PARLIAMENTARY DEBATE
BBC Funding - 17 January 2022 (Commons/Commons Chamber)

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.

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.

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 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.

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?

I thank my right hon. Friend for his contribution. I am afraid that we differ in our opinions. We have five or six years—there is plenty of time to decide what a future funding model would look like.

We abolished the radio licence fee in 1979 and moved to a TV licence fee, so I am not against moving towards an internet licence fee or something like it. But we need to know the details, the thresholds and the amount of money that would be raised. Does the Secretary of State accept that her announcement that this would be the last licence fee, without going through the consultation first, was reckless?

As I said, when the new model starts in 2027-28, many of us may not even be here—we are talking six years away. I welcome the hon. Gentleman’s contribution and look forward to his being part of the discussion and debate about what we do in the future.

As the Secretary of State will know, the Select Committee report that my right hon. Friend the Member for Ashford (Damian Green) just referred to acknowledges in its very first recommendation that

“the Government will need to act…to ensure that the public service broadcasting system remains sustainable in…today’s…global media market.”

In that sense, I am glad that we are having the debate, even if I am a little unclear about where it came from this weekend.

Given that the Select Committee report is also clear that the Government need a credible view on what any alternative to the licence fee might be and on what their vision is for the future of public service broadcasting, what are my right hon. Friend’s instincts as she kicks off this welcome national debate?

My instincts are let’s start the discussion. Let’s have a look at the—[Interruption.] That is what I am starting, Mr Speaker—unless, of course, Members of the House would just like us to decide and not have the debates and not have the discussion. That is where we are going: we are going to start that discussion—[Interruption.] The hon. Member for Manchester Central (Lucy Powell) is speaking from a sedentary position; perhaps she would like to confirm whether she supports the freeze to the licence fee? A yes or a no—a nod or a shake—would be great. No? There we go.

Despite the fact that the removal of the free licence for the over-75s was a result of her own party’s actions, the Secretary of State’s tweet yesterday indicated that her attack on the BBC was due to the over-75s being threatened with prison sentences and bailiffs knocking on their doors. Yet less than two weeks ago, she told this House that

“no enforcement action has been taken against anyone over 75 years of age”.—[Official Report, 6 January 2022; Vol. 706, c. 131.]

I know that the Secretary of State would not make such claims without evidence. Will she please now share with the House what data she found to support yesterday’s comments?

The hon. Lady has drawn a direct link between two different parts of my tweet when there is no direct link; it is just one of many reasons why I want to look at how we fund a great British institution in the future.

I accept the need to freeze the licence fee. However, the conversation over the future of the licence fee is far from over. What steps will the Secretary of State take to protect the BBC’s local services, which those who pay for it watch and enjoy, before the knives are sharpened within the BBC?

The conversation has not actually started. Local radio is an important point. Someone made the point about local BBC news coverage. Many of us used to have lots of independent news coverage in our constituencies that is no longer there. Some might say that the dominance of the BBC locally helped to contribute to that. My hon. Friend has some very important points to make and experience on local radio. I urge him to be part of the discussion and help us frame what things will look like moving forward.

Growing up, my cousins overseas always told me that they listened to the BBC when they wanted to know the truth. I now represent somewhere known as “BBC borough”, as there are that many ex-employees, including myself, around. Will she tell all of us where exactly the change was in the Conservative manifesto? Already, people are seeing it as just a distraction for party gain. I also have fond memories of watching, in my constituency, the Secretary of State on Channel 4 reality TV. Does her trashing public service broadcasting apply to that channel, too? It is a great Thatcherite innovation.

Excellent question. I am not going to conflate Channel 4 with the BBC; I am here to talk about the settlement of the licence fee. The second part of question means that I cannot remember the first part, but the hon. Member made a really important point about the BBC World Service. The BBC, with the billions of pounds of funding—£23 billion—it is receiving, will still be able to meet its core mission and purposes.

