TV Licences for Over-75s

John Whittingdale Excerpts

Wednesday 8th May 2019 Commons Chamber

[Tom Watson]

What a great campaigner Jack Jones was. I thank my hon. Friend for raising his contribution. His legacy is the National Pensioners Convention, which is solidly against these proposals. I am sure we will talk about it later in the debate.

That is why the Government’s refusal to honour their manifesto pledge and save free TV licences is so cruel. My co-signatories on this motion show the degree of cross-party consensus on this matter. We are calling on the Government to rethink and change course urgently. The threat to TV licences is part and parcel of the Conservative austerity agenda, which has weakened our social fabric and impacted the most vulnerable in our communities. Our social contract, whereby people who work hard all their lives are afforded comfort in old age, is being slowly but certainly unpicked. Free TV licences are a small but important part of that social contract. Taking them away will force older people into poverty and leave many more feeling isolated and alone. Rather than standing by their manifesto promise and standing up for dignity and comfort in old age, the Government are taking it away.

Now a little history. As my right hon. Friend the Member for Delyn (David Hanson) said, the TV licence concession for over-75s was introduced just over 20 years ago by the Labour Government as part of a robust package of reforms to support our pensioners and boost their quality of life. The universal benefit was a result of a long campaign to show our oldest pensioners society’s appreciation. Some 4.5 million people over the age of 75 continue to benefit from free TV licences today. Although Labour did not commit explicitly in our last manifesto to continue that policy, our commitment was of course implicit. In case there is any misunderstanding among Ministers, let me be clear. If the Government fall before the natural end of the Parliament in 2022, Labour will honour the Conservative party manifesto pledge to protect TV licences until then.

Despite their manifesto promise of 2017, the Government had already set the stage for the concession to be cut, as my hon. Friend the Member for Coventry South (Mr Cunningham) said. In 2015, they outsourced the responsibility for the TV licence concession on to the BBC as part of the charter renewal process.

[Mr John Whittingdale (Maldon) (Con)]

I am interested that the hon. Gentleman is saying that a Labour Government coming to power before 2020 would restore the TV licence. Is he saying that a future Labour Government after 2020 will maintain the free TV licence for over-75s at a cost that, next year, will already have reached £745 million?

[Tom Watson]

My answer to the right hon. Gentleman is a complicated one. We are committed to 2022. I do not write or decide our manifesto. He knows I cannot do that. Our commitment to pensioners and protecting their benefits will be very clear. It is highly likely that we will be supporting pensioners after 2022, but I cannot give that commitment today. I will certainly make sure we do not outsource welfare policy to a public broadcaster.

The Government’s outsourcing means that, as of 2020, the BBC will be fully responsible for deciding who gets a free TV licence, and for funding that concession. It is manifestly unfair. Labour opposed that at the time, and our position has not changed—first, because passing responsibility for free TV licences to the BBC is outsourcing an important social policy. The BBC makes some of the best TV content in the world, but it is not a political body—it is not an arm of the Department for Work and Pensions—and nor should it be. It is not elected, and nor should it be.

Secondly, we opposed the move because the Government deliberately saddled our national broadcaster with a cost that could lead to many skilled job losses.

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[Mr John Whittingdale (Maldon) (Con)]

I am grateful for the opportunity to speak in this debate. As the Minister pointed out, I was the Secretary of State at the time when the licence fee settlement was agreed with the BBC, so I would like to set out some of the reasons why those decisions were reached.

As the Opposition spokesman said, the concessionary TV licence for over-75s is not a fundamental pillar of the welfare state—it was actually introduced by the previous Labour Government. It was introduced to address an anomaly that elderly people living in sheltered housing did not have to pay the full licence fee whereas others did. However, the Labour Government did not introduce free TV licences for all pensioners, on the basis that it was far too expensive to do so—they restricted it to those aged over 75 at a cost, at that time, of £365 million. It is important to realise that that money was not removed from the BBC—it was given to the BBC by the Department for Work and Pensions. It has always been the case, since then, that the cost of exemption from the TV licence is met out of the Government’s budget. The cost to the Government of doing so has risen steadily, so that by last year it had already reached £660 million.

I had the task of negotiating both the new BBC charter and the licence fee settlement. Personally, I would have much preferred that the licence fee had been included within the charter negotiations, since the licence fee settlement, to some extent, pre-empted decisions that we took as a result of the charter review process. However, as the Minister rightly pointed out, we were in very difficult financial circumstances thanks to the profligacy of the previous Labour Government, and we had to take a lot of very difficult decisions. The then Chancellor was clear that we should seek to achieve savings from the BBC, as a publicly owned institution funded by the Government, in the same way that all other public institutions were being asked to find savings. So we agreed with the BBC that it would take over the cost of funding the licence fee concession. However, we were also clear that we had given a pledge that the concession would be maintained until 2020, and therefore the agreement with the BBC was that it would take it over in 2020.

