BBC

Lord Vaizey of Didcot Excerpts

Monday 15th July 2019 Westminster Hall

[John Howell]

I thank my hon. Friend for that comment. The idea of keeping out commercial advertising was fine 50 years ago, and even 20 years ago, but in today’s world it needs to be looked at again in the context of how the BBC will function.

I was going to say a few things about free TV licences, but the hon. Member for Warrington North has said many of them already, so I will not comment.

[Mr Edward Vaizey (Wantage) (Con)]

Do you agree with her? That is what we want to know.

[John Howell]

I think this is a fault of both the Government and the BBC. I have told the director-general that—he happens to be a constituent of mine—and that is the position I will take. Just before my right hon. Friend the Member for Wantage (Mr Vaizey) comes in with a witty comment, that is not sitting on the fence; it is a position that I fully hold. The BBC has done itself no good at all in how it is has gone about dealing with the TV licence.

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[Mr Edward Vaizey (Wantage) (Con)]

It is a pleasure to serve under your chairmanship, Mr Wilson, not least because my hon. Friend the Member for Stone (Sir William Cash) is speaking in the main Chamber, so this is a safe haven for the next 45 minutes, I estimate.

I am an unashamed fan of the BBC. We keep talking about the TV licence fee, but it is worth rehearsing the fact that the BBC provides a huge range of services in at least five or six distinct areas. What I would loosely call the social aspect of the BBC is hard to define, but people forget that it funds five classical music orchestras. We could debate whether that is a good use of licence fee payers’ money, but there it is.

I refer hon. Members to my entry in the Register of Members’ Financial Interests. Last week I hosted an event for the BBC at which it launched a new app called Own It, which is designed to help children to navigate social media. This week, I am hosting an event with the BBC for a scheme it is doing with the Arts and Humanities Research Council to fund doctoral students. Of course, we all celebrate the Proms. The BBC does a lot that no commercial organisation would do, much of which strays into the area of social good or the work of the Arts Council England. Frankly, I do not think it spends enough time telling people like us what it does in that field.

We refer to the TV licence fee, and we have heard a lot of citations from pensioners talking about how much they love television, but let us not forget radio. The BBC accounts for about 70% of radio listening. There are not just the national channels that we all listen to—Radio 4 and 5 Live for this demographic, I suspect, and also Radio 1, Radio 2, Radio 3 and 6 Music—but local radio, which is absolutely vital. In my constituency we have BBC Radio Oxford and, nationally, 39 local radio stations provide vital local coverage, in particular local news.

It is often BBC News that gets the BBC into trouble—there is always something for Brexiteers, remainers or Corbynistas to get their teeth into and object to. I thoroughly enjoyed the speech of hon. Friend the Member for Henley (John Howell)—I had no idea about his life as top-flight media executive; he was a star of the BBC World Service. There is also the Parliament channel, local radio news and the BBC’s website. However often we disagree at times with how the BBC covers particular aspects of news, we can all agree that in an era of fake and very biased news being disseminated on social media—we see the effect that that has had on politics in the United States—we are lucky to have, broadly speaking, an unbiased and objective news service at the heart of the BBC, which is widely respected in the UK and abroad.

Then there is BBC drama and entertainment, including “Strictly Come Dancing”, “Poldark”, which we all watched last night, and “8 Days”, which I watched this morning with my Cavapoo at home. Quality drama pervades the whole of the drama output of British television. One reason why British television is so respected around the world is because the BBC sets a quality anchor—a quality level—that everyone else aspires to, which would not be there without it.

Then there is the BBC’s foray into the world of commerce. It generates its own revenue to keep the licence fee within reason and sells its programmes all over the world. BBC Studios, which makes programmes, is now in profit. The BBC has made a foray into commercial television with UKTV, to which I shall return.

The BBC does much work to make itself as accessible as possible. The iPlayer is probably the most user-friendly TV platform—I include Netflix in that. The BBC has also supported the roll-out of digital radio, and it has constantly innovated in relation to apps, as more and more people are obviously accessing content on smartphones. As my hon. Friend the Member for Henley said, BritBox, which it launched in the US with other commercial players, is now potentially being launched in the UK.