My right hon. Friend must be right that the BBC cannot stand still while the rest of the world moves along, but does she accept that, when we think about the future funding of the BBC, we have to consider both the content that is marketable and is going to be commercially successful, and the content that is not, but will act as the beacon she describes—not just to this country, but to the rest of the world—in quality broadcasting and news and current affairs content in particular? Is not that kind of content likely to continue to need subsidy in any future funding model we design?

I thank my right hon. and learned Friend for that contribution and he is absolutely right. One of the things we do not want is for all the TV that is streamed in the UK to come from overseas. The discussion and the debates that we have about the future funding formula are going to have to include how we protect, preserve and create great British content. That has to be part of the debate moving forward. Can I tell him about elements? No, I cannot because we have not even begun the discussions yet. What modelling is there? I have been told already there are a number of ways in which we could look at funding the BBC moving forward.

Well, it is not for me to decide, so we have to—[Interruption.] It is not for me to decide until I have all the information and all the evidence.

Could I just say to the Secretary of State that I wish I had the level of broadband coverage that she talks about in my constituency?

When I was a councillor—a member of the Highland Council—I had to be very careful of the BBC, because its reporting of all I said and did was very thorough indeed, and that was good for local democracy. Can I also say to Conservative Members that the coverage of the Scottish Government has been very thorough? At the time of the Scottish independence referendum in 2014, it was so thorough that it reduced the then First Minister to near apoplexy, as Members will recall. A slimmed-down BBC may not be able to deliver the sort of service that is good for local democracy and for Scottish democracy. Could I ask the Secretary of State how she intends to make sure that we do not lose out on that front?

Democracy, particularly local democracy, is at the heart of a lot of what the BBC does, and that is why it will be an important element of conversations that we have moving forward—an important contribution. As I have said a number of times, the discussions, the debates that we will have in this place and the evidence that we will take moving forward have not begun. We are seven years—six or seven years—away, and that is the consultation that we will have here, the evidence that we will gather here, and the debates and discussions that we will have. Those discussions will start shortly. We are talking about a new funding model that will start in 2028.

My right hon. Friend will be aware that, last year, the number of TV licences purchased fell by 700,000, and that more and more young people are now saying that they do not need to watch the BBC because of the enormous amount of choice through the streaming services. Does she agree that, even despite that increase in content, we will still need public service broadcasting and the BBC, and therefore it is right to have a debate about the future funding model not to undermine the BBC, but to ensure that it can survive going forward?

I thank my right hon. Friend, and that was my response to my early question: how do we keep good content—great British content—made in the UK? The BBC is a national institution—how do we maintain the BBC? The question is not: do we or do we not have a BBC? The question is: how do we fund the BBC moving forward? I know my right hon. Friend has made some interventions of his own and has ideas of his own, and I look forward to his furthering those.

Many of us find it nauseating that the Secretary of State has come here to talk about hard-pressed families when she supported the £20 cut to universal credit. I am sure she wants to be objective and have the fullest information. So could we test how much she considered some of these factors, perhaps in the style of the broadcast media? How much more money is generated by the investment in the BBC? Is it £1, £2 or £3? She talks about the north. How much of the BBC’s economic impact is beyond London? Is it 10%, 20% or 50%? Perhaps she could demonstrate her knowledge at least of the BBC’s impact.

I will write to the right hon. Gentleman with those specific figures.

Eleven years ago, the then director-general of the BBC said the corporation would have to do “fewer things better.” The current director-general has challenged the organisation to prioritise how it spends its money and maximises its commercial revenues. Does the Secretary of State agree that reform is necessary for the BBC to thrive in the digital age in both how it works and how it is funded?

We cannot ignore the fact that our digital landscape is transforming and advancing at a rapid pace, which has resulted in people, and especially the younger generation, changing their viewing habits. I would be accused of being a dinosaur if I stood here and said we should just let the BBC carry on as it is with this licence fee model. As my right hon. Friend the Member for Maldon (Mr Whittingdale) highlighted, 700,000 fewer people are paying the licence fee. We have to do something now to sustain the BBC and maintain this British beacon. We have to act now to ensure the BBC remains the BBC and is here for the future.

