§ Mr. Peter Bradley (The Wrekin)I welcome my hon. Friend the Minister to the Dispatch Box. While this is her first engagement in her new capacity, I am sure that she will grace the office for many years to come.
It is one of the few privileges of a Member of Parliament to have the opportunity to air the grievances that have accumulated over a lifetime. I first encountered the concessionary television licence scheme and the anomalies that go with it more than 10 years ago, when a resident of Glastonbury house, a tower block of 160 flats not far from here, contacted me to ask why, although she and about 155 other tenants of those flats were of pensionable age, because of the presence of a handful of people below pensionable age, neither she nor her neighbours could qualify for a licence concession. For many years since, that anomaly, the lack of logic in the system and the injustice caused to so many have nagged away at me.
It is clear from recent early-day motions that other hon. Members, of all political persuasions, share my concern. Early-day motion 1483 standing in the name of my hon. Friend the Member for Walsall, North (Mr. Winnick) has already gathered 177 signatures. A second early-day motion currently circulating in the name of my hon. Friend the Member for Rugby and Kenilworth (Mr. King) has collected 52 signatures. The sense of grievance is felt not only by Members of Parliament, local councillors and council officials, but by pensioners who are excluded from the scheme. It is impossible to quantify the resentment that many pensioners feel. A previous Minister from the Department for Culture, Media and Sport, the Minister for Arts, my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher), said that the Department receives more correspondence on that issue than on almost any other issue that comes within the Department's control.
The scheme's history is complicated. It was first introduced as a somewhat ad hoc arrangement by officials at the Post Office who, I believe exercising their discretion, granted concessions to some pensioners living in residential homes. The first statutory scheme was introduced in 1969, but it contained anomalies which, despite the passage of time, remain the cause of considerable grievance. More experienced Members of Parliament than me have tried to grapple with those anomalies. My hon. Friend the Member for Walsall, North has been a champion in the campaign for many years: he proposed that concessions should be extended to all pensioners and promoted a private Member's Bill as long ago as 1987—which, surprisingly, was the last time the issue was debated in the House.
Successive Governments have tried to improve the scheme, but each option that they have considered has given rise to a fresh batch of problems. It is my strong conviction, however, that the fact that it is difficult to right something that is wrong is all the more reason to seek to do so. The problem with the current scheme is that no one understands the regulations; no one believes that they are just; no one believes that they fulfil their 339 purpose; and no one thinks that they provide value for money. A letter to me from TV Licensing set out the details of the scheme, saying:
It is available to people living in
- (i) Residential homes; or
- (ii) Sheltered accommodation which
It is a fitting irony that the new regulations were introduced on 1 April 1997.
- (a) forms part of a group of at least four dwellings within a common and exclusive boundary (though up to 25 per cent. of units in a scheme can be properties purchased under the 'right to buy' legislation); and
- (b) is specially provided for occupation only by disabled people, people with learning disabilities or retired people of pensionable age; and
- (c) is provided or managed by a local authority or a housing association; and
- (d) has a person whose function is to care for the needs of the residents (eg a warden) and who either lives on site or works there for at least 30 hours a week."
The problem is that the scheme is not linked to individual need—although it does at least try to address that need—but, to quote the letter again, it is linked
to the kind of accommodation occupied and the way that it is provided or managed".The limitations of the scheme are clear: it is solely for narrowly specified groups whose accommodation must be run by a local authority or a housing association, and must contain at least four homes; and residents must have the services of a warden for at least 30 hours a week.I am indebted to the National Association of Citizens Advice Bureaux, which in March this year published its report, "TV Sinners", which included several examples of the anomalies which occur under the scheme. I shall quote three. First:
A CAB in Hertfordshire reported an elderly woman living in sheltered accommodation. The client had been paying the reduced rate … licence fee of £5. Residents were informed that the warden's hours were being reduced from 35 to 20, and that as a result they would all become liable to pay the full fee.Secondly:A CAB in Norfolk reported two pensioner clients living in sheltered accommodation. The housing association responsible for the development began to provide housing to single homeless people in addition to elderly people, and as a result elderly residents lost their … concession.Thirdly:A CAB in Essex reported a man aged over 60 who was living in sheltered accommodation and paying £5 for a … licence. The housing association responsible for the accommodation took a decision to lower the qualifying age for residents to 55. This meant that the development was no longer exclusively available to pensioners, and TV Licensing decided that the concession could no longer apply. The client was therefore required to find the full fee.
