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Motion made, and Question put forthwith (Standing Order No. 118(6)),
That, at this day's sitting, Standing Order No. 41A (Deferred divisions) shall not apply to the Motion in the name of Mark Hoban relating to European Union Economic Governance. -( Mr Dunne.)
Motion made, and Question put forthwith (Order, 2 November, and Standing Order No. 118(6)),
That, pursuant to section 4(4) of the House of Commons Members' Fund Act 1948 and section 1(4) of the House of Commons Members' Fund Act 1957, in the year commencing 1 October 2010 there be appropriated for the purposes of section 4 of the House of Commons Members' Fund Act 1948:
(1) The whole of the sums deducted or set aside in that year under section 1(3) of the House of Commons Members' Fund Act 1939 from the salaries of Members of the House of Commons; and
(2) The whole of the Treasury contribution to the Fund in that year. -( Mr Dunne.)
Mr Jim Cunningham (Coventry South) (Lab): The petition states:
The Petition of residents of the Coventry South constituency,
Declares that the Petitioners believe that animals in British factory farms are pumped full of protein to speed up their growth; notes that soy is a major source of protein; further notes that, in order to produce enough protein, precious habitats like rainforests are cleared in South America to make way for vast soy plantations; and further declares that this increases climate changing gases in the atmosphere, damages the Earth's free life-support systems, which provide us with clean water, healthy soil and air to breathe, forces small farmers off their land, making them unable to grow food for their families, and fails UK farmers, leaving them vulnerable to fluctuating commodity prices.
The Petitioners therefore request that the House of Commons urges the Government to take steps to shift subsidies away from factory farming, to support farmers to grow their own animal feed and to ensure supermarkets offer fair deals to everyone.
And the Petitioners remain, etc.
Motion made, and Question proposed, That this House do now adjourn.-(Mr Dunne.)
Ian Murray (Edinburgh South) (Lab): Mr Deputy Speaker, all day long colleagues have been tempting me to say, "Nice to see you, to see you-"
Dr Thérèse Coffey (Suffolk Coastal) (Con): Nice!
Ian Murray: I thank the hon. Lady for that sedentary intervention.
Ever since the BBC's inception in 1922, it has played a major role in this country. The public not only admire the BBC; they trust the corporation to deliver real value and quality while they watch and listen to its channels or, more recently, surf its online content. Indeed, the quality of the BBC output could only be improved by you, Mr Deputy Speaker, appearing as the guest presenter on "Have I Got News For You" or by light-footed former Conservative Members appearing on "Strictly Come Dancing."
We must, however, protect what the BBC provides and how it is paid for. The licence fee enables our national public-sector broadcaster to provide 10 TV channels, 10 UK-wide network radio stations, 46 national and local radio services, regional options, interactive services on BBC iPlayer, and high definition television, as well as the ever-popular BBC websites which attract 22 million unique users in the UK every week. On top of all that output, the BBC is the engine room of the country's hugely important creative industries.
Let us consider the value of the licence fee. It costs about 40p per day, which is less than half the cost of many daily newspapers and about the same as the price of a pint of milk or a first-class stamp. It costs less than the price of half a loaf of bread, 20 times less than the average cinema ticket, and a 25th of the cost of joining the Liberal Democrats. The licence fee also enables the BBC to invest in the UK as a whole, with a commitment to 50% of network production coming from outside London by 2016 as well as a commitment to the BBC regions in Scotland, Wales and Northern Ireland.
Most importantly, the BBC delivers a significant contribution to the creative industries and the UK economy. Britain's creative sector, which accounts for about 6% of the UK's GDP, can make a significant contribution to economic growth and employment. Having grown at a faster rate than the general economy in recent years, the creative industries are now expected to grow by 4% on average in the next five years. The beneficial impact of the BBC to that is some £7.6 billion a year, including more than £150 million through BBC Worldwide.
Robert Halfon (Harlow) (Con): I congratulate the hon. Gentleman on securing this important debate. He has made the case for the licence fee, and there is obviously a case for it, but does he not agree that the big problem with it is that no licence fee payer has a say in how the BBC is run? We need to democratise the licence fee and give licence fee payers the vote, at least in respect of the board and trust and the BBC's direction.
