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Lord McIntosh of Haringey: The taxpayer!

Baroness Anelay of St Johns : My Lords, I am delighted to hear the Minister remind me, from a sedentary position, that when we talk about the Treasury paying we are talking about each and every one of us paying. Indeed, pensioners between the ages of 65 and 75 will pay more for their TV licence, not receive a free licence and, if they are a taxpayer, still pay even more for the administration costs.

My question is simple: will the taxpayers, through the Treasury, bear that cost or will the BBC be expected to make further savings or dip into the money it has been given to provide for its digital expansion? Will it have to do that to pay for the administration costs? I hope that that would not be the case.

There are some complexities in the way the free TV licence will operate. For example, can the Minister confirm that those who are over 75 must still apply for and hold a licence, even though it is free? What happens if somebody over 75 fails to apply for a licence or, having applied for it, fails to complete it and send it in? If detected, can the Minister confirm what I believe to be the case; that is, that over-75 year-olds will still be subject to prosecution? I have this ghastly vision of the first ever case of the TV licensing people having no choice but to prosecute somebody aged 90 because that person does not have a TV licence, even though the licence is free. I see that as a potential bureaucratic nightmare.

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Finally, I turn to the third change made by the order; the ARC system--the licensing system which covers those in sheltered accommodation. Last night, when this order was taken in another place, the Minister stated at col. 301 of the Official Report, that this provision,

    "will have the additional benefit of safeguarding the entitlement to the concession of residents in sheltered housing schemes with male residents aged between 60 and 64".

I fully acknowledge what the Government are trying to achieve. But I have been advised by TV Licensing that the way in which the order is worded introduces a new and unwelcome anomaly that in practice could remove the right to hold concessionary licences from those people over 60 who live in sheltered accommodation. It works like this.

As the situation currently exists, if I am living in sheltered accommodation and am just over 60 and there is a gentleman living in that sheltered accommodation between the ages of 60 and 65, because he is not of pensionable age he should in theory knock me out from having access to concessionary licences. TV Licensing has been exercising a discretion to ignore the presence of that man and therefore allow the concessionary licences to apply. At times it has been taken to court by bodies which say that if it exercises discretion in that case, it should exercise it in others. I am sure TV Licensing would welcome the fact that this change means it is not in the invidious position of having to decide whether or not to exercise discretion.

I can therefore see the logic behind what the Government are trying to achieve. It looks as though the BBC would be OK and people in sheltered accommodation would be in an acceptable position. But I am advised by TV Licensing that, if a man aged between the magic ages of 60 and 65, lives in sheltered accommodation and works over 15 hours a week--that means he can no longer be calculated as retired--this order will abolish the right of everybody else in that sheltered accommodation to hold concessionary licences. Noble Lords will be aware that there are several good practice employers like B&Q who actively recruit older workers. It is therefore possible that the scenario I described could occur.

I contacted Age Concern to discuss this matter and found that it was not aware of this potential anomaly. Matters came to a head so late because I only saw TV Licensing on Monday and it has not been possible to follow it through. But I undertake to try to do so. None of us want this to occur. I am seeking from the Government an answer as to whether or not they are aware of this development and this advice from TV Licensing. Whatever is the position, will they undertake to look at the situation urgently after the order goes through, as go through it will, so that, if there is a potential anomaly, we are able to put it right on a future occasion?

I come back in a rather elliptical way to where I began a long while ago--this is a complex order--to say that, of course, this is a statutory instrument and as such it cannot be amended. So even if there is fault in it, it must go through. I commend the Prayer to the House.

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Moved, That an humble Address be presented to Her Majesty praying that the regulations laid before the House on 8th March be annulled (S.I. 2000/630).--(Baroness Anelay of St Johns.)

7.45 p.m.

Lord McNally: My Lords, having taken advice from the table I should declare an interest in that a company with which I am associated under Category 2 of the Register of Members' Interests has worked for the BBC. I am also President of the British Radio and Electronic Equipment Manufacturers' Association (BREMA). Both those interests are registered in the appropriate fashion.

Listening to the noble Baroness, Lady Anelay, I sometimes wonder whether the Government do not put their proposals on concessions to pensioners on the old "bike shed" process of getting material through council budgets. The council always used to put in the cost of repainting the bike shed, knowing that that would dominate the ensuing debate and the rest of the council budget would go through on the nod. I dipped into last night's debate in the Commons and a lot of attention was paid to these concessions to pensioners. I see the noble Baroness, Lady Greengross, glaring at me. That in no way implies that it is not a welcome concession to pensioners and one that is not appreciated. However, it is away from the main and welcome thrust of this order; that is, the increase in licence fee. Indeed, if the noble Baroness had pressed her Prayer this evening we would resolutely have voted against it.