§ Mr. Martin Salter (Reading, West)Does my hon. Friend agree that it is an absolute disgrace that those anomalies remain and that this country does not have a comprehensive concessionary TV licence scheme specifically targeted on pensioners? Will he give examples of other nations—especially European nations—that treat their old folk a little better than we do?
§ Mr. BradleyMy hon. Friend is quite right, and I should pay tribute to his long-standing commitment to the 340 cause. For a number of years, both in the community and in this House, he has served his constituents very well in respect of this issue. Although the proposals that I shall put forward later in my speech might not meet fully the needs that he has identified, I can tell him that several European nations recognise the importance of caring for their pensioners. Austria, France, Finland, Germany, Hungary, Switzerland and Ireland are just a few of the countries that grant a full concession to pensioners. Several other European nations make similar concessions to people with disabilities, whether they are blind, deaf, or suffer from impaired mobility.
The anomalies in the existing UK scheme mean that, while many are targeted by the spirit of the regulations, many more are excluded by the letter. Currently, 651,000 pensioners receive concessions, but about 10.5 million do not. Many people benefit who do not need to benefit because they have sufficient income to pay the full licence fee, whereas many of those who are not in receipt of the concession are on low incomes. It is not difficult to see the source of the resentment that has accumulated over the years.
The next problem is the cost of the scheme to the BBC. Currently, it costs £60 million a year. If the £5 licence were to be extended to all pensioner-only households, the cost would rise to £437 million. The problem with such a universal solution is that it would apply equally to those on relatively high incomes as to those on relatively low incomes. Therefore, the large majority of members of the other House would qualify for a concessionary licence—although it might be argued that they would be better off at home watching "Men Behaving Badly" than coming here and ensuring that life imitates art. It would be difficult to sustain the argument for a concession that covered those who had no particular need of it.
Extending the concession in that way would add £28 per annum to the cost of the licence fee. A free licence for all pensioners would cost about £628 million and result in a £36.50 increase in the price of a licence. That would severely affect those on low incomes who do not happen to be pensioners, and it was rightly rejected as a solution by the Secretary of State as recently as last November.
There have been several proposals for change. As long ago as 1977, the Annan committee criticised the lack of relationship between cost and need, and recommended the phasing out of the current scheme. In 1986, the Peacock committee proposed that pensioner households on income support ought to receive a concession in recognition of their low-income status. Sadly, the previous Government rejected that proposal and said that the best way to meet need was to increase the level of pension. Most Labour Members—it is interesting to see that no Opposition Members are present—would agree with that proposition. The problem is that, far from increasing provision to pensioners, the previous Government cut it year on year.
In the last debate on this matter, on 16 January 1987, David Mellor, then a Home Office Minister on his way up the slippery pole down which he more speedily descended, criticised Labour Members for raising the issue and proposing to extend concessionary licensing. He accused them of the "cynical exploitation of pensioners". The payroll vote on that occasion ensured that the Free Television Licences for Pensioners Bill, 341 which was a private Member's Bill in the name of my hon. Friend the Member for Walsall, North, was defeated by just 21 votes.
This Government can do better and I welcome the Department's proposal to review the licence fee beyond 2002 and the fact that the review will include consideration of the concessionary scheme. I should like to contribute by making a proposal. We should return to the basic principle of need, both income related and dependency related. There are people who rely on television not only for entertainment or information, but for company, and they are not exclusively pensioners. I urge the Government to include in the scheme people on low incomes and on benefits, and people who are housebound and dependent. The problem at present is that those people are not targeted.
