Television Licence Fees (Hansard, 1 December 1981)

§ Lord Belstead
My Lords, with the leave of the House I shall now repeat a Statement being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"Mr. Speaker, I will with permission make a Statement about the television licence fees. As honourable and right honourable Members will be aware, the BBC has made an application for an increase in the colour licence fee to about £50 to last for three years. In considering that application it is my duty to ensure that the corporation's home services are adequately funded, and at the same time to have regard to what is fair to the licence fee payer.
"I have therefore decided, and have today laid the necessary regulations, to increase the fee for a colour television licence from £34 to £46 and for a monochrome licence from £12 to £15. The new fees come into effect at midnight tonight. It is my intention that this level of fees should last for at least three years and I shall he making it clear to the BBC that I shall expect it to pay off its current deficit and live within the revenue which these new levels of fees will produce until the end of the 1984–85 financial year.
"My purpose in deciding on an increase to last for at least three years is to make the licence fee system work as it should.
"It is also my aim to fix the level of fees for a period which will enable the corporation to plan ahead more effectively. A three-year increase will require considerable financial discipline on the part of the corporation; and the extent to which it will be able to pursue its plans for new or improved services will depend crucially on its ability to keep down its costs, particularly labour costs.
"In this context the board of governors has announced that it has commissioned a wide-ranging review of the systems by which the BBC monitors its efficiency. I welcome this decision, which indicates how seriously the board of governors takes its responsibility for ensuring that the licence fee paying public get an efficient service and value for money.
947 "I recognise that it is not easy for some people to find the licence fee in a single lump sum each year. I therefore intend to provide a range of means to enable members of the public who wish to do so, to spread the cost of the licence fee over the year. To supplement the successful and widely-used television saving stamps scheme. I have approved plans for the introduction of payments by instalments. We propose in the course of next summer to start accepting monthly instalments towards the following year's licence fee by means of direct debit from bank accounts, and to introduce at least a pilot scheme for payment by credit cards. This will be followed, I hope by the summer of 1983, by a scheme for the payment of monthly cash instalments over post office counters towards the following year's fee.
"Mr. Speaker, I believe that the three-year increases which I have today announced, coupled with greater flexibility in the methods of payment, will do much to strengthen the licence fee system and preserve the independence of the BBC".
My Lords, that concludes the Statement.

§ Lord Ponsonby of Shulbrede
My Lords, I thank the noble Lord for repeating the Statement. We on this side on the House believe that the BBC should be financed by a proper licence fee to ensure its independence and maintenance of proper standards. However, we are also concerned that the licence fees should be raised and that proper provision should be made for those who find television indispensable to any enjoyment of life, as indeed the Minister recognises in his Statement. We are particularly concerned about the old and the disabled. The increase of approximately 35 per cent. over a three-year period suggests that the Government do not see inflation falling into single figures during the remainder of their period of office. The increase will not reflect itself in the retail price index, on which old-age pensions are based, until next year's increase. So old-age pensioners will immediately find themselves in difficulty in finding the full amount of the new licence fee.
The Government's proposals for the payment of fees by instalments are inadequate. Both of the schemes outlined—the existing television savings stamp scheme and the proposed instalments scheme—involve paying money in advance for the licence and no interest or concession is proposed to be made for this money which the Government will hold in their kitty prior to the payment of the fee. Equally, the holder of the licence will not receive any discount for making payment earlier. I wonder whether the Government could consider a scheme for paying licence fees in arrears, as, of course, we currently enjoy with regard to the payment of rates. I should have thought that a deferred payment scheme would be of great benefit. As to the proposal for payment of the licence fee by credit cards, I shall leave others to comment on that.
The other matter at which I think the Government should take a look is the unfairness in the current scheme in that at present the same licence fee is paid by a large hotel, with 500 or maybe more television sets throughout the hotel, as is paid by an individual 948 for a single set. I should have thought that this was an area at which the Government should look; indeed, if they could find a way of raising additional revenue in this direction, it might be possible, with the extra income generated, to give some concessions to old-age pensioners.
Until these matters can be resolved, we must oppose the increase in the licence fees. However, we should like to welcome the review instigated by the board of governers. Any large organisation needs to review its activities periodically and we welcome the fact that the governors have set this in motion.