I have to say to the House that the negotiations with the BBC over that were indeed robust. I remember sitting down with the then Prime Minister, David Cameron, with George Osborne and with Lord Hall, the director-general of the BBC, and we had some good discussions in which Lord Hall argued forcibly that this would have a detrimental impact on the BBC. Therefore, in recognition of that, we also included, as part of the licence fee settlement, agreement to address some of the things the BBC raised as its principal concerns. One was the freeze in the licence fee. The licence fee had not gone up at all for a number of years, and therefore the BBC was looking at a real-terms reduction every year. We agreed that the licence fee should be unfrozen. Secondly, a growing number of people were avoiding paying the licence fee by watching the BBC on catch-up, through the iPlayer. Under the law as it then stood, if someone watched the BBC a mere two minutes after the live transmission, they did not have to pay the licence fee. The licence fee was therefore extended to close what was called the iPlayer loophole.

[Bim Afolami (Hitchin and Harpenden) (Con)]

Does my right hon. Friend agree with the director-general of the BBC, Lord Hall, that the funding arrangements put in place with the BBC by my right hon. Friend and the previous Prime Minister, David Cameron, represented a fair deal?

[Mr Whittingdale]

I am extremely grateful to my hon. Friend, because he allows me to quote the director-general. As I say, our negotiations were robust, but we emerged from them with the director-general issuing a public statement saying that it was

“the right deal… in difficult economic circumstances”.

He went on to say:

“Far from being a cut, the way this financial settlement is shaped gives us, effectively, flat licence fee income across the first five years of the next charter.”

[Mr Edward Vaizey (Wantage) (Con)]

I do not know whether my right hon. Friend will mention this part of the licence fee deal, but it is worth making the point that the last Labour Government imposed on the licence fee a levy to fund broadband roll-out, and because of the success of the broadband roll-out under our Government, we removed that levy from the BBC. While there was a stick with free TV licences, there were carrots with the removal of some of the subsidies the last Government had asked the BBC to provide.

[Mr Whittingdale]

I am grateful to my right hon. Friend, who was also a key player at that time as a Minister in the Department. He is absolutely right. I mentioned two of the BBC’s requests at the time—the unfreezing of the licence fee and the closure of the loophole—but he is correct to point out that the BBC had always been unhappy about the top-slicing of the licence fee to fund broadband, which it saw as far removed from the purpose of the licence fee. That was another agreement we reached with the BBC, which I think was why the BBC felt that it was a fair and proper settlement.

[Mr McFadden]

The right hon. Gentleman is implying that the BBC was happy with all this at the time, but in the press statement announcing the consultation, the BBC said:

“The BBC could copy the scheme… but we think it would fundamentally change the BBC because of the scale of service cuts we would need to make.”

That is not the statement of an organisation that thinks it can easily absorb this.

[Mr Whittingdale]

The agreement with the BBC was that it would have responsibility for maintaining or amending the licence fee concession. The right hon. Gentleman quoted the BBC’s view about the cost of maintaining the concession as it stands, and that view is understandable, since the cost next year will be £745 million, rising to £1.06 billion by 2029-30. I am not at all surprised that the hon. Member for West Bromwich East (Tom Watson) was unable to give any commitment that a future Labour Government would maintain the concession at the cost of the taxpayer, since that would be a £1 billion public expenditure pledge.

In recognition of that, the BBC has put forward three different options. It has talked about continuation, which, as the right hon. Member for Wolverhampton South East (Mr McFadden) said, it feels is not realistic, as that would amount to the current cost of BBC 2, BBC 3, BBC 4, the news channel, CBBC and CBeebies all put together. It has also suggested some amendment to the concession, or discontinuing it altogether. Each of the three possible amendments to the licence fee concession that the BBC has suggested has some attraction. It has talked about raising the age limit to 77 or 80, which to some extent would reflect the ageing population and maintain roughly the same proportion. A second possibility is to introduce a discounted fee, so that people over 75 would not have to pay the full cost.

[Vicky Ford (Chelmsford) (Con)]

My right hon. Friend, who is an excellent neighbour, is making an excellent speech. Many of my constituents who are over 75 have emailed me to say that they want to continue to watch the TV with a free licence, but they are not necessarily also watching the BBC on multiple other devices, as many younger people are. Can my right hon. Friend see a case for older members of the public still being able to watch the BBC via a single device, while younger people watch on multiple devices? Would that sort of system work?

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I reiterate that there is pressure on time, and interventions need to be short.

[Mr Whittingdale]

I will of course take account of your guidance, Madam Deputy Speaker, but my hon. Friend raises an interesting point, which I want to touch on as I conclude my remarks.

The third possible amendment would be to limit the concession to those in receipt of pension credit. That would address many of the concerns expressed by Opposition Members about those on very low incomes finding it hard to afford and would introduce an element of targeting, to ensure that those who will struggle to afford the television licence do not have to do so.

