Before I call the Secretary of State for Digital, Culture Media and Sport, I want to point out that there were extensive stories in the media over the weekend about the future of the licence fee and the BBC’s funding arrangements. I also understand that the Secretary of State tweeted about the subject—either that or she lost her phone—stating:
“This licence fee announcement will be the last.”
These are very important matters that affect all our constituents, and this House quite rightly has a keen interest in them. Any statement on a substantial policy development should have been made to this House before being made to the media.
I am glad that we have a statement today, but it is not good enough for this House to come second to the media, especially on subjects such as this that are of interest to us all. When the House is sitting, important policy statements must be made here before being made to the media, as required by the Government’s ministerial code. In any event, I will always ensure that the House has the opportunity to scrutinise important policy announcements, and the Government may well find that such opportunities are more frequent and more extensive if announcements are made to the media first.
I have the greatest respect for the Department for Digital, Culture, Media and Sport and for the Secretary of State, but can we please ensure that such announcements are made here? If it was leaked and the Secretary of State felt that she had to respond, let us have a leak inquiry, because we have a major colander right across Government, and I do not want to see this happen again.
Thank you, Mr Speaker, and I offer you my personal apology. I actually refused every media invitation both yesterday and today.
Under article 43 of the BBC’s royal charter, I am required to determine a funding settlement for the level of the licence fee for a period of at least five years from 1 April 2022. I am legally required to make my determination as far in advance as possible.
I also highlight that, this year, the licence fee settlement has featured S4C prominently for the first time. In line with the recommendation from the independent review of S4C completed in 2018, the licence fee will be the sole source of public funding for S4C.
Negotiations began back in November 2020, and both I and my predecessor met the BBC on several occasions during this period to discuss this settlement. As part of those negotiations, the charter requires that I assess both the BBC’s commercial income and activities and the level of funding required so that the BBC can effectively fulfil its mission and public purposes. In addition, this Government set out our own relevant factors to consider during the charter review in 2015-16: evasion, commercial income, household growth and industry costs.
As the Prime Minister has said, the BBC is a great institution. It has a unique place in our cultural heritage. Beyond our shores, the BBC broadcasts our values and identities all over the world, reaching hundreds of millions every day. Likewise, the Welsh broadcaster S4C plays a unique and critical role in promoting the Welsh language, and in supporting our wider public service broadcasting landscape.
However, in reaching this settlement, I had to be realistic about the economic situation facing households up and down the country. The global cost of living is rising, and this Government are committed to supporting families as much as possible during these difficult times. Given that climate, we had to think very carefully about imposing any potential increase in the TV licence fee, particularly when any increase would expose families to the threat of bailiffs knocking on their door or criminal prosecution. When it comes to monthly bills, this is one of the few direct levers we have in our control as a Government. In the end, we simply could not justify putting extra pressure on the wallets of hard-working households.
I completely agree with you, Mr Speaker, that it is a disgrace that an announcement of this importance was not made to Parliament first. I also look forward to the leak inquiry that you mentioned.
May I take this opportunity to congratulate the Secretary of State on coming top of the teacher’s pet list? She was the first Cabinet Minister to tweet support for the Prime Minister; she was the first to volunteer to do a broadcast round; and now she has been the first to throw up a distraction and find someone else to blame for the Prime Minister’s disintegrating leadership: the BBC’s reporting, of course.
The licence fee deal must be fair to fee payers while ensuring that the BBC can do what it does best. There should be no blank cheques. However, the Government claim that this is all about the cost-of-living crisis. I mean, pull the other one! What is it about the £13.57 a month that marks it out for such immediate and special attention to address the cost of living, over the £1,200-a-year increase in energy and household bills or the £3,000-a-year tax increases that the Culture Secretary’s Government have imposed?
Is the licence fee really at the heart of the cost-of-living crisis, or is this really about the Government’s long-standing vendetta against the BBC? Now it is part of Operation Red Meat to save the Prime Minister from becoming dead meat. Apparently, negotiations with the BBC had not even been finalised when the Culture Secretary gave the details to a Sunday newspaper on the very weekend when the Prime Minister’s position was most in peril? I leave it to you, Mr Speaker, and others to judge the timing of that.
The Culture Secretary has proven today that Conservatives may know the price of the licence fee, but not its value. The last time they targeted it, the over-75s paid the price. What assessment has she made of the impact of the two-year freeze on BBC output and commissioning and on the wider creative industries more broadly? Is she happy to become the Secretary of State for repeats? [Interruption.] Oh, there’s more coming—there is lots of fun to be had with this, don’t worry.