I welcome that, at long last, we have a Secretary of State who is prepared to grasp this nettle, to tackle the BBC poll tax, to stop enforcing payments against people who are angered by the BBC’s bias, to force this organisation to consider its bloated expenditure and, especially as broadcasting is now changing, to allow people greater choice. I hope that, despite the cries of outrage from the BBC’s buddies in this House, she will not back down on these issues.

I thank the right hon. Gentleman for his support. It is worth making the point that the BBC will continue to receive billions of pounds of public support and funding between now and 2027.

Will my right hon. Friend decriminalise non-payment of the licence fee to take the pressure off magistrates courts? Should this not be a household bill like any other?

That is something we are keeping under review. In today’s age, should we really continue with a licence fee paid by individuals with the potential threat of bailiffs or criminal prosecution? That is an important question and it will be part of the discussion.

The establishment of the BBC in Salford, neighbouring my constituency, has created many excellent jobs for my constituents and has been an important economic and cultural driver of success in the north-west, but that is not what I want to ask the Secretary of State about. What guarantees can she give to the BBC’s world-class salaried orchestras? I have had the great privilege of attending the BBC Philharmonic’s concerts as its guest.

The BBC, as I have said, will continue to receive billions of pounds-worth of funding, and it will continue to meet its mission and core purpose, but I cannot dictate how it spends its money and I do not have editorial control. It is up to the BBC to decide how it spends its licence fee settlement.

I warmly welcome my right hon. Friend’s statement and recognise the priority she has given to Welsh language broadcasting and its importance to the Welsh-speaking community in Wales. In supporting her statement and helping the BBC to achieve its objectives under the new settlement, will she call on the BBC to follow other public sector organisations in improving its transparency and to publish every invoice in excess of £500, just like every other organisation does?

S4C plays a vital role supporting the Welsh economy, culture and society. The funding will support S4C in reaching more Welsh language speakers, including younger audiences. I am sure S4C heard what my right hon. Friend just said, and I shall certainly take his points back.

Let us talk about value for money. Does the Secretary of State agree that 43p a day is value for money for BBC iPlayer, BBC Sounds and the BBC World Service?

It is billions of pounds, and I do not believe that any family receiving repeated letters, or a bailiff knocking on their door, or a request to appear at a magistrates court would think it is value for money, because it is money they cannot afford. The issue is that working families and people who are hard pressed in the current situation of rising inflationary pressures think it is difficult to pay £159 a year out of their income, which is why we are freezing the licence fee for the next two years and not allowing it to rise.

I welcome my right hon. Friend’s statement, because household bills are under pressure and it is reasonable to freeze the fee for two years. In the whole discussion outside and inside this place so far, we talk about television and streaming services, but does she agree that, when the conversation takes place, we will have to make sure that the BBC’s important radio programmes across the board are protected and still funded? We cannot compare it to a Netflix or Apple model, because radio is such a key part of the BBC’s output.

It absolutely is, and I think it will be a key part of the discussion. My right hon. Friend mentions Apple and Netflix, but it is not the BBC’s role to be competitive with other providers. Radio will certainly continue to be a huge part of the BBC and will be the subject of a huge part of the discussion.

Over the generations, people all over the world—some in fear of their lives—have huddled around their radio, straining to hear the words, “This is London,” because they trust the BBC World Service news. Given that a subscription service will never work for airwave radio, what assurance can the Secretary of State give those listeners and the House that the BBC’s service to the world that is the BBC World Service will be able to continue to do its job?

The right hon. Gentleman jumps the gun when he talks about a subscription service. I have not mentioned that. I have said that we need to have a debate about how the BBC is funded in the future. I completely understand his point, but how the BBC spends the money it receives via the charter is for the BBC to decide. We do not have any influence over that.

The Secretary of State is right to say we should be discussing the future of the BBC. In her statement, she mentioned two important elements of the charter—to entertain and to inform—but there is a third: to educate. That is the element of public service media that is the most difficult to commercialise. Will she ensure that that element of the BBC is protected in the future?

