Television Licence Fees

HC Deb 28 March 2000 vol 347 cc292-314 8.20 pm

Mr. John Greenway (Ryedale)

I beg to move,

That the Wireless Telegraphy (Television Licence Fees) (Amendment) Regulations 2000 (S.I., 2000, No. 630), dated 6th March 2000, a copy of which was laid before this House on 8th March, be annulled. We have called the debate because we feel that the House should have the opportunity of debating a substantial increase in the BBC licence fee, particularly bearing in mind that the regulations substantially alter the arrangements that Parliament approved as recently as 1996. There was no way of achieving such a debate other than by an Opposition prayer. It is unfortunate that the Select Committee on Culture, Media and Sport is away on a foreign visit. I am sure that many members of that Committee would have wanted to contribute to the debate. We are grateful to them for their report on the funding of the BBC, which was published only three months ago.

We think that there is a need to reflect on the mismanagement of the issue by the Secretary of State and his Department. There are questions relating to the proposal for free television licences for pensioners aged 75 and older, which need to be put on the record.

We are disappointed that the Government have chosen to link an unjustified increase in the licence fee and the proposed free licences for pensioners over 75 in one set of regulations. Effectively, this has denied the House the opportunity of expressing a separate view on two fundamentally different elements. As the regulations cannot be amended, the package must be accepted or rejected as a whole. In effect, that guarantees that the Government will get their way on the licence fee increase, whatever the merits of the case.

I wish to make it clear that we support the BBC and its unique position within the United Kingdom and throughout the world. The BBC is a key part of our national life and has established a benchmark of quality of programmes to which many other broadcasters merely aspire. The output of the BBC World Service reaches billions of people throughout the globe, often circumventing state-imposed censorship of national news broadcasts. We should celebrate that.

Without question, the licence fee has played a crucial role in ensuring the continuation of the BBC's distinctive role and the high quality of its output. That should be retained, which means that we must be careful not to ask the viewing public to pay more than is reasonable. There is a limit, and that limit is bound to be influenced by people's viewing habits in a multi-channel age. With digital, satellite and cable delivery systems now sufficiently established for the Secretary of State to have announced a welcome target date for analogue switch-off, we think that the time has come for the BBC's role in that multi-channel environment to be reassessed and redefined.

In essence, we think that the Government are putting the cart before the horse in obliging the licence fee payer to stump up more money for the BBC in the absence of a clear and modern definition of the BBC's role. The areas to which this extra revenue is to be directed amount to little more than a wish list. They are not a coherent long-term strategy. Nor could they be, because a new director general has only just been appointed, with expectations of far-reaching reform. In what seems to us an extraordinary omission, the question of the BBC's remit was not part of the Gavyn Davies inquiry, which led to the licence fee increase, albeit in a way not originally envisaged.

We would argue that the BBC's primary purpose should be to produce a quality and diversity of programmes that is not possible or sustainable by commercial television. The licence fee allows the BBC to take risks and to cater for minority interests, as well as providing a range of programmes of popular appeal that attract sufficient audiences to ensure that all licence fee payers find something that they want to watch at various times. In addition, BBC radio is one of the nation's most endearing institutions, and provides an unrivalled service, especially in news, current affairs and sport. Where would we be without the BBC telling us the football results at various times?

The new director general, Greg Dyke, has reaffirmed that the BBC's overriding priority must be to ensure that the maximum resource is put into programme making. We warmly welcome this approach and agree with the analysis that there remains too much bureaucracy and administration. It is a long overdue approach in the BBC.

Mr. Desmond Browne (Kilmarnock and Loudoun)

I am glad that there is a consistency of approach between that taken by the hon. Member for East Surrey (Mr. Ainsworth) on 1 February and that taken by the hon. Gentleman this evening. Indeed, one speech could have done for both hon. Members in the presentation of the argument. The key to the argument appears to be the absence of a modern definition of the BBC's role. That is a phrase that both hon. Members have used. Is there any intention to give us the Opposition's definition of the BBC's modern role?

Mr. Greenway

It is—

Mr. Deputy Speaker (Mr. Michael J. Martin)

Order. A narrow matter is before us. We are discussing the increase in the licence fee, and we must restrict ourselves to that and not debate the role of the BBC. Perhaps that issue can be discussed on another occasion.

Mr. Greenway

I am grateful for your protection, Mr. Deputy Speaker.

It is our view that there should have been a new approach and a redefinition of the BBC's role in a multi-channel environment before the licence fee increase was announced. I am grateful to the hon. Gentleman for his confirmation that my hon. Friend the Member for East Surrey (Mr. Ainsworth) and I are being consistent in our argument. I shall shortly draw on the recommendations of the Select Committee.

I was saying that the new director general has made it clear that he believes that there are significant cost savings to be made within the BBC. In its recent report, the Select Committee drew attention to earlier efficiency initiatives that delivered savings way beyond what was predicted. I know from over 10 years' experience of working with Yorkshire-Tyne Tees Television and the ITV network that ITV has undergone rigorous streamlining on more than one occasion.

The new director general's determination to expose the BBC organisation to the rigour of a similar approach, however, confirms our suspicion that the restructuring should have been allowed to run its course before any decision was made about the BBC's funding needs and any licence fee increase. That, in effect, was the Select Committee's general conclusion.

Such a fundamental shake-up as we are being lead to expect from Mr. Greg Dyke was not anticipated when the Davies inquiry was established. On the contrary, in evidence to the Select Committee, the former director general, Sir John Birt, said that there was no real scope for further efficiency savings. Yet, only weeks later, the new director general is putting out a different story, which I must say I welcome.

The Davies inquiry was predicated on the premise that the BBC needed more money, thus generating an expectation that an increase in the licence fee would be recommended and granted, notwithstanding the fact that throughout the entire inquiry no effective case for extra money was made. Indeed, when Gavyn Davies took representations, nobody knew how much the BBC itself thought it needed.

That view appears to have been shared by the Select Committee, which was robust in arguing that there should be no new money for the BBC until 2002, when the existing December 1996 agreement will lapse. By 2002, of course, the charter renewal due in 2003 will also be on the agenda, all of which adds weight to the argument that we should have examined what the BBC is for and how it should be supervised before entering into a new six-year inflation-busting licence fee agreement. It is remarkable that the Secretary of State himself appeared to agree that breaking that agreement was not justified when he set out the terms of reference for the Gavyn Davies inquiry, a matter that the Select Committee drew to our attention.

The worst feature of the Davies recommendations, which has thankfully been rejected, was the proposal for a digital licence supplement, and we agree with the Secretary of State that such a supplement would have been inappropriate. It would have undermined progress towards increased digital take-up, which will lead in time to the switch-off of analogue signals. Nevertheless, the proposal generated damaging uncertainty, for which the Secretary of State must shoulder some of the blame.

It is almost 18 months since the Davies inquiry started work. The inquiry took almost a year, and there was then further consultation on its findings. After weeks of rumour and counter-rumour, the Secretary of State appointed management consultants Pannell Kerr Forster to re-examine the issues. During that time, however, no effort was made to examine the BBC's future role, and the Secretary of State's stewardship throughout this period has been unimpressive.

