That this House has considered the future funding of the BBC
It is a real pleasure to serve under your chairmanship, Mr Mundell, and to debate a subject that I seem to have spent a large part of my parliamentary career discussing, but which has become extremely appropriate to examine once again today. The Minister, who I have spent a lot of time debating over the last few years, last night replied to an Adjournment debate touching on the overall process under which the BBC charter will be renewed, but as she said last night—and she is completely right—the funding of the BBC is a central part of the charter renewal process, and what the BBC does will to some extent be affected by the money available to it and vice versa. I do think it is right that we look at the matter.
I had responsibility less than 10 years ago for drawing up the charter under which the BBC currently operates. That was in 2015-16—only seven or eight years ago—but the changes that have taken place in the broadcasting landscape since are huge and continue to accelerate. At the time of the last charter, streaming did exist, but it was only a couple of years after Netflix had launched in this country, and there were still only one or two other streamers available. Since then, we have seen an explosion, with an enormous number of different streaming platforms that are investing heavily in extremely good content. Most people now enjoy streamed services as well as traditional broadcast, and subscribe, quite often, to several streamers.
Despite the huge range of content that is now available, in my view—and I think the Government take the same view—public service broadcasting is still absolutely necessary, particularly in the core public service content areas of news and current affairs, which are not really provided by the streaming services. I continue to believe that there is a very important role for the BBC in this country’s broadcasting landscape, but my concern is that the traditional method by which the BBC is funded—through the licence fee—is going to become steadily harder to sustain.
Even seven or eight years ago, we saw the beginning of the challenges. At that time, at the request of the BBC, we closed the iPlayer loophole, by which people were viewing BBC content on the iPlayer but not paying the licence fee. We said then, and it remains the case now, that if people watch live television in any form and if they use the iPlayer, they are required to have a TV licence. Other drivers have increased revenue for the BBC over the years, like the growth of single-parent households and immigration levels, meaning that more licences have been issued—but that trend has now reversed, despite the closing of the loophole; each year, fewer people are buying a television licence. In the course of the last year, the number of licences held has fallen by 500,000, and that movement is likely to continue.
My right hon. Friend will recognise, as I do, that one big challenge in relation to the BBC is that many of those who are most opposed to its further commercialisation are the other public service broadcasters, who worry about disruption to their own revenue streams, particularly in relation to advertising. That is why it is tricky to come up with an alternative to the licence fee.
My hon. Friend is completely right. She and I both had the pleasure of serving as Minister; I was delighted to stand in for her while she was on maternity leave, so we have both looked at the issue for some time. We have to look at the overall television landscape. If we allow advertising, or encourage the BBC to compete, it is likely to have an impact on the commercial sector, which completely depends on advertising revenue. Our traditional advertising-funded PSBs—ITV, Channel 4, Channel 5—are already finding it difficult competing in a world with well-resourced streamers, and this would make it worse.
One of the weaknesses of the streaming companies is regional and national news coverage and programming. For BBC Scotland, at the moment 99% of the licence fee paid by Scots is invested in Scotland. That is a really important and positive aspect of the current licence fee arrangements that must be protected as we move forward.
I have sympathy with the hon. Gentleman. It is the case that the BBC provides more of the core public service content than the other PSBs—the others do, but not to the same extent. National and regional coverage of the type he has described is absolutely a core part of that. I think that needs to continue, and if the licence fee is not able to fund it, there is a case for it moving across to general taxation. There is a world in which the core PSB content is funded out of taxation, and then people could choose to subscribe to the content that is more entertainment based—a subscription model—but it is too early to say.
These are the kinds of discussions that are fundamental to the next charter. I am delighted that the Government are now beginning to consider that. My purpose today is to flag up the extent to which the existing model cannot be sustained, and to begin having the debate.
Following the recent developments in Syria, I understand that the BBC World Service will offer enhanced services to audiences across Syria on broadcast medium wave and FM. Would the right hon. Member congratulate the World Service on stepping in to respond to an emergency situation with the utmost professionalism? Does that not underline his point as to why it should be funded from the Foreign Office?
I agree. Yesterday, the Culture, Media and Sport Committee took evidence from the director general and the deputy director for news, Jonathan Munro, on this subject. He talked about the way the World Service provides its core language services and can also provide additional coverage quickly. Syria is a good example of where it is doing that. That is an extremely important role for the BBC, and one that I do not think could be funded in any way other than through public money. The BBC make a good case as to why the licence fee may no longer be appropriate, which we also need to consider.
There are a large number of Members present in the Chamber, so I do not want to take up any more time. I hope that I have raised one or two questions that we will need to debate thoroughly over the course of the couple of years that lie ahead for the charter renewal.
I remind Members that they should bob if they wish to be called. I do not intend to set a time limit, but if Members could stick to five or six minutes, everybody should get to speak.
