BBC Funding
(11 months ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Baroness Merron (Lab)
My Lords, we on these Benches are clear that the BBC must continue as a universal, publicly owned and publicly funded public service broadcaster, with funding that is both sufficient and sustainable. After flirting with the privatisation of Channel 4, the Government’s somewhat chop and change approach to BBC funding is creating significant uncertainty for our valuable public service broadcasters and the wider creative ecosystem. Have the Government undertaken an assessment of the likely impact of the additional pressure being placed on BBC budgets? Is this likely to lead to more journalist job cuts, disruption to commissions and supply chains, or harm to the organisation’s soft power across the world? If an assessment has been undertaken, will it be published?
The BBC has already scaled back some of its public service output in response to the licence fee freeze. This has seen, for example, local radio services streamlined. From my time as an MP in the other place, I recall how local communities had the greatest trust in local TV and radio stations as a source of news and information. Does the Minister agree with the continuing importance of local provision of news and information at a time when fake news proliferates, particularly online, and when many local newspapers are scaling back their operations? To turn to the national sphere, most recently, the format of “Newsnight” has changed, with its important investigative journalism scaled back and moved elsewhere.
The Government’s desire to focus on the cost of living is understood, but it is their actions which have stretched household budgets to breaking point. Does the Minister accept that this change in how the licence fee is calculated will have a negligible impact on working people’s finances, through a saving of just £4 a year, while having a far bigger impact on the BBC’s ability to fulfil its public service duty and role?
We also understand the desire of the Secretary of State to launch the future funding review. She is, after all, not the first person to have had that idea, but many lack confidence that the process is about getting the right result for the BBC. What steps will be taken to shore up confidence in the review among stakeholders, staff and the public?
We have learned so much from the past few years about what it means to be a resilient society, not least because of the pandemic, when the BBC really came into its own, not just as a broadcaster but as an educator, a trusted source of information and a connector. The Government’s resilience framework promises a direction of travel which incorporates prevention, preparedness, response and recovery, no matter what the disaster. Can the Minister indicate whether there has been consideration of the impact of the BBC’s funding on all these aspects of resilience?
Our great broadcasting institutions, their employees and the wider creative sectors that they do so much to sustain deserve far better than they are getting currently. Labour, on the other hand, will work with, rather than against, the BBC and other public service broadcasters to grow our creative industries and ensure that all parts of the UK benefit from their output. That is the essence of public service broadcasting.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, in 2022, the Government made a firm commitment that, after two years of freezing the licence fee, they would allow it to rise for the following four years according to the rate of inflation. The BBC kept its side of the bargain, despite having to make heavy cuts. The Statement repeated here today makes it clear that the Government have not. The Government’s excuse—that their below-inflation settlement is about helping with the cost of living—will not wash. The difference between an inflation- linked settlement and the actual one is 45p per month, yet this will deprive the BBC of £400 million over the next four years, causing enormous damage to an institution already reeling under successive cuts by this Government. There are more direct ways to help those who are trying to deal with the burden of inflation and increased energy bills.
What does this mean? It means less investment in the nation’s creative industries, fewer jobs created nationwide, more job cuts at the BBC and, almost certainly, fewer journalists dedicated to checking facts and reporting impartially, which is so important in the world of the internet. The BBC feeds into the Government’s levelling-up agenda, making programmes across the country while boosting local economies and utilising local skills—except that cuts to BBC local radio, already in train, mean that the spotlight on the local level is increasingly dim and will grow dimmer, thanks to today’s Statement.
As mentioned by the noble Baroness, Lady Merron, another casualty is investigative journalism. I used to work on “Newsnight”; we criss-crossed the UK and the world seeking out stories and telling them in depth, not just reacting. Now, it is another current affairs programme shunted off to an existence solely in the studio. As my former colleague Michael Crick—he may not be the favourite person of some of your Lordships, but he is one of mine—noted:
“If I were a dodgy politician or a crooked businessman or a lazy civil servant, I would rest a bit easier in my bed”.
I mentioned the world. International reporting is already shrinking, and believe me it will shrink further. Just look at how the terrible events in the Middle East have led to Ukraine virtually disappearing from the airwaves. Major events have been occurring in Afghanistan, Sudan, Myanmar and Latin America: we hear nothing. Bringing the world to domestic audiences is so important. As a consequence, we are more equipped to understand, connect and empathise with what is going on beyond UK borders. Ignorance is not a good idea. It is fed by the echo chamber of the internet. Does the Minister not agree?