Order. Quite rightly, I wanted silence for the Secretary of State. I expect the same respect to be given to the shadow Secretary of State. To those voices that I keep hearing, I know who is behind the mask. If you want to go out early, do not make me help you on your way.
I know that the hon. Member for Stoke-on-Trent North (Jonathan Gullis) is actually a big fan of mine but he is just trying to hide it behind his mask.
The impartiality of the BBC is crucial to trust in it. By explicitly linking charter renewal to the BBC’s editorial decisions, the Government sound more like a tinpot dictatorship that a healthy democracy. The BBC creates great quality, British-produced programming, from royal weddings to “Strictly Come Dancing” and great British drama, as well as championing new music. It is at the cutting edge of harnessing the digital age. Of course it needs to change with the times and review its output and reach, but it is a well-loved and trusted British treasure, and it is the envy of the world.
The Government are in trouble, however. The Prime Minister is casting around for people to blame, and the Culture Secretary has stepped up to provide some red meat. Well, it will not work. This is not how the future of our jewel in the crown and the cornerstone of our world-leading creative industries should be determined. She will have a fight on her hands if she wants to destroy it.
I think there were about 30 questions in that statement so I will address the top points. First, it is nobody’s intention to destroy the BBC. In fact, I completely agree with the hon. Lady that it is a beacon, but the BBC licence fee is not a small amount of money for families across the UK who are working hard but struggling to pay that bill, and who face bailiffs at their door or a magistrates court appearance. Who are we to say that it is a small amount of money? That is a disgrace. It is a significant sum, and it is also regressive. Whether getting by on minimum wage or on a multimillion-pound presenter’s salary, we fork out the same amount of money. That is not right. Only those who have not faced hard choices weekly on what they can and cannot afford for their families would claim that that was a small amount of money. As a point of principle, we cannot add to that bill at a time when every family faces pressure on their wallets.
Would the hon. Lady like to indicate from a sedentary position whether she supports freezing the licence fee for two years and helping those hard-pressed families? [Interruption.] Is that a no? The hon. Lady is shaking her head. She does not support freezing the licence fee to support those hard-pressed families who need every bit of help in the face of rising global energy costs and rising pressures from inflation. The hon. Lady has declined to help those hard-working families. What we are saying is that moving forward, we need to decide, discuss and debate. Bring it on—everybody in the House, let’s discuss what a BBC in 2027 will look like. It is not a policy; we are announcing a debate and a discussion. Let’s all get involved positively.
May I say to my right hon. Friend that I am not impressed by the process or the proposal, and I do not think it necessarily leads to progress, either? I would be grateful to know whether there was an assessment of alternatives, when they were put to Cabinet Sub-Committees, when the Cabinet considered the proposal and why it is that this is the one thing on which a Government Minister will claim that we cannot have any kind of increase because people are short of money.
Other things that the Government run are linked to the retail price index or the consumer prices index, and it seems to me that it would be better to have a discussion in the House on whether we should have a moderated increase during the remaining years of the charter. If she did not say that this is the last time that there will be a charter with a subscription, will she please put the options in front of the House for people like me who say that if the choice is between the United States or the state, public broadcasting on the BBC and Channel 4 is better than having everything go to some of the big media people around the world who would not maintain the kind of BBC that we have had for the past 100 years?
The decision on what the future funding model looks like is for discussion. Some of us may not even be here by the time 2028 arrives, but it is up for discussion, and that is what we need to decide. I have the greatest respect for the Father of the House—he knows that; I have known him for 20 years—but I honestly cannot agree that the BBC can just continue to ask for more money from the British public year after year. I do not agree with that premise. Do not be under any illusions: the BBC will continue to receive billions of pounds, even under this settlement. It will get £23 billion of public money over the course of the charter to 2027. We cannot justify, in the face of rising inflationary pressures and increasing global energy prices, going to the British public and say, “Pay more. If you don’t, a bailiff will be at your door.”
I thank the Secretary of State for an advance copy of the statement, not that we needed it; she shared her thoughts with Twitter. Plus ça change. We all know that the timing is to distract from the Prime Minister. The Secretary of State claims that the move will protect pensioners from court cases, but that argument is disingenuous nonsense. It was this Conservative Government who abolished automatic free television licences for the over-75s. If pensioners are struggling with the BBC fee rate of 43p a day, imagine how they will cope with the cost of a Netflix or Sky subscription model. Everyone knows it means less programming at a greater cost.
