number of points which arise out of the important statement which the hon. Member has made and which I should like to put to him. Would it not have been better if this statement had been incorporated in the White Paper on Television Policy, or had been directly involved in the debate on the Television Bill, with a possible further White Paper?

Without prejudice to whether the B.B.C. should make an independent contribution to the Exchequer—which is a debatable point upon which I do not feel dogmatically—in view of the B.B.C.'s difficulties, why must the Government now insist on taking this £2 million from the B.B.C.? No doubt the Government will see to it that the B.B.C. is exercising proper economy, which is right, but even assuming that that is so, why should they not let the B.B.C. have the £2 million? In connection with the further development of television—and we on this side of the House are anxious to avoid the advertising element—would the Government consider whether a loan should not be raised for the development period of television, in the new circumstances?

Finally, what are the Government doing by seizing part of the licence revenue contributed by the public in order to hand it over to the new corporation, which will be concerned with advertising? [HON. MEMBERS: "Subsidising advertisting."]. Why should I, as an ordinary citizen, who does not want commercial television, be compelled, through the ordinary B.B.C. licence fee, to contribute to a subsidy, direct or indirect, for commercial television?

Mr. Gammans

The right hon. Gentleman's first question was, why was this increase not incorporated in the Bill? This point will, of course, be embodied in the Bill, and, therefore, it will be subject to discussion. The next question was, why do the Government take the £2 million? For the reason which I have given— that television does not pay Entertainments Duty and, therefore, it is quite legitimate that it should pay something to the exchequer. The third question was, why is the second corporation not financed out of loan?

Mr. Hamilton

And the B.B.C.

Mr. Gammans

Because the greater part of this money is not concerned with capital expenditure which is reasonably subject to amortisation, but is concerned with current expenditure. As for the last question, no money whatever is being given to the advertising interests; the money will go to the corporation and will not go to the advertising companies.

Brigadier Medlicott

Can the Minister say whether, in the Civil Estimates for 1954–55, account is taken of the increased revenue which the B.B.C. will receive as a result of the increases which have just been announced?

Mr. Gammans

No, Sir, but a Supplementary Estimate will be presented in due course.

Mr. Ness Edwards

Might I express to the hon. Gentleman our pleasure that at least the sound licence fee has been kept at £1? What justification is there for giving £750,000 a year to a commercial undertaking to pay for the non-profit-making element of the programme? Surely the hon. Gentleman himself said earlier that one of the objections to financing it in this way was that people would have to pay for something they were not getting. Yet that is the principle which the hon. Gentleman is now enforcing. Is there any intention at all of reducing the amount the Post Office will get for collecting these fees?

Mr. Gammans

It is very difficult to understand the attitude of the party opposite. They wished the second corporation to be financed entirely out of revenue. Now that we are giving the corporation a small part of it, hon. Members opposite object. This money will not go; to the advertising companies at all. It will go to the corporation and will be spent by the corporation. [HON. MEMBERS: "Reducing advertisers' expenses."] As to the second question, about Post Office costs, those costs will rise slightly because there will be more licences to look after, but they will not rise in proportion to the number of new licences which we expect to be taken out.

Mr. Elliot

Is it not the case that a great many people felt considerable uneasiness at the new corporation being financed entirely out of advertising revenue and that they will be greatly: relieved by the fact that that is not to be so? Is my hon. Friend aware that this will meet a great many of the objections which otherwise would have been felt to the proposal for commercial television? With regard to the increase in the fee, is it not a case that if this expansion had to be financed entirely out of contributed revenue a much higher fee would have had to be charged for the new television licence?

Mr. Gammans

As I said in the debate at the end of the year, if both corporations were entirely financed by licence revenue, it would mean a fee of about £5. It is because of the view expressed then, that the new corporation should not entirely be financed out of advertisement revenue, that the Government have decided to make this allocation.

Mr. Hobson

Is the hon. Gentleman aware that at present wireless listeners subsidise television? Can he give the House an assurance that, as a result of the increase of the television licence from £2 to £3, this position will no longer appertain?

Mr. Gammans

Last year the B.B.C. income from television was only £1,600,000 and it spent £4,300,000 on television. So it is perfectly true that the sound listener does finance the television viewer. The extent to which he will do so in the future will, I think, be reduced, but the licence money is given to the B.B.C. as a whole to do with as it thinks fit.

Sir R. Grimston

Can my hon. Friend break down the proposed £3 licence fee, and tell us how much of this sum goes to the B.B.C., how much to the Government and how much to the proposed new corporation?

Mr. Gammans

In terms of actual money, £2 million goes to the Government. In 1955–56, the new corporation will get 3s. 3d. from each licence and in 1956–57, on our present computation, it will get 2s. 10d.

Captain Orr

On a point of order. I am sorry, Mr. Speaker, that I was not able to give you notice of this point, because I had no idea of the contents of my hon. Friend's announcement. I ask if you would be kind enough to look into this matter and give us your guidance on the Postmaster-General's authority to collect any licence revenue at all, because, as I understand, under the Wireless Telegraphy Act, 1949, the Postmaster-General can only collect this revenue if he has laid the necessary regulations under Section 2, and I understand that these regulations have not been laid.

Furthermore, there is now pending in the courts an action, on behalf of a user of ordinary mobile radio, challenging the Postmaster-General's authority. In these circumstances, do you, Mr. Speaker, think that it is proper for the Postmaster-General to suggest that he will continue collecting this revenue and increase it while the matter is still sub judice?

Mr. Speaker

The hon. Member has raised a very interesting and intricate legal argument, which I am quite unable to pronounce upon at the moment. I doubt whether it is a matter for me ultimately. It is a matter for the courts, I should have said, and I certainly cannot consider it as a point of order now.

Mr. Fell

Owing to the thoroughly unsatisfactory nature of the statement which has just been made by the Assistant Postmaster-General, I beg to give notice that I shall raise the matter again as soon as possible.