We understand that a protocol to the Amsterdam treaty required such a review of the BBC's role. Why have not the Government undertaken that? The whole situation is absurd. Here was a golden opportunity to make an attempt to consider the BBC's future before announcing an increase in public subsidy, yet the Government sought to ignore it.

I have already highlighted a further concern that the existing agreement reached just three years ago has been breached. That agreement was seen as a breakthrough at the time, and was said to be sufficient to fund the BBC's digital requirements. It is clear that for the next two years we would have had a licence fee increase below the rate of inflation. Now we have the prospect of a real-terms increase for the next six years. What guarantee can the Minister give to the House that the agreement will not be breached again within that time, notwithstanding the benefits that might accrue from Greg Dyke's initiatives on cost and efficiency?

Another area for potential cost savings lies in reappraising the value of the peripheral parts of the BBC's empire and the expansion of BBC services, in particular News 24. The Secretary of State told the House on 21 February that a review of News 24 would be a priority, although we were not told when the review would take place or with what objective. I understand that on Friday the Secretary of State suggested that it would now be improper to review BBC News 24 in the run-up to a general election. That will not please the Select Committee, which criticised the high costs of News 24, which I gather has already cost the taxpayer over £130 million. Those high costs were never explained to the Select Committee.

Perhaps the Secretary of State has some inside knowledge about the election date. One wonders whether he is postponing the review in the belief that the general election will take place soon. More seriously, has he concluded that over the next couple of years, the BBC might seek to incorporate News 24 in its mainstream BBC 1 and BBC 2 television news programmes, thus rendering the review unnecessary? That might well be sensible, but why the secrecy?

The suggestion that a review now would be improper in the run-up to a general election has been greeted with incredulity. The only thing on which we can be clear is that the licence fee payers will foot the bill for however long it takes for a decision about the matter to be concluded.

The whole issue epitomises the absurdity of the Government's position in awarding the money ahead of determining the need. There can be no incentive for the BBC to reduce costs and take a more rigorous approach to efficiency if it thinks that a licence fee increase is there for the asking. Our view remains that the BBC should look to reduce its costs and, over time, its licence fee for everyone, not just pensioners over 75.

In his statement to the House on 21 February, the Secretary of State confirmed the intention to introduce the over-75s free TV licence, which had been announced by the Chancellor last year, with effect from 1 November. However, closer examination of his statement and of matters that have arisen subsequently highlights a number of anomalies and practical difficulties that the House needs to consider, now that the order has been laid.

The free television licence for the over-75s does not solve the accommodation for residential care concessionary scheme anomaly: a relatively small number of pensioners qualify, but the majority do not. All hon. Members present are aware of the resentment to which the scheme gives rise. However, the same sense of unfairness associated with that scheme might become—

Mr. David Winnick (Walsall, North)

I am grateful to the hon. Gentleman for giving way. He refers to the accommodation anomaly, and I agree. One day it will have to be rectified. Is the hon. Gentleman aware, however, that on 12 July 1988, we tabled a prayer against the restrictions that led to such an anomaly, whereby one person who was in the accommodation before May 1988 would get the concession of £5, but another person would not? That all arises from what the Conservative Government did on 12 July 1988.

Mr. Greenway

The hon. Gentleman makes a fair point. Although I was in the House at the time, I cannot claim to remember that particular occasion, but I am aware that hon. Members on both sides, including many of us when we were in government, argued with Ministers that the matter needed to be resolved. My point is that the free licence for the over-75s solves nothing.

The same sense of unfairness will become even more keenly felt when the age-related free licence is introduced. The Minister has made it clear that in a pensioner couple household that benefited from a free TV licence because of the age of the older spouse, a widowed younger spouse below the age of 75 would have to purchase a licence all over again at the next renewal date.

One accepts, of course, that the anomaly will arise wherever the age qualification is drawn. The problem is that the surviving pensioner widow is often left with a much lower income, and may therefore be thought more worthy of help than the married couple pensioners, one of whom is over 75, who still benefit from the husband's full pension. I have no doubt that colleagues will raise other examples.

On the cost of implementing the scheme, we were told by the Chancellor last year that it would cost £300 million. The BBC now says that the cost may be anything from £320 million to £330 million. In the first year, there will be start-up costs of £22 million, and annual running costs of a further £10 million, all of which will be met by the Treasury. It will be helpful to us all to have these figures confirmed and on the record.

We understand that qualification will be determined and administered by the use of the pensioner's national insurance number. That raises other issues. Will primary legislation to amend the data protection legislation be required? If so, when will that be implemented and in what form?

The Minister for Tourism, Film and Broadcasting (Janet Anderson)

I thank the hon. Gentleman for giving way. Will he tell the House whether he and his few colleagues on the Conservative Benches for this important debate support the Government's intention to grant free television licences to the over-75s?

Mr. Greenway

That is a bit like asking whether a donkey likes strawberries. The Government have made the announcement and we do not intend to oppose it, although I dare say we might have thought of a different way of spending the £300 million to help elderly pensioners.

I sat here last night and heard the Chief Secretary to the Treasury give a totally implausible explanation of why it was right to pay every pensioner household £100 this year in winter fuel allowance, and £150 following the Budget, rather than increasing the old age pension. Apparently, poorer pensioners would not be helped because of the thresholds relating to the withdrawal taper for benefits; but those thresholds could have been raised.

The announcement has been made, and we do not seek to oppose it. I am asking justifiable questions about how the scheme will work—and, if the Minister wishes to introduce a controversial element, let me add that all we have heard suggests that no aspect of it had been thought through before the Chancellor's statement.

If the BBC is to be given access to such sensitive information as national insurance records, we are surely justified in asking certain questions. Does the Minister accept that there will be widespread concern about the need for security in regard to such information? We hope that any tabloid headlines suggesting that Auntie had become Big Brother would be unfounded, but this is a genuine worry. Will the use of national insurance records catch everyone over the age of 75, or might there be a number of elderly people, perhaps immigrants, who have never had a national insurance reference?

Our principal concern, however, is that the main result of this initiative will be the state's paying directly to the BBC more than 13 per cent. of its income. I think we are right to ask the Minister to give a categorical assurance of the BBC's continuing independence of any governmental interference.

Does the Minister realise that if the scheme were extended to all pensioners over 65, at least a third of the BBC's income would come directly from the state? However popular such a decision might be with pensioners, if the Government took such a significant stake in the BBC, public concern would be raised about its continuing autonomy and impartiality. That has never happened before.

We urge the Government to keep firmly in mind the continuing acceptability of a publicly funded BBC in a multi-channel environment. Paradoxically—this is, in large measure, why we felt we should have this debate—the principle of the licence fee, which we want to continue, may be undermined by the scale of the increase for which the order provides. The sum is not insignificant: it is estimated that an extra £1.25 billion will be raised for the BBC over the next six years, and household growth may increase that figure. Many of the new homes will be for young people, and there is already demographic evidence to suggest that younger people who have access to, and have invested in, multi-channel television do not want to pay the licence fee at all, let alone the increased amount. That is why we believe that it was essential to make a case for the increase, and no such case has been made. There is a limit to what people will pay, and the tolerance of that limit may well be bridged as the year-on-year increases planned for the next six years unfold.

