BBC Funding

Lord Parkinson of Whitley Bay Excerpts

Tuesday 25th January 2022 Lords Chamber

[Noble Lords]

No.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, I am grateful to the noble Lord and the noble Baroness for their questions. I will deal first with the question of timing and the assertion that this may be to do with other matters. I point out that my right honourable friend the Secretary of State is under an obligation, under Article 43 of the BBC’s royal charter, to determine a funding settlement for the level of the licence fee for a period of “at least five years” from 1 April this year. She is also required to make her determination as far in advance of April as possible—that is what she set out in her Statement to another place on 17 January.

I welcome the focus of the noble Lord, Lord Bassam, on the cost of living. I was not clear from his remarks whether he agrees with the Government’s decision to announce the freeze in the fee so that the licence fee remains at £159 for two years, before rising in line with inflation—or whether he would have supported the alternative, which was for the licence fee to rise to £180 by 2027. But I welcome his recognition that there is a rationale for the decision that the Secretary of State has taken.

As the noble Baroness says, the Department for Digital, Culture, Media and Sport is not a social policy department as some others are, but this is one area in which we are able to help people with the bills they face as the cost of living rises. Again, it was not clear from her Benches whether the decision to help people met with her party’s support.

Across the country, businesses and households face rising bills and are tightening their belts. It is right to expect the BBC to do the same and to support people as they do so. The decision we have taken follows extensive discussions with the BBC—negotiations that began as far back as November 2020—which involved my right honourable friend and her predecessor as Secretary of State and continued until, most recently, 12 January, the Wednesday before she made her Statement in another place. I was aware of those discussions and welcome the decision to help people with the rising bills they face.

On the idea that this attacks or undermines the BBC, which the noble Baroness and the noble Lord said, I simply point out that the settlement provides the BBC with some £3.7 billion in licence fee funding this year and £23 billion over the duration of the settlement period. It also gives the BBC financial certainty for the next six years, to the end of the current charter period, so that it can continue doing its excellent work, which I have been very glad to pay tribute to in your Lordships’ House before; I continue to do so.

I agree with the noble Baroness in her remarks quoting the Prime Minister, who, since he left the Foreign Office and moved to Downing Street, has repeated the comments about the value of the BBC—not just the World Service but at home—and the lifeline it provided to many people during the pandemic. That is why we have given the settlement that we have.

We also gave a generous settlement to S4C, which was set out in the Statement. S4C plays a vital role in supporting the Welsh economy, culture and society, and the Government decided to award it a £7.5 million per year uplift from the licence fee to support its digital development. In total, that will provide S4C with approximately £88.8 million in licence fee funding per annum, which will rise in line with increases to the licence fee from April.

We believe this is a fair settlement for the BBC, S4C and licence fee payers across the United Kingdom. It strikes the right balance between protecting households and allowing the BBC and S4C to deliver their vital public responsibilities. The settlement will encourage the BBC to make further savings and efficiencies as it becomes a leaner organisation that delivers better value to licence fee payers.

The Government will also more than double the borrowing limit of the BBC’s commercial arm to £750 million, which will enable the BBC to access private finance as it pursues an ambitious commercial growth strategy and to boost investment in the creative economy across the UK. The noble Lord and the noble Baroness are right to point to the important part it plays in the wider creative economy.

The BBC is a beacon for news reporting and the arts around the world, and has a unique place in our cultural heritage. We want it to continue to thrive in the decades to come, and to thrive alongside its competitors. That is why, as the Secretary of State also announced, the Government believe that it is the right time to begin asking serious questions about the long-term funding model of the BBC. We need to ask whether a mandatory licence fee is still appropriate, particularly as audience viewing habits have changed, especially among younger viewers.

The context of that debate is important. Over the last three years, the number of licence fees paid has declined by some 700,000. We need to acknowledge that the criminal sanction for non-payment of the licence fee can cause considerable stress and anxiety for people, particularly at a time when the cost of living is rising.

I was staggered to learn that almost one-third of convictions of women in this country are for non-payment of the licence fee. A growing number of women are getting criminal records and some are being imprisoned for non-payment of the fines imposed. These are the questions we should be asking and the debate we should be having as we undertake the review of the overall licence fee model. As the Secretary of State set out in her Statement in another place, this is the start of a discussion. I saw in the papers this weekend that the former Labour Culture Secretary, James Purnell, a senior executive at the BBC until recently, has started to engage in that debate in a very thoughtful way. I look forward to having that debate with noble Lords from across the House, but I hope they will agree that it is an important discussion to have.