It is a pleasure to serve under your chairmanship, Mr Mundell. I refer colleagues to my entry in the Register of Members’ Financial Interests; I am the chair of the BBC all-party parliamentary group, a recipient of hospitality and a former employee of Prospect and Bectu unions, which represent workers at the BBC.
I thank the right hon. Member for Maldon (Sir John Whittingdale) for securing this debate on such an important issue, not only for the BBC as an organisation, but for all of us who benefit from its mission to inform, educate and entertain. When we discuss the future funding of the BBC, we must understand the need to safeguard its unique role with a funding model that enables it to continue to be independent and universal and to provide the unique content that its audience expects. With BBC iPlayer having been the fastest-growing streaming service this year and with 95% of UK adults using BBC services every month—whether that is its nine TV channels, its 16 radio stations, its streaming apps or the World Service —we must recognise that the demand for the BBC’s services and content reflects what a vital source of information and entertainment it is for our constituents and for people accessing World Service content around the world.
It is also vital to our democracy. In a landscape of bias, spin, the common approach of “Don’t let facts get in the way of a good story” and the rise of unverified content and disinformation masquerading as news on social media, the BBC’s championing of impartial and fearless reporting at home and abroad and its operating without pandering to political or commercial interests is becoming more vital, not less. I am sure that colleagues of all political persuasions agree with that.
The financial challenges for the BBC are stark; when we debate future funding, we must recognise that. It has seen a 30% real-terms decrease in funding for UK services in the past decade, exacerbated by previous decisions around the licence fee and, of course, the hyperinflation in the film and TV industries in recent years. It has also taken on additional financial responsibilities in the past decade, including licences for the over-75s on pension credit. Although I know that the BBC welcomes the new Government’s funding uplift for the World Service in our recent Budget, two thirds of its funding still comes from the licence fee. I know that the licence fee will be in place until at least 2027-28, but given the challenges that have been outlined, this debate on its future funding is timely.
My area has excellent regional news coverage, including BBC Three Counties Radio and “Look East”. However, back in 2022, a decision was taken that has meant that my regional politics programme is now recorded more than 100 miles away from my constituency. Given that all news is local, would my hon. Friend care to comment on whether that is the right starting point for regional news coverage, or whether we might want to do something more local and perhaps better?
I agree that it is a shame that some regional political and news programming is being filmed further away than before. Of course, I am not able to answer directly for those decisions by the BBC, but the 30% funding decrease that I mentioned may explain the reasoning behind them. It is a shame that we find ourselves in this position; it underlines the importance of finding a funding settlement and model that will allow regional programming and truly local programming to be safeguarded as much as possible.
As I was saying, the BBC provides fearless coverage in our neighbourhoods—sometimes a little further away than previously—and in Westminster and abroad. It invests in creative talent and programming across every corner of our great country. That is something worth fighting for in a world of media fragmentation. I hope all colleagues will support my push for a future funding model that ensures that the BBC lasts for another century.
It is a pleasure to serve under your chairmanship, Mr Mundell. I thank the right hon. Member for Maldon (Sir John Whittingdale) for securing this very important debate and for his thoughtful comments. I should make colleagues aware that I am a co-chair of the National Union of Journalists’ parliamentary group.
The BBC has been at the heart of the UK’s national life for over 100 years, and it is at the heart of my constituency of Salford. Its mission to inform, educate and entertain is underpinned by its funding model, which ensures that it is universal, independent and never at the whim of vested business interests or advertisers. It is there for the people of Britain, not for profit. It has a more important function than just entertaining us; it reaches out to every community in the UK and gives them a voice. It is an intrinsic part of political accountability, holding local and national politicians to account. It strives to provide content in the public interest, not just sensational headlines that offer the best clickbait. From educational resources produced by the BBC that are relied on in schools to fact-checking services that cut through misinformation, local radio and local democracy journalism, it is clear that the BBC’s impact on our communities is profound.
Does the hon. Lady agree that the BBC’s unique currency is trust, and that one of the challenges in recent years is that people have lost faith in the BBC as an organisation that produces impartial news? One challenge that I saw in the last Parliament was that the BBC was reducing local and regional journalism, even while protecting some very large salaries for its biggest stars. That is one of the reasons why people are losing faith that the BBC is investing in journalism in the way that it should and in the way that people expect from a public service broadcaster.
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If we look at the public’s viewing behaviour, we find that less and less traditional broadcast television is being watched, particularly by young people. Most 16 to 24-year-olds now do not watch any live broadcasts each week—10 years ago, 80% did—and broadcast channels take up only 57% of all viewing, against TikTok, YouTube and all the other streaming services. People are genuinely saying, “We choose to subscribe and pay for Netflix, Amazon, Discovery, Apple and all the other streamers. We don’t see why, on top of that, we should have to pay for a TV licence when we don’t watch the BBC.”