I hear my hon. Friend’s point, and I think a lot of people agree with him. People have talked about the contribution made by BBC Bitesize during the pandemic, which was vital to families home schooling their children. I will bear his comments in mind and take them back.

Does the Secretary of State agree with me that, having shown contempt for the British people in the past week, today’s announcement on the BBC shows the Government treat British institutions with contempt as well?

No.

Last Friday, my private Member’s Bill to abolish the BBC was to be read a Second time, but, unfortunately, there was not enough parliamentary time to proceed. I promote quite a lot of private Members’ Bills, and sometimes I get some support and sometimes I get some opposition. Tens of thousands of people supported getting rid of the BBC licence fee and very few were against it, so may I thank the Secretary of State for coming to the House today and making a statement? If my Bill is of any use to her, I would be very happy to change in Committee any of the stuff I have there at the moment.

Thank you. I look forward to that.

The Secretary of State has come to the House today to say that the freeze in the licence fee is to help hard-working, struggling families. May I ask her to answer the question put to her by the Father of the House: when was this decided? Did it go through a Cabinet Sub-Committee? Did Cabinet sign this off, or is it that just over the last weekend the Government thought they would come up with something that would take the attention away from the Prime Minister?

Cabinet has signed it off. These negotiations have been going on; they did with my predecessor as well as with me. Legally, I had to make my statement in as much time as possible before April, which is why I am making it today.

I often find that those best placed to give their view on whether we need the BBC or not are those who have lived, worked and travelled abroad and have not had access to the BBC. Therefore, I applaud the constituent who has written to me, having done just that, to say that the BBC needs to be celebrated and maintained, because he sees what a future looks like in this country without the BBC. Given that inflation is expected to rise to 6% in the early parts of this year, what conversations has the Secretary of State had about which content will be reduced as a result of the decision she is making today?

I ran a school in Africa for a year and I understand the value of the BBC World Service, because I was a listener for a whole 12 months. Having lived in Africa and run a school there for a year, I also know the importance of the BBC. That is why I have said all along that this discussion is not about, “Do we have a BBC or don’t we?” It is about, “How do we maintain the BBC moving forward, in a rapidly changing, modernising landscape? How do we fund the BBC in that event?” That is what the discussion is about, moving forward; it is not about whether or not there is a BBC.

I am no fan of the regressive licence fee, but the Secretary of State saying on Twitter that this will be “the last” licence fee announcement is discourteous to this House, to all the many people who watch and listen to the BBC, and to all of those who are employed by the BBC. How does she believe that the 50 BBC employees based in my constituency are currently feeling because of the announcement she made on Twitter over the weekend?

I think that on Instagram I added that it is likely to be the last, because I cannot see a world—and I do not think many people can—in 2028 where individual households are paying an outdated fee which was established in 1922 to fund such an organisation; I do not think anyone could ever have seen what a digital landscape would be like today, what the viewing habits of young people would be like today or what the opportunities will be in 2028.

In some ways, the BBC is the best of global Britain, but in a globalised media landscape we know that there are people prepared to pay for Netflix, for all those subscription services, and for web services and for all the multitude of things that the BBC offers. Is it not daft that someone would suggest that the Secretary of State should stand up today and say that even from 2028 to 2038 people will have to pay for the whole lot, whatever they want?

I thank my hon. Friend for that contribution and for his contribution to the Department when he was there. He is absolutely right: it is not about whether we have our great British institution of the BBC, which is globally recognised—that is not the question. The question is that we live in a different world, people have different and changing viewing habits, and by the time we reach 2027—[Interruption.] When I started some of the negotiations—when my predecessor started some of the negotiations—TikTok did not even exist. We are moving rapidly to a different place, which is why we have to have the debate.

Many of my constituents have written to me in praise of the recent BBC investigative documentary about the cladding scandal. One of my constituents who lives in a dangerously clad house talked about how much she appreciated having an independent state broadcaster to challenge unethical companies. I remind the House that it was the BBC that revealed that warnings about cladding quality issues had been ignored for years. Does the Secretary of State recognise the BBC’s crucial investigative role? In the discussion that she keeps talking about, will she assure the House that her proposals will not cut the budget for the BBC’s investigative programmes?