[Lord Fowler (CB)]

My Lords, I apologise for being premature, but I wanted to congratulate the noble Baroness on what she said, which my noble friend repeated. I have no objection whatever to re-examining the basis of the licence fee. That is a sensible thing to do, but what concerns me is the accompanying statements made by the Secretary of State for Culture, which seem to suggest that this has been more about a political battle between the Government and the BBC than the future of the corporation. I therefore hope that the noble Lord will dissociate himself from that campaign and say that that is not the policy of Her Majesty’s Government.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, this is not part of any political discussion, other than the politics of ensuring, in the short term, that people are assisted with the rising cost of living and, in the long term, ensuring that the BBC has a sustainable model to continue to produce the excellent output that it does, both at home and around the world. My right honourable friend the Secretary of State paid tribute to it in her Statement and we all continue to do so. It is because we want to see it thrive that we want to make sure that it has the best sustainable model for the long term.

[Baroness Blackstone (Ind Lab)]

My Lords, is the Minister aware of just how much the BBC licence fee payer gets for his or her relatively low outlay on the licence fee? Let me just list the services: 10 TV services; 10 national radio services; 40 local radio stations; BBC iPlayer; BBC education programmes; the World Service; the BBC website and much more. Why are the Government jeopardising the quality of these many, varied services by their mean-spirited decision to freeze the licence fee for two years, thereby leading to a real-terms cut in BBC revenue? The explanation given in the Statement and implied by what the Minister said earlier—that the Government want to put more money into hard-pressed households’ pockets—just does not make sense, given the trivial amount entailed per household. If that is really what the Government want to do, I am sure the Minister will agree that abandoning their increase in national insurance payments, which really would make a difference, would be a better approach.

[Lord Parkinson of Whitley Bay (Con)]

I do not think a settlement of more than £23 billion can be called mean-spirited. The noble Baroness is right to point to the wide range of things that the BBC does, but it is right, as we decide what the cost to the licence fee payer should be, that we look at those services in the context of the changing landscape and the other ways that people are consuming their news content and their entertainment provision and make sure that the BBC continues to be funded in a way that maintains its excellence and is fair to the people who pay for it.

[Lord Carlile of Berriew (CB)]

My Lords, notwithstanding the success of S4C, does the Minister agree that BBC Cymru Wales makes an extraordinary, virtuous and unifying contribution to the life of people in Wales? Will he give an undertaking to the House that nothing will occur to undermine the quality of public service broadcasting through the BBC in and for Wales, given the huge contribution that BBC Cymru Wales makes to news, popular culture and sport for the people of the Principality?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, as the BBC is operationally and editorially independent, it is up to it to decide how it spends its settlement, but I know it will want to maintain its excellent reputation throughout the United Kingdom in representing and delivering an excellent service to people right across the British Isles, as S4C does in Wales, as the noble Lord says.

[Baroness Bottomley of Nettlestone (Con)]

Will the Minister advise the Secretary of State that it would give greater veracity to her criticisms of the BBC if she refrained from commenting on party-political bias? That is the job of the party chairman. As Secretary of State, she is the sponsor for the broadcasting industry and I suggest she leaves criticisms of party-political bias to a different authority.

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

My Lords, as we touched on in our debate on the BBC instigated by the noble Lord, Lord Bragg, before Christmas, it has been the hallmark of many Administrations to speak about the BBC with affection and sometimes criticism, as is the case with a much-cherished 100 year-old institution. The Statement that my right honourable friend the Secretary of State set out is the culmination of negotiations which began in November 2020, focused on helping licence fee payers in the short term and setting out a sustainable model for the BBC over the long term.

[Lord McNally (LD)]

My Lords, I cannot think of a time in the 100-year history of the BBC when an announcement of its future has been so politically motivated and accompanied by such ridiculous statements from the Minister responsible on Twitter. The one thing to grasp from the Statement was the offer of a proper, open, fair study of the problem of how we fund the BBC. If she wants to redeem her reputation, it would be by establishing such an independent, open commission to look at this problem and report, so that the next decision can be made in an informed way. Since we have just heard from one Bottomley, I shall quote another, the Father of the House, Peter Bottomley, my pair when I was in the other place. He said:

“The Conservative approach is to keep what is good, what works—and to improve whenever possible.”