Ian Murray: I think the BBC has a lot to learn on those principles. However, I will talk shortly about what the Government have done by not including licence fee payers in the comprehensive spending review and the future of the BBC.
The BBC is a globally respected brand, which is why the House should be concerned for its future, and it has been described as a national treasure, which is why Labour Members will always stand up for it as a friend, although a critical friend. I must state clearly at the outset that the BBC should not be immune from reform or cuts at a time when we are all supposed to be in this together, but that reform process has to be done through negotiation and with respect for what the BBC delivers and the people-its staff-who deliver the service on behalf of us all.
The outcome for the BBC from the CSR has shown contempt for the corporation, and the opportunity has been lost truly to change the organisation in the context of a new digital age, changing and fast-moving markets and, significantly, shrinking budgets across the sector in programme making.
The BBC also has a responsibility to consolidate its own activities within the continual pursuit of excellence alongside an honest examination of the role of both the BBC and, more importantly, public sector broadcasting. The final settlement for the BBC through the comprehensive spending review is yet another example of the Government's undue haste. We have seen that with the dangerous too-deep, too-soon, too-quick cuts that will harm jobs, harm growth and threaten the already fragile UK economy.
The CSR deal for the BBC was put together in 72 hours. It was a dubious deal, with Ministers embarking on a strategy to intimidate the BBC into accepting whatever came its way. Why? Because the outrageous proposal that the BBC take responsibility for free TV licences for the over-75s hung over it like a guillotine. What would be next? The licence fee paying for the winter fuel allowance, child benefit or perhaps even the Prime Minister's new personal photographer?
That threat ensured that the BBC would grab the deal given to it through the CSR quickly and with both hands. Let us look at the settlement it was given. It includes a freeze in the licence fee for the remainder of the charter period and the BBC taking on funding for the BBC World Service, BBC Monitoring and the Welsh language channel S4C. In addition, the BBC will be supporting the Secretary of State's pet project, the new City TV, through a £25 million ring-fenced partnership fund. It will also be given responsibility for delivering broadband services. All in all, there is a £340 million bill alongside a 16% real-terms reduction in licence fee income over the period.
This "delicious" deal, as the Prime Minister described it, was so hastily contrived that it prevented proper consultation and debate with licence payers, stakeholders and, most importantly, BBC staff themselves to the extent that we are left with no real way of knowing the true impact on the BBC. Will it affect the quality of programming? Will it mean the BBC stopping services? Will it mean significant job cuts? Will it damage the independence of the BBC and the BBC World Service? Will the board of S4C take the Government to court, due to it not being consulted about its funding being transferred to the BBC?
Conversely, this rushed deal has also restricted the opportunity to keep the pressure on the BBC to continue on its programme of reform in terms of bureaucracy and excessive executive pay.
Graeme Morrice (Livingston) (Lab): I am grateful to my hon. Friend for giving way. Has he, like me, received many representations from constituents arguing against any freezing of, or indeed cuts in, the licence fee and supporting its retention so that a quality service can continue to be provided by the BBC?
Ian Murray: I welcome the intervention from my hon. Friend, who raises an important point. Many Members, I am sure, will have received dozens, if not hundreds, of e-mails, letters and telephone calls from people who are concerned about the BBC, cuts to it and what it delivers. Constituents have raised that point with me on numerous occasions.
To go back to the missed opportunity, the BBC was entering into a new culture of transparency and accountability-a programme that was, on its own measurement, to save £2 billion by 2014. I want to ask the Minister some questions about the future of the BBC. Is this deal on top of the BBC's current strategy to save £2 billion by 2014? What criteria will be applied to where the cuts will fall? Will there be job losses and a reduction in quality? What impact will the cuts have on the move to the media city in Salford and the programming being transferred to the regions-50% by 2016, I think? Who is now responsible for the roll-out of broadband-the Department for Culture, Media and Sport, the Department for Business, Innovation and Skills or indeed the BBC? What will the future hold for the BBC World Service? What budget protection will the World Service have? Will that critical service have to compete with other parts of the BBC budget in due course?
