PARLIAMENTARY DEBATE
BBC Licence Fee Non-Payment (Decriminalisation for Over-75s) Bill - 20 October 2023 (Commons/Commons Chamber)
Debate Detail
Debate resumed.
Question (21 October 2022) again proposed, That the Bill be now read a Second time.
Just over 100 years ago, on 18 October 1922, the BBC came into being as the British Broadcasting Company. It was an arrangement between the Post Office and a group of radio set manufacturers to provide radio content and promote the sale of wireless sets. It was funded through a 10 shilling licence fee. In 1927, the BBC received its first royal charter, becoming the British Broadcasting Corporation, with a mission to inform, educate and entertain. Since then, the BBC has continued to evolve and to play a hugely important role in British life, as it has touched the lives of almost everyone in the UK and made a unique contribution to our cultural heritage.
In December 1932, the BBC launched its Empire Service. Days later, the service broadcast the first Christmas day message by a British monarch when King George V addressed the empire live from Sandringham. In 1940, Winston Churchill delivered his first radio broadcast as Prime Minister. In 1946, the first combined radio and TV licence fee was introduced, at a cost of £2, which then became the TV licence in 1971.
In 1985, Live Aid was broadcast to an estimated 400 million viewers, and in 2007, iPlayer pioneered a whole new way to watch BBC content on demand via the internet. A year later, that was followed by BBC Sounds, which is a streaming media and audio download service hosting a range of content including live radio broadcasts, audio on demand and podcasts. As was noted in the brief debate we had a year ago by the right hon. Member for Warley (John Spellar), last year the BBC’s coverage of the funeral of Her late Majesty the Queen was watched by 22.4 million people across BBC channels at peak viewing time.
The BBC, now just over 100 years old, continues to be a great national institution. It is an invaluable source of education, information and entertainment, particularly for the most vulnerable and isolated people in our society, including older people. It is respected globally and reaches hundreds of millions of people across the world every week. No other country in the world has anything quite like it.
To return to the point of the licence fee, the licence fee pays for, overwhelmingly, the BBC’s non-commercial activities. It raises something like £3.74 billion in public funding every year, with which the BBC has to deliver its mission and public purposes. A television licence is required to watch, record or receive television as it is broadcast live on any channel or online service.
In a subsequent licence fee settlement, which was in my second incarnation, it was set to be frozen for two years and then to be uprated in line with inflation. The original charter agreement reached a settlement with the BBC where it was agreed that a licence should be required to watch not just live transmission of linear television services but live or on-demand content on BBC iPlayer, meaning that the so-called iPlayer loophole was closed.
It is worth noting that the licence fee is not just used to fund the BBC. It is also used for other strategic public service objectives, including the funding of the Welsh language broadcaster S4C. I spent yesterday in Cardiff, where I was able to visit S4C; I visited the set of “Pobol y Cwm”, for any Welsh speakers in the Chamber today. I can vouch that S4C does an important job in sustaining the Welsh language and is thoroughly deserving of public funding through the licence fee, which is why the Government agreed in the last licence fee settlement to a significant increase in that funding.
The licence fee represents a significant intervention in the broadcasting market, providing a predictable and steady source of revenue for the BBC. The Government are currently committed to maintaining the licence fee funding model for the duration of this 11-year charter period, which runs until 2027. But as I have already suggested—I will come on to this point at greater length—the BBC funding model is facing major challenges, and it is necessary to look at ways to ensure that it remains sustainable in the longer term.
The licence fee does not represent the only intervention by the Government in the broadcasting sector. There are a number of other ways in which we support a dynamic and successful broadcasting sector and, in particular, public service broadcasting. We have six public service broadcasters: the BBC, ITV, STV, Channel 4, S4C and Channel Five. Only two of those—the BBC and S4C—receive direct public funding from the licence fee. All six broadcasters benefit from regulatory advantages such as prominence and guaranteed access to spectrum. With these benefits come obligations with respect to the content that they show and how it is made.
The UK’s public broadcasting system was originally born of necessity when there was limited analogue capacity of spectrum, but more recently—over the past 50 years—the role has become clearer. The six broadcasters complement the free market, producing the type of content that would otherwise be under-served, such as local news that addresses communities across the country, current affairs programmes and original, distinctively British programming that shapes our culture and reflects our values. It is not limited to traditional broadcast television; BBC Bitesize, for example, provides an important resource for young people and schools across the UK. The UK’s public service broadcasters complement their commercial competitors by raising standards across the industry, investing in skills, boosting growth and taking creative risks.