What better terms of reference for such a future study of the funding of the BBC?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, Parliament is lucky to have a Bottomley in each House and I have the pleasure of calling them both friends. I will take the noble Lord’s suggestion about how we might have the debate that the Secretary of State has said we want to have about future funding back to the department. I welcome the fact that he is beginning to engage with it and look forward to having that debate with noble Lords across the House.

[Lord Grade of Yarmouth (Con)]

My Lords, I have some difficulty accepting the criticism of intimidation of the BBC from noble Lords opposite. I seem to recall that the most dangerous moment in the whole history of the BBC was when Prime Minister Blair and his untrained attack Doberman, Alastair Campbell, attacked the BBC over the Gilligan broadcast about weapons of mass destruction. It brought the corporation to its knees to the extent that the chairman and the director-general resigned within 24 hours. The Blair Government were so desperate at what they had done to the BBC that they sent for me to go in and try to sort it out—that is how desperate they were.

That said, one would get the notion from listening to some of the comments around this House this evening that the BBC is impoverished by this settlement. Does the Minister agree that £3.7 billion in a very crowded marketplace of public intervention is a surprisingly good settlement? I wish those in the BBC who asked for more money from the Government would watch their own news bulletins and see what is going on, with people having to decide whether to heat or eat, and the increased use of food banks. There is a complete lack of reality about what is going on in Britain with this regressive tax. I believe in the BBC and I stand with everybody in this House who supports it, but this is not the time for it to be asking for more money. Does the Minister agree that the Secretary of State’s decision to fire the starting pistol for the big debate about what we want from the BBC and how we pay for it is a very good step in the right direction and very timely?

[Lord Parkinson of Whitley Bay (Con)]

My noble friend makes two pertinent points on the basis of his considerable experience. As I said, it is not unusual for this much-loved, much-cherished national institution to attract political comment from all quarters from time to time. That is as it should be. We all do it from a position of wanting the best for the corporation and to ensure that it can survive and thrive for its next 100 years. My noble friend is right to reinforce the point that £3.7 billion from licence fee payers this year, at a time when people’s bills and costs of living are rising, is a fair settlement that enables the BBC to continue doing the excellent things that it does, but in a way that shows that it understands how businesses and households across the country are having to tighten their belts—looking at how they can do what they do more efficiently and get more bang for their buck.

[Baroness Hoey (Non-Afl)]

My Lords, I welcome the Statement by the Secretary of State, which will have been welcomed outside in the country if not necessarily in your Lordships’ House. Does the Minister not agree that, in this day and age, when someone might buy a television with absolutely no intention of ever watching the BBC—given all the other choices that they will pay for—it is surely time for that proper debate on whether we can continue to fund the BBC in this arbitrary way that makes it impossible for some people to afford it?

[Lord Parkinson of Whitley Bay (Con)]

The noble Baroness is right that the way people are consuming their media is changing, and changing rapidly. I have spoken about the 700,000 fewer licence fees that have been bought over the last three years; that change is happening rapidly. It is essential that we have this debate so that we can protect the BBC to make sure that it continues to thrive alongside, and as part of, a changing media landscape. That is the reason why we want to start having this discussion well in advance of the next charter period.

[Baroness McIntosh of Hudnall (Lab)]

Listening to this debate, I think it is pretty clear that nobody who has spoken so far has suggested that there should not be any further consideration of how the BBC is funded, or that there should not be regular consideration of whether it is being supported in the right way. The noble Lord, Lord Grade, made a perfectly legitimate point when he referred back to actions during the time of the Blair Government. In doing so, he underlined the point that Governments of all colours and at all times have been periodically extremely irritated by the BBC. I do not refer to any particular accusation, but accusing the BBC specifically of party political bias is a very different matter from being irritated by how it behaves from time to time.

My questions to the Minister are these: does he think that, as this debate proceeds, it can now be conducted in a tone of generosity and impartiality rather than in the terms set by, shall we say, the Daily Mail? Will he also answer the questions that came from various Members of your Lordships’ House about whether he thinks that, on its current settlement, the BBC can, and indeed should, continue to deliver everything that it currently delivers? And if it cannot, what does he think it should stop doing?

[Lord Parkinson of Whitley Bay (Con)]

As I have said, the BBC is operationally as well as editorially independent, so it is up to the BBC to decide how it spends its settlement and how it continues to deliver for licence fee payers. That is a decision that is being repeated by many businesses and in many households across the country as people tighten their belts; it is important that they do so.