Of course, the BBC is not just about journalism, important as that is. It is the backbone of our world-beating creative industries and the single largest investor in original UK content operating in the UK. Innovation is often overlooked. It was the BBC that came up with the idea of television. My noble friend—if I may call him that—Lord Birt was behind BBC Online and the BBC has continued to lead, with the likes of the iPlayer and BBC Sounds. It led on rolling out the digital switchover and created two consumer platforms to help make online TV available to all UK audiences. Every £1 of BBC R&D spend alone contributes to £9 in value beyond. Can the Minister explain why this is not something to support?
Then there is soft power. Through the World Service and the programmes the BBC exports, it is central to promoting the UK around the world and is the envy of the world. The Government’s integrated review, published this year, boasted correctly that the BBC is
“the most trusted broadcaster worldwide”.
Considering all these positives, have the Government assessed the impact of these unexpected cuts on the BBC? Can the Minister say where he sees them coming from and what he would be happy to do without?
Finally, on the announced review of the BBC’s funding model, it is of course appropriate that the funding model for the BBC should be investigated, but does the Minister think it is right for the Government to do so without any public consultation and in the space of a few months? Who will be on the expert panel and how will they be chosen? These Benches have long proposed that the funding process, as well as the appointment of the BBC chair, should be taken out of government control and handed to a genuinely independent body. As David Attenborough said:
“The basic principle of public service broadcasting is profoundly important. If we lose that we really lose a very valuable thing”.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
My Lords, I am grateful to the two noble Baronesses for their questions. I was not clear from the contribution of the noble Baroness, Lady Merron, whether the Labour Benches are closed-minded to the future funding model of the BBC and wedded to the licence fee model. Nor was I clear from the noble Baroness, Lady Bonham-Carter, whether the Liberal Democrat Benches think the rise for licence fee payers ought to be higher.
What we have done this year and since the beginning of 2022 is, initially in 2022, agree a funding settlement with the BBC, which froze the licence fee at £159 for two years. That has already saved households £17 over this year and last. Under the terms of the settlement, the licence fee must now increase annually in line with CPI but, because of the decision we have taken to calculate this using the annual rate of CPI in September, rather than a rolling six-month period, the increase will be kept as low as possible.
In April the licence fee will therefore rise by 6.7% to £169.50 annually. That is an increase of just 88p per month, as opposed to a rise of £14.50, which would have happened under the previous way of measuring CPI using an average of the 12 months preceding September. We have done this because we recognise that household budgets remain under pressure. This decision, alongside the two-year freeze, will save individual licence fee payers more than £37 by the end of 2024. It will also ensure that the BBC is provided with more than £3.8 billion to continue to produce the world-leading content for which it is rightly renowned across this country and the world. That is a fair deal which provides value for money for the licence fee payer, while ensuring that the BBC can continue its important work and play its important role in our national life.
The BBC has made a statement about the impact of the decisions as it sees them—the noble Baroness, Lady Merron, asked about that. It is of course for the BBC to make its decisions about how it spends this £3.8 billion, but we are providing it with a significant cash uplift that will support the corporation in delivering its mission and public purpose and continue to deliver for licence fee payers.
The noble Baroness, Lady Bonham-Carter, was right to highlight the work that the BBC does across the country reporting on the lives and interests of people across these islands, as well as the important work done by the BBC World Service across the globe. That is the world’s largest international broadcaster and plays a hugely important role providing accurate and impartial news, analysis and discussion in more than 40 languages to more than 360 million people around the world every week. The Government strongly support the BBC’s mission to bring high-quality impartial news to global audiences, particularly in places where free speech and the freedom of journalists is limited. We will consider how the topics that the future funding review will explore apply to the funding arrangements of the BBC World Service and to the important work that the BBC does in broadcasting in minority languages here at home in the United Kingdom.
The next steps of the funding review will include appointing an expert panel, engaging with interested parties and commissioning research. The review will aim to report to the Secretary of State by next autumn. The findings will inform the charter review, which is where any final decisions on changing the BBC’s funding model will be made by His Majesty’s Government. Given the commercial sensitivities, the findings of the review will remain confidential until the review has concluded. Decisions about the membership of the panel will be made by Ministers, but we will ensure that the panel incorporates a broad range of views. Its role will be to provide advice and external challenge to the review, so that we can consider the best way to equip the BBC with the income it needs to continue the important work that it has done for more than a century, and that we look forward to it continuing to do in an increasingly complex media landscape. It is vital that it is able to continue doing that for the reasons the noble Baroness, Lady Bonham-Carter, highlighted about the contested news sources we see and have debated many times in your Lordships’ House.