The TV licence does not just cover the BBC; it covers all live television viewing. Nevertheless, a lot of people can watch on catch-up the programmes that are available on the other public service channels. Genuinely, people are not required under the law to have a TV licence, and more and more are choosing not to have one. That will pose an increasing problem for the BBC.
We have seen complaints from the BBC about the fact that the revenue available to it has been cut in recent years—like every other public service, it has been required to find efficiencies—but the director general has talked about the crisis that has been created by the lack of money and his inability to invest to compete. That situation is not likely to get any better if we continue with the licence fee; if anything, it will become steadily worse.
I remember chairing a Select Committee—I think it was about 15 years ago—that looked at the funding of the BBC and the licence fee. At the time, we concluded that although the licence fee had many drawbacks, it was still probably the best available option. It is a regressive tax, it is criminally enforced and it is the case that among the people convicted of failing to pay, a large proportion are women. Those are all drawbacks of the licence fee, but at that time the alternatives did not seem possible. Certainly, advertising is not likely to be beneficial to the BBC or to the whole commercial television sector; there is not that much advertising revenue to go round, and if there were advertising on the BBC, it would result in a reduction for everybody else.
There is an alternative option. A lot of people have said, “Why can’t the BBC charge a subscription, so people can choose whether or not to pay it?” The reason is simple. At the moment, most people still access the BBC and other traditional broadcasters through digital terrestrial television, or Freeview, and there is no mechanism for conditional access—in other words, the choice to receive a particular channel—with Freeview. At the launch of Freeview, the BBC was very keen that that should be the case, because it was worried about subscription, but it means that while a significant proportion of the population continue to rely on Freeview, we cannot move to subscription. But that will change.
Both the last Government and this Government have said that Freeview will be maintained until 2034; it may well be that we need to maintain it for a bit longer. However, the transition to IPTV or internet protocol television—the provision of television over the internet—will steadily increase, and if people have smart TVs, which allow them to choose whether to subscribe to the streamers, it means they could also have the choice of whether to subscribe to the BBC. I think that that option is likely to become more attractive, although it will only really become viable when we reach the point where almost the entire population have IPTV, but for the reasons I have set out, it is important that we start to talk about it now.
The last Government had future funding of the BBC panel, which this Government have not continued. On the other hand, I know that the Minister has set up a future of TV distribution panel, which does not look vastly different. Anyway, I am glad that the Government continue to look at the issue, which is why I think this is the right time to have this debate.
There are certain things that will never be possible to have on a subscription basis, including BBC Radio—I do not think there is any way in which there can be conditional access on radio—and the World Service. I sit on the Foreign Affairs Committee and we are currently examining the World Service, which is of huge benefit to this country. It could not be provided on a subscription basis, as the people it is aimed at are certainly not in a position to pay. The World Service also makes a very valuable contribution to the reputation of the UK and to our soft power, and the BBC has said that it should be funded by the Foreign Office and not by the licence fee. That argument is quite attractive, although I recognise that it would be a big challenge for the Government to take on. The Minister gave evidence on the subject yesterday and it remains an issue that we will want to debate.
With radio, it would be possible to extend advertising, but, as with any advertising on BBC TV, doing so would damage commercial radio. I am also slightly worried about the extent to which advertising is creeping in at the margin, with the BBC allowing advertising through podcast, which is increasingly the way in which people are accessing audio content.
Many funding models have been proposed, but many alternatives to the licence fee would simply not secure the future of our world-leading public service broadcaster and would threaten its ability to create uniquely British content and tell stories, both fictional and real, from across the UK. An advertising model, for example, would not be right for the BBC: it would introduce commercial interests into programming decisions and would force the BBC to compete with other public service broadcasters and commercial radio and TV over ever-dwindling advertising revenue, as the right hon. Member for Maldon pointed out. I would be deeply concerned by the impact that that would have on the BBC’s ability to continue to invest in our world-leading creative industries and talent. It would undoubtedly leave the BBC and the rest of our broadcasting ecosystem worse off.
Similarly, a subscription model would not provide the universal public service broadcasting to which we and the BBC aspire. It would threaten regional programming and investment. It is unsurprising that the Government have committed to a sustainable public funding model for the BBC as part of the upcoming charter review to ensure that we continue to have a BBC that is impartial, universal and accessible, but it is important that we closely examine the licence fee model and consider reforms to ensure that its scope, progression and enforcement are fit for the times we find ourselves in.
We have something very special in the BBC. It has brought the nation together for more than a century for those enormous moments in our shared lives, from sporting triumph to the election drama that those of us in this Chamber all enjoyed this year, and from the latest adaptation of J. K. Rowling’s “Cormoran Strike” books to the upcoming “Gavin and Stacey” Christmas special, which I know will be on in my family’s house. It provides fearless news coverage in our neighbourhoods, from Westminster and abroad, and it invests in creative talent.