8.44 pm

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Janet Anderson)

I shall try to respond to the points that the hon. Member for Ryedale (Mr. Greenway) made. There must be no mistake about the effect of the Opposition's prayer against the order: it would annul it. Yet the hon. Gentleman said that the Opposition simply wanted an opportunity to debate it. There was an opportunity to do that when my right hon. Friend the Secretary of State made his statement. If the Opposition truly wanted a debate, I am sorry that the hon. Gentleman could not persuade more of his colleagues to be present for what he regards as an important discussion.

Nobody enjoys paying the television licence fee. Any increase in that fee, especially above the rate of inflation, is therefore an emotive issue. I concede that that is the subject of our discussion. Unlike the hon. Member for Ryedale, I shall try to concentrate on the issues.

The BBC plays a central role in the cultural life of the United Kingdom. Consequently, it attracts a great deal of attention and scrutiny. Many people have strong views on the way in which the BBC should be funded, the services that it should provide, the standards that it should maintain and the value for money that it offers.

The Government are committed to the BBC's continued role as the United Kingdom's principal public service broadcaster, which provides a wide range of quality programmes on all its services, and offers something to all viewers and listeners. Free access to its public service channels is central to the BBC's role so that a high standard of news, education and current affairs programmes is available to all audiences—not only to those who can afford subscription or pay-per-view services. I am sure that the hon. Member for Ryedale would not wish services to be available only to the latter group.

The Government also believe that the BBC must embrace the technological developments that will revolutionise broadcasting in the next few years. Indeed, we believe that the corporation should drive the take-up of new digital and online services.

The television licence fee currently has distinct advantages over the other options for funding the corporation. At the outset of the BBC funding review, the Government made it clear that we considered the licence fee sustainable as the BBC's main source of funding, at least until the renewal of its royal charter at the end of 2006.

Against that background, an independent review panel chaired by Gavyn Davies was appointed at the beginning of 1999 to consider future funding of the corporation. The panel was asked to examine ways in which funding to promote public service output could be extended from other sources; to consider how to secure an appropriate balance between the BBC's public and commercial services; and to review the mechanisms for fair trading in relation to commercial services.

The panel's report was published last July. When reaching conclusions on the recommendations, the Government took account of more than 2,000 responses to the public consultation on that report and the report of the Select Committee on Culture, Media and Support on funding the BBC.

As the hon. Member for Ryedale mentioned, the Government also commissioned a review of the BBC's financial projections by independent consultants Pannell Kerr Forster to assist our decisions on finance, and an analysis by the chief economist of the Department for Culture, Media and Sport. We wanted to be in no doubt about the BBC's requirements for competing effectively in the digital age.

As my right hon. Friend the Secretary of State for Culture, Media and Sport announced on 21 February, although we have not adopted all the detailed solutions that the review panel proposed, we have accepted its general analysis of the current position. In particular, we accept that the Government's vision for the BBC cannot be realised in the existing funding framework. Much has changed in the world of broadcasting since the previous Government announced their five-year licence fee settlement in December 1996. The hon. Member for Ryedale knows that well. He knows how fast changes occur in the sector that we are considering.

The Government accept the panel's recommendation that additional funding should come initially through self-help. We are therefore challenging the BBC to help itself by efficiency savings, partnerships, joint ventures, reductions in bureaucracy and other means, and very much welcome the steps that the new director general is taking in that direction. We have set the target of £490 million by 2006–07, over and above the £600 million that the BBC itself estimated. That target, which is more demanding than that set by the Davies panel, flows from the conclusions of the independent analysis of BBC finances commissioned by my Department. Thus, over the period of that settlement, the BBC will be required to generate more than £1 billion from self-help. It will be up to the BBC to decide how to meet that target, but we have made it clear that we expect it to be met.

Mr. Peter Bottomley (Worthing, West)

Can the Minister help the debate by saying where the £490 million might come from?

Janet Anderson

I hope to deal with that, if the hon. Gentleman will be patient.

The second source of additional funding proposed by the review panel is the licence fee. The two alternatives identified in the Davies report were, first, a digital licence fee supplement set at £24 and payable only by digital services viewers, which would decline over a number of years to converge with the standard licence fee; and, secondly, an increase in the general licence fee payable by all. As the House knows, we have chosen the latter. Although unlikely to depress the take-up of digital television significantly, the introduction of a digital licence fee would have given the signal that digital television is something out of the ordinary. The Government's view is that it will soon be the norm. The benefits of the increased funding will be available to all licence fee payers through improvements in the BBC core services.

The Government have therefore decided to provide the additional licence fee funding required by the BBC via annual increases of 1.5 per cent. over the retail prices index from April this year through to 2006. That means that on 1 April the colour television licence fee will rise by £3 to £104 and the black and white licence fee will rise by £1 to £34.50. The regulations will bring those increases into effect.

As my right hon. Friend the Secretary of State announced, the Government have also accepted the general thrust of the review panel's recommendations in terms of transparency, fair trading and accountability. We shall institute new procedures for the introduction of new services, which will include an opportunity for public consultation before decisions on proposed new services are reached. There will also be a programme of reviews of all current BBC digital services—News 24, Choice, Knowledge and Parliament—to ensure that they are achieving their stated purpose. The Government have made it clear that they do not expect the licence fee to fund services such as dedicated film and sport channels when there is no distinct and separate public service remit.

Mr. Greenway

If I heard correctly, the Minister said that there will be a review of News 24. Can she confirm when that will take place?

Janet Anderson

I cannot give a precise date, but the hon. Gentleman will be aware that my right hon. Friend the Secretary of State has made it plain that we shall review the digital services because we want to ensure that the public get value for money. I hope that that helps to answer the question asked by the hon. Member for Worthing, West (Mr. Bottomley).

The Government will commission independent scrutinies of the BBC's fair trading policies and financial reporting and publish the resulting reports. The BBC will also be required to have its fair trading and financial audits carried out by different auditors. The fair trading auditor's full report on compliance and risk will in future be published by the BBC. Periodic examinations of the systems and controls in place to ensure fair trading and of the nature and extent of the financial systems will also be carried out by independent consultants. Those will of course be available to be considered and questioned by the Select Committee. Finally, I reassure the hon. Member for Ryedale that we shall also review the public service role and governance of the BBC in the forthcoming broadcasting and communications White Paper.

On concessions, we have already gone beyond the Davies panel's recommendation on assistance for pensioners with the announcement of free licences for the over-75s. The concession will start on 1 November, subject to parliamentary approval of the necessary legislation. The regulations provide that, from 1 April, those who will be 75 or over on 1 November, or who turn 75 after that date but before their licence would expire, will be able to buy a short-term licence lasting until 1 November. From 1 November, refunds will be available in respect of licences already paid for.