Anna Soubry (Broxtowe) (Con): Is not the real problem with the BBC the fact that it has expanded into areas that it should not have expanded into, and that it has lost sight of the fact that it is a maker and broadcaster of programmes? In moving into websites, it is taking away from other websites. Most importantly, it is taking away the ability of people to work in print journalism. It is really threatening newspapers and other websites.
Ian Murray: I appreciate that intervention, but the BBC has been involved in a programme of reform of what it supplies on the website. The list of duties that has been placed on the BBC by the comprehensive spending review has given it more responsibility, not less. It is the opposite idea to that which has been given by the-
Motion lapsed (Standing Order No. 9( 7 ) ).
Motion made, and Question proposed, That this House do now adjourn. -(Mr Dunne .)
Ian Murray: I will get used to the procedures in this Chamber, I am sure, Mr Deputy Speaker.
On the World Service, will the BBC have budget protection or will the World Service have to compete with other parts of the BBC budget in due course? What role will the Foreign Secretary have in that process? The Secretary of State mentioned that the BBC would
have to seek the Foreign Secretary's approval for World Service closures. The fact that the word "closure" is used must concern staff and lovers of the service. Furthermore, the BBC World Service is well regarded as the best international diplomacy and peacekeeping device that the UK has-more effective, indeed, than the UN or any military might.
Indeed, if you will indulge me, Mr Deputy Speaker, the BBC World Service won several awards just last night, demonstrating the distinctive programming that it can provide. At the Association for International Broadcasting awards, the BBC World Service won the best current affairs documentary on radio award and the best single news event radio award for its "Connexion Haiti" team and a drama award for the best creative feature on radio for "The Day that Lehman Died". That shows that listeners the world over appreciate the role of the World Service.
Will the Minister tell the House what the future is for S4C, given that the Secretary of State recently wrote to the chair of the BBC Trust stating that
"if the new partnership model between S4C and the BBC proves unviable...the BBC contribution required for S4C will be taken from the licence fee"?
I read that to mean that S4C could potentially be closed if it becomes unviable. Crucially, how will licence payers, BBC staff and stakeholders be consulted in that process?
If the economic situation changes, will the Government assure the House that the Government do not reserve the right to go back to the BBC licence fee issue in the course of this licence charter period? If the Secretary of State cannot answer those questions this evening, will he be willing to provide me with a written answer to those points?
The comprehensive spending review reduced the BBC to the status of just another arm of government where the veil of deficit was used to disguise rash decisions free of proper scrutiny or credible analysis, leaving the question of where the axe will fall. We have seen the response of the public to decisions on axing BBC services-we need merely look back to earlier this year, with the campaigns to save the Asian Network and 6 Music. Those services were seen by many as benchmarks of diversity, equality and innovation in public sector broadcasting.
There has been no statement in the House on the issues to do with the comprehensive spending review and the BBC. I respectfully ask the Government to provide space in their time for proper debate on and analysis of the consequences of the CSR, the future of the BBC and the future of public sector broadcasting in the UK. This situation shows the Government's attitude towards the BBC. The "delicious" cuts comment by the Prime Minister was, as he later admitted, "ill conceived" and disrespectful to the BBC and showed a callous disregard for the potential job losses at the corporation akin to the Government's ideologically driven 1 million cuts through the CSR in general.
The future of the BBC is a matter of significant public interest. Opposition Members will stand up for the BBC, for what it provides for the cultural make-up of this country and for the contribution it makes to the UK economy. It projects the best of the UK abroad and is undoubtedly a national treasure that is well loved, respected and should be protected for the future at all costs.
Graham Jones (Hyndburn) (Lab): I congratulate my hon. Friend the Member for Edinburgh South (Ian Murray) on securing this vital debate. We all recognise the role of the BBC in the world. The then shadow Foreign Secretary, my right hon. Friend the Member for South Shields (David Miliband), said that the World service is an independent
"credible voice in parts of the world where the only other messages blend threats and propaganda".
That is quite true. I echo those worlds and support the World Service, which is a vital service.
The changes being made following the comprehensive spending review raise serious concerns about the future of the BBC World Service and about the BBC's ability to continue providing a public broadcast service that is informative and represents value for money. Transferring budgetary responsibility from the Foreign and Commonwealth Office or the Treasury to the BBC opens the door to editorial cuts. There has been concern recently that the BBC World Service could be forced to pull out of certain countries, which would be a tragedy given the turbulence in Burma and Iran. I know that the BBC has reinstated its World Service in those areas, but we do not want future cuts to compromise Britain's interests.
