§ Mr. Robert B. Jones (Hertfordshire, West)Shortly before 5 o'clock in the morning is perhaps not the happiest time to consider such an important subject. Interest in this subject goes far beyond that of those hon. Members who are able to join in this discussion.
For many years I have been associated with the BBC in both television and radio. I have contributed to and conducted research for a number of current affairs programmes for BBC radio and television. I formed the impression from inside and outside the BBC that many dedicated people work for the corporation, often in appalling conditions. Some parts of the BBC are of great quality. I single out Radio 3 and Radio 4 and parts of BBC 1. There is also unbelievable waste and inefficiency which are characteristics of many public sector institutions.
There is no doubt that this subject is of great interest. It evokes a considerable response from the public, as I am sure hon. Members will have found from their postbags over the past few weeks and will find in the weeks to come. It also encourages visits by constituents to Members' surgeries.
A number of opinion polls have been published. They show that there is considerable hostility to the BBC's proposal for a 41 per cent. increase in the licence fee. That increase is apparently supported by 13 per cent. only of the sample interviewed by NOP on behalf of D'Arcy-Macmanus and Masius, and by 14 per cent. only of the sample interviewed by MORI on behalf of The Sunday Times. An increase from £46 to £65 is a whopping increase for anyone who is living on a restricted budget due to a fixed income.
I am interested also in the morality of the matter. With the development of cable television, the BBC will have a declining minority of listeners and viewers. There are bound to be questions about the legitimacy of the base for a compulsory tax, such as the BBC licence fee.
Many commentators and hon. Members on both sides of the House have drawn attention to the regressive nature of the BBC licence as a form of taxation. That is hardly surprising. Television sets are possessed by many pensioners, single parent families and others who find it difficult to find the resources to pay a large licence fee, even with the various methods of payment that have been introduced in recent years. Rich people, who have more than one television set, pay the same licence fee as others with one. To that extent, this tax falls harshly upon those groups in our society which can least afford it.
The BBC's problem is that revenues are no longer buoyant. They were buoyant primarily because the number of television sets was increasing. The increase is now declining. The number of people owning colour television pushed up the revenues because of the difference between the cost of a black and white and a colour licence.
Colour television licences exceed 80 per cent. of the total number of licences. The number of colour television licences is not expected to increase at anything like the rate of recent years. That is hardly surprising. The estimates at the moment are for an increase of 3 per cent. per year.
Futhermore, the BBC, in its admirably documented submission in support of its proposal, has drawn attention to the spiralling cost of providing television services. I am 474 not happy to accept that it is necessary that all the costs should spiral in the way that they do. That is a matter to which I shall return.
I want to discuss whether we need to increase the licence fee at all. The commonest solution to be put forward by commentators over the past few weeks is the introduction of some advertising. Whether it should be partial for Radio 1 and Radio 2, or perhaps for BBC 1, or across the entire range of BBC services, is a matter that will no doubt arouse great debate. I find the BBC's attitude to this proposition puzzling. It claims to he noncommercial and it deprecates advertising. Indeed, that has been repeated recently by the new chairman of the BBC. He has said that he does not consider advertising to be appropriate. Yet there has been a grudging acceptance of the value of sponsorship, or at any rate the necessity of sponsorship for sport and some areas of the arts. In appropriate programmes, the BBC will frequently interview authors about books which they have recently published. In a sense, that is a form of advertising of the product.
There are also the BBC's own plugs. It is scarcely possible to listen to the radio or watch television without hearing various forms of plugs almost as frequently as on the independent channels. The BBC plugs only its own programmes or its own products, of which there is quite a wide range. Martin Anderson, an economist, has written:
BBC Enterprises has branches dealing with TV Programme Sales, Film and Videotape Library Sales, Education and Training Sales and Hire, Video Exhibitions, Merchandising, Records and Tapes, Music Publishing, Technical Facilities, as well as Production, Technical and Service Depts.With such a long list of branches, it can hardly be said that the BBC is virginly pure of any commercial involvement.What are the possibilities? The possibility that seems to meet with the broadest degree of support is the introduction of advertising to Radio 1 and Radio 2, which are comparable with commercial radio stations. They play light or pop music most of the time. The primary purpose of BBC 2 is to provide programmes of an educational nature. However, BBC 1 concentrates more on entertainment, so that is another area where advertising could be considered.
What has been the reaction of the public to the idea of advertising? I return to the NOP survey. Apparently 77 per cent. want the licence fee to be pegged, even if that means advertising. According to MORI, the figure is 69 per cent. I would not draw too much of a conclusion from the difference between the two percentages. According to NOP, 56 per cent. think that the programmes would not suffer as a result. That must be set against the 42 per cent. who think that the programmes are not any good anyway.
What do the ITV companies think? We have not heard from them all, but we have heard from Granada through a number of different letters to The Guardian. It seems that it thinks it a bad idea. That is hardly surprising. After all, it would have to compete for the same advertisng revenue and, therefore, it would see the idea as a threat. It would mean that it, too, would have to tackle some of the restrictive practices that riddle the media — both televison and Fleet street.
The BBC objects to the principle of advertising because it says that it would lead eventually to the rejigging of schedules and the sales department would dominate. It claims that the rating schedules would become the most 475 important factor. So the BBC portrays itself as highminded. I find that rather unconvincing. It should be remembered that at the end of 1983, when the BBC's share of the market had fallen to 45 per cent., it rescheduled "The Thorn Birds" in place of "Panorama" and, curiously enough, its rating increased to 49 per cent. Therefore, the BBC is not above rejigging its ratings if it thinks that there is something in it for it.
One must address the question of advertising in principle. I personally believe that advertising has much merit. In order to increase advertising revenue, television and radio must meet audience demand, and surely that should be an objective of television and radio companies. Of course, that argument would not commend itself to the eletists, but it would commend itself to the general public.
It is also said that quality would suffer. That is a difficult argument to follow, because more revenue would come into television and could be devoted to greater quality as well as to a greater range of programmes. It is instructive to note that, even with the present system, the ITV companies are capable of making some extremely good quality programmes, and at the recent Emmy awards, Britain had a clean sweep in the section for non-United States competitors. All five of those prizes went to independent television companies.
§ Mr. Robert Kilroy-Silk (Knowsley, North)Almost as an aside and a throwaway line, the hon. Gentleman said that if there were to be advertising on BBC, more revenue would come into television. That is not the estimate of all the practitioners in advertising or of the television or radio companies. Where will that increased revenue come from? Is the hon. Gentleman saying that the cake will be enlarged, or is he suggesting that the additional revenue coming to the BBC under these proposals will come from commercial local radio and perhaps local newspapers? If so, what is the consequence for the latter?
§ Mr. JonesI shall return to that matter later. The simple answer is that I believe that the cake will grow, and that that view is shared by practitioners in advertising.
Public opinion is important. It is the public's money, and they should be the first to be considered. The MORI poll in March 1984 showed that 44 per cent. thought that the BBC presented either not very good value for money or poor value for money, so clearly that worried them. That might have concerned simply price, with the public feeling that if the television licence fee had been lower, the standard would have been acceptable. However, apparently that is not so, because 42 per cent. were dissatisfied with quality as opposed to 53 per cent. who were satisfied. The same question was asked about ITV programmes. In their case, only 31 per cent. were dissatisfied, whereas 64 per cent. were satisfied. That is a reflection of the increasing quality of ITV productions not just in news and current affairs, where they are incomparably good, but in documentaries, light entertainment, plays, and so on.
The idea of advertising must have its supporters as well as its opponents. I should like to mention them at length. It has been welcomed by the Institute of Practitioners in Advertising. Its media policy group welcomed the Saatchi and Saatchi Compton report calling for advertising. The group stated: 476
It is our view that allowing advertising to fund the BBC increasingly will give the corporation the resources to develop its services more fully without the need for the public to bear the burden.That is part of the reply to the hon. Member for Knowsley, North (Mr. Kilroy-Silk).The idea also commended itself recently to Opposition members. The hon. Member for Bassetlaw, (Mr. Ashton) has shown a particular interest in it, and, much to my amazement, so has the right hon. Member for Chesterfield (Mr. Benn), although not so recently. Michael Tracey, writing in "Public Money", in September said:
In 1966 the then Postmaster General, Tony Benn, as the Minister responsible for broadcasting, actually considered forcing the BBC to take advertising. Such an idea was easily defeated by BBC lobbying, appalled civil servants — one, legend has it, threatened to take the issue to the Queen if Benn did not desist".Of course, the right hon. Member for Chesterfield may have changed his mind about this as much as he has about many other matters, but it is interesting to note that he favoured advertising at that time.Many individual advertising agencies welcome the idea of increased opportunities. Rodney Harris, media director of D'Arcy MacManus and Masius, has said:
Last year, advertisers were having to pay nearly twice as much in real terms for television airtime as they did in 1970".That being so, it is scarcely surprising that advertisers should view this as a means of keeping down their costs as well as bringing extra revenue into the industry.In any real world, the BBC itself should welcome the idea because the gap between BBC and ITV resources continues to widen and will clearly lead to a challenge in the quality of programmes in due course.
Advertising is only part of the answer. For a great part of the revenue necessary there is still the choice between greater efficiency and doing something about the scale of the operations. I believe that there is tremendous waste and major opportunities for cost cutting within the present service. Many who work at the BBC admit that. Stuart Young, the new chairman, in an interview published in The Times recently, conceded:
I think that within the industry there are certain manning practices which have developed that are less than desirable. But what I do know for a fact is that any manning difficulties that there are within the BBC are nothing as compared to the manning difficulties in commercial television.I do not suggest that just because ITV is overmanned that means that the BBC is not. It is a case of the pot calling the kettle black.In an admirable letter in The Times of 27 November my hon. Friend the Member for Brecon and Radnor (Mr. Hooson) detailed the matter as follows:
If one cuts through the BBC's idealised view of itself, what actually exists is a badly managed, over-staffed and over-extended empire, as much in need of pruning as were British Steel, British Leyland and the NCB. When can viewers expect to see a BBC TV exposure of its inefficient work practices and of the large investment in computer technology lying idle in newsrooms because of lack of will to manage resources lest any interest group might be upset?I have had experience of that myself when working for the BBC. One notorious practice of the BBC is that, when it wants information which may not necessarily be urgent, instead of asking one to post it, a taxi is sent to collect it. That is a shocking waste of public resources. It is also well known that on outside locations many BBC staff enjoy a standard of food and hotel accommodation greatly exceeding that which should apply when public money is involved.477 Many people who work in the BBC would probably concede that there is quite a lot of waste. I have heard it said by many who work further down the tree that the BBC is one of those organisations in which there are whole tribes of chiefs rather than Indians. Certainly my personal observation has been that the people at the sharp end often have to operate in extremely poor conditions and with limited equipment, while the top people have far more support staff than one would recognise as necessary.
There is also the question of scale. The BBC has gone into a number of new areas in recent years. Local radio, for example, is costing it about £20 million per year. That is about 3 per cent. of the total and it is increasing. I do not believe that the BBC needs to be in local radio at all. Its service duplicates that of the commercial stations. It is also often inferior in quality to the commercial stations which are famed for their extremely high technical standards.
It would be far better if the public had a choice, and if there were competition. The BBC should sell off its local radio services to the private sector. In that context, I pay tribute to the Chiltern radio station — an independent radio station serving my constituency—which is widely listened to. My hon. Friend the Member for Luton, South (Mr. Bright) nods agreement. The station serves his area, too. It is of very fine quality. If there were two such stations in our area, with no drain on public money, that would be a great amenity for the people of our part of the Chilterns. The proposed BBC radio station will be a drain on the taxpayers' resources.