It is also a pleasure to see the noble Lord, Lord Birt, in his place. I am not sure he has the same brooding presence that Lord Reith must once have had in this Chamber. But he brings considerable experience to our deliberations.

The noble Baroness does not need to apologise for bringing this Prayer before the House. As she said, it gives us an opportunity to air a number of points in relation to the Government's decision on the licence fee. The way that she put forward her views was a welcome change to what was once the strident anti-BBC rhetoric which used to come from the Conservative Benches. The BBC needs friends and, as she put it, it needs candid friends.

The licence fee has always been politically sensitive. I was first brought into this game when the noble Lord, Lord Callaghan, asked me, as his political adviser in Number 10, to keep an eye on what the Home Office was up to in relation to the licence fee in the late 1970s. The idea that the licence fee is a great imposition has been slightly changed with the coming of subscription television. We now see what a bargain the licence fee is compared with that asked by cable or satellite subscription services.

I am glad also that the noble Baroness did not trot out the canard that the licence fee is a poll tax. I believe that by each person paying a licence fee we spread the cost of our public service broadcasting in a way that makes quality public service broadcasting available to all. That is something that should be welcomed by all.

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For that reason I welcome the new settlement. It provides new resources and gives the BBC a vote of confidence which enables it to plan ahead at least until the review of the charter. The way that the Government and the BBC have come to this agreement is welcome. It re-establishes BBC1 as the BBC's flagship channel. It writes in a commitment to education, to exploring the world of interactivity and to enhancing services to the devolved nations and regions of the UK. At the same time it places pretty heavy burdens on the BBC to find further cost and efficiency savings.

The Secretary of State has declared his intention to implement independent reviews of BBC news services, starting with News 24. I have no objection to such a review as long as it is in the context that if the BBC is to remain at the forefront of news coverage it should be as part of a 24-hour news service. There has been much sniping at News 24, but Sky still has minute audiences for its news service. I believe that Mr Murdoch well realises that an effective 24-hour news service is not only a benefit in itself but a useful political calling card. CNN spent many years establishing itself as a 24-hour service. ITN is now moving in that direction. I am quite willing--as I am sure is the BBC--to see News 24 examined. I am quite sure that News 24 is capable of improvement. However, we should not allow News 24 to be sabotaged by critics who have vested commercial interests in their criticism.

We have come to the end of a 12-year battle over the future of the BBC. I hope that the remarks of the noble Baroness signalled that. Almost throughout the 1990s questions were raised as to whether we wanted the BBC; whether it should be split up; or whether it should be privatised. I believe that the national consensus is that we want to retain the BBC. If we are of a mind to retain the BBC, we must give it the resources to do the job that we want it to do. I very much welcomed the statement of the Secretary of State that,

    "the BBC should provide a strong and distinctive schedule of benchmark quality programmes on all its services and should drive the take-up of new digital and on-line services. A strong BBC is crucial in ensuring that everyone can have access to information, news, education and current affairs, using efficient modern methods".

I believe that that is a statement of intent, a mission statement, which we can all support.

The BBC has made a unique contribution to the cultural life of this country in the 20th century. I believe that in the new century it is essential to the health of our democracy. Its cultural role is essential as our values are constantly challenged by the dominance of American media. As was pointed out in the agreement with the BBC, its political role has increased in importance with regional diversity. We need the BBC to bring us together as a nation. I am convinced that, like democracy, the licence fee is a bad system of funding until you compare it with all the alternatives. As one of the alternatives which was rejected, I thought that the Davies committee's

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solution of a digital levy was a bad solution. I know that the noble Lord, Lord Birt, agrees with me because at one time he was for the digital levy and, at another time, against it. That was a good each-way bet which meant that he was on the winning side in the end!

The problem with the digital levy is that it is a catch-22 situation. We need a successful switch to digital to drive forward the digital revolution, yet the digital levy would have made people less keen to switch. We must therefore promote free-to-air digital. I know that the Secretary of State has promised a campaign on free-to-air digital. One wonders when we shall see that. However, there is a danger. We see at the moment what I would call predatory subsidy--the offering of so-called "free" set-top boxes which lures viewers into what is termed "walled gardens". Once they enter the subscription market, they are trapped. We want interoperability and a free-to-air offer, not just because that gives choice to the viewer but also--here I declare my BREMA interest--because it gives a good base for a manufacturing industry in which Britain is at the moment in the lead.