The Secretary of State has spoken about exploring the options for the BBC, but in reality I suspect her mind is well made up. She let that slip in the Select Committee when she said to me:
“How do I even know if the BBC is going to be going in 10 years?”
Some custodian of public service broadcasting. The hostility towards the BBC and its future does not stem from a desire to protect pensioners, but rather from a visceral loathing of the Prime Minister’s critics. The Tory right hates the BBC almost as much as it hates Channel 4. That is why the Culture Secretary, a doting prime ministerial loyalist, is so determined to destroy both. She does not want to see Krishnan Guru-Murthy lead presenter of Channel 4 News, or Nick Robinson—a former chair of the Young Conservatives no less, and now lead presenter on the “Today” programme—pin down the Prime Minister or his slippery apologists. She knows, does she not, that the Tory right wants the broadcast media to be as sycophantic as most of the print press, offering fawning adulation to their leader. If the BBC is felled, and Channel 4 privatised, free speech will be the victim, and we know—do we not, Mr Speaker?—that the result will be yet more obsequious, unquestioning news.
I have no idea how anyone could make the leap from “let’s have a debate and a discussion in the House about how the future funding looks” to “privatisation”. It’s just—I have no further comment.
Julian Knight (Solihull) (Con)
Speaking strictly personally, I welcome the freeze, and the overt commitment to wean the BBC off the licence fee. As Lord Grade said on the “Today” programme this morning, nearly £160 is nothing to Gary Lineker, but it is a lot to our constituents. I and the House would like more details please about whether the licence fee will stop in 2028, or be phased out. The latter, in my view, gives the best chance of preserving the BBC’s status in our national culture. How will moving to alternative funding models work given, first of all, the paucity of broadband coverage, with old technology such as Freeview being embedded in the system? Will the central Government funding that has been mooted stand up legally, and also measure the key issue of impartiality?
I thank my hon. Friend for his comments and support on the freeze, but I take issue with the point about paucity of broadband. Some 97% of homes in the UK have superfast broadband—[Interruption.] As I said, 97% of homes have superfast broadband, and we are rolling out gigabit. As I said in my statement, someone in a house in Cumbria can download five videos—five movies—in five different rooms in the house. We do not have a paucity. On whether the licence fee will be phased out and what a future funding model will look like, those discussions and analyses have not even begun, but all Members of the House should, and will, be part of those discussions. I imagine that the Digital, Culture, Media and Sport Committee will be doing very important work on the issue moving forward, in terms of establishing a future funding model, and that work will continue in the future.
Will the Secretary of State say what impact assessment she has done of the impact that the change will have on households if fees were increased? What will be the impact on services provided by the BBC as a consequence of these freezes to its income, on top of the 31% that it has had cut from its income over the past 10 years? How will that affect the services provided by the BBC, and how will they survive her plans for the BBC?
Both I and my predecessor have been negotiating with the BBC for a considerable period, and the BBC will be meeting its mission and core purpose. The most important impact assessment is that fewer families will end up in a magistrates court.
Like many of the best things in this country, the BBC licence fee may not work in theory but works really well in practice, as shown by very low levels of evasion. There are, of course, many alternative ways of funding it, but as the DCMS Committee, which my right hon. Friend referred to, concluded last year, the Government either need to
“come out with a strong alternative to the BBC licence fee that it can put to Parliament, or strongly support the current model for at least the next Charter period (2028-2038).”
Does the Secretary of State have that alternative on offer?
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Every organisation around the world is facing the challenge of inflation. I simply do not believe that those responsible for setting household bills should instinctively reach into the pockets of families across the country for just a little more every year to cover those costs. Today, I am announcing that the licence fee will be frozen for the next two years, and will rise in line with inflation for the following four years.
The BBC wanted the fee to rise to over £180 by the end of the settlement. Instead, it will remain fixed at £159 until April 2024. That is more money in the pockets of pensioners and of families who are struggling to make ends meet. We are supporting households when they need that support the most. This settlement sends an important message about keeping costs down while also giving the BBC what it needs to deliver on its remit. The approach to funding will be the same for the BBC and for S4C. However, I can announce that S4C will receive an additional £7.5 million funding per annum from 2022, to support the development of its digital offering. That is a 9% increase, following five years of frozen funding.