Breakfast television currently costs the BBC £5 million. I wonder why the project was allowed to go ahead in the first place, at a time when the BBC was complaining about the strain on its resources.
I do not believe that the present method of charging through the licensing structure can survive the present technological revolution. It is almost inconceivable that, with cable television around the corner and the duopoly of ITV and BBC dying, the general public will continue to be willing to pay for licences. I look forward to the day when people will pay for individual programmes through some sort of pay cable system.
The argument is about choice. We have a long way to go. People often sneer at television and radio in the United States—at the experience and the choice—but there is far more choice in the United States. In his book, "The Cable Revolution — Britain on the Brink of the Information Society", the editor of The Sunday Times, Mr. Andrew Neil, picks the schedules available in New York and London at 9 pm on 7 June 1982. In New York there was a choice of 25 programmes, compared with three in London— Channel 4 not yet being in operation. The New York programmes varied immensely. New York had a choice between "MASH", a documentary on black ghetto life, another film, a talk show, a documentary about the Kennedy years, baseball, a Spanish show, a variety show, Nureyev, Spanish drama, an opera—"Orpheus"— a public access discussion on international education, a seminar on nuclear arms, a film called "Bye, Bye, Birdie", a drama, another film, gymnastics, the Royal Ballet, folk art, Chinese cooking, the news and the film "The High Country". The citizens of New York clearly had a phenomenal choice. In Miami, too, there are no fewer than 80 stations in operation.
It is extraordinary that the hon. Member for Knowsley, North should say that there would be a shortage of 478 advertising. If Miami — a small town compared with London—can operate 80 such stations, is it not possible for the United Kingdom to operate more than two television stations with advertising? I do not believe that advertising would be in short supply. The amount may grow slowly. That is something that will have to be taken into account when the decision is made—and in March the Home Secretary will have to make a decision.
All these features will have to be included in the package if it is to win my acceptance. I expect that advertising will be introduced in due course. I expect evidence of improved efficiency in the BBC. I expect that the BBC will be encouraged to privatise local radio and breakfast television. Meanwhile, if there is to be an increase in the short term, it will take place without my vote in the House of Commons.
§ Mr. Francis Maude (Warwickshire, North)I congratulate my hon. Friend the Member for Hertfordshire, West (Mr. Jones) on his introduction of this important subject. I congratulate him on the subject, if not on the timing of the debate. We are not playing to a packed House. My hon. Friend the Minister has had to sir through the previous debate as well, and I congratulate him on looking remarkably perky.
This is an important debate because of its timing in regard to the proposed increase in the BBC licence fee and because, since the beginning of broadcasting, there has been a liberal consensus that we have to maintain the purity and virginity of the public service broadcasting ethic. Any mention of advertising in connection with the BBC somehow signals the advance of the Visigoths across Europe. The fragile structure of civilisation totters and is close to crumbling at the very mention of the word.
The quality of the argument for advertising on the BBC has advanced enormously. The case has become ever more potent and it has been put lucidly and forcefully tonight by my hon. Friend. The argument against has remained static and has been poorly articulated. It does not seem to occur to those who defend the status quo that we require a fairly rigorous analysis of what is going on arid of the justification for maintaining the status quo.
The intellectual arrogance of the argument in favour of the status quo reached its apogee in an editorial in The Observer last Sunday. It had that peculiarly irritating and patronising tone of superiority which is so redolent of the liberal consensus. It said:
It is simply not the case that the sharing of advertising between ITV and BBC would leave the underlying geology of British broadcasting unaffected. It would wreck it".I accept that as a statement of opinion. It can be held genuinely and sincerely. However, such an assertion must be backed up with some form of analysis and justification. What do we have? The editorial continued:if Mrs. Thatcher is not prepared to accept that warning from the BBC … then perhaps she should pay heed to the equally serious forebodings expressed by those in the free enterprise sector of the industry.The support of the BBC is prayed in aid, as is the support of the independent television companies. The same vein of rigorous analysis continues:She might also reflect on the fact that the last politician to bring forward a proposal almost identical to her own was Mr. Tony Benn: he, too, professed not to want to swamp the airwaves with advertising — he simply, until defeated in a Labour Cabinet, proclaimed his desire to see the principle established.479 It is a curious reflection for The Observer, whose distaste for the adversarial nature of politics is well known, to assume that because one part of the Labour party has at some stage supported this issue it ought to be axiomatic that the Government oppose it. The editorial claims to set out the case against advertising in the BBC and yet t is devoid of any justification, analysis or reasoned support for that case. It continues;The truth is that—perhaps more by luck than foresight—Britain happens to have almost the ideal 'mix' in at least one sector of its communications industry: on the one side, a lately somewhat complacent public service corporation and, on the other, a highly competitive free enterprise system.Again, a bald assertion of opinion. The argument just does not measure up to what the public perceive to be the case. The BBC lost its innocence in regard to commercialism a long time ago. Every year, come the run-up to Christmas, we have the unedifying spectacle of the BBC announcing its Christmas line-up with all of the razzmatazz that is attached to commercialism. It competes directly with the ITV companies. It competes, but without the sort of financial discipline that accompanies proper competition in a free market. At the end of the day, the BBC cannot go bankrupt, because it comes back to the Home Office for another subvention — another increase in the compulsory levy on everyone who owns a television set. Similarly, the ITV companies do not operate—as The Observer maintains — within a highly competitive framework. They are a private monopoly.I am not one of those who maintain that the BBC is terribly wasteful and extravagant, without any financial discipline. I accept that there have been attempts to impose some sort of financial discipline in the BBC. I also accept the argument of those who say, "If you want to see overmanning, bad labour practices and wastefulness, don't look at the BBC but at the independent television companies." That is absolutely right. The wastefulness is far greater there, and the reason is perfectly straightforward. There is no competition and the independent television companies operate a monopoly.
There is far too much advertising chasing far too little advertising time in the independent television sector, with the result that prices are sky-high. The independent companies can charge whatever they like, because advertisers have nowhere else to go to get the same sort of coverage. Consequently, the independent companies operate without any sort of cost discipline. As well as having an effect on the quality of broadcasting, this also has a consequence on the cost of the product advertised. There is a direct public interest in that.
In anything purporting to be a free market there must be advertising. The direct consequence of restricting access to the advertising media is that the cost of the products in the market place is artificially increased. We must address ourselves to the direct public interest in that matter.
I hope that I have shown that within the present broadcasting structure there is a failure of the sort of liberal consensus that has existed for so long. At present there is a compulsory levy on everyone who owns a television set. That operates whether or not the owner ever turns on to BB1 or 2. He may watch nothing but ITV programmes, and all the evidence suggests that more people watch ITV programmes than BBC. None the less, everyone must pay the levy. That is nothing short of immoral.
480 Every three years the BBC comes round with the begging bowl. No doubt an agreement will be made between the Government and the BBC, and the licence fee for the forthcoming three years will be set at somewhere between the present levy and the bid. That is a shabby and unsatisfactory way of regulating a most important part of our public life. We must urgently press for the introduction of advertising into the BBC. As my hon. Friend the Member for Hertfordshire, West suggests, it could be done gradually rather than all at once. There could be a phasing out of the licence fee over several years, but at the end of that process I want to see the complete abolition of the licence fee and the funding of public sector broadcasting from advertising.
I know that some people maintain that we could not fund Radio 3 and Radio 4, and possibly BBC 2, from advertising. There may be some justification for that point of view, but to those who say that minority interests cannot be catered for in minority programmes within a commercial framework I would point out that Channel 4, although it was quite rightly criticised at its inception, caters for a large number of minority interests within a commercial framework. To those who say that BBC2 is so sacred and important that it cannot be sullied with commercialism I say that we should try it and see. I believe that it can be properly funded within a commercial framework.
As for Radio 3 and Radio 4, if eventually the conclusion is reached that they cannot be operated within a commercial framework I believe we ought to accept it and fund them out of general taxation. As a proportion of the total BBC budget the cost is tiny. The additional subvention from the Treasury would be minuscule, but it would release anybody who owns a television set from the tyranny of the levy.
The case for keeping advertising out of the BBC has been shown to be wanting in every respect. By its increasing readiness to incorporate advertising for its own products and services within its programmes the BBC has shown that it is not averse to the commercial spirit. It is a gross insult to the dedication and impartiality of those who work in the BBC and to those who acknowledge the need for impartiality and quality in broadcasting to say that to introduce commercialisation is to destroy the public service ethic. The case against advertising has not been made. The case for advertising becomes more potent and cogent as time goes on. I hope that the Minister will be able to indicate that the question is being most urgently addressed and that preliminary conclusions may be reached before the inevitable increase in the licence fee.
§ Mr. Michael Forsyth (Stirling)I am grateful for the opportunity to participate in the debate. May I add my congratulations to my hon. Friend the Member for Hertfordshire, West (Mr. Jones) on having secured the debate and having given us the opportunity to raise this important matter.
If one is discussing the funding of any television network there are a number of options: first to fund it from taxation, secondly to fund it from advertising, and thirdly to look towards some kind of subscription basis of funding, by direct charging or otherwise. Whatever the method of funding of the television network, surely in common with all other businesses its future must depend upon being able to respond to the demands of its 481 customers, in this case its audience. By far the worst possible system is that which is based upon a licence fee. That guarantees stability of income, regardless of the quality of programmes. Advertising, whatever the elitist arguments presented against it might be, has the merit that it is an improvement on the present system of responding to customer demand.
My principal criticism of the licensing system is that it allows no relationship whatever to occur between consumption and the price charged or between quality and the demands of the consumer. The consumer is left with no way of expressing a preference. The only way is to write to "Points of View", but that is hardly the type of preference that I would expect hon. Members of my party to regard as legitimate.
Another more serious objection — although it is a feature of our system of government that we have been able to avoid—is what is affectionately known in the trade as the Carrickmore syndrome. I was unaware of it until I undertook research when preparing for the debate. It refers to the incident in 1979 when the BBC filmed an IRA show of strength in the village of Carrickmore. The Government quite rightly protested about this excess. It happened to be an incident which occurred in the middle of the discussions on the licence fee. The BBC dropped the film and it was suggested that it did so because it was worried about the licence fee increase. Scurrilous as that suggestion might have been, it is worrying to have a broadcasting system that is open to the criticism that it depends on the good will of the Government of the day to secure its funds.
My hon. Friend the Member for Hertfordshire, West said that the BBC was no innocent virgin in advertising and commercialism. I have had a number of visits from constituents who have expressed their strong objection to the proposed increase in licence fees. I have also had visits from people who are opposed to advertising, but they did not object for the same reasons as some of the high-flown advocates on the other side of this argument. They complained that advertising would interrupt the programmes. My perception is that programmes are constantly interrupted by commercial breaks for the BBC's own products and programmes.
Indeed, I suggest that the commercial break is useful, because it gives one—or one's wife—the opportunity to put the kettle on.
§ Mr. Kilroy-SilkThat was a very sexist remark.
§ Mr. ForsythI apologise to the hon. Member. It was meant to be descriptive rather than sexist.
The fact that we see sponsorship at sporting events, such as football matches, shows that the rot has already set in. My hon. Friend the Member for Hertfordshire, West referred to the number of products that the BBC markets. It is suggested that quality would suffer if advertising were introduced, but I believe that some programmes would benefit from the introduction of advertising and would certainly not be disrupted by it. For example, it would be useful to have advertisements between horse races. I cannot see that that would destroy the fabric or the creativity of programmes or justify any of the other bogus arguments that are put forward.