We spoke in our previous debate about the dangers of groupthink and the BBC’s own acknowledgment of the work that has to be done to ensure that it fully reflects the country that it serves, with the Serota review and other things. That work is to be welcomed and I think it was welcomed across your Lordships’ House. This is not a matter of party politics but of making sure that the BBC reflects the country that it serves and the people whose hard-earned money pays for its services.

[Lord Framlingham (Con)]

My Lords, does the Minister agree that, if the BBC is to justify its fee, its news programmes must be honest and straightforward? Last weekend, there was a demonstration in London by people who were against compulsory vaccination. The BBC news reported it as being attended by “hundreds of people”. I saw it myself, repeated more than once—“hundreds of people”—when in fact there were thousands and thousands of people at the demonstration who could be clearly seen on another channel at the same time as the BBC was saying that there were only hundreds. What does that do to the BBC’s credibility, and what will all those people who attended that demonstration, or watched the comparison on television, think about the BBC and the licence fee?

[Lord Parkinson of Whitley Bay (Con)]

The number of people attending protests is often disputed by the people who take part, the police and the reports that are made of them, so I hope that my noble friend will forgive me if I am not drawn into my assessment of the protest or of the reports. The BBC is editorially independent. It reports the news in an independent way; it grapples with often highly politically charged issues as it does so, and it has a means for people who feel that its bulletins are not fair to make their voices heard and seek redress. That is one of the reasons why it is so cherished.

[Lord Clement-Jones (LD)]

The Minister did not answer the question of my noble friend Lady Bonham-Carter as to the consequences of the licence fee not being adjusted for inflation over the next two years. What is he suggesting the BBC should cut?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I have said that, as the BBC is operationally independent, it is for the BBC to decide how it spends its settlement of £23 billion over the settlement period, and how it serves the people who are funding it.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, the Minister seems to indicate that freezing the BBC licence fee could be used as a cost-saving measure to help those who have to meet rising costs as part of the cost of living increase. Does the Minister not agree that it would be much better if the Government were to reduce, and not bring forward the increase in, national insurance contributions—as a measure of dealing with the cost of living increases and ensuring that the BBC continues to provide a good level of fair and equal broadcasting right throughout the UK?

[Lord Parkinson of Whitley Bay (Con)]

The noble Baroness will, I hope, appreciate that decisions on other departments’ areas and how the Government can help people with the cost of living are not for me. However, I hope I infer from her comments that she welcomes the decision that the Secretary of State has taken to do our bit to help people with the rising costs of what otherwise would have been a licence fee increase to £180 by 2027.

[Lord Watson of Invergowrie (Lab)]

My Lords, the remarks of the noble Baroness, Lady Bottomley, and the noble Lord, Lord McNally, about the Secretary of State should perhaps be put in the context of the fact that she has a history of attacking the BBC, and her appointment to her current post was akin to giving a child the keys to the sweet shop.

Almost 80% of school-age children use BBC Bitesize, the UK’s only free-to-use comprehensive education resource portal as a regular part of their learning. During the Covid peaks, BBC lockdown learning attracted an average of four and a half million users to the online resources specially developed to support home schooling at a time when the Government were failing to provide enough laptops or broadband to disadvantaged families. No commercial broadcaster would provide these services gratis. Has any assessment been made of the impact of the licence fee freeze on the BBC’s education output?

[Lord Parkinson of Whitley Bay (Con)]

I agree with the noble Lord that the services provided by BBC Bitesize and more widely were a lifeline to people including those who were home schooling during lockdown, as I said to the noble Baroness, Lady Bonham-Carter. However, I point to the comments of my right honourable friend the Secretary of state in another place when she made this Statement. She was very glad to defend the BBC and to say that she wanted it to continue to thrive for another 100 years. That is why we want to have the open discussion that we need to make sure that its funding model can sustain it in a changing landscape; that is important and, as I have said, I look forward to having that debate with noble Lords.

[Lord Shipley (LD)]

My Lords, in her Statement, the Secretary of State said that she

“had to be realistic about the economic situation facing households up and down the country.”—[Official Report, Commons, 17/1/22; col. 39.]

What consideration might the Government give to introducing a rebate scheme for those on lower incomes, as applies with council tax, so that the licence fee might better reflect the ability to pay?

[Lord Parkinson of Whitley Bay (Con)]

I will take the noble Lord’s interesting point back to the department and discuss it with my colleagues there.