Free TV Licences for Over-75s

Statement

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer to an Urgent Question given by my right honourable friend the Secretary of State for DCMS:

“The BBC is a fundamental part of the social and economic fabric of our country. It is important for people of all ages, but particularly for older people, who value television as a way to stay connected with the world. The Government recognised the importance of the licence fee when we agreed a funding settlement with the BBC in 2015 to provide the BBC with financial certainty to plan over the long term. We agreed to take action to further boost the BBC’s income by requiring iPlayer users to have a TV licence, and we unfroze the licence fee for the first time since 2010 by guaranteeing that it will rise each year in line with inflation.

In return, we agreed that responsibility for the over-75 licence fee concession would transfer to the BBC in June 2020. We agreed a phased transition to help the BBC with its financial planning as it did so. This was a fair deal for the BBC. At the time, the BBC director-general said that the settlement represented,

‘a strong deal for the BBC’,

which provided ‘financial stability’.

The BBC is operationally independent, so yesterday’s announcement is very much its decision, but taxpayers want to see the BBC using its substantial licence fee income appropriately to ensure it delivers for UK audiences. This includes showing restraint on salaries for senior staff. In 2017-18 the BBC received over £3.8 billion in licence fee income—more than ever before. We have guaranteed that the licence fee will increase with inflation until 2022.

The BBC is also making over £1 billion a year from commercial work, such as selling content abroad which can be reinvested, so we are very disappointed that it will not protect free television licences for all viewers aged 75 and over. The BBC received views from over 190,000 people as part of its broader public consultation, which sought opinions on a number of options. With a number of proposals on the table, the BBC has taken the most narrowly defined reform option.

I firmly believe that the BBC can and should do more to support older people and am now looking to it to make clear how exactly it will do that”.

My Lords, I must express a declaration of interest, as recorded in the annals of the Registrar-General, since I was born in 1942. This was the first year that I might have benefited from this particular payout, and since I got there before my wife she changed the name on the television licence from hers to mine. If this is now withheld I will end up paying it, and I am a bit afraid of that.

It cannot be right, whatever terms were agreed between those renewing the charter and the BBC, that the BBC should be turned into a welfare agency. It is not its job. Despite the fact that it might trim back on some top executive salaries and the other remedial measures mentioned by the Minister, the amount of money lost will be trivial compared to the £725 million in question. The BBC already seems ready to act in good faith by making such payments available to licence-owning couples in residence if one of its members is on benefits of some kind. Will the Government think again about the decision that was made by the current editor of the Evening Standard, in collaboration in the coalition Government with the Liberal Democrats—

No.

They will have their moment to explain themselves. Will the Government look again at their responsibilities now that the BBC, using its independence, has taken its decision?

My Lords, I am very sorry to hear that this might cause marital disharmony in the noble Lord’s household. To be serious, this is not a payout, as he called it. This is taxpayers’ money which is going to support the BBC. This was decided between the BBC and the Government in 2015. That agreement took into account the fact that the BBC licence fee was fixed with inflationary increases for five years, which was the first time that had happened. The deal on that and the increases in salaries—I absolutely take his point that that will not approach the £745 million we are talking about at the moment—was made in full knowledge of what it would mean. It was also agreed that the Government would phase this in, so the DWP has contributed to the BBC for it for the past two years, but that was agreed then. That is why we are disappointed that the BBC has taken this decision. There are some potential benefits. I accept that not all noble Lords agreed at the time, but it was passed into law in the Digital Economy Act 2017. It is the BBC’s decision, because Parliament gave it that decision to make.

My Lords, perhaps I may correct what was said from the Labour Benches: this was post-coalition. Indeed, my noble friend Lord Foster, who was then an MP, stopped a first attempt to do this.

Does not the Minister accept that the covert way in which the BBC licence fee was settled last time was wrong: that making the BBC take on the cost of funding free TV licences for the over-75s effectively made the BBC the vehicle to deliver elements of the welfare state, and that that was inappropriate? I agree with the Statement that taxpayers want the BBC to use its licence fee income in an appropriate way to ensure that it delivers for UK audiences. That is the point: the licence fee is not public money but the public’s money. Does not the Minister agree that it is double dipping to use the public’s money to pay for government policy?

The public’s money is what the Government spend. Everything that the Government do is with taxpayers’ money, so I do not really understand the noble Baroness’s point. I should mention, as the noble Lord mentioned the Liberal Democrats, that the Liberal Democrat 2015 manifesto committed to remove the concession for higher-rate taxed pensioners. We have to be careful about what we said when. As for the point about social welfare, the agreement made in 2015 was not about tax policy; it was simply about whether the BBC should have the responsibility for the concession, and that is what it was given.

My Lords, I declare an interest as chair of Age Scotland. This sorry affair is wholly the responsibility of Her Majesty’s Government, not the BBC. Perhaps the Minister could explain one simple thing. Since the legislation was passed before the 2017 election, when the Conservatives included in their manifesto that they would maintain free TV licences for those aged 75-plus, how did they expect to be able to implement that promise?

Of course the noble Lord is right that, before that promise was made, everyone knew that Parliament had agreed that responsibility for the concession fell to the BBC. It was in the BBC’s hands. That is why the Secretary of State has frequently said that he expected the BBC to continue that concession. Do not forget that the BBC has had since 2015 to accept that. This is not some small SME; this is a £5 billion company which has substantial revenues not only from the taxpayer but from its own resources. It could do that. It knew exactly what deal it had gone into. That was not only agreed but promoted by the director-general as being a good deal for the BBC.

My Lords, will my noble friend take time today to look at the Hansard of 21 January this year and read the speech of the noble Lord, Lord Lipsey, who cited the Social Metrics Commission, which showed that more than 80% of over-75s are not in poverty? He went on to say that the policy of giving all over-75s free licence fees,

“is misdirected and does not survive contact with the facts”.—[Official Report, 21/1/19; col. 582.]

My noble friend is right that when the Government make these giveaways, if you like, they should take the future ramifications into account. This would cost more than £1 billion by the time the next charter review is due, which is why we expected the BBC to agree it. He is right that this is about fairness, which is why the BBC decided that the least well-off pensioners will still receive the over-75 credit. Indeed, because it has been universally taken up by the over-75s, there is a very good chance that more people will receive pension credit as a result.

My Lords, is it not fair to say that the BBC is there to provide content that everybody can access, and that we should not lose sight of that as its primary function? Asking it to do something else, such as subsidising a government policy from another department, is bound to end in tears sooner or later. This just happens to have ended in tears now.

I agree that providing content is an extremely important, if not the primary, purpose of the BBC but, as I said, it is not an unsophisticated organisation: it can do many other things besides that, including organising its budget. That is why the director-general said that the deal was good for the BBC.

My Lords, no matter how the Government square the circle here, this is a broken promise. Many people out there feel totally betrayed. This will drive many pensioners below the poverty line, especially in Northern Ireland where we face serious unemployment, higher than anywhere else in the United Kingdom. Pensioners are suffering. Asking pensioners over 75 to pay for a television licence will not solve the real long-term issues facing the BBC. An Urgent Question does not resolve this issue; I ask the Government to look at having a full debate in the House so that we can all say what we need to say.

My Lords, on Thursday this week, there will be a debate in the name of the noble Lord, Lord Foulkes, on this subject and others, such as pensioner poverty and free transport. The noble Lord, Lord Hay, will have an opportunity to debate the matter further then.