I do not set the budgets for the BBC’s investigative programmes; the BBC does.

Reform is clearly needed. It is absurd in the modern world that people can be criminalised for not paying a licence fee just for an entertainment channel. However, the devil is in the detail. I represent a rural constituency where many smaller villages and hamlets cannot get superfast broadband. If we are to base public policy on the fact that everyone can stream programmes, can we ensure that they actually can stream programmes before any final decisions are made or reforms are implemented?

There is no policy; we are just starting a discussion and a debate. This is not based on whether people can achieve streaming or not, but 100% of households achieving superfast broadband or gigabit broadband is the objective.

I heard what the Secretary of State said about S4C, but my constituents would simply not recognise what she says about the rest of the BBC being some sort of London bubble. We have seen a 54% increase in our creative economy locally, with thousands of people employed and the BBC at the heart of that—“Doctor Who”, “Casualty”, “Shreds” and the BBC National Orchestra of Wales. Every pound invested in our local economy by the BBC generates almost double that in return. Does the Secretary of State accept that what she has suggested today puts that at risk, along with jobs and opportunities in Cardiff including those in deprived communities?

S4C will receive a further £7.5 million per annum from the licence fee to support its digital investment. In total, S4C will be provided with approximately £88 million in licence-fee funding per annum. We are committed to S4C, and we are providing it with additional funding.

As a former BBC and ITV journalist, I look forward to taking part in discussions about the future of the BBC. I am a big admirer of local and regional BBC journalism, such as the Local Democracy Reporting Service, and its coverage of rugby league and local football, which maybe would not happen on any other platform. However, in terms of Yorkshire and the location of Channel 4’s new headquarters, how does today’s announcement impact on the timescale for announcements about Channel 4’s future?

I have made no announcement other than to say that we are starting a discussion about the future funding of the BBC. I am here to make a statement on the licence fee settlement, and I am not conflating that with Channel 4.

The Secretary of State does not appear to be being straight with the House. Her tweet at the weekend clearly said:

“This licence fee announcement will be the last.”

That is why many of my constituents are worried that the BBC’s unique range of programming that brings together the UK’s nations, regions and diverse communities is not safe in this Government’s hands. The BBC’s mission to inform, educate and entertain has worked for almost a century, so will the Secretary of State rule it out that she is seeking to undermine and sacrifice this great national institution in order to save the Prime Minister’s political skin?

I am not.

At a time when household budgets are under unprecedented pressure, the decision to freeze the licence fee will be universally welcomed in Blackpool. My constituents will also welcome the Secretary of State’s comment that it is high time we had a discussion about the very existence of the licence fee. In the meantime, what discussions is she having with the BBC to ensure that the licence fee can achieve value for money?

I have regular meetings with the director-general, the chair and other members of the BBC to discuss those very issues.

The Secretary of State says she cannot tell the BBC what to do, but she also says she wants the BBC to play “God Save the Queen” more often, so I wonder whether she thinks today’s announcement makes that more or less likely. The BBC has been described as the glue that holds the Union together, so will slashing its funding in the way that she wants make that glue stronger or weaker?

I did not hear the second part of the hon. Gentleman’s question, but what I would say is: what is wrong with playing “God Save the Queen”? [Hon. Members: “Hear, hear!”] What is wrong with it? He asked the question as though that was a dirty word or something that should not be said. What is wrong with playing “God Save the Queen”?

Like many of my constituents who are also the parents of young children, I have a daily battle to guide my children away from some of the content on some channels and towards the relative nourishment they will find on the BBC. As we look to the future of the BBC, and in addition to the scrutiny that is rightly placed upon the financing model, what objectives or processes might my right hon. Friend have in mind to ensure that the quality of the output, where the BBC is world-leading in so many areas, is maintained for the long-term?