I recognise that the BBC, as a publicly funded body, is obliged to consider its expenditure and whether savings can be made, but that cannot be at the expense of a public service that is valuable at home and abroad. The BBC World Service is one of Britain's most effective and vital assets and we should protect and promote it. We should not reduce our investment in international broadcasting. The National Union of Journalists has said it will fight any proposed cuts, adding that the BBC World Service is a "clear success story". The cuts represent a threat that we can ill afford to that vital service and to jobs. We have to think of the BBC as a world employer because it does not operate only in the UK.
I am a passionate defender of the organisation and I believe not only in retaining the licence fee but in extending the BBC as a British institution. I have experienced television in many countries, most notably in the USA where freedom and open markets have resulted in massively dumbed-down television and a race to the bottom, with programmes between adverts. The quality of BBC broadcasting provides a high water mark for others to match and raises the bar of programme quality. The BBC leads the world in quality, innovation and impartiality.
Steve Rotheram (Liverpool, Walton) (Lab): Does my hon. Friend agree that the BBC is the envy of broadcasting institutions the world over and that we parliamentarians, who are being broadcast live as we speak, should be very proud of it?
My hon. Friend is quite right: the BBC is the envy of the world and is a good business that we should promote. We should see it in that way rather than as a drain on public resources. It is one of the last great vestiges of British influence abroad. BBC online and BBC news provide the world with a British perspective and a brand that should be protected at all costs. A commercial, or part-commercially dependent, BBC would
need to survive from advertising revenue and would have to focus on mass-market universal appeal, but that market is filled by ITV, Sky and Channel Five domestically. That would involve, in short, a dumbed-down, broadest-appeal schedule. I cannot support anything that undermines the BBC and I congratulate my hon. Friend the Member for Edinburgh South again on securing the debate.
Dr Thérèse Coffey (Suffolk Coastal) (Con): I, too, congratulate the hon. Member for Edinburgh South (Ian Murray) on securing the debate. Let me declare an interest: I worked for the BBC before coming to Parliament and I am still engaged in a financial transaction with it. That aside, I want to pay tribute to the Secretary of State for Culture, Media and Sport for the role he has played in working with the BBC, as well as to the Minister answering the debate, the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the for Wantage (Mr Vaizey).
I am a passionate defender of the BBC and I value what it brings to our country and our worldwide reputation. I have heard the points in favour of the World Service and similar services, and I want to give some assurances. I appreciate that a little knowledge is a dangerous thing, but I believe that the BBC can perfectly well survive on the comprehensive spending review settlement of a frozen licence fee for the next few years. It has made a good start with the executive board deciding to slim down. That is good news and will help the BBC to continue to be a dynamic organisation. It has tackled the difficult pension dispute, although I must admit that if I still worked there, I would have bridled at the original pension deal. It has now come up with a sensible solution and I hope that the NUJ will eventually recognise that.
The BBC still has a lot to offer our country, not only through programmes such as "Strictly Come Dancing", with a former Member of the House doing rather well, but by continuing to provide excellent programmes of which we can be genuinely proud and that are sold around the world through BBC Worldwide. The BBC now recognises that its role is not to go off and buy things like the "Lonely Planet" guide-it will not do anything like that again-but to make use of the licence fee to subsidise programmes going forward.
Ian Murray: The hon. Lady has mentioned examples of the BBC slimming down, to use her words. The BBC was already undertaking such a programme, and the comprehensive spending review settlement may have taken its eye off the ball. Will she comment on that?
Dr Coffey: I do not work there any more, so I cannot give a personal comment on that, but the settlement concentrates the mind. I know that when I was there and we were talking in staff meetings, scenario planning was going on-for example, if there was a 20% cut, or a freeze-and there was genuine debate about what that would mean for the BBC in future. The settlement will force the board to think through what it is trying to achieve, what makes the BBC special, what it has to do and what it is nice to do. I welcome that journey because we also have to do in government-let us be honest about it-when we are trying to ensure that we live within our means.