Lord Birt (CB)
My Lords, I quote the current Secretary of State: the BBC
“needs to live in the real world”,
and
“We can’t keep putting prices up for the licence fee”.
What is actually happening in the real world? In the last three years, while the licence fee has been frozen, the price of Netflix has risen by 50%, Disney+ by 83%, Apple TV by 40%, and spend on the NHS, excluding Covid costs, has risen in the same period by around 12%. In the period 2010-20, the BBC had to cut spending by 30%. After two years flat, there is a further drop in real terms of something like 12%. Against that backdrop, frankly, this new settlement will be but a drop in the ocean.
It is recognised the world over that the century-old BBC is one of the greatest creations of our times. No other country in the world has so effectively captured its national experience, cultural expression and national dialogue, viz: the exquisite “Planet Earth”, “Horizon”, “Dad’s Army”, “Fleabag”, “Little Dorrit”, “Happy Valley”, “Gardeners’ Question Time”, and the Proms— I could go on and on. The BBC still makes wonderful programmes, but—
Lord Harlech (Con)
My Lords, the Companion is very clear that, in the Back-Bench portion of Questions on a Statement, noble Lords are encouraged to make their point and ask a question.
Lord Birt (CB)
I hope noble Lords will allow me to come to a conclusion. I can see all too clearly how much the BBC has diminished in every area of programming since my time as director-general. Last year, the previous Secretary of State tweeted:
“It’s over for the BBC as they know it”.
Let us name the game; the BBC is a victim of the culture wars and, as a result, we are witnessing the long, slow, painful, diminution of this great institution. Will this continue?
Lord Parkinson of Whitley Bay (Con)
I must disagree with the noble Lord. We want to ensure that the BBC continues to be able to do its work over the next hundred years just as brilliantly as it has over the past century. That is why we are trying to find a settlement that is fair for licence fee payers, who bear the cost at the moment, but which is also good for the BBC, sustainable for the long term, and supports the BBC in its important work.
The noble Lord drew attention to the rising cost of other service providers. He is right to do so; it highlights what a good deal people get when they pay their licence fee and get to enjoy the work of the BBC. Of course, the number of households holding a TV licence fell by 400,000 last year, and has declined by around 1.7 million since 2017. We want to ensure that the costs are not borne by an increasingly small number of people. Of course, people are consuming television, including on the BBC, in different ways. That is why it is right to look at the future funding model, to make sure that the BBC can continue to do its important work in a very different media landscape over the decades to come.
Lord Hamilton of Epsom (Con)
My Lords, we are regularly told that the licence fee is not a tax, but on the other hand it walks like a tax and quacks like a tax. Of course it is a very flat tax, in that it impacts enormously on people who cannot easily afford it. As the noble Lord, Lord Birt, has referred to, the BBC is coming under enormous competition from many other forms of media. Surely this settlement is quite generous, looked at in those terms.
Lord Parkinson of Whitley Bay (Con)
I agree with my noble friend. We want to strike a balance that is fair to licence fee payers, who are, of course, facing pressures on the cost of living. We want to show that the BBC, like them, is having to make decisions about how it spends its money in the current climate, but also highlight the brilliant way it spends it, the important work it does and the important role it plays with the output it produces.
Baroness Young of Old Scone (Lab)
My Lords, I find the Minister and the Government’s position quite confusing. I declare an interest as a former deputy chair of the BBC, and commend the noble Baroness, Lady Bonham-Carter, and the noble Lord, Lord Birt, for their exposition of the real, parlous state that the BBC finds itself in.
The Minister is saying that he is supportive of the BBC’s role. We have a unique thing in the BBC; it is a jewel in the crown internationally and it provides a huge range of behind-the-scenes and in-front-of-camera services to this nation. Yet the position of this Government has been, consistently since 2010, to squeeze and squeeze the BBC harder. This is at a time when 81% of the households in this country subscribe to multiple streaming services, costing them up to £400 a year, when they are getting a bargain, even with a properly inflated licence fee payment, with the BBC.
I will ask the Minister just one question. When this review of the basis of the funding of the BBC is taking place, is the objective to make sure that the BBC will have adequate funds to do the thing that it really needs to do? That is to help reshape its already changing offering to be relevant in the modern world, both nationally and internationally, and to ensure this jewel in the crown that we have is not destroyed inadvertently by a fruitless debate about the licence fee basis of payment.
