HC Deb 22 February 2000 vol 344 cc1385-9 1.10 pm
Mr. Christopher Chope (Christchurch)

I beg to move,

That leave be given to bring in a Bill to amend the Wireless Telegraphy Act 1949; to remove the requirement for the obtaining of certain wireless telegraphy licences; to make provision with respect to the funding of the British Broadcasting Corporation; and for connected purposes. Did you know, Madam Speaker, that the United Kingdom is spending more than £150 million every year collecting and enforcing the television licence fee? Did you know that the BBC, through its agents, detects more than 1,000 people every day—more than 365,000 people every year—who should be paying the licence fee, but are not? Did you know that, every year, our court system is clogged by up to 150,000 cases—involving mainly women and students—in which non-payers of television licence fees are prosecuted, convicted, fined and/or imprisoned? Did you know that in Northern Ireland the rate of licence fee evasion is said to be more than 30 per cent?

This deregulatory Bill—that is what it is—would put an end, once and for all, to the monumental waste, abject misery and injustice that the archaic television licensing system entails. It would also set the BBC free. May I—with you, Madam Speaker, and more than 20 million other people in the United Kingdom—declare a financial interest in the Bill? This measure, when enacted, from April, will save us each £104 annually, with the saving rising to about £150 annually in 2006.

My Bill already enjoys significant support. Last week, The Southern Daily Echo conducted a telephone poll on my proposal, causing it to produce a headline in Saturday's newspaper saying, "Our Readers Back MP's Bid to Scrap TV Licence". However, that already strong support is increasing even further, as the impact of yesterday's Government announcement sinks in.

Yesterday, the Government announced that, on 1 April, the television tax, or licence fee, would increase by double the rate of inflation, and by 60 per cent. above the rate of inflation for each of the next seven years. If only the Government treated our deserving pensioners with the same benevolence that they bestow on the BBC!

The so-called digital surcharge is now to be paid by everyone. Yet, the Davies panel concluded: It is unfair to charge analogue households for the development of digital services which they cannot receive". The panel also said:

The licence fee is a regressive charge since it falls equally on all households whatever their income. It, therefore, bears more heavily on the poor than on the rich. I welcome the introduction of free licences for those who are over 75—an idea that was promoted earlier this Parliament in a Conservative ten-minute rule Bill. However, as the Institute for Fiscal Studies told the Davies panel, a free licence for those who are over 75 and a 15 per cent. increase in the standard licence for everyone else would result in 71 in every 100 poorest households being worse off. That is exactly what the Government have achieved. They are making 71 in every 100 poorest households worse off.

One might have expected a Government who say that they are committed to reducing social exclusion to act accordingly. However, as is so often the case, the Government say one thing but do another. The increased television tax will hit the poor hardest and make social exclusion worse.

Is it possible to have public service broadcasting without having to have a licence fee? The answer is that of course it is. The BBC World Service is already funded by the taxpayer, and the principle of taxpayer funding for at least part of the BBC has been accepted by the Government in the abolition of the fee for those aged over 75.

Advertising and sponsorship are also compatible with the public service requirement. Indeed, Lord Bragg, in addressing a meeting at last year's Labour party conference, said: ITV and Channel 4 are capable of every bit as much quality, integrity and creativity as the BBC. The question everyone is asking is why, if ITV and Channel 4 are able to achieve that without a licence fee, the BBC cannot do the same.

Yesterday, the Secretary of State repeatedly referred to the quality of the BBC as though it were the licence fee that generated such quality. However, the Labour-supporting Lord Bragg has exposed the fallacy in such thinking. He has also drawn attention to the way in which, in the past 10 years, the BBC has taken on a great deal of advertising of its own—advertising itself, time and time again. He observed:

The BBC has actually helped ITV as British TV is now much more seamless than it has ever been before. Every year some £14 billion is spent on advertising in the United Kingdom—including £4 billion on television advertising and £500 million on radio advertising. Advertising makes innovation and product development more attractive as a competitive weapon. The Bill would make advertising itself more competitive.

I have been asked what the BBC would do without access to the licence fee. My answer is that it would have the freedom to compete globally, deciding its own expenditure priorities and investment, free from Government control. A significant element of yesterday's statement was that the Government wished to take even greater control over the BBC. The Secretary of State wants the BBC to engage in self-help. If it has the freedom that the Bill would give it, it will then be able to exercise that self-help.

At present, because the demand for television advertising is greater than the available air time, the price of advertising is artificially high. That works to the benefit of the independent television companies, but against the interests of consumers and those who wish to advertise their products. That explains why we never find the independent television companies arguing in favour of advertising on BBC.

The Bill would remove a licence fee system that was appropriate in 1949 when independent broadcasting funded by advertising had not been invented and when ownership of a television was the privilege of only a few, but it is not appropriate today. We are in the midst of a digital revolution and the technologies of television, telecommunications and personal computing are converging. Those technological changes will render redundant the concept of a licence for individual items of television receiving equipment in the same way as the advent of transistor and portable radios rendered the old radio licence fee redundant. The Bill is a modernising, radical and inclusive measure. Indeed, it is a Conservative measure and I hope that it will have the support of the House. If any right hon. or hon. Members are not yet convinced, let me draw to their attention the editorial in one of today's national newspapers, the Daily Star, which says: The £3 rise in the TV licence fee is £3 too much. In fact the entire licence fee of £104 is a costly farce … Most BBC programmes are about as exciting as old wallpaper paste … The BBC says it wants to be more adventurous. It can do that by scrapping the licence fee altogether. Think of all the dosh it will save on those stupid detector vans. I could not have put it better.