Anas Sarwar (Glasgow Central) (Lab): Will the hon. Lady give way?
Dr Coffey: I can speak for only two minutes, so I will carry on, if the hon. Gentleman will forgive me.
The hon. Member for Edinburgh South asked what the BBC licence fee would pay for in future. Let us remember that a certain part of the licence fee was hypothecated for the digital switchover. The success of various schemes has meant that that part of the licence fee now does not need to be used; it might be said that it is being used only for broadband. However, YouView, which is coming, will be one of the game-changing things that the BBC delivers to this country, in conjunction with its media partners, and broadband is required to deliver that. It is right that the BBC is involved in the provision of broadband to the country. That is a rather good use of the licence fee.
Given that I was an unexpected participant in the debate tonight, I will not continue further. The BBC is safe in the Government's hands through its relationship with the Secretary of State. A large amount of reconciliation goes on between the World Service and the BBC to make sure that each part does not subsidise the other. That is wasteful work, and those costs will not have to be borne any more, so they can go into protecting the overseas bureaux. There are opportunities for economies, and I know that the board is working hard on them.
I am confident that the Government, with the Minister and the Secretary of State, will continue to have a fruitful partnership. I look forward to the next debate when we discuss the future governance of the BBC. I have been delighted to participate in the debate and I wish all my former colleagues at the BBC well.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey): I am grateful for the chance to respond to this important debate. I congratulate the hon. Member for Edinburgh South (Ian Murray) on securing it and on making such an eloquent speech setting out his views and support for the BBC, as well as his concerns for its future.
I thank the hon. Member for Hyndburn (Graham Jones) and my hon. Friend the Member for Suffolk Coastal (Dr Coffey) for their excellent contributions, with the hon. Member for Hyndburn focusing on the importance and value to him of the BBC World Service, and my hon. Friend bringing to bear her experience as an insider who has worked in the organisation. I was pleased to hear from a former BBC employee about her confidence in the BBC's ability to continue to move forward on the basis of the superb licence fee settlement.
Anas Sarwar: The Minister speaks of a superb settlement. The BBC is one of the largest employers in my constituency in Glasgow. Does he accept that as a result of the decisions taken in the comprehensive spending review, there will be job losses in the city of Glasgow?
The BBC has already significantly slimmed down. Job losses or future jobs will be a matter for it. The debate has been suitably non-partisan. I hate to bring it down a level or two, but I am always pleased to hear from Opposition Members about their conversion to supporters of the BBC. For those of us who remember the previous Government hounding out the BBC's chairman
and director-general over the David Kelly and Andrew Gilligan affair, such conversions always ring ever so slightly hollow. That was the greatest crisis of BBC independence in living memory, so it is worth remembering that it is not always bad news with the Conservatives. Other Governments have behaved very badly indeed towards the BBC, in my view.
However, I want to put on the record this Government's strong support for the BBC-a complete commitment to the independence of the corporation, which, as the hon. Member for Edinburgh South said, has formed the cornerstone not only of public service broadcasting in this country, but of the success of our creative industries. I never tire of pointing out that many of our successful independent production companies and, indeed, other companies in the creative industries are often filled with people who received their training from the BBC.
The BBC is not set in aspic; it remains a dynamic and forward-looking organisation. Not only is it one of the most respected broadcasters in the world, but it continues to innovate with the BBC iPlayer; YouView, a consortium in which the corporation is the cornerstone partner; BBC Worldwide, which has taken the BBC all around the globe; and even the pioneering archive and digital archive work being taken forward by Tony Ageh, which we all admire. We also fully respect, of course, the BBC's editorial and operational independence.
Graham Jones: Does the Minister approve of BBC World Service television and its commercial success? Does he think that it should be expanded as a business, or that the service should be reduced because it is not what the BBC is about?
Mr Vaizey: BBC Worldwide, which has a superb chief executive in John Smith, who really has transformed that organisation, occasionally causes controversy in the House. Its business is to maximise the value of the BBC's assets, and it does so very well, but we in the House and individual politicians take views, such as on the purchase of Lonely Planet, and, as I shall say at the end of my speech, the BBC Trust has made it clear that it wants the BBC to divest itself of its magazine business, because it is very important that it leaves room for commercial operators to make a living in the media. One of the great ironies is that the BBC is so successful that it can often easily squash its competition.