It is important to remember that there is a lot going on in the BBC. When people criticise it, they should ask themselves what we would do without it. I have to admit that it is a bit like the royal family—it is a bit of an anomaly. I am not sure whether we would invent it if we were starting from scratch, but it permeates our culture and I could not imagine a life without it, even though, as my hon. Friend said, it is not perfect and gets things wrong.

The issues facing the BBC include the licence fee itself, which we looked at when we undertook the charter review. We concluded that, rather like democracy, it is the least-worst option of funding the BBC. It maintains a level of independence from the Government and gives the BBC a secure income. By and large, it still works. It is not destined to last forever. It may be that the BBC eventually moves to a subscription model—we will have to wait and see. Let us not forget that the licence fee has evolved. There used to be a radio licence fee that people took out separately from the TV licence. There may be debates about whether there is a licence fee aspect of funding the BBC and a subscription aspect.

The BBC will continue to look at savings. It has taken about £1 billion in costs out of the organisation over the past 10 years, and it is right that it has done so. It has an existential challenge, in terms of competing with the commercial sector. It is a big elephant in the room, in so far as the UK media scene is concerned. Ten years ago, we could not move without every media organisation, including, funnily enough, The Guardian, complaining about its reach and scope. That has been dwarfed by the advent of Netflix, the resources that Sky will have following its takeover by Comcast, and Disney. The competition to fund content, and for eyeballs—not least given the changing ways that people are consuming content—will present real challenges to the BBC to remain relevant, particularly to a younger demographic. I do not envy it that.

The BBC faces challenges on which it can lead the way. It focuses far too much—this slightly contradicts what I just said—on saying, “How do I compete against ITV or Netflix?” and not enough on saying, “What does the privilege of a secure income from the licence fee allow me to do for the UK as a whole?”

[Anna Turley (Redcar) (Lab/Co-op)]

The right hon. Gentleman is giving very compelling testimony about the value that the BBC adds to this country. I wholeheartedly endorse everything he has said. He is getting into the wider issue of the social value that the BBC adds. Elderly people frequently suffer from isolation and are unable to get out of the house. One of my constituents has said:

“I am disabled. I cannot go outside without my carer or my wheelchair. The television is my friend and companion.”

Does that not back up what the right hon. Gentleman has said? The BBC is about more than just entertainment; it adds social value over and above that.

[Mr Vaizey]

It certainly is. If I knew about the services that the BBC provides in greater depth, I could probably rattle off five or six others, beyond simply the television, that it provides for the hon. Lady’s constituent.

Perhaps this sounds like navel-gazing—I am coming to my conclusion—but I think the BBC could take a massive lead in supporting much greater diversity, including with disabled people and black and minority ethnic people, not just in front of the camera but behind it. It really could invest in that. That is not to say that, over the past 30 or 40 years, it has not been at the centre of training legions of people who now work across the media.

The issue that concerns MPs at the moment, however, is the BBC’s struggle with having the free TV licence foisted upon it. As I have said already in the main Chamber, that policy was forced on the BBC by the Government, by the Treasury. There was no negotiation—the BBC was going to take the free TV licence, whether it liked it or not, as far as the Treasury was concerned. The only room for negotiation was what the BBC might be able to claw back in order to mitigate the financial impact.

The decision was wrong, and it was made because the then Government had to meet their manifesto commitment—ironically—of making £12 billion in welfare cuts. It was the wrong decision to impose on the BBC, and this Government compounded it. Having forced it on the BBC, they are disgracefully trying to have their cake and eat it, saying, “It’s the BBC’s decision but we disagree with it.” If they are going to force the policy on the BBC, they should support its decision. If we could roll it back, an honest Government would take the policy back from the BBC, engage with the public and decide whether free TV licences are affordable.

My personal view—this is where I will lose the support of Opposition MPs—is that the free TV licences were a gift given by a previous Government without thinking whether it was financially sustainable. Reform of free TV licences is a perfectly sensible position to look at, and it seems to me that the BBC, after careful analysis, has come up with a sensible reform policy. However, the question is whether that should be the BBC’s role, and the answer to that is no.

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[The Minister for Digital and the Creative Industries (Margot James)]

It is a pleasure to serve under your chairmanship, Dame Cheryl, and I congratulate the hon. Member for Warrington North (Helen Jones) on securing this important debate on these three petitions. I agree with the shadow Minister, the hon. Member for Cardiff West (Kevin Brennan), that the hon. Lady’s opening speech was an excellent account of so many of the issues that drove those petitions, and her own response to them.