Not all pensioners would benefit from that scheme because a third of pensioners are in the upper half of the income bracket, but many people would benefit, including those who are of non-pensionable age, but who suffer from disabilities. I have tried to quantify those who would benefit, the costs of introducing the benefit and the practical means of offsetting those additional costs. I am indebted to a number of sources for the information on which I draw. The House of Commons Library has been helpful; answers to parliamentary questions have been illuminating; the BBC has co-operated and I am grateful for advice received from Age Concern. I have tried to be fair but practical in my proposal because although it is right that the scheme should be improved and more people should benefit, it is also right that the costs should be contained.
§ Mr. David Drew (Stroud)I welcome the debate on this important matter, during which my hon. Friend has put forward an excellent case. One anomaly that he has not mentioned, and about which I receive many letters, is the example of bungalows in a shared complex which may be connected by a joint alarm scheme, but which are excluded from the concessionary licence arrangements. That is unfair because many people living in such bungalows are on low income and feel particularly discriminated against. Will my hon. Friend comment on that?
§ Mr. BradleyMy hon. Friend illustrates an important anomaly within the scheme. Another example was given by NACAB in its excellent report, which said:
A CAB in Greater Manchester reported a man over pension age who came to the bureau to ask why he had to pay the full licence. The client was living in accommodation fitted with an emergency alarm, and was identical to neighbouring properties. The properties were not classed as sheltered accommodation, and the client therefore had to pay the full price for his licence. However, because his neighbours had enjoyed a concession since before 1988, they continued to qualify for a concessionary … licence.That is not an isolated incident, but one of the many anomalies caused by the scheme's flawed provisions which affect people throughout the country. If I listed all the others, we would probably be here well into October, and I am sure that Members would dwindle in number. There are still no Opposition Members present—my reputation has obviously preceded me.My proposal is to phase out the existing scheme and replace it with a concessionary scheme that would require beneficiaries to contribute 25 per cent. of the fee. That is 342 reasonable because it would enable the scheme to include many more people. That would be a weekly payment of 50p, which is not unreasonable for people who enjoy full use of their television set. I propose that the scheme be extended to pensioners on income support, all those on disability living allowance and attendance allowance, and the registered blind and deaf.
On that basis, I calculate that while 651,000 people currently enjoy the scheme, about 4 million would benefit from my proposals. That includes the following groups: 1.5 million pensioners on income support, at a cost of £84 million; 1 million pensioners on attendance allowance but not income support, at a cost of about £38 million; 1.2 million non-pensioners on disability living allowance, at a cost of £76 million, and the blind and deaf, at a cost of £16 million. The total cost would be £214 million.
As I said earlier, the current scheme costs £60 million, so there would be a significant but containable increase. It would be containable because the costs could be reduced by ending the concession to hotels, which currently pay only for the first 15 rooms that contain a television set and then for each set of five rooms. If that concession were ended, the BBC estimates that an additional £31.5 million would be raised.
If we went further and required offices and commercial premises to license individual sets, we could expect to raise a sum so significant that the BBC, with which I discussed the issue this morning, could not quantify it. It is not unreasonable to suggest that the figure would be at least equivalent to the £31.5 million raised from abolishing the concession to hotels. In the Palace of Westminster and surrounding parliamentary buildings, there must be at the very least 1,000 television sets. I understand that the privilege of the Crown means that we pay for only one, which seems a little absurd.
If we included that additional revenue, we could expect to bring down the cost of the new regime that I am proposing to £150 million or less compared with the current cost of £60 million, which would be phased out. I should say at this point that those who currently enjoy the benefits of the scheme should not be deprived of them. Their rights should be reserved.