Lord Winstanley
My Lords, I join with the noble Lord, Lord Ponsonby of Shulbrede, in thanking the Minister for repeating this important Statement. Arising from it I should like to ask the noble Lord, Lord Belstead, two questions, one specific and one more general. First, will he look again at the quite extraordinary anomalies which arise from the 5p concessionary television licence fee arrangement for certain elderly people, though not for a great many other elderly people? Secondly, and more generally, does the noble Lord agree that the whole purpose of the BBC Charter was to put the control of public broadcasting at a distance from Parliament? Does the noble Lord agree that for the BBC to have to come, cap in hand, to Parliament for an increase in the licence fee every three years really makes the BBC dangerously dependent on the Government of the day?
Is it recollected that when I raised this matter before in your Lordships' House, on 11th June 1980 (in the course of a brief debate initiated by the noble Lord, Lord Hill of Luton), the noble Lord, Lord Belstead, told us that discussions were taking place between the Home Office and the BBC on alternative methods for the future financing of public service broadcasting? Does this Statement mean that those discussions have borne fruit, or are those discussions continuing?

§ Lord Belstead
My Lords, I am grateful to both noble Lords for their questions and replies. Although I recognise absolutely that the noble Lord, Lord Ponsonby, accurately put his finger on many of the difficulties which are attendant in fixing a licence fee which is both fair to the licence fee payer and also meets the needs of the BBC—the two main factors which my right honourable friend the Home Secretary has to decide upon—he was a little short on ideas as to how to help the old and the disabled, the first two sets of people whom he identified. The difficulty is that if those people were to be given absolute exemption, or even a considerable exemption, from the licence fee—something which no doubt in our hearts we should all like to see—it would immediately mean that for everyone else, whatever their needs, there would be a very much increased licence fee. If, for instance, there were a completely free retirement pension licence at the moment, it would immediately mean a £70 colour licence fee, so we assess, and a £25 monochrome licence fee. The only other alternative to bring such help to the people whom the noble Lord identifies is, of course, to raise the money 949 by taxation. The difficulty there is that you undermine the independence which, in fact, the licence fee brings to the BBC.
To answer the last point made by the noble Lord, Lord Winstanley, at this moment I think that the introduction of a three-year licence fee will bring to the corporation a certainty which the governors will, I hope, recognise, and which I believe they will welcome. The noble Lord, Lord Ponsonby, spoke about the uprating of pensions, Of course, the Government are committed to compensate pensioners for price increases over the lifetime of this Parliament, and since November 1978 pensions have kept up with the retail price index. Therefore, the Government have honoured their commitment. The increase in the licence fee goes into the retail price index and any shortfall on last month's uprating will be made good next year.
The noble Lord felt that the part of the Statement about instalments was inadequate. I should just point out to the House that the best known—in fact, at the moment the only—instalment system, which is the 50p savings stamp, astonishingly accounts now for one-fifth of all the licence fee revenue received each year. I do not think that the people who are buying savings stamps would agree with the noble Lord, Lord Ponsonby, that that is an inadequate system. Again, I hope and believe that when people read and think about the Statement they will agree that my right honourable friend is making sensible and compassionate provision for the future in the other measures which he has said he will bring forward.
The noble Lord mentioned the specific subject of hotels. The Administration of the Broadcasting Receiving Licence Working Party, which of course comprises both the BBC and the Home Office, has advised my right honourable friend that it is technically feasible for hotels to be licensed in respect of each guest room in which a television set is installed. My right honourable friend accepts that there are anomalies in the present arrangement, but he is still considering whether it will prove practical or desirable to implement any changes.
Finally, I come to the specific point which the noble Lord, Lord Winstanley, put to me about the 5p licence for old peoples' homes. My right honourable friend accepts that there is indeed an anomaly here. The Annan Committee recommended that it was a form of concession which ought to be phased out. My right honourable friend would not he prepared to extend the anomaly, but he believes that it would be harsh to withdraw it.