§ Mr. Robert B. JonesIs that not particularly the case with Radio 1 and Radio 2? The jingles would be part of 482 the atmosphere, as they are on commercial radio. The atmosphere is part of the reason why so many young people listen to commercial radio.
§ Mr. ForsythThat was an extremely helpful intervention. I do not often listen to Radio 1 or Radio 2. I find the commercial stations much better.
We should be suspicious of the BBC's self-indulgent, self-congratulatory attitude. My hon. Friends have been much kinder to the BBC than I shall be. The argument that the corporation is the pinnacle of broadcasting has yet to be proved. These matters are subjective, but it seems to me that on news coverage, current affairs and investigative reporting, ITV takes the BBC by storm and is much more effective. If hon. Members choose something a little closer to home, I believe that the ITV coverage of general elections has consistently been better than that of the BBC. The ITV coverage of the recent American elections was masterful. On the BBC there was only a cosy anti-Reagan fireside chat, with little information being provided for those of us who were looking for the high ground that the BBC claims to occupy.
The argument that advertising would debase the quality of programmes hardly stands up when one switches on and sees shows of the calibre of "Blankety Blank" and other quiz programmes broadcast by the BBC. Mention has been made of the rejigging of programmes around "The Thornbirds". I seem to recall that the BBC spent a very considerable sum on securing that, I believe Australian, soap opera. Again, it would not fit the description of the high ground.
I would not describe Channel 4's broadcasting as broadcasting of the lowest possible denominator, yet advertising obviously plays its part there. I may have missed the point because I do not watch it frequently, but I would not describe breakfast television as particularly elevating. The Fleet street newspapers compete for advertising, yet they still seem capable of producing quality newspapers. Judging by the editorials, some of them are improving before our very eyes.
The fact is that the argument about quality is purely an elitist argument to prop up the view that there are one or two people in the BBC who know what a quality programme is, and what is best for the viewing public. They are entitled to their opinions, but hon. Members should look at their performance records. They show that they are extremely sensitive to audience ratings. By their own actions, they admit that the best test of effective broadcasting and quality is the extent of high ratings. One of the unfortunate aspects of the argument is that the high ratings are considered a criticism and something that should be despised. On the contrary, they should be sought after, because they show that there are satisfied customers.
The hon. Member for Knowsley, North (Mr. Kilroy-Silk) asked whether there would be enough advertising. I notice that the director-general of the BBC was recently quoted as saying that local newspapers would suffer as a result of introducing advertising into the BBC. That was a new and very welcome demonstration of concern for local papers by the BBC. I am sure that we all appreciate that. But I seem to recall that the same argument was used by local newspapers against commercial television and radio in the early days. It was then argued that if there was advertising on radio and television, it would take away business from the newspapers, and would mean the end of civilisation as we know it.
483 We know that that was a totally bogus argument. Far from taking away advertising, the increase in commercial advertising in broadcasting in turn increased demand for advertising in the local press, as it resulted in tie-up advertising and marketing. The principal source of the argument about the volume of advertising has been the independent television producers. My hon. Friend the Member for Warwickshire, North (Mr. Maude) eloquently described how the interests coincided. People are desperately keen to preserve the monopoly. I have always been on the fringes of advertising, but those whom I know in that world very much resent that monopoly. It is used to say, "Take it or leave it. This is the price and this is the slot." Incidentally, some of the most expensive advertising on ITV is in the slots that block some of the best and most prestigious programmes on BBC. Anyone who has been interviewed at home by ITV must have been astonished by the number of cars and the people who emerge from them with clipboards but, who appear to have no particular function.
Wages in the independent television companies have consistently gone up at an astonishing rate—about 35 per cent. above the BBC rate. We are told that that is why the BBC finds it difficult to compete, that it trains all the people and that they then go off to ITV. Therefore, it is said, it needs more money to attract them back. It is a self-fulfilling spiral which is going downwards and which can only be broken by competition. It is a system that has allowed restrictive practices to grow and that has been to the detriment of both commercial and public broadcasting.
The argument about whether there is enough advertising available in the market is ridiculous when it is seen in the context of the fact that a mere 15 minutes a day for the BBC would bring in £50 million a year. We are not talking about wall to wall advertising from the start of broadcasting to the finish.
One or two anomalies exist within the licensing system which are unfair. It is impossible to defend the fact that a pensioner, regardless of income, will have to pay the proposed £65 licence fee. It becomes even harder to defend when it is recognised that if that pensioner lives in a sheltered housing scheme he would have to pay only £5 a year, provided the sheltered housing scheme is in the public sector. If the pensioner lived in one of the splendid examples of a private sheltered housing scheme put up around the country, he and every other pensioner in that scheme would have to pay the full licence. That cannot be fair.
The licensing system is questionable when one looks at the costs of collection. I understand that the cost of collecting is about 6 per cent., which is high when compared with, say, income tax, at 2 per cent.
Having put the case for advertising, let me mention the possibility of a subscription scheme, because I do not think that that has come into the debate, either outside or inside the House. The licence started as a subscription scheme. It was only as part of the wheeling and dealing done by the Government of the day in the days when it was necessary to give something in return for taking away a monopoly — a curious notion — when the BBC's monopoly on television broadcasting was removed to allow the ITV companies to come into existence, that the 484 subscription system was changed to a licensing system, or, in effect, a poll tax on people with sets. It was part of the quid pro quo.
There is nothing in the world to prevent the BBC from allowing existing licences to expire and in 12 months we could scramble the signal. Having been so hard on the BBC, I do not want to imply that I am trying to ensure that nobody is capable of receiving its programmes any more. Newsagents and normal retail outlets could market a small device to put between the aerial socket and the television to unscramble the signal, for which a monthly rental or flat charge is paid. To deal with piracy, and so on, the scrambling could be altered and a new device could be obtained every two or three months.
That would have the happy advantage of preventing the BBC from padding out the summer with those repeats of repeats of repeats which no one wants to watch, because presumably no one would go along to their newsagent and buy the delightful device to unscramble the programmes. The BBC would have an incentive to ensure that it kept its subscribers.
I know that arguments against that will be advanced. I know that people will say it would be unfair, that the BBC would have to think about its customers, market itself, and be responsible to consumer demand. I know that those arguments will be advanced against the proposal, but they are precisely the arguments that I would advance in favour of it.
There is a further anomaly. I confess that I have not done my homework as well as I should have liked. I understand from a constituent who wrote to me this week that at every sitting of a court in my constituency there are about a dozen cases of people who have forgotten to buy television licences and have been caught by detector vans. The normal procedure is to fine them about £5 for each month for which the payment is outstanding, and to make them pay the back-duty on the fee. I understand that the latter payment goes to the court, not to the BBC, which is in contrast with the system that operates for vehicle licence dodging. As a result, the BBC is losing considerable amounts of revenue. As a gesture to its empty coffers, I suggest that that should be examined, if the present licence system, which I do not support, is to continue.
The debate this morning and the recent debate in the press and elsewhere provides us with an opportunity. Public opinion is on the side of those who think that the licensing system has been tested to destruction. There is a serious problem in the BBC, which relates to its decreasing cost-effectiveness. Since 1971 its income has romped well ahead of inflation. Licences have increased in number from 16 million to 18.5 million. Colour licences, which are about three times the price of black and white licences, have increased from 4 per cent. to 80 per cent. of licences. The BBC has, therefore, had an enormous increase in revenue.
Now the total number of licences is in decline. We have had five increases in the seven years between 1975 and 1981, compared with seven in the previous 50 years. The BBC told the Annan committee that with 8 per cent. inflation it would need a 25 per cent. increase in the licence fee every three years. This year with 5 per cent. inflation, it wants a 30 per cent. increase—that is three years after a 35 per cent. increase.
The time has come to think about radical action in terms of commercialising the BBC. Even in the present political 485 crisis it is astonishing to find senior figures in the BBC saying, "Ah well, the problem is all those people with car radios. We need a car radio tax. It would be simple. We would just put a little green band on the tax disc of the motor cars of those who had paid their car radio fee. It is tremendous value because there are millions of car radios and the cost would be only ½p a week. People should be made to contribute towards that." Even now they are pumping the same old argument, which no longer has credibility. Auntie is in desperate need of surgery.
BBC 1, BBC 2 and breakfast TV could be hived off as a separate company. The board of governors of the BBC should be turned into a sort of IBA. It should ensure that matters go right, but it should not be involved commercially. That entity could then be funded entirely by advertising without any difficulty. I accept that there is a problem about getting all the revenue from advertising for BBC 2. However, a combination of subsidy from BBC 1 and breakfast TV — it is questionable whether breakfast TV is a viable proposition—sponsorship and subscription could fund BBC 2.
There may also be merit in hiving off BBC Television News as a separate entity that could sell its product in the way that Independent Radio News does for the commercial radio stations. My hon. Friends the Members for Hertfordshire, West and for Warwickshire, North made a convincing case for advertising on Radio 1 and Radio 2. I believe that they should he sold off lock, stock and barrel, because they are ideally placed to be operated as private concerns. There is no possible case for their being operated by the state.
I recognise the special position of Radio 3 and Radio 4, but their funding could easily be organised through a combination of sponsorship and subscription on the lines of the public broadcasting service in the United States. As for BBC local radio, I must tell my hon. Friend the Minister that in all the research that I have carried out, and in all the thinking I have done, I cannot find a single argument for that service being run by the BBC. It should be privatised, preferably through management buy-outs, or simply by the highest bidder taking all.
If I may be allowed a regional reference, BBC Scotland, BBC Wales and BBC Ulster could be funded from advertising, and private capital could be introduced. There is no reason why the board of governors of the BBC should not still ensure the quality of programmes.
Perhaps I may be allowed one reactionary proposal in my suggested programme of radical reform. It would be a grave mistake to alter the basis of the BBC external services. The case for retaining it under the control of the BBC., and funded by the Foreign and Commonwealth Office, is overwhelming. Indeed, that service—the one for which there is a strong case for public broadcasting —is consistently damaged as a result of our exercises to restrain public expenditure. There is a strong case for giving that service more resources, which could be saved from the other action that I propose.
This is a great opportunity for the Government to sort out, once and for all, the licence problem. It would command the support of the vast majority of British people. Even some Opposition Members argue the case for advertising — something that I did not believe would happen in this Parliament, if ever. That is a recognition that advertising would not sound the death knell of the BBC and that there is an opportunity for change. Some Conservative Members are extremely worried by the 486 noises being made in Government. My right hon. Friend the Prime Minister said some extremely encouraging things about advertising, but we have also heard the echo, "Yes, we will settle the licence fee this time, and we will think about advertising next year." No doubt that echo will disappear into the mists of, "We have an election coming", and all the other arguments that have been used to delay good ideas. The echo will result in reverberations from many hon. Members, who want the Government to seize this opportunity.
§ Mr. Christopher Chope (Southampton, Itchen)I join my hon. Friends in congratulating my hon. Friend the Member for Hertfordshire, West (Mr. Jones) on his success in the ballot, and on enabling several hon. Members to articulate the worries of many members of the public. It is significant that all those who have spoken in the debate so far are new Members of Parliament. They represent the new thinking among the public on this issue.
I am concerned about this matter for four reasons. First, I believe that we should respond to public demand on this issue. As far as possible, Members of Parliament should reflect the views of their constituents, and there is no doubt from the excellent statistics and polls that the public want change in this sector.
Secondly, I am naturally opposed to compulsory levies in principle, and at the moment we have a compulsory levy on anyone who has a television set in his home.
Thirdly, I want to bring more competition into advertising. At the moment, advertising is a monopoly of the independent sector, and that is leading to higher costs than would be the case if there were more competition.
