Seventh Standing Committee
on Delegated Legislation
Wednesday 8 May 2002
[Mr. Peter Pike in the Chair]
(Television Licence Fees) (Amendment)
Miss Anne McIntosh (Vale of York): I beg to move,
That the Committee has considered the Wireless Telegraphy (Television Licence Fees) (Amendment) Regulations 2002 (S.I. 2002, No. 641).
What a pleasure it is to be here this afternoon, Mr. Pike, serving under your estimable chairmanship, albeit in the rather cool climate of this Committee Room. We have prayed against the regulations, so I am delighted to have a short but comprehensive debate on the issues relating to the licence fee. From previous discussions, the Minister is probably aware of where I am coming from. I am grateful to my noble Friend, Baroness Anelay of St. Johns, for raising the matter in the other place and, as ever, to the BBC for a comprehensive briefing note, to which I hope to do full justice.
Will the Minister say why there should be a systematic increase in the licence fee? I commend the chairman of the board of governors, Mr. Gavin Davies, who is the first chairman in my lifetime to leave his office and go out on patrol to visit those houses where people do not have a paid-up, valid licence. That should be a lesson to us all—inside and outside Parliament—on swoop and scoop, as it could be the chairman who visits us. We must ask the question that he asked: were those people not purchasing a licence because they could not afford it? I am sure that people in one category cannot afford a licence. Those on benefits may have their benefits reduced if their children misbehave, so they would have less money in the family budget to purchase a licence in future.
However, there must be a category of people who simply refuse to pay the licence fee. As the Minister knows, we would have preferred to discuss the issues in the context of the forthcoming communications Bill, which we eagerly anticipate following the precursor of the draft communications Bill. It is appropriate to ask whether those people have a point. I am not saying that I necessarily agree with them, but they have a legitimate point that the Minister may want to consider.
I would not like to go into a lengthy discussion about the alternatives to the licence fee, but we might consider the BBC earning modest commercial revenue. I am not as avid a reader of the Radio Times as I should be, but I was delighted to learn this afternoon that there are advertisements in it.
Michael Fabricant (Lichfield): Is my hon. Friend aware that the Radio Times is the most popular listings journal in the United Kingdom and, some would say,
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one of the most popular magazines? That is one reason why it contains advertising, which generates a small, but useful revenue for the corporation.
Miss McIntosh: My source of the staggering information that the Radio Times contains advertisements is revealed. I obviously did not read the free copy with which I was provided at Christmastime as carefully as I should have.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Dr. Kim Howells): A free copy?
Miss McIntosh: I received one free copy.
I am grateful to my hon. Friend the Member for Lichfield (Michael Fabricant) for informing me that I am not alone in regularly logging-on to the BBC website, which is among the most visited and is probably the most popular. That is a double whammy for the BBC, because it has the most popular television listings and the most popular and widely visited site—the biggest hit on the internet.
The Government may be minded to consider allowing advertisements on the BBC site. If they considered such an alternative source of funding, we would obviously have to consider what current revenue is being spent on. A BBC position paper, which is a reliable source, so I think that we can take this as read, states that the licence fee in 2000–01 brought in an income of almost £2.4 billion. I was delighted to read that licence fee evasion was reduced by 0.2 per cent., which added an extra £4.6 million, although I am not clear whether that was before the current chairman of the board of governors went round visiting people. Such visits might produce a further decline in evasion at a future date.
The briefing note says how the money was spent, and the welcome news is that in 2000–01 the amount spent on running the BBC, which I presume covers its administration, was reduced from 24 to 19 per cent. of income, and an extra £165 million was therefore put into programmes.
The most contentious point is that the increased licence fee settlement has funded many digital developments and the roll-out of national and regional variations on digital satellite by the BBC. I have said that that is the most contentious point, but I accept that there are swings and roundabouts. When the economy was buoyant, the advertising revenue to commercial television and radio stations was probably much greater than the income from the BBC licence fee. Against the background of 11 September and the preceding 12 months, however, there has been a serious decline in advertising revenue. Regrettably, we have seen the demise of ITV Digital, which raises the serious question whether the revenue-raising process is equitable.
Without being party political, and taking a neutral view across the board—
Virginia Bottomley (South-West Surrey): Shame.
Miss McIntosh: I am losing my train of thought, because I am used to being more party political.
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We should visit wireless telegraphy, which is more commonly known as television licence fees, in contexts other than that of the regular increase in the fee. It casts a cloud over proceedings when we read about wireless telegraphy, which is a bit like saying, ''My carriage awaits,'' when my motor car is waiting for me downstairs. It would be simpler if we could talk about the television licence fee.
Will the Minister not concede that it would be better to consider the regular increase in television licence fees in terms not only of the BBC charter, but the Office of Communications Bill and the main communications Bill? Without being too controversial, I welcome the opportunity to elaborate on some of those concerns. Since being given the privilege of representing my party from the Front Bench, I have been more privy to the general views and concerns of those who either pay or do not pay their licence fee, and I welcome the opportunity to put those views across.
The Minister may like to justify, this afternoon, why the BBC has received more revenue through the licence fee, against the background of declining advertising revenues. Playing devil's advocate, some might argue that that has enabled it to subsidise its digital programme and the roll-out of BBC 4, for example.