1.17 pm
Mr. John Grogan (Selby)

Like democracy in another context, I would contend that the TV licence system is the least worst system on offer, particularly if we have as our central aim the need to nurture and develop the world-class public service broadcaster, which is still our BBC.

Generally, there is no widespread revolt against the licence fee. Evasion rates are falling sharply. When the BBC took control of the collection of licence fees in 1990, 10 per cent. of licence fees were evaded. According to the report published yesterday by Pannell Kerr Forster for the Department for Culture, Media and Sport, the figure had fallen to 8 per cent. in 1995–96. It is now down to 5.1 per cent. and is projected to fall to 4 per cent. in the next couple of years. The report concludes that the overall cost of collection and evasion will be down to 9% by 2006–07 compared with 13.2% in 1995–96. That is due to the widespread development of easier payment mechanisms.

Let us set the £104 licence fee in context. The average spend by a cable, digital or satellite subscriber last year was £300, largely on sport and movies. In its report "Public Service Broadcasters Around the World" published in 1998, McKinsey consultants looked at 20 countries. It found that the BBC's operating income per capita was very much in the mid range.

In terms of distribution, the licence fee is certainly regressive, though less so since the concessions for 75-year-olds. Indeed, my father was 75 on 12 November last year, three days after my right hon. Friend the Chancellor of the Exchequer announced the concessions. At least now my father has to accept that I am a man of some influence.

Even though the licence fee is regressive in pure economic terms, I contend that it is progressive in its effects on society as a whole because it means that the BBC can be properly funded. It means that many of the good things about our national life and many of the best things in our culture are available to everyone who has a television or radio set. We should celebrate the mantra of the BBC that it strives to make the good popular, and the popular good. It still accounts for nearly 40 per cent. of our total television viewing. In homes with satellite and cable, the BBC is still the market leader and accounts for 27 per cent. of total viewing. The BBC accounts for 43 per cent. of our total listening and viewing. Its online site is the most visited in Europe and two thirds of all GCSE students last year visited BBC online sites.

McKinsey concluded that there were two essential characteristics of a public service broadcaster that is successful throughout the world. The first was that it was distinctive in programming, content and scheduling; the second that it retained a sufficiently large market share to keep the commercial sector honest. That is one of the reasons why the commercial sector supports the licence fee. The evidence of the Culture, Media and Sport Committee shows little support for the privatisation of the BBC and the abolition of the licence fee, other than from Mr. Kelvin MacKenzie, the ex-editor of The Sun and current managing director of Talk Sport. Both BSkyB and the ITV companies support the continuation of the licence fee.

What are the alternatives? The hon. Member for Christchurch (Mr. Chope) suggested funding through taxation, which is an interesting tax and spend promise. Total state funding for the BBC would mean about 2p on income tax. What would that do for the independence of our national broadcaster? Would Jeremy Paxman seriously grill a Treasury Minister if he knew that the next morning the director general would have to troop into a meeting with the Chancellor of the Exchequer to plead for next year's income? All the evidence from abroad suggests that state funding of a national broadcaster is massively cut in times of recession, as happened in Canada and Australia with great harm caused to the state broadcasters.

The total advertising income of the commercial television sector was £2.6 billion last year and that would not rise dramatically if the BBC was involved. The consultants London Economics suggested that the BBC could obtain some £1.6 billion from advertising if it freed its schedules to advertising. That would totally disrupt the commercial sector but, perhaps more seriously, it would also dumb down the BBC. The news at 9 pm would go the way of the "News at 10" as the BBC chased ratings because its schedules had to fit in with the needs of advertisers.

Sponsorship of programmes is not really an option either. The total sponsorship of British television programmes last year amounted to £50 million and is projected to rise to £100 million, according to ITV. Individual subscription to BBC programmes would destroy universality of access. Fund-raising by the BBC, as happens in the United States, would mean that programme content and management time were totally devoted to fund-raising.

John Birt said that it was the privilege of his life to lead the BBC and Pannell Kerr Forster concluded that the BBC had made significant savings of £500 million over the past five years. My right hon. Friend the Secretary of State rightly sets the BBC challenging targets for the next five years, but the BBC should be involved in the digital as well as the analogue world. Market failure also applies in the digital world and market concentration is likely to be more dangerous in the digital world than in the analogue world.

Why should not the BBC seek approval from the Secretary of State to run a children's channel on free-to-air digital to compete with the cartoon-based children's channels that are available at the moment? Why should not it seek to run a 24-hour news channel? The viewing figures for cable television show that News 24 is now outperforming Sky News. On digital television, Sky News is outperforming the BBC, but that is not surprising because the BBC channel is 584th on the Sky programme guide. That is another big issue for the digital world—who controls the programme guides and the gateways?

The McKinsey study of public service broadcasters around the world concluded by stating:

Our analysis shows that licence-fee-funding has been more stable and predictable than the other forms of funding … This allows PSBs to invest in programming or operational improvements, as they can be confident about their revenue for the term of the licence agreement. Who knows what the future will bring? Perhaps people will receive their television pictures mainly through the internet—if so, we shall indeed be in a different world. However, for the foreseeable future, yesterday's settlement and the licence fee provide the best basis for public service broadcasting in this country.

I do not intend to divide the House but, as chairman of the all-party BBC group, I want to illustrate the strength of support in all sections of the House for the BBC and the principle of the licence fee. For those reasons, I oppose the Bill.

Question put, pursuant to Standing Order No. 23 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.

Bill ordered to be brought in by Mr. Christopher Chope, Miss Julie Kirkbride, Mr. Ian Bruce, Mr. Eric Forth, Mr. Michael Fallon, Mr. Edward Leigh, Mr. Owen Paterson and Mr. Christopher Fraser.