There is another change that I ask the BBC to consider, which is not included in its options. At the moment, households are entitled to a free television licence if a member of the household is over 75. It is ridiculous that a household might have four adults of working age who are all bringing in an income, but because they happen to have their grandmother living with them, they do not have to pay for a television licence. I ask the BBC to consider a simple change, to restrict the concession to households that only consist of people aged over 75.

I want to end by saying that this raises fundamental questions about the future of the licence fee. Viewing habits are changing, as my hon. Friend the Member for Chelmsford (Vicky Ford) indicated. Evasion of the TV licence is rising. It has gone up from 5.2% in 2010 to an estimated 7% now, with the advent of new services such as Netflix and Amazon, and soon possibly Apple and Disney. The old argument that every household needs to pay the licence fee because everybody watches the BBC is, I am afraid, beginning to break down, and we are reaching a position where many households watch the huge range of programmes available and never turn to the BBC.

That is why I have always believed that, in the long term, the licence fee is not sustainable. We addressed that at the beginning of the charter review. It is recognised by the director-general, who has said that the BBC needs to look at alternative models and has mentioned the possibility of introducing subscription services on iPlayer. At the moment, there is no alternative to the licence fee because we do not have a system where people who choose not to pay it can be cut off; that was why we reached the conclusion that the licence fee had to be maintained. But in the longer term, that will not be true. There will come a time when the licence fee cannot be sustained, but that will be the task of the future Secretary of State who has the job of undertaking the next charter review.

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[Kevin Brennan (Cardiff West) (Lab)]

We have had a very good debate with some excellent contributions from the Back Benches. Like other hon. Members, I wish to declare an interest at the outset, which is that although I do not qualify for the concession myself—a fact that is well known by the former Secretary of State, the right hon. Member for Maldon (Mr Whittingdale), as we share a birthday, having been born on the same date in the same year—my mother does. Like the parents of other hon. Members, she is, with her free television licence in hand, a keen follower of the BBC Parliament channel. Like others, she could perhaps afford to pay for her television licence, but she is a miner’s daughter who left school at 14 and worked hard in a factory all her life. It is the sort of concession that is extremely important to someone living on their own at that age. As other hon. Members have pointed out, it can be very lonely for those people. We should bear it in mind that there will probably be many people taking an interest in our proceedings today—I am told that there are often dozens watching the BBC Parliament channel—including many from the over-75 bracket.

We have had some excellent speeches today, including that of the right hon. Member for Maldon, the former Secretary of State. I thought he tried to give the impression that the BBC was delighted with the deal that was struck back in 2015, even though it has been described by others as a hospital pass. I am afraid that nobody really believes that, and deep down, I do not think that the right hon. Gentleman does either. He is entitled, I suppose, to believe that ultimately there should not be a licence fee, which is what he said—he felt that it was unsustainable. However, knowing him as I do, if he wanted that to happen he would probably believe that it should have been in his party’s manifesto, and that it should have been consulted on, because it would be a major change in Government policy. Similarly on this—the potential ending of the free concession on the TV licence for the over-75s—it should have been in the manifesto if the intention was to end the free television licence concession, rather than pretending in the manifesto that it will be maintained rather than outsourced to the BBC.

[Mr Whittingdale]

To some extent I agree with the hon. Gentleman. I remind him that the charter review, which was carried out in 2015-16, was the subject of the biggest public consultation in the history of public consultations in terms of the number of responses that were received. Obviously, the same degree of interest will be generated before the next charter.

[Kevin Brennan]

We also know what actually happened in relation to the free television licence concession. Basically, as I will say later in my remarks, the BBC hierarchy were taken into a darkened room, rubber hoses were taken out by the Chancellor of the Exchequer, a punishment beating was administered, and they came out making the hostage statement that had been prepared for them, which was that they were delighted with the outcome of these negotiations. I note that the right hon. Gentleman laughs at that, so perhaps my description is not as far-fetched as it might sound.

My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) pointed out that she could make the shortest speech on parliamentary record if the Government would simply honour their manifesto. We could have done without having this debate today. We would not have needed to be here at all if the Government had actually made real the words of their 2017 manifesto. Instead, as she said, they have used this smoke and mirrors approach to avoid their real responsibilities.

The hon. Member for North Devon (Peter Heaton-Jones), who is unfortunately not in his place at the moment, worked for the BBC for many years and often participates in our discussions about the BBC. He said that the 2015 deal with the BBC represented, from the BBC’s point of view,

“all their Christmases come at once”.

Well, I do not think that it was actually the intention of the former Secretary of State that the BBC should walk away from that negotiation thinking that all its Christmases had come at once; in conjunction with the former Chancellor, it was quite the opposite. Whatever the rights and wrongs of the deal on the funding for the future of the BBC, it was wrong in principle to pass on responsibility for this social policy to the unelected, unaccountable and undemocratic BBC.