The Government have introduced welcome concessions to pensioners. The winter fuel payments go a long way towards meeting need, and the national travel scheme, announced last week by the Deputy Prime Minister, will be extremely welcome in my constituency and elsewhere. The concessionary television licence scheme should in future be administered not by the BBC, but through the benefits system. That will have a number of advantages. It will preserve the BBC's integrity by removing any suggestion of the Government paying subsidy to the BBC to finance the scheme. It will relieve pressure on BBC budgets and, as the BBC will no longer have to bear the cost of the scheme, the full licence fee could be cut by about £3.50.
Those proposals may or may not prove attractive to the Treasury or the Department, but I have another specific plea which I hope will receive a positive response. At present, 34,400 blind people who have a television set receive a concession of £1.25 on the £97.50 licence fee. That is a scandal. The amount has remained the same since 1965; it equates to the radio licence fee, which was phased out in 1971. Generously, the Government of the 343 day ensured that blind people would continue to enjoy the benefit of the £1.25 concession. It has not been increased since. That is shameful and utterly unjustified. It is the worst of the penny-pinching anomalies in the scheme. Surely it must end.
The Government must devote urgent attention to the needs of blind people currently in receipt of a licence. They surely must enjoy a fairer deal. I calculate that the cost of abolishing the cost of the licence for those 34,400 people would be little more than £3⅓ million. If the cost were transferred to the full licence payer, it would be equivalent to about 19p a year on the licence—a cost which I am sure that the people of this country would be happy to bear. I hope that, if nothing else, the Minister will say that that petty injustice will be ended.
I hope that these proposals, although imperfect, may at least help to refuel the debate and inform the thinking of Ministers, who must agree that the current scheme is not only inefficient and inequitable, but unsustainable.
§ The Parliamentary Under-Secretary of State for Culture, Media and Sport (Janet Anderson)I thank my hon. Friend the Member for The Wrekin (Mr. Bradley) for his well-timed congratulations, and I congratulate him on securing the debate. I also pay tribute to my hon. Friends the Members for Reading, West (Mr. Salter) and for Stroud (Mr. Drew), who have campaigned on the issue; to my hon. Friend the Member for Rugby and Kenilworth (Mr. King), who sponsored an early-day motion on the issue; and to my hon. Friend the Member for Walsall, North (Mr. Winnick), who has campaigned on it for many years.
I am sure that most, if not all, Members of the House have received numerous representations about concessionary television licences, not only for pensioners, but for other groups such as the disabled, the unemployed and those on a low income. The subject frequently crops up in my constituency mailbag. My hon. Friend the Member for The Wrekin specifically mentioned the position of people who are blind, and we listened carefully to what he said. As he said, and as the Government are very much aware, the system is illogical. It produces a great deal of resentment and a sense of grievance.
The Government are keenly aware of the importance of television to many people, especially to those who are socially isolated as a result of old age, illness or disability, or who are unable to afford other types of leisure activity. I am only sorry that, for the majority of this important debate, the Opposition Benches have been empty. I can only conclude that Opposition Members do not accord this issue the importance that Labour Members do.
Although we believe that the television licence fee, at 27p a day for colour and 9p for black and white, represents good value for money, we appreciate that it is a significant expense for people on a low income. The difficulty is that, for a large number—in fact, a substantial proportion—of households, a persuasive case can be made for a concessionary television licence. My hon. Friend the Member for The Wrekin has gone some way to make the case for several categories of people.
However, the BBC depends on television licence fee revenue for its home broadcasting grant. The Government's current agreement with the BBC 344 guarantees the licence fee as the mechanism for funding the corporation until at least March 2002. Any broadly based concession at a rate likely to be of real help to recipients would lead to a considerable loss of licence fee revenue. As a result, to maintain the level of the BBC's grant, everyone else's television licence fee would have to rise sharply.
I give a few examples. The provision of concessionary television licences for all pensioner-only households would lead to an estimated loss of £489 million in licence fee revenue, and would require an increase of approximately £29 in the standard licence fee. Free licences for all pensioner-only households with at least one member in receipt of income support would cost an estimated £112 million, and would require an increase of about £5 in the full licence fee—an increase which would also fall on non-qualifying pensioners.