Charlie Elphicke (Dover) (Con) rose-
Mr Vaizey: I shall take an intervention from my hon. Friend, who has not yet spoken.
Charlie Elphicke: We have heard much about the excellence of the BBC, but does my hon. Friend agree that we should also pay tribute to the excellence of ITV and of BSkyB? They have outstandingly good output, too, and it is important to ensure that the BBC's state subsidy does not crowd them out.
I absolutely accept my hon. Friend's point, and I congratulate him on his excellent work to try to secure the future of Dover port, working with Dame Vera Lynn, who broadcast her great songs that
lifted the morale of British troops during the second world war via the BBC. I also pay tribute to the many successful media companies that operate in the United Kingdom.
The hon. Member for Edinburgh South was concerned about the speed of our negotiations. I was slightly surprised by that, because I read in his biography that he used to work for an organisation called 100mph Events. I thought that he was a man who felt the need for speed, but now he wants to be in the slow lane. A year-long negotiation of the licence fee would have taken the BBC's eye off the ball in respect of running a successful media organisation, and there would have been a year of sniping from the BBC's competitors, with people calling into question the licence fee and so on.
Graham Jones: The Minister and other Government Members have mentioned crowding out, but is it not the case that The Times and The Sunday Times have a paid-for service that is beginning to wipe its face? If the BBC were impinging on the profits of the online print industry, would The Times and The Sunday Times be able to wipe their face with that paid-for service? It seems to be quite successful, and there does not seem to be any evidence of crowding out. Does he accept that point?
Mr Vaizey: I suggest that the hon. Gentleman talks to those at The Guardian, as it is they who usually complain about the BBC crowding them out. The Guardian website remains free, and they claim that one of the difficulties they are finding with monetising its website is the presence of the BBC.
The agreed settlement that we reached with the BBC is a good deal for all parties that reflects the current economic environment. Most importantly, of course, it is an excellent deal for licence fee payers, delivering a freeze in cash terms in the £145.50 colour licence fee for the next six years. I was interested to hear the hon. Member for Livingston (Graeme Morrice) suggest that many of his constituents are writing in, wanting to pay more for the licence fee. I am not sure that that view is held nationwide.
Julie Hilling (Bolton West) (Lab): I am concerned that a freeze for four years in fact represents a year-on-year cut, particularly when inflation is predicted to rise much higher than was expected, and with VAT increases coming in as well. Does the Minister agree that more than the initial cuts will need to be made because of the budget restrictions, but we will then face year-on-year cuts in the BBC that reduce its services and its ability to be the wonderful broadcaster that it currently is?
Mr Vaizey: As I say, the BBC will have to find savings; I shall come to that in a moment. It is important for Labour Members to make their position clear. If they think that the BBC licence fee should be increased, they should say so, and they should state the level at which they think it should be set.
The current licence fee settlement remains at £145.50. It is important to remember that for the first year this was volunteered by the BBC and the BBC Trust, and it was likely to be volunteered for the second year, and then we negotiated a freeze for the four years after that until March 2017. Within that settlement, as the hon. Member for Edinburgh South pointed out, the BBC
has agreed to play an active role in supporting new local television services through a partnership fund providing capital costs of up to a total of £25 million in 2013-14 for up to 20 local TV services-city TV stations to provide truly local content rather than the regional content people have at the moment. The BBC will also commit to ongoing funding of up to £5 million per year from 2014-15 to acquire content for use on its own services from these new services. Should capital costs be required earlier, this will be facilitated by access to the existing digital switchover underspend by mutual agreement.
Robert Halfon: Does my hon. Friend agree that this is not just about the level of the licence fee but the fact that licence fee payers have no real say over what goes on in the BBC, whether it is salaries, the make-up of the BBC Trust, or the number of stations? The answer, surely, is to democratise the licence fee by giving licence fee payers a vote.
Mr Vaizey: My hon. Friend is a pioneer in this House. He is already proposing and taking forward an internet bill of rights, which has enlivened the blogosphere, and he has radical proposals for the democratisation of the BBC. Given his campaigning record, I will leave him to take those forward.
