BBC Licence Fee (Hansard, 13 December 1990)

§ 4. Mr. Barry Field
To ask the Secretary of State for the Home Department what progress is being made in the study being undertaken by independent consultants appointed by his Department into the ways in which the BBC spends its licence fee income.

§ 9. Mr. Tredinnick
To ask the Secretary of State for the Home Department what discussions he has had recently with the director general of the BBC concerning the licence fee.

§ The Parliamentary Under-Secretary of State for the Home Department (Mr. Peter Lloyd)
We had discussions with the chairman and director general of the BBC before we asked Price Waterhouse to advise how licence fee 1097 increases could be held below the retail prices index. Its report is now being completed and my right hon. Friend hopes to announce his decision in January.

§ Mr. Field
Are not vehicle excise duty and the television licence fee the last remaining bureaucratic and inefficient forms of taxation? Is not it time for the BBC to be set free and allowed to generate its own revenue—perhaps matched by the Government pound for pound, as they have done with their very successful programme of supporting the arts? Would not that create independence and improve efficiency?

§ Mr. Lloyd
I cannot agree with my hon. Friend that the licence fee system is inefficient. It raises 97 per cent. of the BBC's revenue and will remain its major source of income at least until the corporation's charter is renewed in 1996. The BBC is experimenting with subscription television, but its first essay was not successful owing to the failure of the decoding equipment. Nevertheless, the BBC is pursuing a dozen or more ideas that it hopes to introduce at the end of 1991. If my hon. Friend has any specific ideas that could be effective in raising additional revenue for the BBC, I hope that he will inject them into the discussions on the renewal of the corporation's charter. As they will begin in a couple of years' time, that leaves my hon. Friend with plenty of time to give thought to the matter.

§ Mr. Winnick
Does the Minister accept that the licence fee represents excellent value for money and, so far as Labour is concerned, is far superior to the alternative of subscription fees, which would undoubtedly be much more expensive for the average viewer? Our only qualification is that pensioners, particularly those on very low incomes, should be exempt from paying the licence fee. That would make it far less of a controversial issue. Any alternative system not offering exemption, such as subscriptions, would certainly be more expensive for pensioners.

§ Mr. Lloyd
One cannot reach a definite conclusion on different forms of financing the BBC until they have all been thoroughly examined. I agree that the BBC licence fee offers extremely good value for money. As the hon. Gentleman knows, concessionary licences are available to pensioners in local authority warden-controlled homes. The hon. Gentleman should talk to Labour Front-Bench spokesmen who specifically said that there should not be concessionary licences for all pensioners, because many of them have greater incomes than the non-pensioners who would have to pay extra for their licences to cover the cost of the pensioners' concession.

§ Mr. Andrew MacKay
Is my hon. Friend aware that most people deeply resent paying such a large licence fee and that they will resent even more any increase, particularly as there is an easy way of increasing the BBC's revenue—by allowing advertising on Radios 1 and 2?

§ Mr. Lloyd
It is not simply a matter of allowing advertising, because the BBC's charter forbids that. We cannot change the existing charter, or consider renewing it in its present form, until it has expired.

§ Mr. Wilson
Does the Minister accept that, contrary to what was said by the hon. Member for Berkshire, East (Mr. MacKay), a large body of people values the oasis of broadcasting that is free from advertising and commercial pressures? Will he give us an assurance that the 1098 Government have no intention of introducing advertising into the BBC and thereby reducing it to the same level as every other "income sourced" broadcasting concern?

§ Mr. Lloyd
As I said, the Government have no such intention. All the possible ways of raising revenue for the BBC, including maintaining the licence fee, will undoubtedly be considered when the charter comes up for renewal. I agree, however, with the hon. Gentleman's implication that many people consider the licence fee good value for money—[HON. MEMBERS: "No."] Moreover, research studies have shown that at least a good proportion of people say that they would be prepared to pay more.