Fourthly, I am concerned about the BBC licence fee being increased to anything like the level that it requests in its application. Figures such as 0.5 per cent. on the retail price index have been quoted, and that would lead to about £150 million extra public expenditure, with the knock-on effect on benefits, which are tied to the RPI.
I do not agree with the three-year agreement proposal. We should be looking for a one-year agreement. In the meantime, we should be discussing alternative funding and a long-term solution that will eliminate the need for a licence fee.
Whenever one challenges public sector sacred cows, there are always people who complain and predict doom and gloom. There was an interesting article in The Times by Bernard Levin not long ago, in which he told those of us who are too young to remember what happened in the 1950s in the debate over the creation of an independent television network. He said:
As the debate got under way, such demotic figures as Lord Waverley, Lord Halifax, Lord Brand and Lady Violet Bonham-Carter denounced the proposal as certain to corrupt the popular taste, of which they had always, of course, been such conspicuous guardians. Lord Hailsham envisaged 'Caliban emerging from his slimy cavern'; Lord Esher foresaw the nation plunged 'into a planned and premediated orgy of vulgarity': Lord Mathers shrank from the horror of young people seeing on their screens such foul slogans as 'Beer is Best'; Mr. Scholefield Allan, MP, described the never-forgotten revulsion he had experienced when he had heard, on Radio Luxembourg, an advertisement immediately preceding a Beethoven symphony; Herbert Morrison threatened that a future Labour government might abolish ITV altogether; Beverley Baxter shuddered at the thought that an advertisement might feature a man extolling a deodorant.Advertising-funded television arrived, and the skies did not fall.487 The public realise that that is the reality. We have been experiencing a self-interested lobby by the BBC, which is trying to prevent Members of Parliament from taking cognisance of what people think.The effect of the advertising monopoly has already been referred to by a number of my hon. Friends. The restrictive practices and high wage rates that exist in the television world are renowned. I shall refer to an article that Mr. Max Hastings wrote in the Standard on 25 October 1984. He was talking about the dispute that brought Thames Television to a halt for several consecutive days. He spoke of the "absurdly high" salaries in ITV and the "absurdly unrealistic" work practices, which were matched only in the press industry. The difference between Fleet street and the BBC is that one does not have to pay a compulsory amount every day for a newpaper. Many people choose not to buy a newspaper, but those who have a television set are compelled to pay a licence fee, even if they do not wish to watch BBC. Mr. Hastings said that ITV has really had a licence to print money when so much revenue was coming that nothing seemed to matter but continuing to churn out programmes at any cost. He also said:
Once created, the system became enshrined in tradition. In the past few years, all producers of television have become deeply concerned by cost escalations, running far ahead on inflation. Yet none has made significant progress in persuading its employees to adopt more realistic practices.With ITV film cameramen making around £40,000 a year, some electricians even more than this, film editors the right side of £20,000, relatively unskilled sound and camera assistants closer to £30,000, there is room for everybody on the gravy train.The impact on film-making caused by overtime agreements is soul-destroying. Once the basic day has been worked, every hour thereafter the scale of technicians' earnings multiply until they reach a level four or five times basic rates.There are 'pocket money' agreements for crews working abroad even when all their expenses are being paid, meal-break deals and rest-period arrangements of fantastic complexity. Only a handful of technicians are willing to be flexible about interpreting their rights.Mr. Hastings went on to say:The irony is that BBC, with its resolute determination to yield nothing to the commercial principle, is sinking into ever-deeper financial problems, which in turn make for worse programmes, which in turn make for lower ratings.ITV, wallowing in advertising revenue, is riding so high in the ratings that any contractors are desperate to see an improvement in the BBC's fortunes, before the Government steps in to cream off yet more of commercial TV's profits.Last weekend, we were given our first frontal nude on that most loathsomely exploitative of all soap operas, Tenko. Do we call this an opening shot in the BBC's great ratings fight-back?If the restrictive practices, overmanning and high wages were occurring solely in the independent television companies, perhaps that would be of relatively little concern compared with what is happening now. Unfortunately, these same practices are occurring in the BBC. Mr. Woodrow Wyatt, writing in The Times on 6 October, said that, contrary to some opinions, the BBC has even more staffing than the independent sector. He then said:The BBC has a staff of some 29,000. Commercial broadcasting with a comparable television output and a radio network, employs fewer than 20,000. The BBC, a bureaucracy not concerned with maximising profits, probably employs a staff about one third more than if it were a commercial organisation.Because there is an advertising monopoly, the independent channels are able to make extra profits by pushing up the advertising rates far ahead of the rate of 488 inflation. Their work force then demands an extra share of those profits, and as a result, the BBC finds that it has to pay staff extra to compete. It is a vicious circle in which the consumer comes out worst and the monopoly unions operate to good effect for their members who are lucky enough to work in those industries.Many of the people who oppose advertising on the BBC suggest that there would need to be a massive amount of advertising to have an impact. One of the points coming through in this welcome debate is that a relatively modest amount of advertising would suffice. Advertising for one minute 20 seconds in an hour would obviate the need to increase the fee. Advertising for only one minute 20 seconds in an hour would not mean that programmes have to be interrupted by advertisements. Advertisements could be placed between programmes. I believe that there would be wide public acceptance of a modest amount of advertising, even if, to start with, there was advertising only on BBC 1. That would leave BBC 2 to operate more like the public broadcasting service that operates in the United States.
I am worried about the negotiations for a three-year licence agreement. It means that any agreed licence fee will be that much higher than if it were a one-year agreement. I have already illustrated the adverse effect that that would have on the Government's policy of keeping down inflation. It also means that the welcome public debate on the subject would close as soon as a new three-year agreement was reached. I implore the Government to recognise that it is now too late to rejig the whole thing before March next year when the licence fee must be agreed. They should say that the BBC will have a one-year agreement only and that the extra time will be used for increased public debate, which I hope will result in a Bill being brought before the House and lead to the complete phasing out of the BBC television licence fee.
We have all heard about the effect of the licence fee on pensioners, people on fixed incomes, and so on. A counter-argument is that, because the licence fee would be reflected in the retail price index, pensioners would receive extra on their pensions each week from which they would be expected to meet the additional cost of the licence. In the real world it will not be like that. When it comes to paying the increased fee, pensioners will ask how they can pay for it out of their limited incomes. I sympathise with pensioners who live on fixed incomes and who are worried about this matter.
We should give all pensioner households a 5p licence, or do away with the licence. At the moment we fall between two stools. We say that the pensioner who lives in council-run sheltered accommodation is entitled to a 5p licence, whereas the pensioner who lives in a rented flat on his or her own, who probably has costs additional to those of the first one I mentioned, must pay the full licence fee.
There is one anomaly after another. Everything the Government do to try to resolve the matter leads to further anomalies, because the impact on the licence fee for everyone else if every pensioner could have a 5p licence would be so great that people would take to the streets to protest.
That is why my hon. Friends and most members of the public believe that we should eliminate the licence fee. We should not be content with half measures which lead to the problems we have had with dog licences, where the cost of collecting the fee becomes progressively a higher 489 proportion of the revenue raised and people ask whether it is worth collecting. We should have a programme to phase out the licence fee.
If we could go to the people and say that in three, four or five years the licence fee would be eliminated, we would effectively be giving £1 per week extra to almost every householder to spend as he wished. That would be in accordance with Conservative philosophy and, I hope, with Government policy.
We know how people have been agonising recently about the £1 per week reduction in the increase in heating allowance. The Labour party spokesman on this issue is not prepared to say that phasing out the licence fee will give back £1 a week to householders.
In another article in The Spectator, Mr. Paul Johnson wrote about the "stone age BBC". He said:
At present the BBC's obstinacy in accepting advertisements has no more foundation in reason and economics than Arthur Scargill's refusal to accept pit closures.I agree with that. It is no doubt because the Labour party agrees with him that it is embracing the policy of repealing any proposals to introduce advertising into the BBC in the same supine way as it has been supporting Mr. Arthur Scargill.I hope that, as a result of the debate, there will be a further debate before the BBC's licence fee increase application is approved. I hope, too, that the Government will introduce proposals for a one-year increase and a wide-scale public debate that will lead to the phasing out of the licence fee for ever.
§ Mr. Piers Merchant (Newcastle upon Tyne, Central)I, too, congratulate my hon. Friend the Member for Hertfordshire, West (Mr. Jones) on his initiative in bringing the debate before the House. My hon. Friend has demonstrated his acute sensitivity to popular concern. The fact that we are debating a matter of great concern to the public is borne out by press comment, public opinion surveys and letters received by many of my colleagues and me about the BBC, its financing and the proposed increases in licence fees.
The debate is extremely relevant and timely, because the BBC is mounting a campaign in support of its desire for a large increase in the licence fee. It is appropriate that we should have an early opportunity to discuss and consider the implications of the proposed increase before a decision is reached. The fact that the debate has been allowed to continue for three hours reflects the concern that is felt among hon. Members about the issue and their desire to express themselves and debate the principles involved.
I congratulate my hon. Friend on his contribution to the debate, the persuasiveness of his arguments and the general thrust of his contentions, which in general I strongly endorse. I endorse his remarks on the many good features of the BBC, its employees and its services. I have always found myself most courteously, fairly and fully treated by the BBC, and any criticism that I make of the system and its financing does not stem from a personal axe that I might wish to grind.
On the other hand, I must observe that the political nexus that the present financing system creates is one that runs to the detriment of both the BBC and Members of Parliament. The BBC rightly resents having to come almost on bended knee for increases in its revenue. I am 490 sure that it would prefer a system where it was free of any possible political colouring and judgment. At the same time, I have heard colleagues say in private that they might not wish to be heard to be objecting too strongly to the BBC's request for a licence fee increase for fear that that might jeopardise their chances of being represented by the corporation. The political nexus bites both ways and I am sure that any means that was found to break free of it would be welcomed.
There is a strongly principled argument against any increase in the licence fee. I think especially of those of my constituents—a high proportion of them—who are unemployed, elderly or on low incomes. The ability to watch television is one of the few luxuries that they are able to afford. It might even be described as a necessity for those who have time on their hands and little to occupy it with. They have to pay for this "luxury" what is already a high rent when it is set against their income band.
The BBC is pressing a case to increase the licence fee to £65 a year, an increase of £19, or about 41 per cent. That would be an extremely large increase bearing in mind the present rate of inflation and increases in costs elsewhere. It is equivalent to a back-door tax increase of over 40p a week, which is considerable, and would be rightly condemned were it to fall in any other way.
I regard the proposal for an increase in the licence fee as quite unacceptable. After all, it is already a high enough hurdle to overcome to change from not having a television to having one. A family has to afford the capital cost of either buying the apparatus or entering into the rental agreement, and then has to pay an already large licence fee. To widen the gap between those who do not have and those who do have a television service would be iniquitous, but to load on to each year that extra payment, making a heavy annual cost, is unacceptable to the many people to whom television is so vital. They have no choice in any case over the cost of the service because, unlike virtually any other product, they cannot turn elsewhere to a competitive product and pay slightly less, perhaps for something of less quality, or even something of higher quality that offers a better bargain.
For the purposes of these arguments, I completely dismiss the suggestion that black and white television is in some sense an alternative to which one can subscribe at a lesser rate, for two reasons. The first is that it bears absolutely no relevance to the provision cost because, from the point of view of the corporation and others, it is exactly the same, whether the receiver happens to be black and white or colour. Secondly, these days, with the importance of the colour aspect of television acknowledged right throughout transmission, for someone to be expected to have to make do with black and white television is to reduce the quality of reception so far that it makes a mockery of the provision of the service.