I hope that the Government will campaign hard on the free-to-air offer. They have shown commendable courage in ignoring the vandals who wish to dismember the BBC and they have supported higher standards. On that basis the BBC should be able to go forward with confidence.

A demonstration of that confidence is the BBC talent initiative. The BBC should be looking for new performing, creative and technical talent. Quite frankly, I do not think that it should worry about so-called "star performers" being poached. They rarely twinkle quite so brightly once they are away from the BBC. The BBC has constantly shown its capacity to find new talent and to bring on new stars.

There are two mantras worth preserving: first, the one that the noble Lord, Lord Hurd, used in his White Paper over a decade ago; namely, that we must have quality, diversity and choice for British broadcasting. The best way to achieve that is through a well funded BBC that can operate in all centres of technology and not be restricted by either lack of funding or by attempts by commercial interests to undermine its initiatives. The BBC still has that old Reithian objective to entertain, educate and inform. I believe that that is as important as ever to the health of the nation.

8 p.m.

Baroness Young of Old Scone: My Lords, the noble Baroness, Lady Anelay, was right to point out that there is a veritable phalanx of "BBC types" in the Chamber tonight. I particularly welcome the noble Lord, Lord Birt. I declare an interest as a vice chairman of the BBC and also as the daughter of a blind mother over 75 years-old.

There are three questions on which we might legitimately dwell tonight. The first is the question that is perhaps central to the licence fee increase; namely, is an increase in the licence fee justified? I am always slightly bemused when that question arises because if

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you go anywhere outside these islands and ask people whether the BBC is a good thing, you hear paeans of praise heaped upon it. People are in no doubt whatsoever as to the value of the BBC. People abroad often think that we are rather mad to question that. It is now the second most recognised global brand after Coca-Cola. The BBC is promoting Britain right across the globe.

Back here in the UK the BBC fulfils a clear and distinctive public service role. Any doubt expressed about that needs to be closely examined. The smokescreen of saying that there is uncertainty over the BBC's public service role in the digital age is indeed a smokescreen. I believe that the BBC will continue to be a benchmark for quality and for influencing the whole of the broadcast ecology. It will continue to provide universality of access irrespective of ability to pay when more and more broadcasting is on a pay-per-view or subscription basis.

At the end of the day, it cannot be denied that the BBC offers a bargain. Viewers receive two analogue television channels, four digital television channels, five national radio stations, a range of local radio stations and the biggest on-line content site in Europe, with over 150 million page impressions every month. That represents a bargain now; and it will represent an even bigger bargain in the future. Alongside an increase in the licence fee, there is an agreement with government to produce over £1 billion in internal savings and to redirect the maximum amount of resources to programme-making, and there is a clear package of new developments spanning creativity, citizenship, learning and services for the devolved nations as part of the UK. People receive all that for less than the price of a packet of crisps a day--so it is a veritable bargain. I believe that the increase in the licence fee can be justified to the man in the street.

The second issue that is worth touching on briefly is the vexed question of concessions. Who should receive concessions is a decision for government. We have seen one major benefit this year for which we must be thankful; namely, the free licence for those over 75. That reduces to 130,000 those who are subject to the other, much vexed, concessionary licence schemes, in relation to which there are always anomalies and problems of boundaries.

A third issue concerned me which has not been touched on in the debate. It is the question of whether there is a risk to the independence of the BBC if 13 per cent of its licence fee income comes direct from a government department. I hope that the concessionary schemes have been designed specifically to ensure that the BBC's independence will not be eroded. The strong principle will remain that each household must still have a licence; the only difference will lie in how the cost is met--by the DSS or the individual. DSS payments will not come from a capped budget subject to spending review control. The only question is whether the household will pay directly for the licence or whether the payment will be made automatically by the DSS. I hope that that goes some way to reassuring the noble Baroness, Lady Anelay, who expressed concerns about whether the BBC will be faced with a

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shortfall if the sum currently predicted were not to be met. It will indeed be met. Over the past few months I have felt more reassured that the new system of concessions will not erode the independence of the BBC. The BBC guards its independence ruggedly, and intends to remain independent while making sure that it receives and collects a proper payment for the services that it provides, to a high standard, to each household.

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