Broadcasters, including the public service broadcasters, are facing a number of challenges due to changing technology. Just as the advent of cable and satellite revolutionised public service broadcasting, internet-delivered services are revolutionising broadcasting now, creating new distribution models with their own gatekeepers. It is telling, for example, that 74% of households with a TV set now choose to connect it to the internet. That has provided viewers with an enormous amount of choice in what they watch and how they watch it.
In particular, the trend away from linear viewing and towards on-demand viewing is continuing. According to Ofcom, in the first quarter of 2023, approximately two thirds of UK households were subscribing to a subscription-video-on-demand service. The weekly reach of broadcast TV fell from 83% in 2021 to 79% in 2022, which is the biggest ever annual drop. This ongoing shift away from traditional, linear, scheduled TV viewing to on-demand via the internet offers viewers an enormous extra range of choice, but it is also putting pressure on the traditional funding models and on public service broadcasters. One way in which the Government intend to address that is through the introduction of the media Bill, which I hope we will hear more about in the King’s Speech. The purpose of that Bill will be to ensure that the public service broadcasters remain visible at the top of the programme guides, whatever form of TV distribution viewers choose to use, because we believe it is important that the public service broadcasters are sustained.
I come to the specific issue my hon. Friend the Member for Christchurch raises in his Bill: TV licences for the over-75s. Both decriminalisation of the licence fee and the exemption for the over 75s have been debated at length many times in this Chamber. I understand that they remain controversial and that many people remain critical of the fact that the BBC now enforces the payment of the licence fee for over-75s who do not qualify as a result of receiving a means-tested benefit.
Let me go back to the issue of the licence fee for the over-75s. As the hon. Member for North West Leicestershire (Andrew Bridgen) suggested, in the 2015 funding settlement the Government agreed that responsibility for the over-75s concession should transfer to the BBC. The Government and the BBC agreed to make that change alongside a number of other elements of the licence fee settlement, such as the closure of the iPlayer loophole, to which I have already referred, and an agreement to increase the licence fee in line with inflation from there on. It was also agreed that the transfer would be phased in over two years so that the BBC had time to adjust to meet the additional cost of maintaining that. It was debated extensively at the time of the passage through Parliament of the Digital Economy Act 2017.
The result is that responsibility for the over-75s concession now rests with the BBC. The Government made it plain that we hoped and expected that the BBC would maintain the concession, but the BBC chose to restrict it to those in receipt of pension credit. The Government remain disappointed about that decision. I recognise, however, that even that concession represents quite a considerable cost to the BBC, and how the BBC budgets, and the extent to which it feels able to maintain the concession, is a matter for the BBC.
The Government recognise the importance of television to people of all ages, particularly older people who value television as a source of entertainment and companionship and as a way to stay connected. We remain committed to ensuring economic security for people at every stage of their life. We believe that the BBC has a duty to ensure that it uses its substantial licence fee income to support older people. As the hon. Member for Ellesmere Port and Neston (Justin Madders) suggested, the BBC has informed the Government that no enforcement action has been taken against over-75s at this stage.
The proposal of my hon. Friend the Member for Christchurch in his Bill would be to decriminalise TV licence evasion for the over-75s. It would be very difficult to make it a criminal offence not to pay the licence fee up to a certain age, after which it would no longer be a criminal offence. Our view is that the law needs to apply equally to offenders, regardless of their age. It is right that our justice system is fair and just to all people, regardless of their characteristics.
The more general issue of decriminalisation is one that we have considered on a number of occasions. In fact, when I was Secretary of State in 2015, I came into the job supporting decriminalisation, because I shared the views expressed by a number of my hon. Friends. We commissioned a review of the matter, conducted by Mr Perry, which came out firmly against decriminalisation. Subsequently, in February 2020, when I was a Minister in the Department for a second time, a further consultation received a large number of responses—over 150,000—the majority of which were against decriminalisation.
The reasons for that were several. The BBC argued strongly that it would lead to an increase in evasion, which it estimated would cost it in the order of £300 million. It was also pointed out that if it became a civil offence, and people were taken to court for failure to pay as a civil matter, that could lead to significantly higher fines and costs, if they were found guilty. It highlighted significant impacts in terms of the cost and implementation. The current system works relatively efficiently in the magistrates courts, but moving it over to be a civil matter would result in a considerable increase in costs.