There is also the aspect of the cost of the collection of the licence, which has been mentioned by many of my hon. Friends in the debate. The detection and collection cost is estimated by the BBC to be around 7 per cent. of the total cost of licence collection in the coming year, which is an enormous percentage if one compares it with alternative forms of taxation or revenue collection. The number of people that the BBC estimates are not at present in possession of a licence but are in possession of the facility to receive transmissions is around 1.5 million, despite the massive increase in detection facilities and warnings issued by advertising and other means which the 491 BBC is wont to do from time to time. Nevertheless, that large figure is one that I fear will only increase if the licence fee goes up and the larger the increase in the licence fee, predictably, the larger the increase will be in the number of people attempting to get round paying.
The licence fee system has no link to usage of the service. It is not in any sense measured by the amount someone is prepared to listen to the BBC, which benefits from the revenue, as opposed to its independent competitors. I should like to refer now to linkage to use. It is of course a fact that many people might happily watch independent television and not the BBC, and listen to commercial radio, and not the BBC radio, and be quite happy with the provision that they get from the independent sector, yet still have to pay the full amount of the licence fee. They are effectively paying for nothing because they are not benefiting from or receiving the service paid for out of the licence revenue. They are using their equipment to pick up broadcasts that come from, and are funded from, entirely different sources.
There may also be people who do not receive television and do not pay a licence fee but who listen to BBC radio every hour of their waking day and even perhaps when they are asleep, and thus benefit from a service subsidised by the people watching independent television. The licence fee system is completely unmeasured, almost irrelevant, and bears no relation to actual use.
There have been dramatic changes in broadcasting and in communications generally in the past 20 years and there is no doubt that change will continue and indeed accelerate. I just about remember the days when the BBC had a complete monopoly as sole supplier of broadcasting. Some hon. Members' memories may go back even further. I certainly remember the days when one relaxed in the comforting arms of "Auntie" BBC knowing the standard of service that would be provided and regarding it as something sacrosanct that would never change.
Nevertheless, things changed and, although some horror was expressed before independent television and later commercial radio came on the air, both services have proved extremely popular as well as being free to the listener or viewer. Commercial radio was preceded by pirate radio—a sure sign if ever there was one that the market was cramped and unable to deal with the demand that had arisen. Were the fears of poor standards expressed before pirate radio became commercial radio ever justified? I believe that they clearly were not. In any case, what are absolute standards in broadcasting? I find myself questioning the whole concept, but I shall return to that later.
Far from being unpopular, both commercial radio and commercial television were highly popular and much desired. Far from hating the advertisements, as had been suggested, people liked them. According to a recent survey, about 77 per cent. of people actually enjoy watching or listening to the advertisements. As has been pointed out, there are added advantages—including the provision of a break in which one's spouse, of whatever sex, can make tea. The present system is an anachronism. The licence fee is no longer relevant, as it may once have been. Nor is the organisation of the BBC, to which the system is intimately related, ideal for the 1980s, let alone the 1990s and beyond.
492 Where do we go from here? First, we must look not to the past or the present but to the future and try to anticipate what will happen in broadcasting in general. I think that there will be massive changes. The BBC and broadcasting in general cannot resist direct broadcasting by satellite even if it wished to do so. There will also be competition from cable television. The BBC cannot resist more broadcasting. I have no doubt that in due course domestic viewers here will be able to pick up broadcasts from other countries and, probably via satellite, some of the main United States television channels which, as they broadcast in our language, would be immediately applicable to British audiences.
I do not doubt that before long we shall see the setting up of trans-national television, aiming not just at one country but at a number of countries. Channels such as the music and television network in the United States—which is the television equivalent of Radio 1 or some of the commercial radio stations—will inevitably catch on here sooner or later, and they could have trans-national applications. The BBC could not keep up with all those developments and corner all those markets, even assuming that it would wish to do so, which I do not believe that it would.
The BBC suffers from inherited problems. It suffers from having been an empire and also from the desire—almost the obligation — to participate in all the new applications and developments, because it always has done so in the past. As broadcasting moves into the future, the BBC always seems to want to fight its own Star Wars in the ether. One might more appropriately say that the empire is always wanting to strike back. From the days of VHF and stereo radio to those of the broader remit covering the production of its own films, records, music and video tapes, from the technical support side of television and radio to the second television channel, local radio, DBS and breakfast television — the BBC has shown an interest in everything that one can name, and tried to enter the field. I am sure that if the resources were available—the will would certainly be there—the BBC would like to launch its own satellites to provide for DBS.
A line must be drawn. There are fields that the BBC cannot reasonably enter, and things that it cannot afford to do. Inevitably, its share of the broadcasting market will slip. That cannot be helped. Whatever is done, it will attract less and less of the market. We will therefore find, if we maintain funding solely by licence, that the anomaly becomes greater and greater.
By asking for a huge licence increase this year, the BBC is, happily, opening the door to a complete review of its financial base and its structure. We should seize the opportunity to institute a timely reform of the whole provision of broadcasting by the BBC, in which we consider the broad issues of accountability and efficiency as well as financing.
Much has been done in the past few years with the telephone system. We need to open up broadcasting as widely as possible to competition, enterprise and freedom. By all means let us preserve the best of the BBC. I acknowledge that it has made great contribution to broadcasting and can contribute much in future. However, we should also give the viewers as many alternatives as possible and as fair a means of funding the various possibilities as can be provided.
One possible scenario would be very flexible. There would be a number of options that we could develop after 493 having tested the water. In the first stage, there would be no increase in the licence fee in the foreseeable future, and permission would be granted to the BBC to bring in limited advertising, perhaps first on Radios 1 and 2 and BBC 1. Those measures could be accompanied by a measure to prevent the BBC developing into new areas and perhaps an encouragement to it to contract out many of its internal activities and limit the growth of ancillary areas.
In the second stage, we could envisage the selling off of Radio 1 and Radio 2, which are perhaps the least credible from the point of view of the BBC's historic purpose and maintenance of standards. Coupled with that, we could extend free licences to the 4.7 million pensioners. The third stage could involve the possible selling off or breaking down into separate organisations of BBC 1 and local radio or of BBC 2, Radio 3 and Radio 4 which, for the foreseeable future, should be kept as they are. They could be subsidised by a reduced licence and perhaps accept some advertising.
§ Mr. Michael ForsythMy hon. Friend said that he would extend a free licence to the 4 million pensioners. Why has he singled out pensioners — they do not demonstrate need as a category? What about other groups, such as the unemployed?
§ Mr. MerchantThese proposals have a great element of flexibility. I do not want to narrow the argument by saying that only one sector of the population should benefit from a reduction in licence fees. I chose pensioners because it can be argued that they are most dependent on television. Moreover, they have probably paid more than most in licence fees.
The BBC is a monolithic organisation which has expanded into areas such as breakfast television that could not have been imagined only a few years ago. It is an unaccountable organisation in many ways and it is certainly uncompetitive. Many of its attitudes are paternalistic and anachronistic. It follows what it believes people should see rather than what they demonstrate that they want to see.
We should not kid ourselves on the argument about standards. Standards are a subjective element. The BBC might think that it has the answer, but many others might not agree. Is the BBC that good? It argues that it offers the highest standard of broadcasting in the world, but many disagree. Close examination of the BBC and a comparison with the independent networks show that many independent programmes are of higher quality. The argument that only the BBC offers the highest standards is no longer sustainable. Does the introduction of advertising mean that there will be an automatic reduction in standards? I do not think so. Indeed, I believe that adverts would be welcomed and improve the service.
Paternalism in broadcasting might have been satisfactory in the 1920s, during the war years and perhaps in the austerity that immediately followed the war. The spirit of today's age revolts against paternalism, monopoly, duopoly and everything that goes with them. We should imagine what would happen if Fleet street or the magazine empire were run by a subsidised monopoly that was not open to the market. There would be an outcry. In the interests of plurality, quality and choice, there should be a major review of the licence system, the funding of the BBC and its structure. There should not be an increase in the licence fee but a move towards its decrease. Above all, 494 this would clearly be in the interests of the consumer and would provide more and better services, as well as greater choice, at a lower cost.
This is a fitting time for a complete review and the institution of radical reforms in broadcasting, and I urge my hon. Friend the Minister of State to do all he can to achieve this in the near future.
§ Mr. Roger King (Birmingham, Northfield)I apologise to my hon. Friend the Member for Hertfordshire, West (Mr. Jones) because I did not hear his opening remarks. However, I have listened with great interest to the contributions of others of my hon. Friends, and there is not a lot with which I would disagree. Indeed, I would positively agree with the vast amount of what I have heard, because the general feeling is that, before the BBC is able to obtain any extra increase in its licence fee, at the very least some kind of inquiry into the funding of the organisation should be undertaken before we commit ourselves to what, on the face of it, could be a very large increase.
The BBC seems to suffer from an ever-spiralling increase in running costs. Because of our busy life, many hon. Members are unable to see the programme diet that is dished up day by day and week by week. On the odd occasions when I have been at home on a Saturday or Sunday evening, snuggled up by the fireside with my wife, I have found that the last thing worth watching and indulging in is television. That applies equally to the commercial channels, but time stands still on the BBC on a Saturday evening. It is hard to tell one Saturday from another, because the same programmes are shown each week. There is a quiz show, with the same panel and almost the same contestants. There is also a female police soap opera—each channel has one—and probably an old American film which is being shown for the fourth or fifth time. That is followed by soccer, or that other hideous cult programme — snooker. It may be that such a diet is welcomed by the viewer, but it leads me to question where all the money goes.
Recently there has been a contest between the commercial and state sectors over breakfast television. I am not sure that the financial moguls at the BBC did their costings correctly on whether the corporation could afford breakfast television, but no one asked me, and many others like me, about whether we were prepared to watch it. Having said that, I should add that many hon. Members on both sides of the House seem to enjoy appearing on the programmes. Nevertheless, breakfast television has added a great deal to the cost of the BBC's budget.
That was emphasised only yesterday, when the corporation began attempts to retain one of its prominent female anchor women. A salary of about £80,000 a year has been proposed, but that is not for a five-day working week. It has suggested that that would be for working every other week. That strikes me as money very badly spent.
In the west midlands, the BBC's contribution—Radio WM — is a worthwhile operation and well worth listening to, but whether it fulfils a demand within the area, which is adequately covered by commercial radio, leaves something to be desired. In some of its programmes, both on television and on the radio network, 495 there are grounds for economies, and probably grounds for withdrawing from a market that is best left to the commercial sector.
As was mentioned earlier, the increase in the television licence fee plays its part in the pension increase, but it never works out quite like that. Those on supplementary long-term pension arrangements have this year suffered a £1 reduction in their pension. The proposed increase of 40p or 45p per week will therefore swallow up about 25 per cent. of their pension increase. It is very hard for some pensioners to accept that.
Some kind of licence fee is needed. I do not believe that it should be phased out completely, to be replaced by commercial advertising. However, we ought to look more closely at the dividing line between black and white and colour television reception. Apart from the receiver, virtually the same equipment is needed. Years ago, when colour television was the in thing, it undoubtedly cost the television contractors a great deal more to provide colour television. However, the extra cost of transmitting colour television has long since been absorbed. Therefore, the justification for two kinds of licence fee no longer obtains.
It is also wrong that elderly people who have difficulty in finding the extra money for a colour television licence should have to put up with black and white television. First, we should consider bringing closer together the cost of black and white and colour television licences. There should at least be a reduced fee for a colour television licence. If we consider also the contribution that advertising might make, we should be moving towards overcoming some of the BBC's financial problems.