That is the point of discussion. I have said again and again that this is about how we protect the BBC and how we ensure that, under the present agreement and settlement, it can continue to meet its mission and its purpose. How do we protect the BBC going forward? How do we ensure that we have good quality content made in the UK that stays in the UK and that we can sell from the UK? And how do we, in this changing, shifting, rapidly moving landscape, have a BBC that is funded for the future in order to protect it?

I am glad that the Secretary of State responsible for digital has noticed that business models for content creation have changed in the last 100 years, but the need for a unifying, shared expression of British culture, identity and creativity has not. Is not the real reason for this attack on the BBC that it is a successful British public sector institution, and she just cannot stand that?

No.

I was proud to spend the first seven years of my career at the BBC, but it is worth remembering that back then, in the 1990s, there were only four main terrestrial TV channels. The Secretary of State is absolutely right to say that the whole landscape has changed fundamentally since then, and I tend to agree with her that the licence fee must therefore be on borrowed time, but does she agree that any new long-term model of funding for the BBC will need to take into account the possible implications and repercussions for the commercial public service broadcasters that currently rely on advertising?

That is a very important point. Everything needs to be considered in the round: all the elements of the BBC’s reach, everything that it does and everything that it achieves. That is why we have to start the debate now, even though the future funding model would not come in until 2028. We need that time to prepare, to ensure that all the elements that are beneficial to the UK, to the BBC and to producing that great British content will remain.

It was pleasing to hear the Secretary of State claim that she recognised the importance of Welsh language broadcasting, but she then proceeded to announce a real-terms cut to the BBC settlement. That settlement provides around £20 million of S4C programming annually in addition to the Welsh language services provided by BBC Radio Cymru and Radio Cymru 2 and by BBC Cymru Fyw. Can the Secretary of State therefore explain how a real-terms cut to the BBC settlement will not see a reduction in its important contribution to Welsh language services?

S4C’s settlement will consolidate S4C’s current £74.5 million licence funding with its current £6.8 million annual DCMS grant income. On the real-terms cut to the overall BBC that the hon. Gentleman has talked about, that is a fact because we have frozen the licence fee for two years, but S4C’s funding, which has not increased for five years, will now increase. The BBC’s funding has always increased every year; it will now freeze for the next two years. S4C’s funding has been frozen for the past five years, and it will now increase.

We have to accept that the media landscape, and importantly its use, has changed beyond recognition over the past few years, so I agree with Lord Grade, the former chair of the BBC, that a universal regressive tax to pay for a BBC that is no longer universally used is no longer defensible. Does my right hon. Friend agree that the BBC, now and in future, has a vital role to play in creating a version of our common truth at home and abroad?

That vital role of the BBC moving forward is one of the issues that we have to ensure we protect, along with the British content that we make, as I have said. The fact is that the BBC is a global beacon around the world and people in other countries depend upon it, as hon. Members have mentioned. Maintaining the BBC is something we have to protect, but how it is to be funded is the question. That is what the discussion will be about.

I am British and proud of it, and I am proud of the BBC. It reaches 468 million people in 42 languages around the world every week. It is the envy of the world. Cutting funding to the BBC and the World Service already leaves the path clear for Russian and Chinese influence in those countries. Does the Secretary of State agree that only an unpatriotic party would cut the real-terms funding of that national treasure?

Unpatriotic? I do not think it was this side of the House that was laughing about the prospect of the national anthem being played on television; I think it was that side of the House. I disagree—I am not unpatriotic; I am very patriotic.

The people of Stoke-on-Trent North, Kidsgrove and Talke want the licence fee to be scrapped. When I had 3,000 respondents to a survey, 96% of them agreed with that. They feel that the BBC spoke down to them when they voted for Brexit and that it is out of touch with the people and values of Stoke-on-Trent North, Kidsgrove and Talke. It is time for the BBC, like the Labour party, to get out of the metropolitan bubble and spend some time in Stoke-on-Trent in order to understand what people think. It is welcome that my right hon. Friend has frozen the licence fee and opened the conversation, but does she agree that it is time to scrap the licence fee altogether?

