BBC: Funding

Julia Lopez Excerpts

Wednesday 18th December 2024 Westminster Hall

[Sir John Whittingdale (Maldon) (Con)]

I beg to move,

That this House has considered the future funding of the BBC

It is a real pleasure to serve under your chairmanship, Mr Mundell, and to debate a subject that I seem to have spent a large part of my parliamentary career discussing, but which has become extremely appropriate to examine once again today. The Minister, who I have spent a lot of time debating over the last few years, last night replied to an Adjournment debate touching on the overall process under which the BBC charter will be renewed, but as she said last night—and she is completely right—the funding of the BBC is a central part of the charter renewal process, and what the BBC does will to some extent be affected by the money available to it and vice versa. I do think it is right that we look at the matter.

I had responsibility less than 10 years ago for drawing up the charter under which the BBC currently operates. That was in 2015-16—only seven or eight years ago—but the changes that have taken place in the broadcasting landscape since are huge and continue to accelerate. At the time of the last charter, streaming did exist, but it was only a couple of years after Netflix had launched in this country, and there were still only one or two other streamers available. Since then, we have seen an explosion, with an enormous number of different streaming platforms that are investing heavily in extremely good content. Most people now enjoy streamed services as well as traditional broadcast, and subscribe, quite often, to several streamers.

Despite the huge range of content that is now available, in my view—and I think the Government take the same view—public service broadcasting is still absolutely necessary, particularly in the core public service content areas of news and current affairs, which are not really provided by the streaming services. I continue to believe that there is a very important role for the BBC in this country’s broadcasting landscape, but my concern is that the traditional method by which the BBC is funded—through the licence fee—is going to become steadily harder to sustain.

Even seven or eight years ago, we saw the beginning of the challenges. At that time, at the request of the BBC, we closed the iPlayer loophole, by which people were viewing BBC content on the iPlayer but not paying the licence fee. We said then, and it remains the case now, that if people watch live television in any form and if they use the iPlayer, they are required to have a TV licence. Other drivers have increased revenue for the BBC over the years, like the growth of single-parent households and immigration levels, meaning that more licences have been issued—but that trend has now reversed, despite the closing of the loophole; each year, fewer people are buying a television licence. In the course of the last year, the number of licences held has fallen by 500,000, and that movement is likely to continue.

If we look at the public’s viewing behaviour, we find that less and less traditional broadcast television is being watched, particularly by young people. Most 16 to 24-year-olds now do not watch any live broadcasts each week—10 years ago, 80% did—and broadcast channels take up only 57% of all viewing, against TikTok, YouTube and all the other streaming services. People are genuinely saying, “We choose to subscribe and pay for Netflix, Amazon, Discovery, Apple and all the other streamers. We don’t see why, on top of that, we should have to pay for a TV licence when we don’t watch the BBC.”

The TV licence does not just cover the BBC; it covers all live television viewing. Nevertheless, a lot of people can watch on catch-up the programmes that are available on the other public service channels. Genuinely, people are not required under the law to have a TV licence, and more and more are choosing not to have one. That will pose an increasing problem for the BBC.

We have seen complaints from the BBC about the fact that the revenue available to it has been cut in recent years—like every other public service, it has been required to find efficiencies—but the director general has talked about the crisis that has been created by the lack of money and his inability to invest to compete. That situation is not likely to get any better if we continue with the licence fee; if anything, it will become steadily worse.

I remember chairing a Select Committee—I think it was about 15 years ago—that looked at the funding of the BBC and the licence fee. At the time, we concluded that although the licence fee had many drawbacks, it was still probably the best available option. It is a regressive tax, it is criminally enforced and it is the case that among the people convicted of failing to pay, a large proportion are women. Those are all drawbacks of the licence fee, but at that time the alternatives did not seem possible. Certainly, advertising is not likely to be beneficial to the BBC or to the whole commercial television sector; there is not that much advertising revenue to go round, and if there were advertising on the BBC, it would result in a reduction for everybody else.

There is an alternative option. A lot of people have said, “Why can’t the BBC charge a subscription, so people can choose whether or not to pay it?” The reason is simple. At the moment, most people still access the BBC and other traditional broadcasters through digital terrestrial television, or Freeview, and there is no mechanism for conditional access—in other words, the choice to receive a particular channel—with Freeview. At the launch of Freeview, the BBC was very keen that that should be the case, because it was worried about subscription, but it means that while a significant proportion of the population continue to rely on Freeview, we cannot move to subscription. But that will change.

