HL Deb 15 February 1971 vol 315 cc380-5

3.58 p.m.

LORD DENHAM

My Lords, this may be a convenient moment, with your Lordships' permission, to repeat a Statement being made in another place by my right honourable friend the Minister for Posts and Telecommunications. My right honourable friend's Statement is as follows:

"The Government have been concerned at the financial difficulties in which both broadcasting organisations have found themselves. In order to ensure that the B.B.C. and I.T.A. remain in a position to provide services of a high standard, the Government now propose changes in relation to the financing of both organisations.

"First, the finances of the B.B.C. It will be recalled that under regulations made in the last Parliament, the licence fee is due to be increased on April 1 next by 50 pence; that is, from £6 to £6.50 for monochrome television, and from £11 to £11.50 for colour television. The B.B.C. have represented to me that this increase of 50 pence will not suffice: and that they are faced with the prospect either of making severe cuts in their present services or of accumulating a serious deficit which, initially, the B.B.C. put at £70 million by March 31, 1975. They considered that licence fees of £7.50 and £12.50 would be needed to meet this situation.

"However, after a close review with the B.B.C. of their forecasts, the Government have concluded that the increase in the licence fee should be limited to £1, making it £7 for monochrome and £12 for colour television. This increase is designed to meet the foreseeable needs of the Corporation until March, 1975: the B.B.C. accept that this should be sufficient for this purpose. The new fees will take effect from July 1 next.

"The increase of 50 pence due on April 1 next will not now take effect. The necessary regulations will be laid as soon as possible.

"Second, the Independent Television Authority have represented to me that in the circumstances of a continuing decline in advertising revenue over the last year, together with rising costs, the levy at its present rate is seriously threatening the companies' ability to provide a television service of high quality. The Government have therefore decided, after a careful study of I.T.V.'s finances and of the recent report of the National Board for Prices and Income, that the rate of the levy should be changed so as to reduce the yield in a full levy year by an estimated £10 million. The Order to give effect to the new scale will be brought before Parliament as soon as possible.

"I am satisfied that these reductions will provide Independent Television with the resources that it needs. It is also designed to enable the companies to improve the quality of their programmes and those of Independent Television News. The Authority have assured me that it is their intention to use this opportunity to secure such an improvement. The Government regard the present reduction as a holding measure designed to stabilise I.T.V.'s financial position at least until July 31, 1972—that is, until the end of the next full levy year. In the meantime, the Government will review the basis on which the levy is charged."

My Lords, that is the end of the Statement.

BARONESS LLEWELYN-DAVIES OF HASTOE

My Lords, I should like to thank the noble Lord for repeating that Statement. It is important and complicated, and we shall need to look at it carefully. While this side of the House regrets the raising of the B.B.C. licence fees—particularly in regard to the effect on old people and the sick, who rely so greatly on the B.B.C.—we recognise that the B.B.C. have serious financial difficulties, and we are glad that these have been taken into account. I should like to ask the noble Lord whether he can assure us that this means that the B.B.C. can now confidently go ahead with their original plans for 40 local radio stations.

As to the levy, we on this side of the House warmly welcome the emphasis in the Statement that the money will be put to improving the quality of the programmes. I wonder whether the noble Lord would agree that the time has now come for a much more rational system to be devised for the levy—one that would satisfy the Government, the T.V. companies and public opinion. In this regard, particularly, would he not agree that there is a serious need to set up an expert Committee—on the lines of the Annan Committee set up by the previous Administration—to consider the whole future of broadcasting; and for the advice of that Committee to be taken by the Government?

LORD BEAUMONT OF WHITLEY

My Lords, I should like to join the noble Baroness in thanking the Minister for repeating the Statement, and say in general that we certainly welcome it. I have three questions. First, the Minister says that the B.B.C. accept that £7 and £12 should be sufficient for their needs. Why then did they apply for £7.50 and £12.50? Are the Government implying that the B.B.C.'s demands were excessive, or is the B.B.C.'s present agreement to the smaller sums merely because they have no alternative but to accept a 7 per cent. cut when it is presented to them by the Government?

Secondly, will the Government look again at the means of collecting the enormous sums of money in licence fees of which they are being cheated? Surely an efficient and businesslike Government should not put up with this evasion for as long as they have. Thirdly, I welcome the Statement that the Government will review the basis on which the levy is raised. I am surprised that they have not done it already in view of the immense length of time that this problem has been before us. Do I take it that the Government are seriously considering changing the levy from being one on revenue to one on profits? That would be much more sensible.

LORD SLATER

My Lords, in giving support to the noble Baroness's question in regard to the increase in the television licence fee, would not the noble Lord agree that the B.B.C. ought to continue with their investigation, so far as their operations are concerned, as to where they can cut back, instead of making applications to successive Governments for an increase in the licence fee? This is the easiest way out for any organisation that is able to make an application to a Government for an increase to meet its expenses. Could the noble Lord say how much of the £10 million levy is to be allocated to the Independent Television Authority to meet its purposes?