Dr. Howells: Will the hon. Lady acknowledge that there are now strong indicators that advertising revenues, after a serious downturn, have risen and look as though they will continue to rise? They have certainly risen in the past couple of months and they look very good for the next few.
Miss McIntosh: I would not disagree with the Minister, but I add a note of caution. He will forgive me for yet again drawing a parallel with my husband's business, an American airline company—for the record, Delta Airlines, which is declared, widely. The economy is now more buoyant; more seats are being sold and more advertising revenue is being generated. However, I shall be cautious until I see evidence that that trend will continue for 12 or 18 months. All of us who watch television immediately after Christmas and new year normally expect some 30 to 50 per cent. of advertisements on the commercial stations to be for holidays. If the Minister considers the scenario that that and holiday sales have probably reduced by about a third, he will understand my note of caution.
As we are discussing wireless telegraphy, it would be remiss not to record my personal gratitude for all that BBC radio achieves. It is important to recall the Secretary of State's statement to the House yesterday. I am sure that it was accurate, because all Secretaries of State make accurate statements to the House, otherwise they would wish to come to the House to explain why their statement was not borne out by facts and other accuracies that subsequently emerge from a particular Department. It was a source of some pleasure to learn from the Secretary of State yesterday that there are as many radio listeners a year—I think the figure is 9 million—as television viewers. That is a welcome development, which shows that there is a great future for radio, as well as for television, in this country.
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I welcome the debate and await with earnest interest and anticipation the Minister's response and other contributions.
Mr. Richard Allan (Sheffield, Hallam): I wondered whether the Conservative Opposition prayed against the regulations because they had found an error in the calculations. I found page 2 of the document rather like an arithmetic GCSE. I checked a few calculations, but got stuck at 11 times £8.30 plus two times £8.10. However, I am impressed that we ensure that the public get good value for money. As far as I am aware, the figures all add up to £112, so no funny business is going on there.
My principal concerns about the licence fee involve how it might be applied to a range of devices. I put in a query on that to the Department for Culture, Media and Sport some time ago, which, interestingly, has been referred to the BBC. I am curious about the extent to which we regulate, or the BBC regulates, the collection of the licence fee. I note that we are discussing the Wireless Telegraphy (Television Licence Fees) (Amendment) Regulations, but there is concern over the extent to which television licence fees apply to wired telegraphy. By that, I mean devices such as computers, which nowadays can receive television signals either over the airwaves or through wires. There is a need to reconsider the television licence fee.
Now is not the time to consider the principle of the television licence fee, because that will be part of the forthcoming charter review process. It muddies the waters to talk about it. However, there is an urgent need to discuss the breadth of the licence fee's application, given the range of access devices, both wired and wireless. People are asking whether they are breaching the law if they have a computer containing a card that can receive television signals, although they do not use it. Technically, they have a piece of television-receiving equipment, because it is so enabled. Are people who want to access television and radio through the excellent BBC Interactive online service rendering themselves liable to a licence fee by streaming media through that mechanism? If not, why not? There are arguments on both sides. If someone uses an access method different from access content, have they breached the law?
The regulations are not a major issue for most domestic homes, which are already covered by a television licence, although its scope and extent is sometimes questioned. However, they apply to workplaces. For the record, I bought a television licence for my workplace in Sheffield. When people use a computer in the workplace to access BBC Interactive or other television, they are unsure about whether they are liable to pay the licence fee.
The hon. Member for Vale of York (Miss McIntosh) referred to advertising on the BBC website. I suspect that one reason why that site is so successful is because it does not have advertising; it is one of the few places one can visit for decent news content without being bombarded by advertisements.
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I am still concerned by the tone of the argument on the licence fee. Why does the BBC's dependence on it necessarily have a negative impact on commercial broadcasters? It has been suggested that the answer is for the BBC to substitute advertising for the licence fee, but my understanding of economics is that, given the BBC's market-dominant position, allowing it to compete for advertising would have a negative impact on Granada, Carlton and so on. The licence fee should be dealt with in the round, rather than ad hoc.
My final point relates to the development of digital television services. I hope that the BBC is funded adequately to develop digital terrestrial television in particular. The BBC may be the one that digs the Government out of the hole in which they might find themselves in relation to digital switchover. The brand of digital terrestrial television as a pay-TV platform has been fundamentally damaged in recent months, but the Government could get out of that situation and achieve their laudable objective of enabling people to receive digital television by promoting a free-to-air platform. Who better to do that than the BBC? It has a trusted brand, as opposed to ITV Digital, which is not trusted at all.
Perhaps contrary to the views of the hon. Member for Vale of York, I hope that the licence fee gives scope through this budget for significant developments in digital terrestrial television, which will not wait. If the Government aim for switch off by 2008 to 2010, the 2002–03 period is critical. A BBC-branded free-to-air product would get digital terrestrial television out to millions of homes, and I find it hard to see how any alternative pay-TV platform could gain the credibility necessary to achieve such reach. That would allow the Government to say that they have truly achieved digital terrestrial television penetration that enabled switchover.