Revenue from advertising does not destroy the quality of programmes. There are many good commercial television programmes. There is no evidence to suggest that advertising has reduced the standard or quality of that kind of programme. In the early years of commercial television the contractors indulged in sponsored programmes. They fell by the wayside. They were not part and parcel of the operating requirements of commercial contractors. Some of the magazine programmes, consisting of a half-hour presentation of new products, left a great deal to be desired. But there is no reason why the "Look at Life" and programmes of that kind should not be sponsored by oil or pharmaceutical companies. It would be a very convenient and cheap way for commercial contractors and BBC television to get hold of high quality programmes at a generally low cost. It would result in the provision of cheaper programmes without necessarily having to resort to the other form of advertising—the interruption in the middle of a programme. There are other ways of presenting a commercial partnership between industry and commerce and broadcasting than blatant advertising through subsidised or sponsored programmes.
The challenge that the broadcasting companies face throughout the remainder of the century is daunting. With the advent of satellite and cable television, there will be a much wider choice for viewers. The result will be that they will watch fewer programmes of the contractors who now present them. If viewers are faced with the prospect of paying a great deal more for watching BBC, they will not resent so much having to pay the price for watching a minority channel.
We must grasp the nettle. The licence fee should be reduced and there should be only one category. We should 496 also allow the BBC to introduce sponsored programmes and ask it to look again at its radio sector and introduce commercial sponsorship, at least on Radio 1 and local radio. Indeed, it should also consider selling local radio stations, perhaps to the existing managements.
The debate is timely and I look forward to some positive action.
§ Mr. Richard Tracey (Surbiton)I am grateful to my hon. Friend the Member for Hertfordshire, West (Mr. Jones) for initiating this timely debate. I am sorry that I was not here for his speech, but I know that he examines competition closely and that he likes the smack of firm competition and cost-effectiveness. I look forward to reading his speech in Hansard.
I am also grateful that Mr. Speaker allowed three hours for the debate, which should serve as a curtain-raiser for a full debate in the House on the licence fee and the future financing of the BBC before any firm decision is taken about whether we retain the licence fee for another year. I do not think that we should keep it for more than one year. I am glad that my hon. Friend the Minister of State, Home Office is to reply to the debate. I know that he is aware of the pressures of the market and no doubt he will show us some of his wisdom in these matters.
Although this time of the morning is fairly uncongenial and uncomfortable for us, it is an appropriate time to debate the BBC, because the range of BBC broadcasting at this time of the day shows how the corporation seems to be trying to cut its own throat. The highest pressure is put on the listener and viewer by Radio 1, Radio 2, Radio 3, Radio 4 and breakfast television. They all compete fiercely for the captive audiences in British households and among people driving to work. There is further competition from the BBC's local radio stations. In some areas, two such stations overlap. That is an excessive coverage by the BBC.
We are moving into an era of new developments in broadcasting. The BBC has stated adamantly that it wants 50 per cent. of direct broadcasting by satellite. I believe that it would be acceptable for the BBC to have one third of DBS, with one third going to independent broadcasters and the remaining one third going to the commercial world in general. Nevertheless the BBC wishes to grab an excessive slice of the action there.
Then we have cable television—the new development for which the House legislated during the last Session. Again, that will put heavy pressure on the broadcasting world. Finally, there is the argument now for much more community local radio, with low-powered transmitters spread over a wide area of the country. The community is asking for true local stations, and that will once again increase the amount of broadcasting in Britain.
Those great developments are going on, and so it is wholly appropriate that we should now look afresh at where the BBC stands within the broadcasting world. How is the BBC to be financed? My hon. Friends have very adequately covered the main suggestion, which is that it should move towards some advertising. From what I have heard and read, and from programmes in which I have been involved during the past few weeks, I understand that to put it mildly, the BBC is running scared from the idea of any advertising on its networks.
The BBC's worry is wholly unfounded. It is argued that the quality of broadcasting will be reduced as a result of 497 advertising, but that is arrogance on the part of the BBC. Who would suggest that the programmes of independent television are of an inferior quality to those put out by the BBC? The truth is that all too often people tell us that independent television news — which is only part of independent television's output—is of a higher quality than that of the BBC. There can be no question but that the current affairs programmes and much of the entertainment put out by independent television are of a quality that is certainly equal to that seen on BBC.
Advertising already exists on the BBC. How many times do we sit in front of our television sets watching the BBC advertise the Radio Times, The Listener, BBC books, BBC video and radio tapes, not to mention BBC programmes? Indeed, great chunks of trailer material are put on at the junction of programmes. The British public are now perfectly accustomed to such advertising. It is advertising, although it is not paid commercial advertising. The British public are quite used to seeing that, and it would not think it unusual if commercial advertising was introduced into the same spaces between programmes or in the middle of them. As my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Merchant) said, the polls and surveys show that many people find the advertisements carried on independent television highly acceptable productions, which are of a very high quality in terms of film work and general production. There is no hann in looking further at such advertising and at that sort of British standard of advertising on the BBC.
We are always being told that we shall get the standards of American trans-Atlantic television if we introduce such advertising. The same applies to trans-Atlantic radio. I do not believe that that will be the case.
As a former broadcaster, I have heard a great deal of that sort of thing from the other side of the Atlantic. Britain's broadcasting standards are now so firmly based that we are never likely to move to the constant churning out of commercials in the middle of a programme. We shall not have the experience which one so often has on the other side of the Atlantic.
I do not wish to delay the House, because all hon. Members wish to hear the Opposition's response, although they amount to only one Member at the moment. I beg your pardon, Mr. Deputy Speaker, it has just become two. Reinforcements have arrived. In addition, the House will wish to hear the response from the Home Office.
As I said at the beginning, the debate should simply be a curtain-raiser for a major debate on the matter before we proceed further. There is much worry, particularly in the minds of pensioners — I have many of those in my constituency—about the prospect of a £65 licence fee for a further three years. There is a worry about how much higher the figure will go. With the constant wish of the BBC to expand its empire, who knows where the BBC licence fee will go? At what point will it reach £100 a year and at what point will it go even higher? The problem cannot simply be tackled by the suggestions of some of my hon. Friends that we should move to curtail the activities of the BBC. This is the moment for a much more radical look at the financing of the BBC.
My hon. Friend the Minister may wish to know, if he does not already, that there are many producers and directors in the BBC who also wish that to happen. Let him not hold the idea that people within the corporation necessarily want to see the licence fee continued in 498 Britain. They believe that for perhaps too long now resources have been tight because of the format of the licence fee. They would wish, in terms of some of the technological developments and in terms of their productions, to be able to see that the BBC's finance is on a truly competitive basis with the independent networks. If the Home Office is prepared to grasp that nettle and to have full discussion with hon. Members and with the wider public about the future financing of the BBC that will be welcome indeed.
I urge my hon. Friend, if he and his right hon. and learned Friend the Home Secretary feels that the time is too short to move to something new within the next few months—I would understand that—to move to no more than one year of licence fees for the BBC. If the rumours of the £55 charge for the coming year are correct, that may be about right. At that point I would say to my hon. Friend that a full debate must take place in the House and among the public about the future.
§ 7.4 am
§ Mr. Robert Kilroy-Silk (Knowsley, North)I join hon. Gentlemen in congratulating the hon. Member for Hertfordshire, West (Mr. Jones) on being fortunate enough to win the lottery for this debate, and on initiating an interesting, though albeit one-sided, debate on an extremely important subject. It is a pity that he spoiled his case by degenerating in part of his speech to a generalised attack on the British Broadcasting Corporation. A hostility to the BBC was shown overtly in some cases and implicitly in all the speeches from Conservative Members. Hon. Gentlemen also showed envy and jealousy at some of the salaries being earned by technicians, directors and performers.
The debate was obviously triggered by the BBC's application for an increase in the licence fee for the next three years, and by the report of the media policy group of the Institute of Practitioners in Advertising, which contains proposals to allow advertising on all BBC, radio and television channels. Clearly it has a sharp eye to its narrow self-interest and little thought for the needs of the BBC, ITV or viewers.
We are implacably and fundamentally opposed to the introduction of advertising on BBC radio and television. The introduction of advertising would damage the BBC, the ITV companies, local commercial radio and local provincial newspapers. Most important, it would substantially erode the standards of the BBC and ITV. If advertising were carried, some programme makers and schedulers would inevitably think — even if only unconsciously—that they had an obligation to those who were paying for the programmes and financially supporting advertising. That will affect the output and style—
§ Mr. Kilroy-SilkI cannot give way. I am the only Opposition Member to speak and I have a great deal to say in what has been a one-sided debate. The hon. Gentleman and several of his hon. Friends spoke for a considerable time — indeed, far longer than I or the Minister will have to speak. I should like to give way and participate in debate, but hon. Gentlemen have prevented that.
The institution of advertising would also mean, the bigger the audience, the larger the income. Therefore, 499 there would inevitably be pressure on broadcasters for high-rating programmes that attract the largest possible audiences and, therefore, the greatest income. We would have a constant diet of pap, such as Blankety Blank, which was derided by the hon. Member for Stirling (Mr. Forsyth), chat shows, and quiz programmes. They may be good of their kind and right in their place, but they are not the appropriate constant diet. We would be reduced to the appalling and abysmal level of television in the United States. The advent of advertising on the BBC would destroy public service broadcasting, of which the Labour party is rightly proud, and which is the envy of the rest of the world. We seek to protect the integrity of broadcasting, and not to destroy it through the introduction of advertising.
We cannot accept that there should be advertising on one part of the BBC or for a limited period during the day. To introduce any sort of advertising would be to embark on a dangerous slippery slope. It would provide a temptation for future Governments, when confronted with proposals from the BBC for an increase in the licence revenue, take the easy option and extend the range of advertising on the BBC.
Moreover, it is not merely the BBC's standards that are likely to be damaged. As many observers testify, there would be a struggle between the BBC and the independent television companies for what they say is a limited cake. I know that Conservative Members say that that is not the case, but it is a matter of judgment and belief.
On my side of the argument—Conservative Members have other evidence to adduce on their behalf—is the letter to The Times on 8 December 1984 from the chairman of Granada Television, Denis Forman. He says:
All experienced broadcasters know that the introduction of advertising on BBC television is bound to lead to a struggle for revenue since there is not enough available to support more than one of the two major broadcasting systems … If the BBC were to have only five minutes of advertising each evening"—more than one Conservative Member this evening has proposed something similar to that, implicitly recognising that there is something slightly disreputable about having advertising throughout the normal schedule—the result could be a drop of £110 million in the annual revenue of ITV. The profits of the ITV system in the last year were less than £100 million before levy and tax.Of course, Mr. Forman has a vested interest, but he makes an important point. I would not have thought that Conservative Members would wish to damage ITV, just as they would not wish to damage the BBC. The Opposition would not wish to take steps to damage either.Such remarks do not come only from those who have a vested interest in protecting the monopoly of the independent stations. The hon. Member for Hertfordshire, West quoted Mr. Rodney Harris, the media director of the advertising agency that is largely responsible for the current debate, D'Arcy MacManus and Masius. However, he did not quote all Mr. Harris's statement. He said, in the document provided to all Members of Parliament by the BBC:
Not everyone has appreciated that if the BBC went commercial tomorrow and sold advertising at six minutes per hour of total broadcasting, as on ITV, that the ITV companies would all go bankrupt the day after tomorrow. Quite simply there is not enough advertising money to fund all UK broadcasting.500 He was quoted by several Conservative Members in support of their case for advertising, and it ill becomes them to deride his judgment and his knowledge when I quote him in support of my case.
