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Mr. Greenway: I am grateful for your protection, Mr. Deputy Speaker.
It is our view that there should have been a new approach and a redefinition of the BBC's role in a multi-channel environment before the licence fee increase was announced. I am grateful to the hon. Gentleman for his confirmation that my hon. Friend the Member for East Surrey (Mr. Ainsworth) and I are being consistent in our argument. I shall shortly draw on the recommendations of the Select Committee.
I was saying that the new director general has made it clear that he believes that there are significant cost savings to be made within the BBC. In its recent report, the Select Committee drew attention to earlier efficiency initiatives that delivered savings way beyond what was predicted. I know from over 10 years' experience of working with Yorkshire-Tyne Tees Television and the ITV network that ITV has undergone rigorous streamlining on more than one occasion.
The new director general's determination to expose the BBC organisation to the rigour of a similar approach, however, confirms our suspicion that the restructuring
should have been allowed to run its course before any decision was made about the BBC's funding needs and any licence fee increase. That, in effect, was the Select Committee's general conclusion.
Such a fundamental shake-up as we are being lead to expect from Mr. Greg Dyke was not anticipated when the Davies inquiry was established. On the contrary, in evidence to the Select Committee, the former director general, Sir John Birt, said that there was no real scope for further efficiency savings. Yet, only weeks later, the new director general is putting out a different story, which I must say I welcome.
The Davies inquiry was predicated on the premise that the BBC needed more money, thus generating an expectation that an increase in the licence fee would be recommended and granted, notwithstanding the fact that throughout the entire inquiry no effective case for extra money was made. Indeed, when Gavyn Davies took representations, nobody knew how much the BBC itself thought it needed.
That view appears to have been shared by the Select Committee, which was robust in arguing that there should be no new money for the BBC until 2002, when the existing December 1996 agreement will lapse. By 2002, of course, the charter renewal due in 2003 will also be on the agenda, all of which adds weight to the argument that we should have examined what the BBC is for and how it should be supervised before entering into a new six-year inflation-busting licence fee agreement. It is remarkable that the Secretary of State himself appeared to agree that breaking that agreement was not justified when he set out the terms of reference for the Gavyn Davies inquiry, a matter that the Select Committee drew to our attention.
The worst feature of the Davies recommendations, which has thankfully been rejected, was the proposal for a digital licence supplement, and we agree with the Secretary of State that such a supplement would have been inappropriate. It would have undermined progress towards increased digital take-up, which will lead in time to the switch-off of analogue signals. Nevertheless, the proposal generated damaging uncertainty, for which the Secretary of State must shoulder some of the blame.
It is almost 18 months since the Davies inquiry started work. The inquiry took almost a year, and there was then further consultation on its findings. After weeks of rumour and counter-rumour, the Secretary of State appointed management consultants Pannell Kerr Forster to re-examine the issues. During that time, however, no effort was made to examine the BBC's future role, and the Secretary of State's stewardship throughout this period has been unimpressive.
We understand that a protocol to the Amsterdam treaty required such a review of the BBC's role. Why have not the Government undertaken that? The whole situation is absurd. Here was a golden opportunity to make an attempt to consider the BBC's future before announcing an increase in public subsidy, yet the Government sought to ignore it.
I have already highlighted a further concern that the existing agreement reached just three years ago has been breached. That agreement was seen as a breakthrough at the time, and was said to be sufficient to fund the BBC's digital requirements. It is clear that for the next two years we would have had a licence fee increase below the rate of inflation. Now we have the prospect of a real-terms
increase for the next six years. What guarantee can the Minister give to the House that the agreement will not be breached again within that time, notwithstanding the benefits that might accrue from Greg Dyke's initiatives on cost and efficiency?
Another area for potential cost savings lies in reappraising the value of the peripheral parts of the BBC's empire and the expansion of BBC services, in particular News 24. The Secretary of State told the House on 21 February that a review of News 24 would be a priority, although we were not told when the review would take place or with what objective. I understand that on Friday the Secretary of State suggested that it would now be improper to review BBC News 24 in the run-up to a general election. That will not please the Select Committee, which criticised the high costs of News 24, which I gather has already cost the taxpayer over £130 million. Those high costs were never explained to the Select Committee.
Perhaps the Secretary of State has some inside knowledge about the election date. One wonders whether he is postponing the review in the belief that the general election will take place soon. More seriously, has he concluded that over the next couple of years, the BBC might seek to incorporate News 24 in its mainstream BBC 1 and BBC 2 television news programmes, thus rendering the review unnecessary? That might well be sensible, but why the secrecy?
The suggestion that a review now would be improper in the run-up to a general election has been greeted with incredulity. The only thing on which we can be clear is that the licence fee payers will foot the bill for however long it takes for a decision about the matter to be concluded.
The whole issue epitomises the absurdity of the Government's position in awarding the money ahead of determining the need. There can be no incentive for the BBC to reduce costs and take a more rigorous approach to efficiency if it thinks that a licence fee increase is there for the asking. Our view remains that the BBC should look to reduce its costs and, over time, its licence fee for everyone, not just pensioners over 75.
In his statement to the House on 21 February, the Secretary of State confirmed the intention to introduce the over-75s free TV licence, which had been announced by the Chancellor last year, with effect from 1 November. However, closer examination of his statement and of matters that have arisen subsequently highlights a number of anomalies and practical difficulties that the House needs to consider, now that the order has been laid.
The free television licence for the over-75s does not solve the accommodation for residential care concessionary scheme anomaly: a relatively small number of pensioners qualify, but the majority do not. All hon. Members present are aware of the resentment to which the scheme gives rise. However, the same sense of unfairness associated with that scheme might become--
Mr. David Winnick (Walsall, North):
I am grateful to the hon. Gentleman for giving way. He refers to the accommodation anomaly, and I agree. One day it will have to be rectified. Is the hon. Gentleman aware, however, that on 12 July 1988, we tabled a prayer against
Mr. Greenway:
The hon. Gentleman makes a fair point. Although I was in the House at the time, I cannot claim to remember that particular occasion, but I am aware that hon. Members on both sides, including many of us when we were in government, argued with Ministers that the matter needed to be resolved. My point is that the free licence for the over-75s solves nothing.
The same sense of unfairness will become even more keenly felt when the age-related free licence is introduced. The Minister has made it clear that in a pensioner couple household that benefited from a free TV licence because of the age of the older spouse, a widowed younger spouse below the age of 75 would have to purchase a licence all over again at the next renewal date.
One accepts, of course, that the anomaly will arise wherever the age qualification is drawn. The problem is that the surviving pensioner widow is often left with a much lower income, and may therefore be thought more worthy of help than the married couple pensioners, one of whom is over 75, who still benefit from the husband's full pension. I have no doubt that colleagues will raise other examples.
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