The hon. Member for Ryedale is, I am sure, aware that, in tabling a motion to annul the regulations, he is opposing the proposal to allow pensioners aged over 75 to purchase short-term licences. [Interruption.] That is the effect of the motion.

Mr. Greenway

How many times have Ministers in successive Governments said in Committee that a negative resolution with regard to statutory instruments provides the mechanism whereby Parliament can debate some important matters, of which this is one?

Janet Anderson

The hon. Gentleman should be clear about the effect of the motion. He wanted the regulations to be annulled. If he had been successful—of course he does not have the majority—[Interruption.]

Mr. Deputy Speaker (Mr. Michael Lord)

Order. That is enough interruption from a sedentary position by hon. Members on both sides of the House.

Janet Anderson

Thank you, Mr. Deputy Speaker.

We have accepted the Davies panel's recommendation that registered blind people should be entitled to a 50 per cent. reduction in the television licence fee. That will come into force from 1 April via a separate determination by the Secretary of State.

We have also accepted the recommendation that subtitling of programmes for the deaf and hard of hearing be further developed, so that 50 per cent. of BBC digital programmes are subtitled within five years, and 100 per cent. within 10. The regulations provide that, as recommended by the review panel, the collection arrangements under the cash easy-entry easy-payment scheme are made more equitable.

The accommodation for residential care concessionary scheme is, as we all know, far from perfect. The majority of the current beneficiaries are over 75 and will receive free licences. About 130,000 younger pensioners and mentally and physically disabled people will be left in the scheme. Notwithstanding the drop in the number of people benefiting from the scheme, we propose to keep the arrangement for concessionary licences, but the regulations introduce a minor change to bring within the scope of the provision all retired persons aged 60 years or more, removing the current element of discrimination inherent in the reference to pensionable age. That provision will have the additional benefit of safeguarding the entitlement to the concession of residents in sheltered housing schemes with male residents aged between 60 and 64. I hope that that, too, will be supported by Conservative Members.

The hon. Member for Worthing, West asked where the efficiency savings of £490 million would come from. They will come from increased efficiency, reductions in bureaucracy and increased commercial revenue.

I was also asked what that would be spent on. Labour Members believe that the BBC has an important role in the digital age as a benchmark for quality. We do not believe that its role is simply to provide those services that will not be provided by commercial operators. We hope that the BBC's substantial efficiency savings—they are of a scale that was never demanded by the Conservative party when in government—in conjunction with the increase in the licence fee will enable the BBC to take its rightful place in the digital age.

8.59 pm

Mr. Steve Webb (Northavon)

I will not detain the House for long, but it is important to put on the record the Liberal Democrats response to the statutory instrument. I welcome the fact that the regulations set out the practicalities of how constituents aged 75 or over will obtain their partial licences up to the point when the scheme comes in.

Some months ago, the issue was raised with me by constituents who heard the announcement and wondered what would happen from April. It is good that the regulations now clarify the position. It would have been even better if the original announcement had been accompanied by some explanation, as it has caused some anxiety. Occasionally, however, announcements are made rather hurriedly, as they need to be rushed through without the detail being thought through. Nevertheless, it is welcome that we now have the detail. I also welcome extension of the residential accommodation concession to men aged 60 to 64. There was an anomalous situation in which a woman over 60 might be covered by the concession, whereas a man over 60 might not be. Some levelling between those groups seems quite appropriate.

I have two reservations about the regulations. The first is that the concession for the over-75s reveals confusion in the Government's approach to supporting pensioners.

Just a few months ago, the Government rejected an amendment that I moved to the Welfare Reform and Pensions Bill that would have provided for an across-the-board pensions rise for the over-75s. Ministers argued that such a provision would be poorly targeted. However—except in relation to one or two-pensioner households that do not have a television—a free concessionary television licence has exactly the same properties as the proposed provision.

Liberal Democrat Members have been arguing for months, if not years, that older pensioners are poorer pensioners, and that targeting by age is very effective. I am puzzled why it is right to target older pensioners in the regulations on television licences, but not right to do so for pension enhancements.

I cannot develop that point much further without straying from the regulations, but the point demonstrates both the Government's confusion and their convenience. When an action such as providing free television licences is politically attractive, arguments against targeting go out of the window, whereas our pension proposals could not be allowed—

Mr. Syd Rapson (Portsmouth, North)

It must not have been a political decision, then.

Mr. Webb

It was a political decision.

On the "Today" programme, when discussing free television licences, a Minister was asked, "Why not just give them the £101?" There is really no answer to that question. If pensioners wanted to spend the money on the licence, they would; if not, they would not. They would have the choice. Nevertheless, we live in a political world, and we have to accept that a free television licence is the way in which the Government have chosen to help older pensioners. Given that we have long argued that older pensioners should be the priority, we welcome that decision.

Liberal Democrat Members are concerned about the increase in the licence fee from £101 to £104. Although £3 may not be a significant sum for hon. Members, for pensioners receiving 75p from the Government in April, it is a month's pension rise. Four weeks-worth of the pension rise will have to go on paying the television licence increase. Although older pensioners will receive the licence free, for those who are aged 65 to 74, a month's pension rise will be eaten up by the regulations. Although hon. Members talk about the percentage increase involved and about hundreds of millions of pounds, we should remember the context of this increase. For many pensioners, £3 is not a trivial sum, and we should not lightly pass the regulations.

I was interested in the point made by the hon. Member for Ryedale (Mr. Greenway) on the position of couples of different ages, when perhaps the older partner dies, leaving—typically—a widow to foot the bill. Do Ministers have any plans to deal with that problem? When a person becomes a widow, the last thing that they want is a television detector van coming round. Strictly speaking, that is what would happen, as the widow would cease to be entitled to a free licence. The regulations do not make it clear that the free licence would continue to its expiry date.

Janet Anderson

The hon. Gentleman is quite correct in his assumption—the free licence would continue until its expiry date.

Mr. Webb

That is a welcome clarification. Obviously, the continuance could be anything from one day to 365 days. Therefore, it is possible to imagine circumstances in which, on the law of averages, a person dies towards the end of a licence, and within weeks or even days, a widow could find herself without, in strict legality, a valid television licence. That is the last thing that she is going to think about.

Mr. Peter Bottomley

I think that on probability, among all widows, there would be six months left on the licence. However, rather more seriously, does the hon. Gentleman agree that, in fact and in logic, the same problem applies to an elderly orphan who is left behind by a parent with whom they had been living? If, for example, someone is 65 and had been caring for a parent aged 90, the parent would have had the free television licence and the same situation would apply to him or her. Moreover, the income decrease is usually even greater for that person than for someone who becomes a widow or a widower.

Mr. Webb

The hon. Gentleman raises an interesting point. A significant number of carers are pensioners, in many cases caring for an elderly relative. The same issues arise for them. The median run-on will be six months, but there will be some whose licence runs out the next day or on the day of the funeral. It would be helpful for the Government to put it on the record that the authorities will show humanity in such circumstances.