§ Mr. Robert B. JonesI also quoted the right hon. Member for Chesterfield (Mr. Benn), but that does not mean that I agree with everything he says. People can be right in some places and wrong in others. That applies to Mr. Harris. It was an extreme case.
§ Mr. Kilroy-SilkI do not quarrel with the hon. Gentleman. All that I am saying is that the introduction of advertising on the BBC would damage it. I also believe that it would damage the ITV companies. My belief—[Interruption.] I listened courteously to Conservative Members; I hope that they will extend similar courtesy to me. My assertion was based on the evidence produced by Rodney Harris and others. It is a belief; none of us could prove it one way or the other. The potential benefits, if there are any, of advertising on BBC television are outweighed by the potential dangers that I mentioned.
Not only Rodney Harris and Denis Forman, but Saatchi and Saatchi make my case for me. The latter's report, "Funding the BBC — The Case for Allowing Advertising", stated:
The threat to radio is much more complex to define"—I acknowledge that—but it can be said with some certainty … that there is a risk to ILR that might pose problems to the financial viability of some stations.It is no more and no less than a risk, although it must be taken into account. To a large extent, it is irrelevant whether the onset of advertising on the BBC would damage the independent television companies, would ensue that there is a struggle for less advertising revenue, or would damage independent commercial radio and local newspapers. There are important additional considerations, but even if that argument could be sustained, we would still resort to the argument of principle that it is inappropriate and would be damaging to the best interests of public service broadcasting.Nor is the suggestion appropriate that the BBC's revenue should be raised through taxation. It is superficially a much more attractive method because it is more simple, and less painful, and the cost would be less direct to the individual viewer. A progressive system of taxation is more fair than the licence fee, which is a regressive system that hits hardest those who are poor.
§ Mr. Kilroy-SilkI have already said why I cannot give way.
There are great dangers to the BBC in a taxation system of funding. Inevitably, it would quite properly be subject to Treasury control, and to scrutiny of its internal accounting system and policy decisions. It would be subject to Home Office accountability for expenditure on a detailed day-to-day basis. Once it is subject to Treasury and Home Office accountability, hon. Members would quite properly wish to subject it to parliamentary accountability, for instance on the efficacy of its programmes and particular stations. We might have a view as to whether particular stations should be closed. That is a dangerous road for any Government to go down, and no Government of either party have so far been prepared to tread it.
501 This has not been mentioned in the debate tonight, but in previous exchanges in the House, both at Question Time and in other debates, it has been pointed out that the universities have managed to retain their independence while being funded, through the University Grants Committee, by the Government. However, a great deal of the autonomy and independence of universities has been eroded, not least by the actions of this Government.
Therefore, we are left with the licence as the best, most appropriate and most sensible means of raising the revenue for the BBC. It is right that the Government should have to determine the overall level of licensing. Every hon. Member must know that this is an important and sensitive issue, and it is right and proper that the decision on the level of the licence should be a political one determined by the Government. They have the responsibility to determine the overall budget that they are prepared to provide to the BBC. They have to decide what is reasonable and appropriate in the economic circumstances of a given time, and match that to the needs of the BBC.
§ Mr. Kilroy-SilkThe hon. Gentleman should not be silly. If he thinks that such a question will embarrass me or catch me out, he is being both naive and absurd, which can perhaps be accounted for by the lateness of the hour at which we are debating this issue.
Having made those decisions, the Government may decide on a figure that the BBC feels is not enough. However, it can then supply its own competing priorities in terms of programmes, capital and current investment, and it can determine its own functions. For example, it can decide whether it wishes to continue breakfast television or embark on more ambitious programmes for local radio. That is properly a matter that should be left to the BBC within the confines of the overall financial strategy determined by the Government in allocating the licence. I prefer the BBC to be more selective in its functions, and to aspire to more excellence rather than to cover the whole sector. However, I resist the suggestion that that should be anything other than a matter for the BBC to decide.
The BBC has suggested that the licence fee be increased to £65, pegged for three years, to April 1988. I accept that that is, as Alasdair Milne, the BBC's director-general, said in his submission to Members of Parliament, the best bargain in Britain. No doubt it is, but the problem is that we cannot always afford bargains. I wish that we could. The fee may well prove to be a bargain, but at that price it may not be a bargain that we can afford or that the country can afford to pay.
As the BBC says in its thoroughly researched, well-presented submission to the Home Secretary and hon. Members in general, the fee may be good value. Clearly, the annual cost of a licence is good value, using the BBC's basis for the increase — making the licence fee equivalent to the cost of buying a pint of milk or a newspaper a day, or buying 20 cigarettes a week. I do not believe that any hon. Member would dissent from the suggestion that we obtain more impartial information and entertainment in a day from the BBC, in its various forms, than from the Daily Mail, the Daily Telegraph or the Daily Express. And the cost is equivalent.
The price suggested by the BBC may be reasonable in terms of what the BBC wants to do and can provide. We 502 must accept that it is a great deal of money for all households, particularly the poor. There may be a case for saying that the BBC should not get all it wants at this time. There needs to be a much more thorough analysis of the proposal for an increase and a far more balanced debate on the BBC's future financing.
The Opposition do not want an erosion of the way in which the BBC is financed and retains its independence, but we should like more time to consider whether it is appropriate to fund the BBC to the extent it requests. We are especially concerned, as some Conservative Members said, about the effect of the increased fee on low income groups, particularly pensioners. At whatever level, the BBC licence represents a high proportion of the income of 7 million pensioner households. I believe that every hon. Member realises that the BBC's proposal has already led to a great deal of controversy and a great outcry from pensioners. I have received their complaints in my mailbag and pensioners have turned up at my surgery to discuss the matter.
Pensioners are extremely anxious and deeply distressed about their ability to raise the money required. Many already find it difficult to find sufficient funds to pay the present licence, without having to go without other necessities. Many pensioners are heavily dependent on television. Many are housebound and inactive, and a considerable proportion are ill. As the BBC points out, pensioners watch 20 per cent. more television than other viewers. Clearly, it is unjust that some pensioners should have to pay a full licence fee when others, who are also pensioners, live through no fault of their own in sheltered housing where they receive a concession and pay no more than a 5p licence fee.
This is a great cause of resentment and bitterness among pensioners. They point out that they will have to pay the new licence fee of £65, while hotels will pay the same fee for 15 sets and a standard fee for every five additional sets. It is clearly wrong, unacceptable and indefensible, as I am sure every Government Member who has participated in this debate would say, for the Savoy to have free television sets in its rooms while pensioners in my constituency—in Stockbridge village, Contril farm and Prescot — on Merseyside generally or anywhere else in the country would have to pay a full fee. That has always been unjust and inequitable, so it is important that I renew and reaffirm the Opposition's commitment to enable all pensioners to have free television licences. One of the first acts of the next Labour Government, if elected after the next general election, will be to ensure that our pensioners no longer have to suffer the anxiety and distress of finding large slices of their income to view what they regard as a social necessity. Instead, they will all be able to watch television relieved of that burden and in the knowledge that they will receive licences free as of right.
The Opposition's aim is to preserve the BBC's integrity and standards and to enhance the quality of life and the incomes of our pensioners. It is also to preserve the BBC's political independence. That clearly is and has been under threat from the Government.
The Prime Minister, not least, has been leading the way in attempting to threaten, cajole, bully and impose pressure on the BBC to influence its choice of programmes and scheduling. The Prime Minister above all should be the guardian of the integrity, impartiality and political independence of our major public service broadcasting corporation. Instead, she has exhibited a narrow-minded 503 parochialism and a hostility, manifested also by many of her hon. Friends tonight, towards the BBC, and has attempted overtly to exert pressure on programme makers and schedulers. That is unacceptable, unprecedented and indefensible.
Much worse than that has been the recent disgraceful and inexcusable display of threatening petulance exhibited by the chairman of the Conservative party, the Paymaster General. He, as hon. Members will recall, complained about a "Panorama" programme about the Conservative party and alleged Right-wing infiltration. In The Times of 13 February 1984 he is quoted as saying that the "Panorama" programme
alleged links between Conservative MPs and extreme right wing groups"—andcontained smears and innuendoes and used undemocratic techniques.He went on to say it containedoutrageous sentiments … guilt by association and McCarthyite comment.He gave a warning thatvery serious action would have to be taken.That report goes on to refer to the chairman of the Conservative party and the Chief Whip requesting a meeting with the director-general to protest about that programme.We then had a saga of petulant, hysterical bullying of the BBC and its officials by the chairman of the Conservative party over that programme. He made several substantial allegations which the director-general spent two days going through, every one of which was found not to be substantiated. To this day, those apparent McCarthyite smears, innuendoes and undemocratic techniques have not led to one official complaint from the chairman of the Conservative party, the Chief Whip or any Conservative Member to the Braodcasting Complaints Commission. The threat of it was reported in The Times of 17 March, but as of 31 March not one complaint had been received by the Broadcasting Complaints Commission. There may well have been things wrong with that programme—
§ Mr. MaudeOn a point of order, Mr. Deputy Speaker. It should be brought to the attention of the House that the programme to which the hon. Gentleman is referring is the subject of legal action. It is inappropriate for the hon. Gentleman to refer to it in this detailed and lengthy way, as it is sub judice.
§ Mr. Deputy Speaker (Mr. Harold Walker)I understand the position to be that if a date has been set down for legal proceedings the matter is sub judice and should not be referred to. The Chair does not know the exact position of the proceedings. It might be as well if the hon. Member were to avoid referring to cases.
§ Mr. Kilroy-SilkLike you, Mr. Deputy Speaker, I am well aware of the sub judice rules in the House. As the hon. Gentleman should know, given his legal background, no cases are before the courts at the moment and none are set down; nor have I spoken about any hon. Member who is involved in a case. In any event, when we are talking as we are today about a matter of great public interest, it is proper and appropriate for Parliament to comment properly on the issues while not in any way derogating 504 from the need to comply with the sub judice rule. I think that I have done that. If the hon. Gentleman had paid a little more attention to what I was saying, he would have acknowledged that.
We saw a deliberate, sustained and premeditated campaign to put pressure on the BBC on the content of its political programmes. If there were features of the programme which needed to be complained about, that should have been done through the civil courts, as the hon. Gentleman says is being done, or through the proper complaints procedure of the BBC. A Minister should not, aided and abetted by the Government Chief Whip, have been browbeating the director-general of the BBC. No doubt the Minister threatened that, if proper amends were not made, the BBC's application for a licence fee increase would not receive the same sympathy and consideration that would otherwise have been offered.
It is ironic that all the information for the programme which was the subject of complaint emanated from the young Conservatives. It was the act of a political pipsqueak, as I think the Minister was called. He acted in a petulant, bullying, intimidatory and little-Hitler fashion. It is an example of the threat that the Government pose to the BBC and to standards in public life. It was an offensive and unwarranted smear on the impartiality—
§ Mr. MaudeOn a point of order, Mr. Deputy Speaker. This is a debate about the funding of the BBC. Save that the hon. Gentleman is referring in the most indirect and oblique way to the BBC, I submit that his remarks are entirely out of order.
§ Mr. Deputy SpeakerI am listening carefully to the hon. Member for Knowsley, North (Mr. Kilroy-Silk). What he has said so far has not been out of order.
§ Mr. Kilroy-SilkThank you, Mr. Deputy Speaker. The hon. Member for Warwickshire, North (Mr. Maude) should be aware that his interventions are taking time from the Minister's reply, which we all want to hear.