Both the last Government and this Government have said that Freeview will be maintained until 2034; it may well be that we need to maintain it for a bit longer. However, the transition to IPTV or internet protocol television—the provision of television over the internet—will steadily increase, and if people have smart TVs, which allow them to choose whether to subscribe to the streamers, it means they could also have the choice of whether to subscribe to the BBC. I think that that option is likely to become more attractive, although it will only really become viable when we reach the point where almost the entire population have IPTV, but for the reasons I have set out, it is important that we start to talk about it now.

The last Government had future funding of the BBC panel, which this Government have not continued. On the other hand, I know that the Minister has set up a future of TV distribution panel, which does not look vastly different. Anyway, I am glad that the Government continue to look at the issue, which is why I think this is the right time to have this debate.

There are certain things that will never be possible to have on a subscription basis, including BBC Radio—I do not think there is any way in which there can be conditional access on radio—and the World Service. I sit on the Foreign Affairs Committee and we are currently examining the World Service, which is of huge benefit to this country. It could not be provided on a subscription basis, as the people it is aimed at are certainly not in a position to pay. The World Service also makes a very valuable contribution to the reputation of the UK and to our soft power, and the BBC has said that it should be funded by the Foreign Office and not by the licence fee. That argument is quite attractive, although I recognise that it would be a big challenge for the Government to take on. The Minister gave evidence on the subject yesterday and it remains an issue that we will want to debate.

With radio, it would be possible to extend advertising, but, as with any advertising on BBC TV, doing so would damage commercial radio. I am also slightly worried about the extent to which advertising is creeping in at the margin, with the BBC allowing advertising through podcast, which is increasingly the way in which people are accessing audio content.

[Julia Lopez (Hornchurch and Upminster) (Con)]

My right hon. Friend will recognise, as I do, that one big challenge in relation to the BBC is that many of those who are most opposed to its further commercialisation are the other public service broadcasters, who worry about disruption to their own revenue streams, particularly in relation to advertising. That is why it is tricky to come up with an alternative to the licence fee.

[Sir John Whittingdale]

My hon. Friend is completely right. She and I both had the pleasure of serving as Minister; I was delighted to stand in for her while she was on maternity leave, so we have both looked at the issue for some time. We have to look at the overall television landscape. If we allow advertising, or encourage the BBC to compete, it is likely to have an impact on the commercial sector, which completely depends on advertising revenue. Our traditional advertising-funded PSBs—ITV, Channel 4, Channel 5—are already finding it difficult competing in a world with well-resourced streamers, and this would make it worse.

--- Later in debate ---

[Rebecca Long Bailey (Salford) (Ind)]

It is a pleasure to serve under your chairmanship, Mr Mundell. I thank the right hon. Member for Maldon (Sir John Whittingdale) for securing this very important debate and for his thoughtful comments. I should make colleagues aware that I am a co-chair of the National Union of Journalists’ parliamentary group.

The BBC has been at the heart of the UK’s national life for over 100 years, and it is at the heart of my constituency of Salford. Its mission to inform, educate and entertain is underpinned by its funding model, which ensures that it is universal, independent and never at the whim of vested business interests or advertisers. It is there for the people of Britain, not for profit. It has a more important function than just entertaining us; it reaches out to every community in the UK and gives them a voice. It is an intrinsic part of political accountability, holding local and national politicians to account. It strives to provide content in the public interest, not just sensational headlines that offer the best clickbait. From educational resources produced by the BBC that are relied on in schools to fact-checking services that cut through misinformation, local radio and local democracy journalism, it is clear that the BBC’s impact on our communities is profound.

[Julia Lopez]

Does the hon. Lady agree that the BBC’s unique currency is trust, and that one of the challenges in recent years is that people have lost faith in the BBC as an organisation that produces impartial news? One challenge that I saw in the last Parliament was that the BBC was reducing local and regional journalism, even while protecting some very large salaries for its biggest stars. That is one of the reasons why people are losing faith that the BBC is investing in journalism in the way that it should and in the way that people expect from a public service broadcaster.

--- Later in debate ---

[Patrick Hurley]

Millions will be watching the King’s speech this time next week—on the BBC. People would not subscribe to the BBC on Christmas day to watch the King’s speech, but to watch programmes such as “Gavin and Stacey”, “EastEnders”, or “Doctor Who”. If they subscribed for only entertainment purposes, however, they would miss out on the cultural life of the country and on important issues that they should be exposed to and should consume.