Before I address some of the issues that have been raised, I will echo the huge positivity from across the Chamber about the role, importance and value of the BBC. We in this country are extremely fortunate to have the BBC, for all the reasons that right hon. and hon. Members have mentioned; it delivers an enormous public service, with hugely successful productions such as “Bodyguard”, “Strictly Come Dancing” and the “Today” programme. I would add a recent one, “Gentleman Jack”, which is absolutely fantastic.

[Mr Vaizey]

Oh, I loved that.

[Margot James]

I am glad my right hon. Friend loved it. It was a series that illustrated the importance of diversity in the BBC: a regional series set in Halifax, written by a BAFTA-winning director and playwright, Sally Wainwright—also from Yorkshire—and co-produced by BBC Studios and Lookout Point. I wish that such a series had been aired when I was growing up in the 1970s.

Of course, it is the licence fee that delivers that public value and allows the BBC to reach UK audiences everywhere, from the TVs in our homes to all the gadgets and devices that we carry around with us. The BBC is also required to represent and cater for all sorts of niche interests that may well not attract the attention of a channel that depends on advertising, or even broad-based subscription revenues, for its identity and position. The BBC received close to £3.7 billion in licence fee income last year, and its unique position of providing distinctive content in under-served genres to under-served audiences is vital.

Right hon. and hon. Members will know that we carefully considered the question of the licence fee as part of the BBC charter review process in 2015 and 2016. We found that independent research demonstrated a great deal of public interest in the licence fee. Some 60% of people surveyed backed it as the least worst option, as my right hon. Friend the Member for Wantage (Mr Vaizey) mentioned. For 60%, the licence fee was the mode of payment that they most supported, with fewer than 3% backing either an advertising model or a subscription-based model. Those figures are quite powerful, which is why we have committed to maintaining the licence fee funding model for at least the duration of this new 11-year charter period, which will bring us to the end of 2027. That provides the BBC with the funding certainty that it needs to thrive and deliver its mission and public purposes.

The media landscape is changing all the time, and citizens and consumers have more choice than ever before, particularly in the form of subscription-based services. However, the BBC’s content remains hugely popular. Some 91% of adults in the UK use its services each week, spending an average of 18 hours watching, listening to or using those services. Such figures demonstrate the continuing importance of the BBC in the fast-changing and increasingly competitive media landscape. In addition, the BBC directly invests over £2 billion in the UK’s creative industries each year, and invests billions of pounds in the digital and high-tech industries that support content creation and distribution. It is therefore a very important contributor not only to our shared experiences and public life but to the economy.

I now turn to the over-75s’ licence fee concession. Of course, the Government recognise the importance of television to people of all ages, particularly older people. We have heard a lot today from Members who, having talked to their constituents, have recounted what we all know: that the television can provide a lifeline to older people, particularly those who are recently bereaved or live alone, as a way of staying connected with the world. Right hon. and hon. Members have made that point clear, and I wholeheartedly agree with those sentiments.

However, if we cast our minds back four or five years to the time of the 2015 funding settlement, the Government had an expectation that all public services and public institutions had to find some economies and play their part in reducing the budget deficit overall and bringing some stability and sense to the public finances. Older people, like everybody else, mostly agreed with the need to do so, although they did not necessarily agree with all the means that were identified as routes towards restoring that stability and sense. However, it was agreed with the BBC that the responsibility for that concession would transfer to the BBC by June 2020.

In return, the Government closed the iPlayer loophole so that more people paid the licence fee. Many more people now pay the licence fee, leading to an uptick in the BBC’s revenues. The Government also committed to increase the licence fee in line with inflation during the charter period, which for the first time gave the BBC a more sustainable income for the future. At the time, the Government and the BBC agreed it was a fair deal. Indeed, the director-general said:

“The Government’s decision here to put the cost of the over-75s on us has been more than matched by the deal coming back for the BBC.”

Parliament debated the issue extensively in passing the Digital Economy Act 2017 and approving the transfer of the legal responsibility for the concession to the BBC. I was a Whip in that Government, and I can tell Members—I am sure you will remember this too, Dame Cheryl—that we had to compromise greatly on a number of very contentious issues, but this was not one of them.