As I was saying, the Minister cast an offensive and unwarranted smear on the integrity, political impartiality and independence of the BBC. It was an attempt to intimidate the BBC and to cause it to cower.
We are debating the funding of the BBC and its application for an increase in the licence fee, and thus its funding, in the context of a Government who do not have the best record as a protector of individual civil liberties or of our public services. If the Government can attack democratically elected local authorities, to the great dismay and concern of Conservative Members and of those in another place, if they can attack the long-estabished democratic rights of voluntary organisations such as trade unions, if they can erode the academic freedom and independence of our universitites and other institutions of higher education, and if they can display, as the Prime Minister and the chairman of the Conservative party have, outright prejudice, bias and hostility to the BBC, we must all of us be on our guard against any of their attempts to undermine the financial independence and political integrity of the British Broadcasting Corporation.
The Opposition wish to protect the standards of the BBC and its enviable record from the philistinism exhibited on Conservative Benches. We wish to protect the BBC from the greed and avarice that seems to motivate 505 Conservative Members and retain public service broadcasting and all that it means for standards in Britain in future.
§ Mr. Deputy SpeakerOrder. Does the Minister of State have leave to speak again?
§ Mr. ShawWith the leave of the House, Mr. Deputy Speaker. I am grateful to you for your timely reminder and for offering me the opportunity to speak again.
I am in a pretty foul temper, having heard an outrageous contribution from the Opposition Front Bench. It was within order, but it was certainly not within courtesy or the practice of the House. The contribution by the hon. Member for Knowsley, North (Mr. Kilroy-Silk), on a most important issue, more or less boils down to the fact that the Opposition are prepared to offer pensioners free television licences at a cost of £250 million on present bases, thus at a stroke removing about one third of the BBC's total annual income. That was a farcical statement, with no suggestion of where the money is to come from. We learnt just two things—first, that there will be not a penny piece from advertising and, secondly, that there will be no taxation. That is what the hon. Gentleman said. It is, therefore, an outrageous, unwarranted and completely unjustified statement of pseudo-policy.
My hon. Friend the Member for Hertfordshire, West (Mr. Jones) introduced a debate of great importance, and his speech was followed by contributions of the highest standing from Conservative Members. I have to say to the hon. Member for Knowsley, North that it is noticeable that throughout the debate he has had massive support on the Opposition Benches for the issues of the day. His hon. Friend the Member for Rother Valley (Mr. Barron) has been a considerable attender—I have to grant him that —but I think that he is probably picketing his way into the next debate by obtaining a seat in good time.
My hon. Friends the Members for Hertfordshire, West, for Warwickshire, North (Mr. Maude), for Stirling (Mr. Forsyth), for Southampton, Itchin (Mr. Chope), for Newcastle upon Tyne, Central (Mr. Merchant) for Birmingham, Northfield (Mr. King) and for Surbiton (Mr. Tracey) offered constructive contributions to the issue of financing the BBC, and, be it noted, most of them were, as I would expect from the Conservative party, reforming and radical contributions contrasted with the total absence of any contribution of a reforming or radical nature from the Labour party, which has so long sought to claim the monopoly on change.
We on Conservative Benches are able to discuss change, progress and the future of our great institutions in a rational and energetic way. That is the profound impression that I trust will be written into the pages of Hansard and observed by those outside the confines of the debate who most assuredly will look to what is being discussed here.
Therefore, I thank my hon. Friends for their contributions. I shall make an immediate response on one or two issues, My hon. Friend the Member for Stirling referred to licence evasion and the way in which the courts were handling it. He was right to say that the court system is concerned purely with the fine, not with refunding to the 506 corporation a chunk of the licence fee forgone. As my hon. Friend probably knows, licence evasion entails a maximum fine of £400, but every time someone is brought before the courts, the corporation identifies someone who does not have a licence, so the licence fee will be recovered from the individual. Therefore, there is some recovery of licence income.
My hon. Friend rightly put his finger on the actual amount of evasion that takes place. In the discussion about funding the corporation and the licence fee, my hon. Friends should bear in mind that television is very widespread—97 per cent. of homes have a television receiver, and it is the receiver that constitutes the right to charge for a licence.
About 1.6 million homes are currently not paying the television licence fee, which means that the corporation forgoes—admittedly against its entire efforts— income of about £60 million on licence evasion alone. It may be only 8 per cent. of the homes in question; nevertheless, it represents a significant licence income forgone.
My hon. Friend the Member for Warwickshire, North referred several times to the compulsory levy. If that meant that everybody paid, today we might be discussing not a massive increase in the licence fee but a reduction. I make that point in parentheses to comment on the observations of my hon. Friend the Member for Stirling, and merely say that there is a very large sum of money around in the licence fee application and that those who do not pay are creating a substantial problem in relation not only to the funding of the corporation but to what other contributors may have to pay to make BBC funding sufficient.
The main issues in the debate clearly revolved round other forms of funding than licence fees. The most prevalent argument was for advertising, although I noted with interest that my hon. Friends' views varied from those who said that it should be limited to television or radio in minutes or by types of programme to those who believed that it should be widespread and completely fund the corporation. Thus, there is a gradation of view as to where the corporation might look if it were seeking advertising revenue.
I note, too, the interesting point made by my hon. Friend the Member for Surbiton about sponsorship of programmes, suggesting that there are other forms of contribution from the commercial sector than spot advertising.
In the remaining minutes, my task is to set out the position as I now see it. As my hon. Friends know, the licence fee has existed for about 60 years, originally covering both television and radio. The system has stood the test of time under successive Governments as well as a fair amount of inquiry by various bodies examining the corporation and its funding—the most recent being the Annan report of 1977. But every Government and every inquiry concluded that the licence fee system was the best available means of financing the BBC in such a way as to preserve its independence and to enable it to fulfil its wide-ranging obligations of public service broadcasting. Those obligations are imposed by royal charter, licence and agreement, so any change would involve a major shift not in legislative structure but in the structure on which the corporation is now run.
There is a great variety of view as to whether the output of the corporation on radio or otherwise suits the public taste. Nevertheless, we have to conclude that over a long 507 period the licence system has provided a major increase in broadcasting and programme provision and, broadly speaking, a very high level of public acceptability.
Alternatives start with taxation. I am glad that the hon. Member for Knowsley, North made a stand on this and said that no Government of whom he was a member would be involved in direct taxation for corporation funding because that would clearly bring the corporation much further into Government control and influence, almost on an annual basis. I am sure that the whole House is anxious to avoid that. I should say at once that the Government do not regard taxation as a suitable way of replacing the existing system.
Advertising is the most frequently argued solution that would be acceptable. It is argued that a limited injection of advertising revenue would reduce or at least avoid any increase in the present licence fee and at the same time provide the corporation with sufficient funding to compete with ITV on more or less equal terms. It is suggested that the amount of advertising revenue could be stepped up each year, so that the fee could be reduced in real terms and perhaps eventually become just a nominal amount or even disappear altogether. That is certainly a very tempting proposition and it merits close scrutiny.
A further factor would be a view about total advertising revenue and availability and whether that would increase at a sufficient rate to allow the corporation to be funded in that way. Having been involved in these matters from time to time in an earlier career, I must point out that the line between fast and famine in the margarine advertising business is not all that thick. Certainly, there are swings and roundabouts which can operate very quickly indeed. It is by no means certain that advertising revenue will continue to grow at the same rate as in the past 10 years. In fact, ITV revenue this year looks certain to fall short of the £1,000 million forecast for 1984, even though only two or three months ago it seemed likely to reach that figure. As some of my hon. Friends will know, there has been a sharp downturn in revenue in the past two and a half months. ITV is not the only consumer of advertising revenue. Consumption is widely spaced across newspapers and other media.
There would have to be a real reliance upon advertising revenue to supply sufficient funds for the corporation. If advertising were to be introduced into BBC programmes, it would have to be done gradually, with the licence fee revenue remaining the major part of the corporation's income for some time.
§ Mr. Michael ForsythHas my hon. Friend noticed that the effect of Channel 4 entering the market —although the same arguments were used in that case—has been substantially to reduce the production costs of advertisements, which in some cases represent the bulk of the cost of running an advertising programme? By reducing the price, one can increase the supply.
§ Mr. ShawYes, I have noticed that there has been little deterrent effect as yet; but my hon. Friend will know that the average viewership of Channel 4 is about 6 per cent. If that percentage were to increase to a level that was seriously competitive with other ITV channels, the question whether it would draw away more costs from the advertising pool would become relevant.
508 There are problems connected with how advertising could be introduced. At present the licence revenue income, at about £770 million a year, is very substantial. Any replacement for it would have to be of a comparable size and ability to grow. Expenditure in the current financial year—the last of the licence fee settlement—is greater than the licence fee income. The cost to the BBC of providing television and radio services is expected to be about £70 million more than the licence fee income this year. So, with a modest allowance for increased costs in 1984–85, the BBC would probably need £100 million more than the present licence fee produces in order to maintain services at the present level. Such a sum could not be generated by, say, one 15-second advertisement on television each hour. It represents between 10 and 15 per cent. of ITV's total advertising revenue. If, as seems likely, competition between ITV and the BBC for that revenue were to drive down advertising rates—my hon. Friends might wish that to happen, because there has been insufficient competition between ITV companies hitherto — competition would oblige the BBC to take more advertising to bring in the necessary revenue.
Another suggestion is that the BBC might take advertising on only some of its services. Radio 1 is often singled out as a service that would be suitable. The cost of providing Radio 1 is about 2 per cent. of the BBC's total expenditure. The saving on each licence under such an arrangement would be about £1. Advertising on the whole of BBC radio might double that saving, but the area is not of the same order of magnitude as other areas mentioned by my hon. Friends.
I have already considered whether there is enough advertising revenue to fund the BBC. Another consideration is whether viewers would find advertising acceptable. My hon. Friends can point to the rapid and healthy development of ITV, which suggests that advertising has not been a bar to growth. Much of the advertising material produced is of a very high—indeed, almost entertaining—quality. I was somewhat worried when my hon. Friends talked of urging their spouses to put on the kettle in the commercial breaks. That would have a serious effect on audiences.
I am not ruling out advertising for all time as a source or partial source of finance. The BBC's licence agreement has for years recognised the possibility, provided that the Home Secretary agreed. My purpose has been to point out some of the difficult issues that must be faced and to demonstrate that a decision on advertising is neither straightforward nor simple.
Advertising deserves the most careful debate and decision. That is why we have made it clear that the Government do not want any radical departure from the licence fee system for BBC finance at this stage. My hon. Friends have also made their views clear. They want a review of the three-year system and the licence not to be committed for that time so that such a review can take place. I note that that is the message that my hon. Friends want to lay before the House and the Government.
My right hon. Friend the Home Secretary is considering the BBC's application, so my response is therefore inevitably somewhat delphic. He will take what my hon. Friends have said as an expression of important opinion.
There are other problems. Efficiency has been mentioned. I assure my hon. Friends that, at the request of my right hon. Friend, the corporation has commissioned an independent consultant's report on its efficiency. It will 509 be completed in January and will be a crucial part of the submission that has now been met. Thus, the view that some of the costs, staffing levels and exigencies in programming that have been incurred should be put under careful scrutiny. That guarantee I can give in the assessment of the current application.
There is no easy solution to the problem of financing. Hon. Members have made it clear that, because the proposed increase is so considerable, the time is right to examine the proposal and the context in which it is put—how to sustain a level of funding which continues to allow the corporation to provide a range of programming which gives value for money by comparison with other media and a high standard of programming which has underpinned the BBC's reputation as one of the finest broadcasting systems in the world.