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The Minister for Tourism, Film and Broadcasting (Janet Anderson): I thank the hon. Gentleman for giving way. Will he tell the House whether he and his few colleagues on the Conservative Benches for this important debate support the Government's intention to grant free television licences to the over-75s?
Mr. Greenway: That is a bit like asking whether a donkey likes strawberries. The Government have made the announcement and we do not intend to oppose it, although I dare say we might have thought of a different way of spending the £300 million to help elderly pensioners.
I sat here last night and heard the Chief Secretary to the Treasury give a totally implausible explanation of why it was right to pay every pensioner household £100 this year in winter fuel allowance, and £150 following the Budget, rather than increasing the old age pension. Apparently, poorer pensioners would not be helped because of the thresholds relating to the withdrawal taper for benefits; but those thresholds could have been raised.
The announcement has been made, and we do not seek to oppose it. I am asking justifiable questions about how the scheme will work--and, if the Minister wishes to introduce a controversial element, let me add that all we have heard suggests that no aspect of it had been thought through before the Chancellor's statement.
If the BBC is to be given access to such sensitive information as national insurance records, we are surely justified in asking certain questions. Does the Minister accept that there will be widespread concern about the need for security in regard to such information? We hope that any tabloid headlines suggesting that Auntie had become Big Brother would be unfounded, but this is a genuine worry. Will the use of national insurance records catch everyone over the age of 75, or might there be a number of elderly people, perhaps immigrants, who have never had a national insurance reference?
Our principal concern, however, is that the main result of this initiative will be the state's paying directly to the BBC more than 13 per cent. of its income. I think we are right to ask the Minister to give a categorical assurance of the BBC's continuing independence of any governmental interference.
Does the Minister realise that if the scheme were extended to all pensioners over 65, at least a third of the BBC's income would come directly from the state? However popular such a decision might be with pensioners, if the Government took such a significant stake in the BBC, public concern would be raised about its continuing autonomy and impartiality. That has never happened before.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Janet Anderson):
I shall try to respond to the points that the hon. Member for Ryedale (Mr. Greenway) made. There must be no mistake about the effect of the Opposition's prayer against the order: it would annul it. Yet the hon. Gentleman said that the Opposition simply wanted an opportunity to debate it. There was an opportunity to do that when my right hon. Friend the Secretary of State made his statement. If the Opposition truly wanted a debate, I am sorry that the hon. Gentleman could not persuade more of his colleagues to be present for what he regards as an important discussion.
Nobody enjoys paying the television licence fee. Any increase in that fee, especially above the rate of inflation, is therefore an emotive issue. I concede that that is the subject of our discussion. Unlike the hon. Member for Ryedale, I shall try to concentrate on the issues.
The BBC plays a central role in the cultural life of the United Kingdom. Consequently, it attracts a great deal of attention and scrutiny. Many people have strong views on the way in which the BBC should be funded, the services that it should provide, the standards that it should maintain and the value for money that it offers.
The Government are committed to the BBC's continued role as the United Kingdom's principal public service broadcaster, which provides a wide range of quality programmes on all its services, and offers something to all viewers and listeners. Free access to its public service channels is central to the BBC's role so that a high standard of news, education and current affairs programmes is available to all audiences--not only to those who can afford subscription or pay-per-view services. I am sure that the hon. Member for Ryedale would not wish services to be available only to the latter group.
The Government also believe that the BBC must embrace the technological developments that will revolutionise broadcasting in the next few years. Indeed, we believe that the corporation should drive the take-up of new digital and online services.
The television licence fee currently has distinct advantages over the other options for funding the corporation. At the outset of the BBC funding review, the Government made it clear that we considered the licence fee sustainable as the BBC's main source of funding, at least until the renewal of its royal charter at the end of 2006.
Against that background, an independent review panel chaired by Gavyn Davies was appointed at the beginning of 1999 to consider future funding of the corporation. The panel was asked to examine ways in which funding to promote public service output could be extended from other sources; to consider how to secure an appropriate balance between the BBC's public and commercial services; and to review the mechanisms for fair trading in relation to commercial services.
The panel's report was published last July. When reaching conclusions on the recommendations, the Government took account of more than 2,000 responses to the public consultation on that report and the report of the Select Committee on Culture, Media and Support on funding the BBC.
As the hon. Member for Ryedale mentioned, the Government also commissioned a review of the BBC's financial projections by independent consultants Pannell Kerr Forster to assist our decisions on finance, and an analysis by the chief economist of the Department for Culture, Media and Sport. We wanted to be in no doubt about the BBC's requirements for competing effectively in the digital age.
As my right hon. Friend the Secretary of State for Culture, Media and Sport announced on 21 February, although we have not adopted all the detailed solutions that the review panel proposed, we have accepted its general analysis of the current position. In particular, we accept that the Government's vision for the BBC cannot be realised in the existing funding framework. Much has changed in the world of broadcasting since the previous
Government announced their five-year licence fee settlement in December 1996. The hon. Member for Ryedale knows that well. He knows how fast changes occur in the sector that we are considering.
The Government accept the panel's recommendation that additional funding should come initially through self-help. We are therefore challenging the BBC to help itself by efficiency savings, partnerships, joint ventures, reductions in bureaucracy and other means, and very much welcome the steps that the new director general is taking in that direction. We have set the target of £490 million by 2006-07, over and above the £600 million that the BBC itself estimated. That target, which is more demanding than that set by the Davies panel, flows from the conclusions of the independent analysis of BBC finances commissioned by my Department. Thus, over the period of that settlement, the BBC will be required to generate more than £1 billion from self-help. It will be up to the BBC to decide how to meet that target, but we have made it clear that we expect it to be met.
Mr. Peter Bottomley (Worthing, West):
Can the Minister help the debate by saying where the £490 million might come from?
Janet Anderson:
I hope to deal with that, if the hon. Gentleman will be patient.
The second source of additional funding proposed by the review panel is the licence fee. The two alternatives identified in the Davies report were, first, a digital licence fee supplement set at £24 and payable only by digital services viewers, which would decline over a number of years to converge with the standard licence fee; and, secondly, an increase in the general licence fee payable by all. As the House knows, we have chosen the latter. Although unlikely to depress the take-up of digital television significantly, the introduction of a digital licence fee would have given the signal that digital television is something out of the ordinary. The Government's view is that it will soon be the norm. The benefits of the increased funding will be available to all licence fee payers through improvements in the BBC core services.
The Government have therefore decided to provide the additional licence fee funding required by the BBC via annual increases of 1.5 per cent. over the retail prices index from April this year through to 2006. That means that on 1 April the colour television licence fee will rise by £3 to £104 and the black and white licence fee will rise by £1 to £34.50. The regulations will bring those increases into effect.
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