A subscription service that unwittingly creates such a taxonomy of programming, and divides content between public sector broadcasting and entertainment, would fall foul of reducing the consumption of important content. The best way to ensure that the BBC continues to provide its services, therefore, is through the continuation and maintenance of the licence fee model, rather than general taxation for public sector broadcasting or subscription services for entertainment.

[Julia Lopez]

Would the hon. Gentleman accept that, whether or not he is a supporter of the licence fee, fewer people are choosing to pay it, so we have a problem that needs to be dealt with, regardless of one’s view on the licence fee and its future?

[Patrick Hurley]

I thank the hon. Lady for the question. Fewer people are willing to pay it, but there is a way around that. The BBC can make efficiency savings that will help to rebuild trust in it. If its content can be improved or its reach can be extended, that will lead to a regaining of trust, which the hon. Lady mentioned earlier, and to more people supporting the BBC financially through the licence fee.

I want to come on to an issue that the BBC has struggled with in recent years: trust. BBC Verify is a new service to combat the disinformation that we are seeing online. BBC Verify can be improved, both in content and in tone, as I have raised directly with BBC executives. I have also raised the fact that it is not perfect, but it is a good start in combating the disinformation and misinformation that we see online. I hope that more effort can be put into improving Verify’s output in the months and years to come.

I turn to the importance of the World Service, which many Members have already discussed. I support the Government’s recent uplift in funding for the World Service, but I favour returning this funding to the Foreign Office to relieve financial pressures on the BBC’s domestic coverage, enable sustainability and stability in the long term, and help to support Britain’s soft-power role in an increasingly dangerous world.

The BBC’s cultural impact is crucial to supporting the creative economy in the UK. The BBC strives to represent and serve all communities across the UK, and invests over half its funding outside London. The UK creative sector is a continuously developing area. The BBC’s £5 billion investment each year supports a unique entertainment output and provides world-class exports for viewers abroad. I want the BBC to be able to invest more in its cultural output so that it can extend its provision in that area. For those reasons, it is incredibly important to maintain the BBC’s position at the top of the electronic programme guide, so that public service broadcasting continues and survives in years to come.

Finally, although the Government should monitor the BBC funding situation, the current system of charter renewal, whereby the BBC continually diverts attention and resources to the upcoming charter review, is less effective than it should be at supporting the BBC to deliver as a public service. I therefore ask that the system be changed to allow a permanent charter for the BBC, which the Government and the BBC, in concert, could alter as and when required, rather than after a mandated medium-term period.

I welcome the Government’s commitment to putting the BBC on a stable financial footing, and look forward to the Minister’s comments.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairmanship, Mr Mundell. I thank the right hon. Member for Maldon (Sir John Whittingdale) for setting the scene so well. I want to make some positive points, and then I will outline what some of my constituents are telling me in relation to bias, because I want to have those comments on the record.

First, as the hon. Member for Southport (Patrick Hurley) said, this time next week the King’s speech will just be over. The nation will sit and watch that, because it is one of the good things that the BBC does, and it does it well. I am also a fan—my age gives it away—of the two Ronnies and of Morecambe and Wise. What humour—old-fashioned humour, by the way, but the kind that I was brought up with. I could tell some of their stories; I will not, because we would be here all day telling jokes, but their humour is incredible. I also endorse the excellent World Service, and agree that it needs to be upgraded and enhanced.

I wish to shine a light on the elephant in the room. The BBC has long prided itself as a national broadcaster, funded by the public and mandated to serve the public interest, yet my constituents tell me that the BBC is biased. Time and again, we see a pattern of behaviour that alienates a significant portion of that very public. The BBC is no longer viewed as the impartial institution it once claimed to be. I will give three or four examples just to have them on the record. They have been proven; I am not making them up—I do not do that sort of thing.

The BBC has adopted a tone and an editorial stance that all too often align with a narrow view. Whether or not Members are in favour of Brexit, let us look at it as an example. Many of us in the House and across the country will remember that the BBC approached Brexit not with curiosity or indeed neutrality, as the public rightly deserved, but with scepticism and outright hostility. It was not reporting the news; it was trying to shape the news.

The same bias has extended to issues affecting Northern Ireland. The BBC cannot even name our country correctly, referring to its correspondent as the “Ireland correspondent”. The hon. Member for Aberdeenshire North and Moray East (Seamus Logan) will know how absurd and wrong that is, because it is the Northern Ireland correspondent. Those who understand the constitution of Northern Ireland will understand that it is part of the United Kingdom of Great Britain and Northern Ireland, yet the BBC cannot get it right. If Welsh reporters can be “Welsh correspondent” and Scottish reporters can be “Scottish correspondent”, Northern Ireland deserves no less.

