TV Licences for Over-75s

Pat McFadden Excerpts

Wednesday 8th May 2019 Commons Chamber

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

On giving a welfare policy to the BBC, a lot of footballing metaphors have been used in the past 24 hours, after Liverpool’s glorious result against Barcelona last night, but does my hon. Friend agree that in policy terms this is the equivalent of a hospital pass?

[Tom Watson]

It certainly is for this Minister, who happens to be answering today. But it is not as if she, or other Front Benchers, did not have notice, because during the passage of the Bill that enabled this my hon. Friend the Member for Cardiff West (Kevin Brennan) made that very point.

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[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.

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[Mr Pat McFadden (Wolverhampton South East) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Crewe and Nantwich (Laura Smith), and I want to begin where she left off. I agree with her that free TV licences were introduced as a welfare policy. That is very much how it was seen at the time, alongside benefits such as free bus passes and free eye tests. The Government’s decision to pass responsibility for this on to the BBC in the knowledge that the BBC would be under this kind of pressure has two impacts. The first is on the BBC itself; the other is on the pensioners who receive the benefit at the moment.

Passing this responsibility on to the BBC is the policy equivalent of a hospital pass. The Government know that the BBC is under pressure. At the moment, the policy costs some £660 million a year, rising to more than £700 million in a couple of years’ time, and asking the BBC to fund this out of its own resources will leave it facing a cut of around one fifth of its budget. As has been said, that is the equivalent of the budgets for BBC Two, BBC Three, BBC Four, the BBC News channel and the children’s channels. This will have a major impact and major implications for our national public service broadcaster at the very moment when the broadcasting and entertainment environment is changing and the BBC is under more pressure than ever from Netflix, Amazon and other providers. The direct impact of this on the BBC is that it will be faced with the awful choice of cutting quality or hitting pensioners.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

rose—

[Mr McFadden]

I am not going to give way, if that is okay, because there is a lot of pressure on time and others want to speak.

The first impact of the policy will be on the BBC itself. The second impact will be on pensioners, and it will be a dual impact—financial and social. The House of Commons Library estimates that there are around 5,600 households in my constituency with someone who is 75 or over. Looking at the options in the BBC consultation, we see that if the free BBC TV licence were restricted to pension credit recipients, 3,390 of those households would lose out, to the tune of £154 a year. If the qualifying age were raised to 80, around 2,200 households would lose out.

It has been said that we should means-test and restrict the benefit to those on pension credit. We are asked, “After all, what about the very wealthy pensioner with a huge estate?” The problem is that, as with changes to any universal benefit, it will not be just the pensioner with a huge estate who loses out. It is estimated that some 40% of pensioners entitled to pension credit do not receive it. If we go down the road suggested, not only the pensioner with the huge wealth will lose out, but some of the poorest pensioners in my constituency and the other constituencies that have been mentioned in the debate.

Then there is the social and cultural impact of cutting much-needed entertainment and information. What is the Government’s justification? The Minister came close to saying in opening that the change was a consequence of the financial crisis and that the Government were ultimately asking pensioners, some of them the lowest-income pensioners in the country, to pay the cost of it 10 years on. That would be unjust and unfair to pensioners in my constituency.

The free TV licence is, after all, a benefit. The Government should fund it and keep the manifesto promise they made in 2017 to maintain it. They have told us that austerity is over. What better way to start proving that than by changing their minds about the TV licence fee?

The debate is not just a party political joust. Let me act for a moment as the Under-Secretary’s political adviser and give him some friendly advice. If the Government go down this road, they will incur the wrath and lasting anger of pensioners, who have come to expect and are used to this benefit after the 20 or so years of its existence. It will do the Government no good to claim at the next election, “It wasn’t us; it was the BBC.” There is no evading the responsibility for the decision. It comes from and is owned by the Government, and the Government will pay the political price if they proceed with this policy.