Lord Parkinson of Whitley Bay (Con)
The review aims to ensure that the BBC’s funding model is fair to licence fee payers, sustainable for the long term and supports the BBC in the vital work it does, including its important role in growing our thriving creative industries. We know that, if we want the BBC to continue to succeed, we cannot freeze its income but, at the same time, we cannot ask households to pay more to support the BBC indefinitely. So, the review will look at a range of options for funding the corporation, including looking at how the BBC can increase its commercial revenues to reduce the burden on licence fee payers.
The Earl of Clancarty (CB)
My Lords, I am not against a review of the funding model, but that is a completely different matter entirely from the long-term squeezing of funds available to the BBC—which is surely, as has just been said, the central problem. One problem should not be used as an excuse not to solve the other problem.
Lord Parkinson of Whitley Bay (Con)
As we know from previous exchanges, there is the immediate decision about licence fee increases and the settlement that the Government reached with the BBC at the beginning of 2022—which saw the two-year freeze to help house- holds at the time—and the longer-term questions which are right to ask to make sure that we are funding the BBC in a sustainable way, so that it can continue to do important work in the decades to come, which are going to look very different from the BBC’s first century.
Lord Foster of Bath (LD)
My Lords, many of us despair at the way in which the Government praise the BBC and yet constantly undermine it. In terms of future funding, is the Minister aware that your Lordships’ Select Committee looked at this and rejected a straightforward advertising funding model on the grounds that it would not provide enough funding for the BBC and would damage other public service broadcasters. It also ruled out a sponsorship funding scheme as well. Will the Government rule out those two options and accept that guaranteeing the universality of the BBC will always require some form of public funding?
Lord Parkinson of Whitley Bay (Con)
I do not agree that providing the BBC with more than £3.8 billion is undermining it. That is a large amount of money for the BBC to do its important work. The noble Lord is right to draw attention to the work of your Lordships’ Communications and Digital Committee. I know that my noble friend Lady Stowell of Beeston would have liked to be here for this exchange, but the committee is on an external visit today. We will, of course, engage with her and the ideas and work of the committee. As I say, the future funding review will look at such matters as we weigh all that up and make decisions about the best way to provide the BBC with the sustainable income it needs.
Lord Mendoza (Con)
My Lords, the BBC is a thriving part of a much wider creative industries sector. That sector has transformed in recent years and continues to transform. The McKinsey report on the arts sector, which came out last month, described the creative industries as now having reached a £126 billion contribution to GVA, which is exactly equivalent to the entire construction sector, with 2.5 million jobs. This is the universe in which the BBC is now swimming. The expert panel will be looking at a funding model, but is it not slightly strange to have a funding model in search of a strategy? Should not that expert panel also consider what we want the BBC to provide as a public service broadcaster, whether on news—local, regional and international—education, children’s programming and so on? I hope that the expert panel will think more on that as well, so that we do not just have £3.8 billion looking for something to do.
Lord Parkinson of Whitley Bay (Con)
My noble friend is right to draw your Lordships’ attention to the excellent report done by McKinsey and published recently, which highlights the successes of our creative industries. They were growing nearly twice as quickly as the rest of the economy before the pandemic. As he knows, the Government are determined, through our Creative Industries Sector Vision, to continue to help the sector grow and thrive. He is also right that the BBC and our other public service broadcasters play an important role in the success of the creative industries. That is why, as I have said, we want to take that into account as we look at the best way to fund the BBC in the decades to come. We want the BBC to continue to succeed as a public service broadcaster long into the future, providing high-quality public service content and supporting our thriving and growing creative industries.
The Lord Bishop of Durham
Will the review look at what the BBC generates for the nation, as well as what goes in? Arguably, it generates far more money than the £3.8 billion, but this cannot be reduced to just an economic debate. Will what the BBC generates in good will around the world and our standing as a nation, because of what it does, be taken into consideration?
Lord Parkinson of Whitley Bay (Con)
I hope the right reverend Prelate can tell from what my right honourable friend the Secretary of State said in another place that we do appreciate the huge value that the BBC brings to viewers and listeners across the country, as it has done for more than a century. It is because we value it that we want to ensure that it is able to survive in decades to come. We are also looking at how we can support the BBC in that fast-changing broadcasting landscape. We have more than doubled the borrowing limit of the BBC’s commercial arm to enable it to access private finance, so that it can pursue an ambitious commercial growth strategy of its own, which of course will have an important impact on boosting investment in the creative economy of the whole UK.