Bias is not merely a matter of perception; it has tangible consequences. Public trust in the BBC has eroded, and I have to say that it is no longer the broadcaster it was once heralded to be. As Government Members will know, my politics lies to the left—a fair bit to the left, I suspect—but that does not take away from where I am. The hon. Member for Clacton (Nigel Farage) faced a hostile audience on “Question Time” and Dame Andrea Jenkyns, a former Conservative MP, was booed before she had even opened her mouth on “Have I Got News for You”. My goodness. That is not organic debate; it is bias in practice.

I will echo something the hon. Member for Aberdeenshire North and Moray East referred to. The BBC selects its audiences, sets the tone and consistently marginalises voices on the right of politics. I am not on the right of politics—I never will be—but I make that point to have it on the record for those who have a different opinion. I respect other people’s opinions, by the way, even though I may not agree with them, because that is the person I am. I hope others are the same.

[Julia Lopez]

Does the hon. Gentleman agree that this gets to the nub of the challenge? The BBC has a unique social contract with the public. It has the licence fee because people trust it to produce high-quality, impartial, trusted content. That is precisely the reason we have the BBC. If there is a sense from the public that that trust is being lost, that is a fundamental challenge to the BBC’s future. With Russia and China putting ever more money into their own state broadcasters, this represents a much wider challenge than just one for us here in the UK.

[Jim Shannon]

The hon. Lady is absolutely right. She has highlighted an issue that I wished to highlight too, but she did so better than I could, and I look forward to the Minister’s response. I should have welcomed the Minister to her place, by the way. She responded to her first Adjournment debate last night and did extremely well, and I know that she will be exceptionally good when it comes to answering all the questions that we pose today.

The BBC’s funding model must also be examined. The licence fee is compulsory, paid for by households across the United Kingdom regardless of whether they feel the BBC reflects their values or serves their interests. It is not a secret that I am an Ulster Scot. I am very proud of my history and the fact that my ancestors came from the lowlands of Scotland to Northern Ireland. When I look around this room, I look upon the hon. Member for Aberdeenshire North and Moray East as my Gaelic brother, and there are probably others across the Chamber who are similar; if we go back far enough in our history, we will find out. Ulster Scots heritage programmes risk being squeezed out of the BBC’s cultural programming. I think that is disgraceful. The BBC should focus on delivering programming that matters to all parts of the United Kingdom. Instead, we see money poured into political agendas and overpaid presenters, while those cherished culturally significant programmes receive less attention.

I have one last one example, Mr Mundell: the BBC’s clear bias in its coverage of Israel and Hamas. My goodness—cast your mind back to all that. It is no secret that I am pro-Israel, but I believe in decency and justice for everyone in the middle east. The BBC refuses to describe Hamas as a terrorist organisation. They are murderers, rapists and baby killers. That is who they are—that is the Hamas that we know—yet the BBC could not bring itself to call them what they were: terrorists. That undermines the BBC’s credibility as a news source. What message does that send to the victims of terrorism?

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)]

It is a pleasure to serve under your chairmanship, Mr Mundell. I echo the shadow Minister, the hon. Member for Meriden and Solihull East (Saqib Bhatti), in wishing a merry Christmas to everyone present, and congratulate the right hon. Member for Maldon (Sir John Whittingdale) on securing this important debate. He and I have had a lot of opportunities to debate the BBC together this week.

Let me start by responding to some of the points that the shadow Minister and others made. First, the right hon. Member for Maldon pointed out that it is a good time to have this debate. He opened by talking about the importance of public service broadcasting today. We spent many hours debating the Media Act 2024, which is legislation that goes to the heart of these issues and now falls to this Government to implement.

The shadow Minister and the hon. Member for Didcot and Wantage (Olly Glover) pointed out how many people access the BBC—over 90% every month—but also the fact that there are lots of important and challenging issues about BBC funding and the charter review.

It has been a good debate, and Members have rightly shared their own experiences and memories of the BBC. My hon. Friend the Member for Southport (Patrick Hurley) spoke about the shared experience we have as a country, and how the BBC brings us together. A week today we will all be watching the King’s speech and, of course, “Gavin and Stacey”—or at least I will be.