Mr. Browne

Is the hon. Gentleman's argument predicated on the assumption that no licence renewal notice will be issued to those with free television licences?

Mr. Webb

No. I am saying that the last thing that someone is going to do immediately after their loved one has died is rummage through the paperwork for the television licence. It would be nice if the Minister said that some humanity will be shown, but the law is the law and it is not clear whether such a defence will be available if the authorities choose to pursue someone who does not have a valid licence. I hope that the Minister will at least acknowledge the issues and tell us that they may be addressed. I am glad to see her nodding.

My only other point is about the accountability of the BBC. The sum involved equates to a month's pension rise, so we have to be sure that our constituents' money is being wisely spent. Accountability has been addressed in other measures that the Government have introduced, but my hon. Friend the Member for Lewes (Mr. Baker), who speaks on these matters for my party, has raised the issue of accountability through the National Audit Office. There is a balance to be struck between unwanted parliamentary interference in the BBC in editorial and journalistic matters and the fact that taxpayers' money is being spent. The National Audit Office has an important tradition of supervising the spending of taxpayers' money. I hope that the Minister will at least keep open the option of involving not just an independent firm of accountants or auditors, who are not directly accountable to Parliament, but a body that exists to scrutinise the spending of public money. That would make us feel more confident that our constituents' hard-earned cash was being well spent.

With those reservations, we welcome the new concessions and recognise the BBC's need for additional funding, so we shall not oppose the regulations.

9.7 pm

Miss Anne Begg (Aberdeen, South)

I am pleased to contribute to the debate. I am secretary of the all-party BBC group. I am pleased that the issue of BBC funding has at last been settled after some months. The uncertainty has caused a great deal of unease and disquiet in the BBC and among our constituents, who did not know what increase in the licence fee they were going to be expected to pay.

I wholeheartedly agree with my hon. Friend the Minister on the importance of the BBC driving forward the new digital age and being at the forefront of the new technologies. If the BBC is to survive in the 21st century with its integrity as a broadcaster of repute intact, it must be able to harness and advance new technology. We have seen that in the new digital services such as BBC Choice, as well as in BBC Online, which is perhaps the most popular of the corporation's new developments. BBC Online is as near as this country will get to having a national public service newspaper, because it presents the news for everyone to see without the bias or slant that we get in the print media. Its unbiased presentation of news is one of the great values of the BBC.

I am also glad to hear that the Opposition are in favour of the retention of the licence fee. It should continue to be the way in which we fund the BBC. When funding arrangements are announced, the cry usually goes up that the measures are too little, too late. The hon. Member for Ryedale (Mr. Greenway) seems to think that it is too much, too soon. The extra £3 a year is too much, according to him. In Aberdeen—which is not always noted for its generosity—the rumour went around that the television licence would be going up by £15, and the people were dismayed and angry. Then the rumour was that the licence would be going up by £12, and they were still dismayed. So when it came out that it was to go up by £3, they were delighted. My constituents believe that an extra £3 is not too much for the excellent service provided by the BBC.

Nor is it too soon. The basis of the argument of the hon. Member for Ryedale was that the new Director General of the BBC, Greg Dyke, will be reviewing the position and the future of the BBC, and therefore he should not know how much money he will have in the future. That seems daft to me. The Government have been right to specify what the funding will be over the next six years for the BBC, so Greg Dyke can ensure that what he wants will fit in with the amount of money that he has. Of course, he must try to find efficiency savings, and he should make sure that the BBC is slimmer and meaner and that it improves its quality. However, at least he will know how much money will go to him over the next six years.

When it was mooted that pensioners should get free television licences, I was not keen. I thought that the only way in which it could be done would be for the BBC to lose the money—some £300 million. The other option was that everybody else would have to pay more for their licence, by up to £40 a year. I did not think that my constituents, particularly those on low incomes, would wear that.

I did not believe that the Treasury would be as generous as it has been. To use a good Scots word, I always thought that the Treasury was a bit grippit—in other words, it held on to its money and would not give any of it away. I thought that our prudent Chancellor would not be prepared to be as generous as he has been. I am delighted that the money is coming from the Treasury. I know that my mum and dad, who are both over 75, are delighted that they are getting a free television licence.

The hon. Member for Northavon (Mr. Webb) should remember that the television licence will be tax free, and that to give pensioners over 75 the money on their pension would result in better-off pensioners paying tax. However, the £104 will be tax free and therefore worth more to better-off pensioners. The start-up costs referred to by the hon. Member for Ryedale will be borne not by the BBC, but by the Treasury. If the Chancellor is being that generous, it would be churlish of us to refuse.

I am glad that the BBC's funding will be on a solid footing over the next six years. The increase of £3 is enough—it is above inflation and it will allow the BBC to continue to play its part in the digital age. I am delighted that Britain's pensioners aged over 75 will have a free television licence.

9.14 pm

Mr. Peter Bottomley (Worthing, West)

It has been a pleasure to listen to the debate. The hon. Member for Aberdeen, South (Miss Begg) was right to point out that the gift of a television licence worth £104 was worth more to pensioners over 75 paying income tax, and even more to those paying higher rates of tax. I declare that, were I a widower over 75, I would have to pay the higher rate of tax, as I would have my own pension and part of my wife's. I do not see why better-off pensioners should get a great deal more.

People have argued that giving pensioners the money would not help those on income support. That argument used to be trotted out against increasing child benefit. In practice, ensuring that an increase in child benefit is of help to the poorest merely means that the levels of income support also have to be raised. There is therefore no particular problem in that regard.

What happened is that the Government found themselves in a hole, with bad headlines on some other issue coming up, and someone had a bright idea for a lollipop. When she winds up the debate, will the Minister say whether she consulted the BBC before making the announcement? I do not think that she did. Did she consult anyone? Was a White Paper produced? Was Parliament consulted? Was Age Concern consulted, or pensioner groups, or Jack Jones, a well-known voice for pensioners and a former general secretary of my trade union? I do not think so.

If we are to accept that it would be very nice if people over 75 did not have to buy a television licence, or if they could be given an equivalent sum, we must consider whether the Government's approach is the most effective way to proceed. I suspect that it is not, although I know that what has happened is typical of the way in which Governments act, and that future Governments may be no different. However, the proposal is slightly illogical and seems to have been thought up in a rush. On the whole, I think that the Treasury could do better.

Miss Begg

I am sure that, like me, the hon. Gentleman has spoken to many pensioner groups and many individual pensioners. I was constantly asked why pensioners could not receive free TV licences, as happens in other countries. The genuine desire articulated by pensioners was for free licences.

Mr. Bottomley

I do not want to come across as the only hon. Member who wants to spoil the party, but those who will decide what to do with television licences in future may read this debate, and they ought to be made aware of some of the points that the Minister would no doubt have made if Liberal Democrat or Conservative Members had come up with the idea of free television licences for people over 75.

The points that I want to make would have cropped up in consultation. The process of consultation, involving working parties and taskforces, is used in almost every aspect of Government these days. That did not happen in this case, and the result is a scheme that is not as good as it could have been.