Lord Inglewood (Non-Afl)
The Minister has explained that at the centre of the financial arrangements which he has described is the concept of fairness. If we consider fairness in respect of licence fee payers and in respect of the BBC, we are really talking about apples and pears. Could the Minister explain how the Government balance fairness to the licence fee payer with fairness to the BBC? It seems that there may be a bit of a risk that we end up with a solution that is rather fairer to one side than the other.
Lord Parkinson of Whitley Bay (Con)
That thorny question is one for the future funding review, but it is important. We want to ensure that the BBC has a sustainable income, but also that the sources of that are fair. I have pointed already to the declining number of people who are paying for a licence fee and the declining number who watch television live. Funding models which are predicated on some of those conceptions of the past will look increasingly anachronistic as we move into the BBC’s next century. We have also seen licence fee evasion rising, so it is right that we look at this to make sure that we are coming up with a good answer to the difficult question that the noble Lord poses.
Lord Wallace of Saltaire (LD)
My Lords, have the Government looked at models of public service broadcasting in comparable countries in terms of both international and domestic activities? In the United States, France and Germany the international dimension of Voice of America and so on is publicly funded, but here the international dimension of the BBC has been financially squeezed by the Government in recent years, which is a disaster for British foreign policy.
In France, Germany and the Netherlands the domestic side is also substantially publicly funded, while in the US it is not; it is given over to commercial interests. The Minister will be as painfully aware as the rest of us of the destructive impact that has had on maintaining a national dialogue at the centre of democratic politics in the US; instead, it encourages culture wars. There are powerful commercial interests in this country—the Murdoch press more than anything else—that would very much like to see that happening here, and it is not at all clear that all members of the Conservative Government are still committed to the principle of public service broadcasting.
Can the Minister, as a One Nation Tory and not a member of any of the “five families” on the right, say that he, at least, is committed to the principle of public service broadcasting, which implies a broadcaster that one can trust—the BBC comes out high on public trust in all public opinion polls—and a substantial chunk of public funding?
Lord Parkinson of Whitley Bay (Con)
The whole of the Government are committed to the BBC’s important role as a public service broadcaster. My right honourable friend in her Statement in another place rightly called the BBC “a great British institution” that
“plays a vital role in our culture and creative economy”.—[Official Report, Commons, 7/12/23; col. 514.]
As we look at future funding options, we will look at how public service broadcasting is delivered in other countries, both the ways in which that is done and the pros and cons of those models.
The noble Lord is right to highlight that the BBC plays its role in a globally exceptional way. I have already talked about the more than 360 million people who tune into and rely on the BBC World Service for impartial news and analysis. We should be very proud that it is our national broadcaster that people across the world tune into, and we want to ensure that it is sustainably funded for many decades to come.
Lord Hayward (Con)
When considering the financing of the BBC, will my noble friend clearly bear in mind all the issues that have been raised by noble Lords across the House concerning its importance worldwide and its contribution to society in general? However, what concerns me is that the BBC has not looked deeply into other areas to see what can be brought under control. I have typed “apple crumble recipes” on my phone. The first four entries come from the BBC. Why on earth, when the BBC should be providing services worldwide in multilingual circumstances, are we confronted by an organisation that provides food recipes to anyone who wants them and who can get them for free from other sites as well?
Lord Parkinson of Whitley Bay (Con)
I did not know there were so many ways to make an apple crumble, but I am sure my noble friend’s was delicious, however he made it. He is right. The BBC is getting more than £3.8 billion, which is a large amount of money, for it to continue to do the important work that it does. It is up to the BBC to decide how it spends its money, but it is right that it makes sure that it is doing so in a way that would delight all licence fee payers.
Baroness Young of Old Scone (Lab)
My Lords, I hate to intervene twice—I know it is against the rules and the noble Lord, Lord Harlech, will tell me that I cannot—but I think I am right in saying, and the noble Lord, Lord Birt, will be able to confirm this, that the BBC’s recipes are an entirely commercial venture and are no longer funded from the licence fee.
Lord Parkinson of Whitley Bay (Con)
I have indeed pointed to the extra freedom that the Government have given the BBC to pursue its commercial income, so that it can continue to do its excellent work and be funded in a sustainable way that is fair to licence fee payers, viewers, listeners and indeed bakers.
Lord Vaizey of Didcot (Con)
My Lords, given that a full-scale rebellion is under way against my noble friend Lord Harlech’s—
The Deputy Speaker (Lord Russell of Liverpool) (CB)
My Lords, the time allowed for the Statement has elapsed.