Members from all parties, and in particular my hon. Friend the Member for Bury St Edmunds and Stowmarket (Peter Prinsley), spoke about their passion and support for the World Service. The right hon. Member for Maldon serves on the Foreign Affairs Committee, to which I was pleased to give evidence. I am pleased that three Select Committees are taking such an interest in the topic. There are a lot of questions and challenges, but it is important that we put on the record our support for the World Service.

The shadow Minister asked questions about engagement with the BBC; the Secretary of State and I have met with the BBC and will continue to do so. The shadow Minister also asked questions about local radio. It is important to state that the BBC is operationally independent, but when I was in the shadow Minister’s place I made my views very clear, as did the hon. Member for Hornchurch and Upminster (Julia Lopez), who was the Minister at the time.

I will speak more broadly about the BBC before addressing some of the wider funding issues. For over 100 years the BBC has been a cherished British asset, making a vital contribution to our national life. It supports our democracy, brings our communities together and helps to shape and define our nation by telling the stories of people in all parts of the UK. The BBC has an almost unique role as a source of trusted news, both in the UK and to millions of people across the globe, as well as being a provider of cutting-edge programming and educational content for the nation’s children. It is so often the first to invest in the skills, the physical assets and the creativity to boost the creative industries in all corners of the country.

The media environment has of course changed over the BBC’s long history. Even since the start of the current charter period in 2017, when the Government were bringing iPlayer into the scope of the licence fee, the market has significantly evolved—a point that has been discussed. The right hon. Member for Maldon knows all that very well, not least because he served as Secretary of State for DCMS during the previous charter review.

The world is changing and, as the right hon. Member for Maldon outlined in his speech, for the first time half of 16 to 24-year-olds now do not watch broadcast TV on a weekly basis. We are seeing audiences increasingly turn to on-demand content, and more than two thirds of households subscribe to streaming services, compared with about a third at the start of the charter period.

The shadow Minister asked about some of the challenges that go to the heart of this debate. As an institution, the BBC has often needed to adapt, renew and grapple with an ever-increasing pace of change. That is something that the hon. Member for Aberdeenshire North and Moray East (Seamus Logan) spoke about in his contribution.

Next year, the Government will formally launch charter review with the need for adaptation in mind. We intend to use charter review to think through the operation of the BBC and how it thrives for not just the next 10 years, but well into the latter half of this century. We know that any reform to the BBC, particularly when it comes to funding, could have a major impact on the whole sector. We will consider that carefully as part of the charter review. We want to have a national conversation to make sure that the BBC truly represents and delivers for every person in this country, wherever they come from and whatever their background. That will include the opportunity for stakeholders and audiences across the country to respond to the charter review public consultation before the new charter comes into effect in 2028.

Our thinking will also be informed by my Department’s wider work. We are undertaking a project on the future of TV distribution to analyse how people receive their television now and through the next decade. That will help us to ensure the continuity of a sustainable TV ecosystem and the best outcome for audiences.

As we address vital questions about the future form of the BBC head on, we must also ensure that there is a sustainable funding model that is fair to those who pay for it. These are undoubtedly complex issues, on which people hold strong opinions, but this Government want to have an open and honest discussion about them in the public’s best interests.

We are fully committed to retaining the licence fee for the rest of this charter period, but we cannot ignore the fact that challenges to this funding model in its current form are increasing, as has been highlighted in the debate. The media market is more competitive than ever, with the emergence of streamers and social media platforms operating on a global scale. That has meant less money for the BBC to invest in our creative industries, in talent and skills, and in telling our stories. It has also resulted in cuts to BBC services, which the hon. Member for Salford (Rebecca Long Bailey) spoke about.

The Secretary of State has announced that we will take forward work on BBC funding as part of the charter review process to bring together the linked issues of what the BBC does, its future role and how it is funded. The Government are keeping an open mind about the future of the licence fee.

The right hon. Member for Maldon referred to his chairing of the Culture, Media and Sport Committee. More recently, the Committee’s 2021 report on the future of public service broadcasting found that there are a range of options for funding the BBC, but none are perfect.

[Julia Lopez]

The Secretary of State has talked about her support for mutualisation, but it has never been clear to me what that actually means. Could the Minister give us more details?

[Stephanie Peacock]

I will happily ask the Secretary of State to write to the hon. Lady. However, in talking about mutualisation, which the Secretary of State made some comments about some years ago, I think it is about having a greater role for the public in BBC accountability and the public feeling more ownership of it. But we will happily write to the hon. Lady with more detail, as I do not want to speak on the Secretary of State’s behalf.