Janet Anderson

Does the hon. Gentleman support the Government's proposal to give free television licences to the over-75s, or not?

Mr. Bottomley

It ought to be clear that I do not oppose the proposal, but that I am trying to talk through the logic behind it. I am not setting myself up as an Enoch Powell, for whom only logic worked. However, I think that it would have been better to present a scheme that provided benefit worth £104, so that people paying tax might find that they had to contribute a little more, while those who do not pay tax would not. Such a scheme would also ensure that people paying at the higher rate of tax would not get a greater benefit.

My reason for arguing against child tax allowances is that they give no help to those below the tax threshold; that they give the greatest help to those paying the highest rates of tax, and that they do not make much difference to those on ordinary levels of income. The same argument applies to pensioner households over 75 years of age.

It is not sensible to give free television licences to all pensioners because many people in work who have children face far more difficult budgeting problems than they do when they retire. Forty years ago, it used to be the case that people were most hard up when they retired, but nowadays it is when they have their first child, when they often go from having two incomes and two mouths to feed to having one income and three mouths to feed at a time when housing costs are at their greatest.

My starting point is that we should not give unalloyed praise to the scheme. Consultation would have helped and would have caused the Government to propose a modified scheme that would have had roughly the same effect, without some of the unfairnesses that I have illustrated.

I accept that many people over 75 years of age now are vulnerable, but I suspect that many people who turn 75 in 20 or 30 years' time will not feel anything like the same squeeze on their financial resources. If 75 per cent. of 35-year-olds are paying for their own homes and will have paid off their housing costs by the time they retire, they will be in a very different financial situation from today's over-75s, who do not necessarily have second pensions, extra savings, and their housing costs paid. The arguments for free television licences for those over 75 in the year 2000 will not be the same as they will be in 2020.

Mr. Webb

One might assume that, but the projections of the Department of Social Security and other research evidence show that, if anything, older pensioners will be getting further and further behind the rest of the pensioner population. One reason is that they tend to be women, who always tend to be further behind, but there are many other reasons as well. It is not obvious that targeting by age is a policy that is right for now but not necessarily right in the future.

Mr. Bottomley

I was making a rather more narrow point. People who will be 75 in 40 years' time are now 35. A lot of 35-year-olds are buying their own homes, and I suspect that that will continue. If the average rate of owner-occupation in this country is getting on for 70 per cent., and if a relatively low proportion of people between the ages of 60 and 85 own their own homes, it must be that successive cohorts will be moving through.

Mr. Webb

That is wealth, not income.

Mr. Bottomley

It is wealth, and savings and second pensions will increase that. Again, that argument can be made for income, taxation and benefit policies. I am trying to establish that what appears to be right now is not necessarily the fairest, most equitable way of providing quality television and reasonable equality in paying for it, which is what we are after.

We have three public service television channels—BBC 1, BBC 2 and Channel 4. Channel 4 is not funded by the licence, but it is public sector broadcasting. In another debate, it would be interesting to hear whether the Government plan to privatise Channel 4 and take the money. I hope that they do not. There are good arguments for Channel 4 to remain in its slightly anomalous situation. Incidentally, anomalies on the licence and in the regulations have been mentioned. Willie Whitelaw, when Home Secretary, was asked whether he understood that there were anomalies, and whether he could search for alternatives. He stood up and, with a straight face, said that he would be perfectly happy to search for alternative anomalies. Almost any way of solving anomalies creates others, at least at the borderline.

I declare that the BBC has given me some hospitality over the years, often at BBC events. I have tried to turn up at the events that do not offer more than a cup of coffee when the BBC is talking about its great work on the World Service and other areas that are not funded by the licence fee. The licence fee basically pays for BBC 1 and BBC 2.

I repeat my question to the Minister, in the hope that she can give a broader answer when she winds up the debate. If not, perhaps she could write to me and put a copy of her reply in the Library. Roughly what are the sources of the extra £490 million that she, her Department or the Treasury believe can be produced from within the BBC, over and above the BBC's estimate of £600 million? Is it just a difference between what John Birt thought he could produce and what Greg Dyke thinks he can produce, or is it something different? If it is a ministerial estimate, let us be told. If the figure comes from the BBC, it would be helpful to know.

Janet Anderson

Let me reassure the hon. Gentleman that the £490 million is not a figure that we have simply plucked out of the air. It was based on the scrutiny of the BBC's finances by the Pannell Kerr Forster report. I repeat that the money will come from increased efficiency savings, reductions in bureaucracy and increased commercial revenues.

Mr. Bottomley

I am grateful for that reply, but I thought that that was where the first £600 million was coming from. If we can raise that figure by an extra 40 per cent., perhaps those accountants would be rather useful in other Departments as well. I shall not pursue that, however. Presumably, Ministers will make available more detailed information if they have it and, if they do not have it, they will say so and it will be just one of those things.

In the regulations, we want to ensure that, reasonably fairly, we protect and enhance public service broadcasting. I want to quote from the McKinsey report from January 1999 on public service broadcasters around the world. It concluded:

Public service broadcasters have a significant responsibility within their markets. As the pacesetters, it is the public service broadcasters who set a tone for broadcasting. Healthy public service broadcasters can potentially greatly enrich their broadcasting cultures and by extension the cultures of their nations. It is in the interests of all audiences to see that they continue to do so, and keep broadcasting the broad-ranging, stimulating, unifying social force it has been for much of the last century. I hope that the settlement for the BBC—a fairly minor increase, although I accept that it makes up about 8 per cent. of the increase in the basic state pension—will manage to achieve that, not only in national broadcasting but in broadcasting within the nations of this country.

I fear that if we keep the BBC too strapped for cash, we will not be able to allow the development of broadcasting in Scotland, Wales and Northern Ireland and, for that matter, England. England is not quite so critical because English culture spreads out and becomes almost British culture in significant part.

I hope that, in time, Ministers will find it possible to use one of the three public service broadcasters as national broadcasters for Scotland, Wales and Northern Ireland. Sometimes, we have broadcasting too tightly controlled at the centre. I know that the BBC has done quite a lot to devolve editorial control of programme making to Scotland and, no doubt, to Wales. There has also been discussion about the fourth channel in Wales, but that may be a debate for another day. The question is whether the settlement will be sufficient for the BBC as it is at present.

I should have preferred the increases to be larger. I represent a constituency with the highest proportion of people above retirement age-55 per cent. are below retirement age and 45 per cent. are above it. I suspect that many of my constituents would agree with the 89-year-old widow who wrote to me in connection with an audiology test saying that the only enjoyment that she had left in her life was listening to the radio and television. The trouble was that, as she did not have a hearing aid, her neighbours heard more of it than she did.

Many elderly people find the BBC and the other broadcasters a lifeline. They keep people in touch with what is going on, they provide entertainment and education and they are informative. They are good value. If one takes the cost of the licence fee as providing BBC services alone, it is well justified, given the broad reach of the BBC. I am becoming more and more confident that it will be justified when the charter comes up for renewal the next time. I know that there were doubts in the last decade about whether the licence fee system could last. I want to make a suggestion about how we could do it next time.