The BBC World Service will now become part of the licence fee-funded BBC from 2014-15, but the BBC will remain independent in all matters concerning the content of World Service output as regards times and the manner in which it is supplied and the management of its affairs. The BBC's editorial guidelines, values and standards will be set by the BBC Trust and will continue to apply to the BBC World Service. The BBC will continue, as now, to set the objectives, priorities and targets for the BBC World Service with the Foreign Secretary, and will obtain written approval from the Foreign Secretary for the opening or closure of any language service. The BBC will also assume responsibility for funding BBC Monitoring from 2013-14.
The hon. Gentleman asked about S4C. The BBC has undertaken to provide the majority of funding to the Welsh language service, S4C, from April 2013. We in the Government remain absolutely committed to a strong and independent Welsh language TV service, which was of course set up under the last Conservative Government.
Charlie Elphicke: Opposition Members are arguing for an increase in the licence fee. [Interruption.] They are as far as I can tell-they say that they have received representations to that effect. In my experience a lot of older people, particularly those who get by on their pensions, have trouble affording the current licence fee. Can anything more be done to help people in that position, and should the BBC take a greater role in funding such help?
Mr Vaizey: My hon. Friend makes an interesting point in his forensic intervention, which secured an immediate U-turn from Opposition Members on a licence fee increase. Perhaps he and I should talk later about what further help can be given to the elderly, but I would say that freezing the licence free is substantial recognition of people's difficulty in paying it.
The Government have put forward a new partnership model between the BBC Trust and S4C as the best way
of securing the latter's future. Under that model, funding for S4C will come from three sources in future: the licence fee, a continued subvention from the Government and commercial income. The BBC will contribute £76.3 million to S4C in 2013-14 and £76 million in 2014-15. The Government will contribute £6.7 million and £7 million respectively. The service will be operated by a joint management board, with a majority of independent directors appointed by the BBC Trust.
I am aware that I am running out of time, but I wish briefly to mention broadband. The current ring-fenced funding for digital switchover of approximately £133 million per annum will be raised to, and capped at, £150 million per annum to fund broadband. It is important to say that the switchover money was never part of the licence fee funding for the BBC, so in effect the £150 million a year broadband money simply continues an arrangement made under the last Government whereby part of the licence fee is used for what could broadly be called "digital switchover". When one talks about the BBC taking on £344 million of extra liabilities, one is really talking about only £200 million.
Graeme Morrice: The point that I was trying to make earlier was that I and other Members have received numerous representations from constituents expressing concern about the freezing of the licence fee for the next four years, because in effect it will mean a real-terms cut. People are concerned about a reduction in the quality of the service. The hon. Member for Harlow (Robert Halfon) made a point about democratisation. What consultation has there been with the licence fee payer about that real-terms cut?
As I have said, we felt that there was a meeting of minds between us and the BBC, and that it
was best to get on with it rather than detain the BBC for a year in negotiating the licence fee.
We welcome the BBC's plans to enhance its national DAB coverage, although we remain in discussions with it about its obligations as regards local DAB. I hope that we can take forward developments on local DAB coverage with the BBC and the commercial radio sector.
Outside the formal licence fee agreement, the BBC has also made assurances to the Government about the scale and scope of its future activities in three areas. First, the BBC Trust has assured us that it considers it desirable to dispose substantially of BBC Worldwide's magazine business. Secondly, the trust recognises the principle that the BBC should not launch services that are more local than its current offerings on radio, the web and television, to give our local newspapers a chance to survive and thrive. Thirdly, it has assured the Government that it will pursue a 25% reduction in the budget of BBC Online, which will please The Guardian. I hope that those assurances from the BBC will be viewed in a positive light by those who have expressed concerns about its income-sorry, impact-on the market. That was a Freudian slip.
I end by reiterating the Government's full commitment to the BBC's independence. We regard it as a fantastic organisation and a beacon of excellence in Britain. I thank the hon. Member for Edinburgh South for securing the debate. In my opening remarks, I forgot to thank him especially for one of the reasons he will now remain my favourite Labour MP-during his speech, he promoted me from Under-Secretary to Secretary of State. For that I will always remain grateful.