BARONESS WHITE

My Lords, is the noble Lord—

LORD DENHAM

My Lords, if the noble Baroness will forgive me, I have been asked rather a lot of questions, and I should like to answer them now. I am most grateful to the noble Baroness, Lady Llewelyn-Davies, the noble Lord, Lord Beaumont of Whitley, and the noble Lord, Lord Slater, for their limited welcome to this Statement. The noble Baroness asked whether the B.B.C. would be able to go ahead with extra local radio stations. I am afraid that I must ask her to await the White Paper which is coming out on the subject—

BARONESS LLEWELYN-DAVIES OF HASTOE

My Lords, may I interrupt the noble Lord? These are not extra stations; I was referring to the ones that were originally proposed.

LORD DENHAM

My Lords, I cannot go further on that point. The noble Baroness also asked whether a more rational system could be produced for calculating the levy. This was also a point made by the noble Lord, Lord Slater, and the noble Lord, Lord Beaumont of Whitley. I have to draw your Lordships' attention to the last sentence in the Statement, which was: In the meantime, the Government will review the basis on which the levy is charged. I am afraid that I cannot go farther than that. I am sure my right honourable friend will read with interest what your Lordships have said. The noble Lord, Lord Slater, asked what proportion of the £10 million reduction was going back to the I.T.A. as extra rent. The answer is £3,500,000. The noble Lord, Lord Beaumont of Whitley, asked how, if the B.B.C. originally requested £7.50 and £12.50, they were going to be able to manage on £7 and £12. When my right honourable friend reviewed the forecasts with the B.B.C., the revenue prospects seemed better than the B.B.C. had allowed for in their calculations, and the Corporation were able also to find ways of reducing their expenditure plans without detriment to their service.

That brings me to a suggestion made by the noble Lord, Lord Slater, that the B.B.C. should cut back in expenses. But this, of course, must be done only without reducing the quality of the programmes, which I think all your Lordships will agree must be kept at their present high level. As regards evasion of licence fees, a point raised by the noble Lord, Lord Beaumont of Whitley, the fact is that there has been a remarkable reduction in evasion since the Wireless Telegraphy Act 1967 came into force. Before that time there were more than 2 million evaders; now there are fewer than one million, and the total is decreasing the whole time.

BARONESS WHITE

My Lords, so far as the B.B.C. are concerned the noble Lord said that the arrangement was to last until 1975. May we be assured that, if necessary, when the White Paper has been published, this matter will nevertheless be open to possible review? Ls he aware that Mr. Ian Trethowan, for instance, on behalf of the B.B.C., has said that if there were to be competition of a certain kind with local sound radio it would inevitably increase the expenditure which the B.B.C. would be required to meet? We have not yet had in any detail the Government's proposals on local sound radio, and some of us are naturally anxious about the position of the B.B.C. should the proposed competition take a certain form.

LORD DENHAM

My Lords, my information is that the B.B.C. are confident that with a £7 fee they will be able, with careful management, to maintain their present range of services until at least 1975.

LORD LEATHERLAND

My Lords, does not the noble Lord think that both the B.B.C. and the I.T.V. will continue to find themselves in financial difficulties so long as they pay the present fantastically extravagant salaries to staff and to performers? Would he agree to ask both those corporations to set up inquiries into the extravagant nature of these items of expenditure?

LORD DENHAM

My Lords, I think that that is definitely a matter which must be left to both the corporations. Both of these changes will form the subject of Orders, one for Affirmative Resolution and the other subject to the Negative Resolution procedure. We can very properly go into the wider aspects of this subject when the Orders have be laid.

LORD HOY

My Lords, would the noble Lord confirm what he said: that out of the £10 million being granted to I.T.V., £3½ million will be paid to I.T.A. in radio rentals, so that in fact only £6½ million will be left—not £10 million—for the improvement of programmes? And can the noble Lord tell us what assurance he has that some part of the £6½ million will not be used merely to increase dividends?

LORD DENHAM

My Lords, the Independent Television Authority are confident that the substantial part of this money will be used for improving the programmes. A certain amount will of course go to offset losses.

LORD HOY

My Lords, may I then ask the noble Lord, if he is being a little generous—

LORD DENHAM

My Lords, if I may interrupt the noble Lord, I wonder whether we could discuss this matter on the Order when it cames before the House. I feel that this discussion is going a little too far.

LORD HOY

I will comply, my Lords; but the noble Lord, with respect to your Lordships' House, said that this £10 million was for the improvement of programmes. But we already know that £3½ million is going to the Authority in radio rentals. Perhaps when the noble Lord brings the Order forward he will also bring the figure of what the concession would cost if old-age pensioners had not to meet the new increase.