Virtually everyone pays their licence fee out of taxed income. Those who do not, because they are below the tax threshold, deserve special consideration in any case. So I would move to a system in which the taxpayer—the Government, the Chancellor—started to build on to the licence fee the imputed tax that people had paid on the money that they used to pay their licence fee. That would be a way of providing extra funds without losing the independence that the BBC system provides.

I hope that the House will approve the packages that the Government propose, which are basically the transitional ones, and that when the Government come forward with the precise way in which they will legislate to pay for licences for the over-75s—not just the transitional element, which the orders deal with, but the next legislation—they will answer the question that my hon. Friend the Member for Ryedale (Mr. Greenway) asked about data protection. What will be the system for checking? Does it require a change to the registration system using national insurance numbers or taxation numbers? Can we be assured that we will not get Big Brother going along with Auntie BBC?

9.29 pm

Mr. David Winnick (Walsall, North)

I can agree with at least some of the remarks made by the hon. Member for Worthing, West (Mr. Bottomley) about the importance of the BBC. The hon. Member for Ryedale (Mr. Greenway) started on the right note—he recognised the importance of the BBC and was in favour of it—but I am afraid that for the rest of his speech he took a carping, criticising tone.

Mr. Greenway

I was referring to the report.

Mr. Winnick

Be that as it may, the hon. Gentleman was criticising every aspect of the BBC and clearly did not agree with the increase. It is interesting that, knowing what the order would be about, the Opposition put down the prayer, but then the hon. Gentleman was frank in saying that they did not intend to vote against the order. It may seem okay to oppose the increase, but the Tories do not want the country to see them oppose the free television licence for the over-75s.

Mr. Greenway

Had we not tabled a prayer against the order, the hon. Gentleman would not have had an opportunity to make his remarks.

Mr. Winnick

Somehow, I do not believe that the prayer was tabled in order to let me make a speech. I may be wrong. Perhaps my wishes are considered by the shadow Cabinet, but I doubt it.

Like the hon. Gentleman, the hon. Member for Worthing, West, my hon. Friend the Member for Aberdeen, South (Miss Begg) and the Minister, I believe that the BBC is in Britain's interests. We need a public service broadcasting organisation. If we appreciate it and recognise its role, we must realise that increases are necessary. The increase amounts to 6p a week. I do not deny that some will find it difficult, but it is extremely modest and I see no reason why we should not agree to it.

Sometimes, Conservative Back Benchers—although not the hon. Member for Worthing, West—give the impression that they would like the BBC to be privatised or semi-privatised. They sometimes seem to want advertisements. I do not believe that the Opposition's enthusiasm for the BBC comes close to ours.

I am glad that the Minister has explained the position relating to the administrative arrangements being made for those approaching 75. I have had queries in writing and at my surgeries about licence renewal from those who are or soon will be 75. I shall be better able to explain those matters to my constituents in future.

My principal reason for speaking is my view that the free television licence is absolutely justified. With others, I have campaigned for that for a long time. I must say that the hon. Member for Worthing, West has been consistent. I have re-read the voting list on my private Member's Bill on 16 January 1987, and his name was among those who opposed the Bill. It is difficult to get colleagues into the House on a Friday, but I managed to have quite a number here that day, only to lose by 21 votes.

Some argue that the free licence is not necessary because some pensioners aged 75 or more are well off, but we do not have means tests for the bus pass, which goes to all. No one, including any Conservative Member, has argued that free bus passes should go or be means-tested. The same applies to prescription charges. Men and women over 60 do not pay for prescriptions—for men that is a result of European Union rulings. No one says that that is wrong, or that richer people over 60 should pay.

The same should apply to the television licence. As people grow older, they watch more television. For the elderly and those who find it difficult to get out in the winter, television is a means of communication with the outside world—that is certainly true of those with few close relatives. Television is important to them.

Some argue that the free licence should be extended to all pensioners. That was the purpose of my private Member's Bill in 1987. However, I believe that the Government can justify their position. They are being criticised already over the money involved—£300 million or more, according to the hon. Member for Ryedale. As a first step, there is every justification for starting with people aged over 75, even if there will be complaints from those under that age.

Like my hon. Friend the Minister, I am not quite sure what the attitude of Conservative Members is towards free television licences for the over-75s. During the Budget debates, the measure was described by Opposition Front-Bench Members as a hollow gimmick. Is it a hollow gimmick? If it is, why will they not vote against the regulations?

When my Bill was debated in 1987, David Mellor, then the Minister of State, Home Office, argued strongly against it on behalf of the Conservative Government. He said that if pensioners had free television licences, those who had black and white sets would want colour sets. He argued that pensioners who had evaded the licence fee—although, in the main, it is not pensioners who do not pay the fee—would receive a free licence. He said that, if my measure became law—horror of horrors—those who had no television set would want one after all.

As for the cost, Mr. Mellor argued, in his sarcastic, mocking tones, against all that Labour MPs were trying to do. He said:

Opposition Members say that all we have to do is to dig into the money mine beneath this Chamber and Parliament will provide the £400 million.—[Official Report, 16 January 1987; Vol. 108, c. 528.] That was his estimate of the cost.

Time and again, during all the years when we were trying to obtain that elementary justice for pensioners, Members of the previous Conservative Government—with the full support of their Back Benchers—voted against us. They made it quite clear that such a measure would not be introduced.

Mr. Peter Bottomley

When the hon. Gentleman made that proposal in 1987, he was about the same age as I am now—in his mid-50s. Why should the general taxpayer pay for my free television licence if I was a Member of Parliament aged more than 60 or 65? On pay of £49,000 a year, we do not need one.

Mr. Winnick

If the hon. Gentleman is having a little dig at me, I point out that I had not reached the age of 54 when I introduced my Bill, so I could not have been acting out of self-interest. No Conservative Member has yet accused me of acting out of self-interest. I am pleased to say that it will be some years before I qualify for a free television licence. I hope that that satisfies the hon. Gentleman.

I conclude by quoting myself—if I may do so on just one occasion—during the debate on my Bill. I said:

What I am advocating is fair and justified. If I am defeated in a Tory-dominated House of Commons on a whipped vote of Cabinet Ministers, I shall carry on the campaign with my right hon. and hon. Friends. We shall not give up, because we believe that we are right. If we do not get this concession for pensioners from a Tory Government, we shall ensure that it comes from a Labour Government.—[Official Report, 16 January 1987; Vol. 108, c. 511.] It is done. There was no election promise—nothing in the manifesto—but many of us were determined that if we could persuade our ministerial colleagues, especially the Chancellor, to introduce the measure, we would do so. I am extremely grateful that the Chancellor has taken that action. I am also grateful to the Minister, who has campaigned ardently in ministerial circles for this concession to pensioners. Once again, that demonstrates the difference between a Tory and a Labour Government.

9.34 pm

Mr. Desmond Browne (Kilmarnock and Loudoun)

I am grateful for the opportunity to speak in the debate. My brief contribution will be restricted to the increase in the licence fee.

