Supplementary memorandum submitted by
the Department for Culture, Media and Sport
FREE TELEVISION LICENCES FOR THE OVER-75s
This memorandum is provided at the request of
the Culture, Media and Sport Select Committee to inform its inquiry
into the Funding of the BBC.
BACKGROUND
In his pre-Budget statement on 9 November, the
Chancellor of the Exchequer announced that, from Autumn 2000,
"every pensioner aged 75 or more will receive their television
licence free of charge". The Government will announce details
of the scheme, including the starting date, in the near future.
The Government estimates that this concession
will benefit over 3 million households. The concession has been
targeted at older pensioners because they are more likely to be
reliant on television for information and entertainment as a result
of poor health, lack of mobility and social isolation and because,
as a group, they are most likely to be on low incomes. An estimated
45 per cent of households with a pensioner aged over 75 or over
are in the bottom 30 per cent of households by income.
The cost of this concession will be met from
central Government funds rather than by other licence fee payers.
The Government will now need to consider the
interaction of this concession for the over-75s with the existing
Accommodation for Residential Care (ARC) concessionary licence
scheme, since three quarters of current beneficiaries are over
75. In reaching conclusions, it will need to take into account
the recommendations of the Davies Report and the responses to
the consultation exercise.
The Government is also considering the Davies
Panel's recommendation that the discount for registered blind
people, which has remained unchanged at £1.25 since 1971,
should be uprated to 50 per cent of the colour licence fee and
that the BBC's targets for the subtitling of its new digital services,
for people who are deaf or hard of hearing, should be increased
substantially, so that 50 per cent of programmes are subtitled
in the next five years and 100 per cent by 2009. The Government
intends to announce its conclusions in January.
Television licence fees are currently £101
for colour television and £33.50 for black and white.
COMMITTEE'S
QUESTIONS
The Committee asked four questions:
(i) What is the estimated cost to the Exchequer
of the decision to grant television licences free of charge to
those aged 75 or more for each financial year from 2000-01 to
2006-07 assuming the cost of the licence rises in line with the
retail price index in each year?
The Chancellor of the Exchequer quoted a figure
of £300 million a year in his pre-Budget statement. The exact
costs will depend on a number of factors, including the precise
operation of the scheme, which will be announced shortly, future
increases in over-75 household numbers and rates of television
ownership (and whether colour or black and white) among such households.
(ii) What percentage of current ARC scheme
recipients are 75 or over?
We estimate that, out of a total of some 650,000
households in receipt of the current concessionary television
licence, approximately 500,000 or about 75 per cent consist solely
of people aged 75 or over.
(iii) In the case of those aged 75 or over
currently benefiting from the ARC scheme, will the Government
pay the BBC for the full cost of a television licence or the cost
of a concessionary licence of £5?
£5. The cost of the existing concessionary
scheme is borne by other licence payers.
(iv) Will those aged 75 or over entitled to
a free television licence be required to obtain a licence and
will they be subject to the criminal law if they do not do so?
Every household which uses a television receiver
will continue to be obliged by law to hold a valid television
licence and the BBC as licensing authority will be obliged to
enforce that requirement.
November 1999
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