We believe this is a fair settlement for the BBC; it is a fair settlement for S4C and, most importantly, it is a fair settlement for licence fee payers all across the United Kingdom. Let us not forget that the BBC will continue to receive billions in annual public funding, allowing it to deliver its mission and public purposes and to continue doing what it does best.
To support the BBC even further in what is a fast-changing broadcasting landscape, the Government will more than double the borrowing limit of the BBC’s commercial arm to £750 million. That will enable the BBC to access private finance as it pursues an ambitious commercial growth strategy, boosting investment in the creative economy across the UK. But as Tim Davie said in his first speech as director-general of the corporation, the BBC must be a “simpler, leaner organisation” that offers “better value” to licence fee payers. We agree with that. Ultimately, this settlement strikes the right balance between protecting households and allowing broadcasters to deliver their vital public responsibilities, while encouraging them to make further savings and efficiencies.
The licence fee settlement is only one step in our road map for reform of the BBC. In the last few months, I have made it clear that the BBC needs to address issues around impartiality and groupthink. Those problems were highlighted definitively by the recent Serota review. The BBC’s own leadership rightly recognised those findings in full and committed to deliver all the review’s recommendations in its 10 point action plan on impartiality and editorial standards. I have had constructive discussions with the BBC about those issues in recent months. The BBC now needs to put those words into action. It needs to convince the British public that those changes are being made, and to provide regular and transparent accounts of its progress.
We will shortly begin the mid-term review of the BBC’s charter, which will consider the overall governance and regulation of the BBC. A key part of that review will look at whether the BBC’s action plan on impartiality has, in fact, materially contributed to improving the organisation’s internal governance.
It is also time to look further into the future. As any serious commentator will tell you, Mr Speaker, the broadcasting landscape has changed beyond all recognition over the past decade. We are living in a world of streaming giants, on demand, pay per view and smart TVs. Technology is changing everything. Some 97% of homes already have superfast broadband. A family in Cumbria can stream five different movies in five different rooms in their house at any one time, and our gigabit roll-out is transforming those networks even further. More than 65% of UK households now have access to the fastest connection on the planet.
As the tech has changed, so have audience habits, particularly among younger viewers, so it is time to begin asking those really serious questions about the long-term funding model of the BBC and whether a mandatory licence fee with criminal penalties for individual households is still appropriate. As we have said before, we will therefore undertake a review of the overall licence fee model. Those discussions will begin shortly.
The BBC has been entertaining and informing us for 100 years. I want it to continue to thrive and be a global beacon in the UK and in the decades to come, but this is 2022, not 1922. We need a BBC that is forward-looking and ready to meet the challenges of modern broadcasting; a BBC that can continue to engage the British public and that commands support from across the breadth of the UK, not just the London bubble; a BBC that can thrive alongside Netflix, Amazon Prime and all its other challengers that attract younger viewers. The licence fee settlement represents a significant step in that journey and in our wider reform of the BBC.
I look forward to continuing to work with the BBC and others across the industry over the coming years to secure the future of these vital British services. I commend this statement to the House.
This is not enough red meat for the Culture Secretary. She will not stop until her cultural vandalism has destroyed everything that is great about Britain. Vandalism is exactly what it is to tweet on a Sunday—with no notice, discussion or thought—the end to the BBC’s unique funding, without any clue about what will replace it.
Perhaps the Secretary of State will explain how the BBC will continue valued services that just would not be commercially viable. First, how can it continue to support local journalism where so many have recently failed? In many areas, the BBC is the last local news desk standing.
Secondly, how would a commercial-only BBC be able to play such a crucial role, as the BBC has, in levelling up and growing the creative industries across our regions and nations, from Cardiff to Salford and elsewhere? The Government are silent on that one. I support the increased funding for S4C, but the Government claim to support the Union, so what assurance can the Secretary of State provide for the continuation of distinct broadcasting in Wales, Scotland and Northern Ireland when there is no licence fee?
Thirdly, would the Secretary of State’s cut-back BBC be able to continue with the world service and its global soft power, which her Government’s review described only last year as
“the most trusted broadcaster worldwide”?
Finally, what would happen to BBC Learning, BBC Bitesize, and children’s educational programming, which, frankly, did a much better job than the Government, who could not even provide iPads, in getting high-quality education into children’s homes during lockdown?
The impartiality of the BBC is crucial to trust in it. By explicitly linking charter renewal to the BBC’s editorial—[Interruption.]