BBC Charter Review (Communications Committee Report)

Lord Desai Excerpts

Thursday 21st April 2016 Lords Chamber

[Lord Desai (Lab)]

My Lords, coming 20th out of 21 speakers is not a great position to be in. I endorse most of the things the committee said about the governance of the BBC, regarding independence, a single board and so on. In his concluding remarks, the noble Lord, Lord Sherbourne, summarised those very well. Let this be the last royal charter. Let us get rid of the royal charter. As the noble Lord, Lord Lester, said, in our system, “royal” actually means the Prime Minister’s prerogative and politicians’ power. Royal just gives an impression that somehow it is above politics. It is actually deep down in politics. I hope the noble Lord, Lord Lester, once again brings about a revolution like the many others he has brought about in our public life. I wish him good luck.

Before I get on to what I wanted to say, let me say that I do not watch the BBC that much. I watch only the news on television. There are perfectly good substitutes available. I am not completely given over to the uniqueness and fantasticness of the BBC. I am not saying it is not good, but I do not watch drama and those sorts of things. As far as the news is concerned, it is all right. However, I somehow feel very surprised that everybody is so fulsome about Lord Reith and the mission statement. I dislike the phrase “mission statement”, which is another reason. Why does anybody need a mission statement? Just get on with the job. It is so paternalistic to say: “educate”. It is commanding, “Out you go to educate and entertain”. As Douglas Jay said, “The man in Whitehall knows best”. So the man in Whitehall said to education and entertain and everybody responded, “Wow”. I am sure that if we had a few people under 25 in your Lordships’ House, they would be laughing at us.

I want to talk about the licence fee. No body can be independent unless it has an independent source of income. Ministers love the licence fee because it gives them immense power and a constant blackmailing force over the BBC. I want to explore how we can find substitutes for the licence fee. The licence fee is regressive because it is a household levy, as the noble Lord, Lord Fowler, said. If you own four televisions, you pay the same as somebody who owns just one television. If you own four cars, you have to get four discs, but not with televisions. It is very inelastic. My main worry is that it may be anachronistic because we are going to have a generation that will not receive its entertainment from a box. A box may not even be needed. Entertainment will be streamed or whatever. We may be talking about the medium, especially the instrument through which we receive this education, entertainment and information. The instrument may not be there in 10 years’ time. Therefore, we have to start thinking now about other ways of financing the BBC which will give it a substantial degree of independence and ensure that the money continues to come. The BBC has a budget of around £5 billion, and £4 billion of that comes from the licence fee—I am keeping the numbers fairly broad—and £1 billion comes from its own business. So we have to find £4 billion at any point in time. Obviously the Government list the receipts from the licence fee among their tax receipts, but we could find from other sources of taxation a form of income whose proceeds could be hypothecated to the BBC. For a long time hypothecation was anathema to the Treasury, but recently it has increasingly adopted the idea that certain taxes should be hypothecated.

I was looking around to find out what kind of numbers there are. Take, say, the duty on fuel along with those on tobacco, spirits and wine. Together they raise about £48 billion, so we are basically looking at a 10% enhancement of the receipts. Noble Lords would be surprised to know that the fuel duty, which has been frozen for the last few years, is right now 25% below what it would have been had the fuel duty regime continued and not favoured people who pollute our air. Just by taking fuel duty back to what the level should be, we would get a substantial part of the £4 billion that we are worried about. I say that as an illustration. I strongly believe that one should have consumption taxes, not income taxes. If you tax people on their consumption basket, tax is felt less acutely than in any other way. The Government ought to explore alternative forms of hypothecated taxes, or increases in existing taxes, which would be given straight to the BBC for its budget. Then it could just continue and no time would have to be spent on the next licence fee renewal.

I have a more expensive proposal to pass on. Right now, the Government pay about 3% on their debt. If they were to gift the BBC a debt stock of £100 billion to perpetually finance its income of £3 billion-odd for a long time, that would be the corpus that the BBC could keep and get on with it. If the yield could be indexed, that would be even better. That would be very cheap; £100 billion is not very much these days.

It should be possible for us to think of elastic, progressive and modern ways of raising money for the BBC. If we can find that, we will guarantee its independence more than in any other way. As soon as the White Paper is issued—it may be too soon for the White Paper itself to include such things—I urge the Government to set up a Joint Committee of both Houses of Parliament to examine the reforms proposed in the report of the Communications Committee and the other proposals that have come up in your Lordships’ House, starting now. If we start now, then by the time the charter needs renewing we will be ready with all the necessary equipment: the structures, the financing and the mission statement.