We can all see how, once again, my hon. Friend speaks up for his constituents. I am interested in the survey and I would love to see some of the responses. He spoke about scrapping not the BBC but the licence fee, because I am sure that his constituents want to watch and enjoy the BBC. This is about how we fund the BBC in a modern digital landscape at a time when young people consume their television in different ways. How do we fund the BBC to protect and maintain it moving forward, but in a different way?

I wish the Secretary of State would stop with the crocodile tears about the cost-of-living crisis, because £159 is a lot of money, particularly for my constituents, but it happens to be exactly the same amount, on average, as they will pay in extra national insurance from April this year. If the Government really cared about the cost-of-living crisis, they could do something about that. My real fear is that she simply does not understand how intrinsic to the nature of the BBC and its success around the world the licence fee is. It means that there is something for everybody—for all my constituents—including the poorest constituents, who cannot afford Sky. She says that the BBC gets lots of money, but Sky got five times as much money this year, and its revenues this year increased by 18.9%. Yes, this is an unpatriotic move to dismantle one of the greatest British treasures.

The hon. Gentleman talks about £159, but the BBC wanted it to project to £180. This is one of the levers that we have in Government to help hard-working families, given the increasing inflationary pressures. We are here to help and protect the BBC, and the only way we can do that—[Interruption.] I ask the hon. Member for Manchester Central (Lucy Powell) again: does she support the two-year freeze on the licence fee to help hard-working families? Again, no plan. The hon. Lady dodged that question on media this morning and she is dodging it here in the Chamber.

I praise the Secretary of State for helping to tackle the rising cost of living for many families at a difficult time. Does she agree that since they are having to tighten their belts, perhaps the BBC should do the same? A good place to start might be with salaries, including that of one of its presenters, who earns £1.36 million a year.

Businesses across the UK are having to tighten their belts. Households across the UK are facing inflationary pressures and having to tighten their belts. The two-year freeze on the licence fee means the BBC will be doing the same. I could not agree more with my hon. Friend.

Last Wednesday, at Prime Minister’s questions, the Prime Minister was challenged about the future of the licence fee. He seemed to caution against this by referring to the BBC as a “great national institution”, yet by the weekend the Secretary of State was tweeting that this would be the last licence fee agreement. Will she explain to the House what on earth has been going on in No. 10 since Wednesday that has led to what appears to be a screeching U-turn?

As I have said on a number of occasions, we have been having these discussions for months. In fact, my predecessor had the discussions before me. Legally, I have to make an announcement as far in advance of April as possible. That is why I am here today.

I commend my right hon. Friend for freezing the licence fee and launching an inquiry into its future. Will she confirm that, first, impartiality and the licence fee are different issues? Secondly, if Netflix can go from one twentieth the size of the BBC to eight times its size in just 20 years, is there not plenty of scope for creative thinking? Thirdly, will she encourage the leadership of the BBC to respond positively, and not with the defeatist and backward-looking attitude of the Labour party?

I thank my hon. Friend and constituency neighbour for his question. Impartiality and the licence fee are two entirely separate things. The Serota review made its recommendations, and the leadership of the BBC fully agreed with those recommendations and agreed to implement them. We now want transparency, to see what difference those implementations make, but they are a completely different issue from the settlement of the licence fees.

I am very proud of the BBC—it is the best of British, and it is recognised and respected around the world. It is also the best of value. Its fee works out as two thirds of the price of a pink of milk per day—I happen to know the price of a pint of milk. Is the simple truth not that the Prime Minister, unlike previous Prime Ministers such as Margaret Thatcher and many others, is frightened of the BBC and of being scrutinised? Margaret Thatcher actually phoned in to Radio 4’s “Today” programme. This Prime Minister would prefer to hide in the fridge.

The Prime Minister is a huge fan of the BBC and of “Today”. The discussions that we are having are to help protect the BBC, because if anyone sitting here thinks that we could go to households in 2028 and expect them to pay the licence fee—with fear of prosecution if they do not—in order to watch the television that they have bought and put in their house, they are, frankly, a dinosaur. We in this House have a responsibility to protect the BBC. As part of that responsibility, we have to look forward and think how we can change the BBC and fund it in a changing digital landscape.