For those reasons, the Government decided that we would keep decriminalisation under review, but we would not proceed to decriminalise at that time. It is more important that we address the whole issue around the future of the licence fee, which is becoming harder and harder to sustain.
I want to say a little more about the challenge to the licence fee going forward. When it was reviewed in 2015, it was recognised that there were a number of drawbacks. In some ways, it is a flat-rate charge for which there is no means-tested assistance, and therefore it is highly regressive. At that time, it was concluded that there was no better system of funding the BBC and that it was the most appropriate. For that reason, it was agreed that the licence fee would continue for the remaining period of the current charter.
As the media landscape has changed in the way that I have described, that has had a consequence. Despite the point made by my hon. Friend the Member for Shipley (Philip Davies) about housebuilding, the number of TV licences held has declined by 1.9 million since 2017-18. That is because, probably for the first time, a large number of people are genuinely saying that they do not watch live television and that they are perfectly adequately entertained by watching streaming services, on demand and catch-up TV. Under the current rules for the licence fee, they are not required to have a licence.
On top of that decline of 1.9 million, estimated TV licence evasion has now risen to its highest level since 1995, standing at about 10.3%. If the trends taking place continue, that represents a significant challenge to the sustainability of the licence fee, and that comes on top of the concerns about the fairness of the model and, indeed, about whether it is right to continue to enforce it through a criminal sanction.
Already we have seen the House of Lords Communications and Digital Committee suggest that the drawbacks to the current licence fee model are becoming more salient. It called for a comprehensive review of the licence fee system. In response, the Government have established the BBC future funding review, with the purpose of examining the options for alternative means of funding the BBC after the end of the current settlement.
However, the relationship between the Government and the BBC, particularly over the funding settlement, is one of negotiation, and it is right that the Government should ultimately decide the level of licence fee. There have been suggestions by some—I do not believe my hon. Friend the Member for Shipley would be among them—that the licence fee should be set by some independent committee or by Ofcom, and that the Government should not have a say. That is not something that I believe would be right. I think the Government have a duty to take account of the pressures on household budgets more widely, and the Government are also accountable for that decision. Therefore, I see no chance of that aspect changing, but there are options that will become available over time for alternative means of funding.
Secondly, I will take this opportunity to say from the Dispatch Box that the Government are very disappointed at the attitude taken by the BBC to the coverage of events in Israel and Gaza. The BBC’s refusal to describe this as a terrorist act is something the Government profoundly disagree with. My right hon. Friend the Secretary of State, while reiterating that we do not tell the BBC what to do, has made it clear that the Government’s view is that the BBC should describe it as what it is: terrorism. The suggestion that, in doing so, the BBC would somehow be in breach of the Ofcom broadcasting code is clearly not the case. Ofcom has made it clear that it is an editorial matter for the BBC. There are plenty of previous examples where the BBC has called terrorism “terrorism”, and our view remains that it should do so in this case.
However, the Government have considered what more could and needs to be done. In the next few weeks we will also publish the outcome of the mid-term review, which will look at this point. My hon. Friend the Member for Bracknell is completely right that the BBC’s reputation for impartiality is paramount, in justifying the need to pay the licence fee and in protecting its reputation, and not just in this country but around the world. We will say more about that in due course.
For the reasons I have described, I do think that in future the licence fee will become harder to maintain and that we now need to start thinking about the alternatives. That is linked to the way in which people receive television. There will probably come a time when television is delivered exclusively via the internet. That will first require everybody to have access to ultrafast broadband in order to receive it—that is another of my present responsibilities—and the technology will need to develop a little more, but we already have internet protocol television becoming more widely spread. Of course, once we get to that moment, subscription becomes viable. We cannot currently have subscription services on Freeview, but we can on the internet, which is why an awful lot of people who have access to that choose to subscribe to Netflix, Disney, Amazon and the rest.
These issues will therefore become more important and more possible as we move towards that future, but we have not got there yet. However, the Government have started to think about those options through the future funding review. Therefore, while I am afraid that we are not in a position to support the Bill, my hon. Friend the Member for Christchurch does touch on extremely relevant points where we think more thought will need to be given in time. I thank him for giving us the opportunity to debate the matter today.
The BBC is also the biggest commissioner of music, and one of the biggest employers of musicians in the country. From the Proms to the programming of Radio 3, to the world-class musicians in the BBC Singers and the BBC orchestras, the BBC is highly regarded for its music, both here and around the world. I have raised a number of issues with the BBC about protecting the position of our world-class musicians, and I think their strengths are now understood.