Many non-pensioners may be thought to have an equally good case for a concessionary licence, as my hon. Friend the Member for The Wrekin eloquently argued. An estimated 19 per cent. of households with television have one or more members in receipt of income support, more than 5 per cent. have a member in receipt of disability living allowance and nearly 4 per cent. a member in receipt of attendance allowance. It would be very difficult to justify to a non-pensioner in such circumstances an increase of as much as 30 per cent. in his or her licence fee to provide a general concession for pensioners.
It is sometimes suggested that the solution is for the Government to make good from public funds the cost of any concessionary arrangements. However, for good reason, the arrangements for funding the BBC have always been kept separate from Government spending. In addition to providing the BBC with a secure source of revenue, licence fee funding of the BBC grant preserves the traditional arm's-length relationship between the corporation and the Government. To abandon that arrangement might be regarded as prejudicing the corporation's independence.
The possibility of funding concessions by charging hotels and other businesses a full licence fee for each television set installed has also been suggested. An estimated £33.5 million in additional revenue might be raised by charging hotels a full licence fee for each television set in use. However, no information is held centrally on the number of television sets installed at other business premises. In any case, the Government are not persuaded that it would be right to impose a significant extra burden on businesses to fund concessionary television licences.
Charging a licence fee for each television set, whether for business premises or generally, would at present also require a significant increase in the costs of administering and enforcing the licensing system, which the Government believe would be unacceptable. Such a system may become possible in future, as digital receivers become the norm, but that day is some way off. Nevertheless, I assure my hon. Friends that it is a possibility, and that we shall keep it under consideration.
Many hon. Members are also familiar with problems arising from the existing concessionary television licence scheme. Under that scheme, television licences are available for £5, but only to pensioners and disabled people living in nursing or residential homes, or in 345 directly comparable sheltered accommodation provided or managed by a local authority, a housing association or a development corporation. Those complications of the present scheme make it very difficult for people to understand how it works.
The Government receive frequent pleas for changes to the concessionary scheme to tackle its perceived shortcomings, usually in relation to specific cases where an individual or a sheltered housing scheme fails to qualify. The concessionary scheme does give rise to many anomalies. Its shortcomings are of particular concern because they directly affect some of the more vulnerable members of our society. Since it was formally established in the 1960s, the scheme has undergone several amendments and extensions. None of them has succeeded in making it more popular, easier to administer or more comprehensible to the layman.
It is clear from the history of the scheme, and from the wide range of criticisms levelled at it, that there is no possibility of resolving its shortcomings by fine-tuning the regulations. The amendments most frequently proposed involve extending the scheme to accommodation that is currently excluded. Examples include sheltered accommodation interspersed with mainstream housing, accommodation without a full-time or resident warden and private sheltered housing. However, such changes would leave out many people who, on grounds of health, social or financial circumstances, deserve a concession just as much.
Another proposal that is often made in relation to the concessionary scheme is that the regulations should be flexible, to allow common sense to prevail in difficult or marginal cases. However, that flexibility would be likely to erode the framework provided by the regulations, increase the number of disputed cases and, in the longer term, make the concessionary scheme impossible to administer.
The Government are by no means complacent about the concessionary scheme. I assure my hon. Friends that we accept that it is less than satisfactory, but we do not believe that changes to the existing scheme would result in arrangements that would be generally acceptable. On the contrary, it is almost certain that pressure for further changes would continue unabated.
As hon. Members know, the Government's current agreement with the BBC guarantees the licence fee as the mechanism for funding the BBC only until March 2002. The agreement provides for a review of the funding arrangements before that date. I give the House an assurance that the Government intend to carry out such a review in good time to allow decisions to be taken before then. We shall use that opportunity to consider in detail not only the future of the existing concessionary scheme, but the wider matter of concessions.
In conclusion, I thank my hon. Friend the Member for The Wrekin for introducing this important debate. We have listened to him and others of my hon. Friends, and we shall certainly take their views into account in our deliberations.