On the Conservative side we have a proud history with S4C. Today is another important step forward. I thank the Secretary of State for putting S4C at the core of her statement, and for the £7.5 million increase per annum. Could I draw her into a meeting with me and likeminded colleagues about the Welsh language, and the fact that core public service broadcasters have nurtured it and helped it grow, such as S4C and BBC Radio Cymru?

I thank my hon. Friend and am happy to have such a meeting. For five years S4C had no increase in its funding, and it was high time that it did, given that the BBC has had year-on-year funding increases.

The family in Cumbria that the Secretary of State talked about, who were streaming five different movies in five different rooms, are probably paying a minimum of £43 a month for Netflix, Sky and broadband. That does not include the social value that the BBC provides, from educating youngsters through CBeebies and CBBC, to the company it provides for those suffering from loneliness, along with the innovation of BBC iPlayer and BBC Sounds. Will she assure me that this freeze will not diminish the vital services that the BBC provides?

The licence fee settlement ensures that the BBC can continue to meet its mission and its purposes, and it will continue to receive billions of pounds of funding—£23 billion over the licence fee settlement period.

When the BBC came before the Public Accounts Committee, it was striking how unambitious its target was for growing commercial revenues, which represent just 6% of its current income. Will this welcome decision, including the increase in the borrowing limit, which the BBC asked for, come with a requirement for the BBC to increase that income rapidly and reduce the burden of the licence tax?

Increasing access to private equity was one of the first steps towards doing that.

We have already seen the loss of hundreds of jobs of BBC journalists involved in the much-valued regional news and current affairs programming, including the excellent “Inside Out” programme. Before making the decision to freeze the fee, what assessment did the Secretary of State make of the impact on local and regional news programming?

This is about increasing and reforming services across the BBC, to ensure that the BBC is there in the future and able to service the hon. Gentleman’s constituents, by adopting a funding model that means the BBC will be sustainable and will be there for the long term.

Putting “BBC documentary” into YouTube is one way of obtaining a world-class education, because it is possible to learn about so many different things. However, that sentence also suggests that the world is evolving. Although I am a huge fan of the BBC, I welcome the licence fee review. Does my right hon. Friend agree that it is important that we ensure that this stuff is still there for people like me in future generations?

I do agree. My hon. Friend has encapsulated the situation we face, given the fact that BBC documentaries are being watched on YouTube. Young people, I was amazed to learn, consume huge amounts of television via YouTube. This is why we have to review the situation and start discussing what the future of the BBC funding stream will look like.

Diolch, Mr Speaker. There will be considerable concern in Wales about the post-2020 situation, because the implied subscription-type model will never work for S4C or Radio Cymru, or indeed for the wider BBC in Wales. Will the Secretary of State pledge to ensure that there is a full consultation with Welsh stakeholders so that the Welsh language does not become collateral damage in the British Government’s culture war against the BBC?

I thought the hon. Gentleman was going to thank me for the additional £7.5 million that we are giving to S4C. I thought he was going to thank us for the fact that S4C’s funding, having been frozen for the past five years, is now being increased and we are freezing the BBC’s funding. I have never mentioned the word “subscription”. As I have said time and again, we need to start a dialogue about how we fund the BBC in the future.

I welcome the freeze in the licence fee and the debate that is to come. Given the millions across the United Kingdom and abroad who do love the BBC, there must be countless options for future funding models for content that can be commercialised, but does my right hon. Friend agree that the most important strand of any reform is de-linking the requirement that in order to watch other content people must pay for the BBC?

That is an interesting concept, and I am sure that it will be part of the discussion.

Is one option that the Secretary of State is considering to increase funding by allowing the BBC to carry advertisements? If so, has she considered the risk that that will remove the balanced factual basis of BBC news reporting?

As I said when I arrived at the Dispatch Box, we are beginning the discussions about how a future funding model for the BBC will look. We have not gone into that level of discussion yet.