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1.17 pm
Mr. John Grogan (Selby): Like democracy in another context, I would contend that the TV licence system is the least worst system on offer, particularly if we have as our central aim the need to nurture and develop the world-class public service broadcaster, which is still our BBC.
Generally, there is no widespread revolt against the licence fee. Evasion rates are falling sharply. When the BBC took control of the collection of licence fees in 1990, 10 per cent. of licence fees were evaded. According to the report published yesterday by Pannell Kerr Forster for the Department for Culture, Media and Sport, the figure had fallen to 8 per cent. in 1995-96. It is now down to 5.1 per cent. and is projected to fall to 4 per cent. in the next couple of years. The report concludes that
Let us set the £104 licence fee in context. The average spend by a cable, digital or satellite subscriber last year was £300, largely on sport and movies. In its report "Public Service Broadcasters Around the World" published in 1998, McKinsey consultants looked at 20 countries. It found that the BBC's operating income per capita was very much in the mid range.
In terms of distribution, the licence fee is certainly regressive, though less so since the concessions for 75-year-olds. Indeed, my father was 75 on 12 November last year, three days after my right hon. Friend the Chancellor of the Exchequer announced the concessions. At least now my father has to accept that I am a man of some influence.
Even though the licence fee is regressive in pure economic terms, I contend that it is progressive in its effects on society as a whole because it means that the BBC can be properly funded. It means that many of the good things about our national life and many of the best things in our culture are available to everyone who has a television or radio set. We should celebrate the mantra of the BBC that it strives to make the good popular, and the popular good. It still accounts for nearly 40 per cent. of our total television viewing. In homes with satellite and cable, the BBC is still the market leader and accounts for 27 per cent. of total viewing. The BBC accounts for
43 per cent. of our total listening and viewing. Its online site is the most visited in Europe and two thirds of all GCSE students last year visited BBC online sites.
McKinsey concluded that there were two essential characteristics of a public service broadcaster that is successful throughout the world. The first was that it was distinctive in programming, content and scheduling; the second that it retained a sufficiently large market share to keep the commercial sector honest. That is one of the reasons why the commercial sector supports the licence fee. The evidence of the Culture, Media and Sport Committee shows little support for the privatisation of the BBC and the abolition of the licence fee, other than from Mr. Kelvin MacKenzie, the ex-editor of The Sun and current managing director of Talk Sport. Both BSkyB and the ITV companies support the continuation of the licence fee.
What are the alternatives? The hon. Member for Christchurch (Mr. Chope) suggested funding through taxation, which is an interesting tax and spend promise. Total state funding for the BBC would mean about 2p on income tax. What would that do for the independence of our national broadcaster? Would Jeremy Paxman seriously grill a Treasury Minister if he knew that the next morning the director general would have to troop into a meeting with the Chancellor of the Exchequer to plead for next year's income? All the evidence from abroad suggests that state funding of a national broadcaster is massively cut in times of recession, as happened in Canada and Australia with great harm caused to the state broadcasters.
The total advertising income of the commercial television sector was £2.6 billion last year and that would not rise dramatically if the BBC was involved. The consultants London Economics suggested that the BBC could obtain some £1.6 billion from advertising if it freed its schedules to advertising. That would totally disrupt the commercial sector but, perhaps more seriously, it would also dumb down the BBC. The news at 9 pm would go the way of the "News at 10" as the BBC chased ratings because its schedules had to fit in with the needs of advertisers.
Sponsorship of programmes is not really an option either. The total sponsorship of British television programmes last year amounted to £50 million and is projected to rise to £100 million, according to ITV. Individual subscription to BBC programmes would destroy universality of access. Fund-raising by the BBC, as happens in the United States, would mean that programme content and management time were totally devoted to fund-raising.
John Birt said that it was the privilege of his life to lead the BBC and Pannell Kerr Forster concluded that the BBC had made significant savings of £500 million over the past five years. My right hon. Friend the Secretary of State rightly sets the BBC challenging targets for the next five years, but the BBC should be involved in the digital as well as the analogue world. Market failure also applies in the digital world and market concentration is likely to be more dangerous in the digital world than in the analogue world.
Why should not the BBC seek approval from the Secretary of State to run a children's channel on free-to-air digital to compete with the cartoon-based children's channels that are available at the moment? Why
should not it seek to run a 24-hour news channel? The viewing figures for cable television show that News 24 is now outperforming Sky News. On digital television, Sky News is outperforming the BBC, but that is not surprising because the BBC channel is 584th on the Sky programme guide. That is another big issue for the digital world--who controls the programme guides and the gateways?
The McKinsey study of public service broadcasters around the world concluded by stating:
I do not intend to divide the House but, as chairman of the all-party BBC group, I want to illustrate the strength of support in all sections of the House for the BBC and the principle of the licence fee. For those reasons, I oppose the Bill.
Question put, pursuant to Standing Order No. 23 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.
Bill ordered to be brought in by Mr. Christopher Chope, Miss Julie Kirkbride, Mr. Ian Bruce, Mr. Eric Forth, Mr. Michael Fallon, Mr. Edward Leigh, Mr. Owen Paterson and Mr. Christopher Fraser.
Mr. Christopher Chope accordingly presented a Bill to amend the Wireless Telegraphy Act 1949 to remove the requirement for the obtaining of certain wireless telegraphy licences; to make provision with respect to the funding of the British Broadcasting Corporation; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 7 April, and to be printed [Bill 72].
The Secretary of State for Defence (Mr. Geoffrey Hoon):
I beg to move,
This debate also enables me to respond to some of the points made in the recent report by the Select Committee on Defence on the White Paper, and in the Ministry of Defence performance report, although we are of course preparing a detailed written memorandum to respond to the issues raised there.
The central theme of the White Paper is modernisation. It sets out the progress that we have made in many areas, not least in delivering the strategic defence review and in taking forward European defence. It describes how we are modernising the whole of defence--from the farthest end of the procurement chain right through to our front-line capabilities. It is a massive programme of change.
This is not modernisation for the sake of it. The process that we have begun is about delivering improvements to the capability of our armed forces. It is about giving them the structures, equipment and support that they need to do the job effectively. It is also about ensuring that we have developed the security architecture to meet the strategic landscapes of this century, not of the last.
Let no one underestimate the ambition or the significance of the undertaking in which we are now involved. It is a hugely complex and challenging process, but it is a necessary one. A modern Britain needs modern defence forces, and the strategic defence review provides them.
When the outcome of the review was announced by my predecessor in July 1998, it was widely acclaimed on all sides. It was admired for its logic, its good sense and its vision. However, we always knew that we would really be judged on our delivery of the improvements that the SDR proposed.
"the overall cost of collection and evasion"
will be
"down to 9% by 2006-07 compared with 13.2% in 1995-96."
That is due to the widespread development of easier payment mechanisms.
"Our analysis shows that licence-fee-funding has been more stable and predictable than the other forms of funding . . . This allows PSBs to invest in programming or operational improvements, as they can be confident about their revenue for the term of the licence agreement."
Who knows what the future will bring? Perhaps people will receive their television pictures mainly through the internet--if so, we shall indeed be in a different world. However, for the foreseeable future, yesterday's settlement and the licence fee provide the best basis for public service broadcasting in this country.
That this House approves the 1999 Defence White Paper (Cm 4446).
I am very grateful to have the opportunity to open the debate on the 1999 defence White Paper--the first that I have had the privilege to present to the House. It gives me the chance to bring the House up to date with the many initiatives that we have under way to modernise Britain's defence.
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