The value that the BBC provides is immense, and for every pound put into the BBC, it delivers back £2.63 of direct economic impact. Importantly, 50% of those benefits are to regions outside London. As a Salford MP, I appreciate the work that the BBC does from its Salford base. To fund a universal service with such breadth and impact, some sort of payment model must exist, and for many years the licence fee has served that purpose.
As we have been hearing, however, for many over-75s, paying for a TV licence is a relatively new experience. Under the previous Labour Government, the licence fee was covered for that age group, making them exempt from payment. In 2015, the BBC was handed responsibility for the policy, and following a consultation with nearly 200,000 responses, it found that it simply could not afford to absorb the £745 million that it would cost to maintain free licences for all over-75s. As a result, since 2020 free licences are restricted to over-75s in receipt of pension credit, costing the BBC a smaller, but still significant sum of £250 million a year.
For those over-75s who must now pay the fee, support in making that change has been crucial. The BBC informed all over-75s personally of the change of policy, ran a public information campaign on the availability of pension credit, phased the payment system in, and offered specialised payment plans for those moving from a free to a paid licence. Decriminalising the non-payment of the fee for that age group is not a suitable support measure. In fact, decriminalisation could make matters worse both for those in that age group, and for the BBC.
Let me look further at the issues around enforcement that we have touched on in this debate. No one wants pensioners to be put in prison for not paying their fee, and fortunately nobody—nobody at all—is imprisoned for licence-fee evasion in England and Wales. The maximum sentence for evasion alone is a fine, and custodial sentences would be imposed only in rare cases where a fine was not paid. Indeed, as the Minister has said, data shows that there are no over-75s in prison for failing to pay a TV licence fine, and prosecution of any kind is an absolute last resort, taking place only after every measure to retrieve payment has been tried. Prosecutions can take place only when it is in the public interest to do so.
As we have heard, under the alternative of the civil system, the enforcement regime has the potential to be harsher. Indeed, the current system allows the court to apply discretion by ensuring that any fines are within what is affordable for an individual to pay. A fine under the civil system would be fixed at a higher rate, and it would not be possible to take income into account, leaving the most vulnerable at risk of being unable to pay. Likewise, the current system means that over-75s leave with no criminal record and no impact to their credit score, and never see a bailiff at their door to collect the fines. Under a civil system, those protections would be lost. Therefore, although decriminalisation may present itself as a supportive measure, it would fundamentally not result in a fairer system for the over-75s.
The Minister said that he will keep enforcement under review, and I think I heard him agree that this is not always done with sensitivity. My hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) will appreciate that, given that his constituents have raised such issues with him, and I hope we can hear more about that. Enforcement for that age group should be done sensitively, and if it is not, we should be doing something about it.
Decriminalisation would also be worse for the BBC—the Minister has already made a similar point. It would send a message that it is okay not to pay the licence fee, and possibly lead to more people avoiding paying the fee. The BBC would then be left with no choice but to absorb the cost by cutting programmes and services, and reducing investment in the UK’s creative economy. The BBC has already faced a 30% real-terms cut to its funding in the past decade, and must make further savings of £285 million a year by 2027. By further starving the BBC of resources, we would all lose, from the 10-year-old on “BBC Bitesize” to over-75s keeping up with their local news through BBC local channels. We all rely on the BBC and its continued success.
The licence fee model might not be perfect—Labour would look at alternative public funding models when the end of the charter period approaches—but any successful funding model must be fair and it must ensure that the BBC can continue to do what it does best. Decriminalising the licence fee, as I have touched on, is not fairer than a civil system and it would come at the cost of substantial detriment to the BBC and therefore to us all. It is on that basis that Labour must oppose the Bill today.
What is encouraging is that the market is working, with 1.9 million fewer licence fee payers—that is great, is it not?—and evasion has gone up to 10.3%. The licence fee is now £159. I am very concerned that if it goes up by inflation next April—it may be 15% or 20% since it was last increased—there could be another £20 on the licence fee at a time when there is a cost of living crisis. Who knows? From what my right hon. Friend was saying, it sounds as though the Government will do something to prevent such an increase taking place in April—just before the local elections, in the year of a general election—but we will have to wait to find out more about that in due course. In the meantime, let us be grateful for the fact that there is, in effect, a de facto decriminalisation, rather similar to the situation in relation to shoplifting, so that is something that we can take into account.
Ordered, That the debate be now adjourned.—(Scott Mann.)
Debate to be resumed on Friday 27 October.
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