It is a pleasure to follow my hon. Friends the Members for Walsall, North (Mr. Winnick) and for Aberdeen, South (Miss Begg), the hon. Member for Worthing, West (Mr. Bottomley) and others who, like myself, are all friends of the BBC. Those who normally take part in these debates and contribute in a slightly different tone have absented themselves from the Chamber tonight. It is pleasant to be in the company of those who appreciate the value of the great institution that is the BBC.

I will resist the temptation to quote myself, even though my hon. Friend the Member for Walsall, North did just that. That might become a habit in the House, and it is not one to be encouraged. As I said in the broadcasting debate, I am against a digital licence fee. I argued for a licence fee that is set against an independent assessment of the financial needs of the BBC. As I understand it, that is the approach of my right hon. Friend the Secretary of State for Culture, Media and Sport. I welcome that and I welcome the increase in the licence fee for a number of reasons. I shall come to them shortly.

I wish to deal with a fairly narrow point. I want to explore and test the core argument put forward by the hon. Member for Ryedale (Mr. Greenway) in opposing the increase. In response to my right hon. Friend the Secretary of State's announcement on the licence fee on 21 February, the hon. Member for East Surrey (Mr. Ainsworth) recognised the achievements of the BBC

in setting a benchmark of quality in national and international broadcasting.—[Official Report, 21 February 2000; Vol. 344, c. 1243.] To that extent, the official Opposition recognise what many Labour Members recognise: the BBC is what my right hon. Friend the Secretary of State rightly described as the UK's most important cultural institution.—[Official Report, 21 February 2000; Vol. 344, c. 1239.] In fact almost the whole House, with one or two notable exceptions, recognises the importance and role of the BBC.

The hon. Members for East Surrey and for Ryedale have not argued that the BBC should not be funded by a licence fee. On the contrary, they have sought to argue that that is how it should be funded, but within the five-year settlement agreed by the previous Government and the BBC in 1996. They have argued that despite the fact that the broadcasting world is changing rapidly, with what the hon. Member for East Surrey has described as an explosion that has arisen from the rapid increase in access to multi-channel digital television—an explosion that

raises fundamental questions about the current and future role of the BBC. Although the circumstances surrounding the BBC have changed rapidly and exploded around it in the past five years, the Opposition have argued that the deal that was struck in 1996 should be adhered to.

The Opposition have opposed the proposal to increase the licence fee by a modest 1 p or less per day, which I accept for some people is a significant increase. However, they are prepared to join us in celebrating the achievements of the BBC and to argue in favour of retaining its funding mechanism. I exclude the hon. Member for Worthing, West from those comments because, for the first time, I heard him expound an alternative method for funding the BBC. I am far from satisfied that funding the BBC out of any form of taxation would not directly threaten its independence, but I shall read his words in Hansard tomorrow and consider his proposal carefully.

What is the difference between the Government and the Opposition on the increase in the licence fee? The hon. Member for Ryedale has expressed a view similar to that of the hon. Member for East Surrey, who said:

It is simply not good enough that he— that is the Secretary of State—

should oblige the licence fee payer to stump up more money for the BBC in the absence of a clear and modern definition of the BBC's role.—[Official Report, 21 February 2000; Vol. 344, c. 1243.] The hon. Member for Ryedale used similar words tonight.

If such a modern definition is provided, the Opposition should rethink their approach to the issue. The hon. Member for Ryedale implied in answer to my intervention that such a definition might be forthcoming, but said so obliquely by referring to the report of the Select Committee. However, as a redefinition was not forthcoming, I shall endeavour to provide one to see whether the Opposition can be persuaded to come on board, there being a modern definition of the role of the BBC at the turn of the century.

Mr. Greenway

I know that we are running out of time, but before the hon. Gentleman provides a modern definition, and given that he seems to be suggesting that there is an argument purely between the Conservative party and the Government, may I remind him that the Select Committee on Culture, Media and Sport, chaired by the right hon. Member for Manchester, Gorton (Mr. Kaufman), expressly stated that there was no justification for breaking the five-year formula? Does the hon. Gentleman agree with the recommendation that the BBC should

cut its coat according to the cloth? That report is only three months old.

Mr. Browne

However old an illogical argument is, it is an illogical argument. My response to the hon. Gentleman's intervention was in my introductory remarks. The BBC is living in a more rapidly changing environment than it has recognised. Yet there are certain forces that still argue for whatever reason—including Opposition spokesmen and the Select Committee—that we should stick to the funding formula that was agreed six years ago, despite the fact that the world is changing around them.

I return to my core theme: what is a modern role for the BBC at the turn of the century? A vigorous media are essential to hold government, institutions and individuals to account. Broadcasting is unique in doing that, unlike the print medium, because it gives access to what politicians say and do, and to what is said and done by professionals and other individuals.

Secondly, broadcasting has a role in promoting personal responsibility. That role is well known in combating crime and increasing awareness of health issues.

Thirdly, broadcasting—uniquely—can facilitate the acquisition of basic skills in literacy and numeracy all the way through to further education at the Open university.

Fourthly, broadcasting has the unique ability to allow many people to share information and to tackle social exclusion. Given the way the BBC is funded through the licence fee, and because of its charter, it can do that without the pressures that any other form of funding would bring.

The licence fee settlement will enable the BBC to meet challenges in the digital broadcasting arena and will provide a clear role for the BBC at the turn of the century. I ask the Opposition to review their stance following that simple explanation.

9.48 pm

Mr. John Grogan (Selby)

In the two or three minutes that are left for the debate, I shall deal with a couple of arguments advanced by the hon. Member for Ryedale (Mr. Greenway). He seemed to suggest that unless there is a precise definition of what public sector broadcasting will be, it is not possible to commit any more resources to the BBC. That is a misunderstanding of the changing broadcasting world. No one can say precisely what public sector broadcasting will be like in 10 years' time. No one can say whether there will be television channels in the conventional sense by then.

If, in the 1950s, a committee of Members or others had been formed to draw up the future for radio, it would not have identified Radio 1. In the 1980s, it would not have been possible to define Radio 5 Live by means of a committee. Public sector broadcasting is a creative and dynamic force, and as a nation we must commit ourselves to the principles that have served us well in the past.

In the 1990s, the private sector was increasing its revenues in broadcasting by 5 per cent. in real terms per annum. That was not envisaged at the time of the earlier review, and neither was the digital expansion.

It is suggested, particularly among those who now have cable or satellite television, that there is a disinclination to pay the licence fee. There is no evidence of a revolt against the licence fee. Collection rates are increasing. When the BBC took over collection of the licence fee in the early part of the last decade, the evasion rate was 10 ten cent; it is now down to about 5 per cent. Pannell Kerr Forster, the consultants to whom my hon. Friend the Minister referred, suggest that the overall cost of collection and evasion will be down to 9 per cent. by 2006–07, compared with 13.2 per cent. in 1995. The licence fee is a small sum compared with the £300 that the average digital or satellite subscriber pays for what are essentially sports and movies.

I want quickly to say—

It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 16(1).

Question negatived.