TELEVISION LICENCE FEES (Hansard, 2 March 1954)

§ THE POSTMASTER GENERAL (EARL DE LA WARR)
My Lords, with your Lordships' permission, I should like to make an announcement on the subject of television licence fees. As your Lordships may know, the present broadcast licence fees were fixed in 1946, but since then the B.B.C.'s costs have risen continuously, and they are still rising. The Corporation drew attention to their financial position in their last annual report, and they pointed out that they were working at a heavy loss, which they were financing out of reserves. Since that report was issued, the Government have approved extension of the Corporation's television system by fourteen additional 8 stations and will also shortly authorise the Corporation to make a start on providing V.H.F. stations to improve their sound services. With these additional responsibilities, the Corporation's reserves will be exhausted in a year or so, and the Government have decided that, if proper provision is to be made for the maintenance and development of the B.B.C.'s services, it is no longer possible to avoid an increase in the television licence fee. They therefore propose to increase this fee, which, of course, includes that for sound, from £2 to £3 a year from June 1 next. The licence fee for sound only will remain unchanged at £1 a year.
The Government have carefully reviewed the question of distribution of broadcasting licence revenue. They have decided, having regard to budgetary needs and the freedom of broadcasting from entertainments duty, that the licence revenue must not only cover Post Office costs for collecting fees and dealing with interference, but also continue to make a contribution to the Exchequer. The Government have, however, agreed that this contribution to the Exchequer should be stabilised for the next three years at the present level of £2 million a year, instead of rising in proportion to the licence revenue. I estimate that if the present arrangement had continued the contribution to the Exchequer by 1956–57 would have amounted to just over £3 million a year. By stabilising it at £2 million, it would be possible, without reducing the amount that would otherwise accrue to the B.B.C., to provide £750,000 a year for the new competitive television authority from the date it starts broadcasting.
This arrangement is designed to meet a suggestion strongly urged in the debates at the end of last year, that the new authority should have at its disposal certain funds independent of revenue from advertisements. A proposal on these lines is being included in the Television Bill which will shortly be submitted to Parliament. Under these arrangements, I estimate that the B.B.C. share of the licence revenue will be increased from £12.6 million in the present year to £17 million in 1954–55 and to up to £20 million in 1956–57. This increase is due, of course, to the steady increase that is taking place in the number of licences issued.

VISCOUNT ALEXANDER OF HILLS-BOROUGH
My Lords, we are grateful for the fact that we have been given an opportunity of looking at the statement which the noble Earl has made. We desire to reserve our comments on the details for any subsequent discussion which may arise, but it must not be presumed that, because we make no comment to-day, we shall not later have something of strength to say, and some criticisms to make, on some of the proposals. The noble Earl's statement certainly could not detract in any possible way from the attitude we adopted with regard to the whole question of competitive television. When we come to deal with the proposals in more detail, I am sure that there will be in the minds of many of my noble colleagues, at least on this side of the House, a good deal of questioning about the action which the Government propose to take.

§ VISCOUNT WAVERLEY
My Lords. whilst it would no doubt be perfectly natural that noble Lords who, like myself. opposed the proposals of Her Majesty's Government in regard to commercial television when the matter was debated in this House a few weeks ago should wish to suspend judgment until they have been able to consider the Government's amended proposals as a whole, I think it only right, speaking entirely for myself, to say that, in so far as the Government have decided, apparently, that the proposed new public corporation should have an independent revenue, of a substantial amount, I would cordially welcome that as at any rate a step in the right direction.

§ THE EARL OF LISTOWEL
My Lords, I should like to ask the noble Earl two questions arising out of his statement. The first is this. In view of the fact that he is transferring this sum of £750,000 a year from the viewer to the competitive authority, can he say whether there will be any direct public control over the policy of this company to ensure that the money is spent to the best advantage of the present and future viewers? My second question is this. The noble Earl does not refer in his statement to the financing—at least, he does not refer fully to it—of the public corporation which will own and operate the stations which will he required for commercial television. Can the noble Earl say whether 10 the whole of these moneys will come out of this extra charge, or whether there will be a further charge on public funds for this purpose?

§ LORD BALFOUR OF INCHRYE
My Lords, may I ask the Postmaster General this question? Arising out of his statement that the B.B.C. television revenue will rise steeply over the next two years, is this increase coupled with any assurance from the B.B.C. authorities that the quality, if not the quantity, of the programmes will improve?—because there is a general feeling that the quality of the programmes is deteriorating at the present time.

§ EARL DE LA WARR
My Lords, the noble Earl, Lord Listowel, has asked me. a question about the control of these funds to be put in the hands not of the, company but of the public corporation., because this will be a public corporation. Members will be appointed by Her Majesty's Government, and naturally, since the funds are coming from public sources, proper provision will be made for the control of their use. The noble Earl's second point was whether the capital required for the erection of the new transmitting stations will be provided out of this money. The answer is, No. These arrangements are made, in order to meet the specific point that was raised by the noble Viscount, Lord Waverley, the most reverend Primate the Lord Archbishop of Canterbury and other Members of this House. An appeal was made to the Government that this scheme should not be 100 per cent. dependent for its revenue on advertisements. What I refer to is a purely revenue provision. With regard to the quality of the B.B.C. programmes, the noble Lord, Lord Balfour of Inchrye, will realise that the Government have no control whatsoever—rightly I think he would agree, and I think the House would agree—over the programmes or the day-to-day working of the B.B.C. I am confident, however, that the B.B.C., having this extra money, will wish to use it for producing the best possible programmes they can.

§ THE EARL OF LISTOWEL
My Lords, I should like to ask a further supplementary. The noble Earl has said that the proceeds of this increased fee will not be used for the capital cost of erecting these transmitting stations. Can he tell us how the capital cost will be met. 11 Will it mean a loan from the Treasury or a further expenditure on the part of the B.B.C., who have, as a rule, to finance their capital expenditures out of fees, for which no provision has yet been made?

§ EARL DE LA WARR
My Lords, the Television Bill will be published in the measurable future, and I think that perhaps it would be best to wait and see what are the provisions in the Bill.