My hon. Friend is absolutely right. No one wants people to go to prison for non-payment of the licence fee. Last year, 165,000 people failed to pay, and 51 were jailed for non-payment of the associated fines, even though people can pay by instalment. Clearly, we need some sanctions to ensure payment. The question is whether the current sanctions are the right ones. That is why we have agreed to a review of the sanctions.
Our amendment 62 would require the Secretary of State to lay the review’s terms of reference before Parliament, because we want a proper, analytical and unbiased review. I wrote to the Solicitor-General’s colleague, the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Wantage (Mr Vaizey), who has responsibility for communications, about this matter on 7 April.
Such a review should cover the impact of a change on the level of licence fee evasion. It would be helpful to have historical data on evasion rates. According to the TV licensing database, the statistics on the socio-economic background of unlicensed properties show that 38% are ABs, 29% are C1s, 13% are C2s, 8% are Ds and 11.5% are Es. Those figures are broadly in line with the socio-economic background of UK properties as a whole. That does not translate to the socio-economic status of those prosecuted or imprisoned for non-payment of the licence fee, but it indicates that there is higher evasion among better-off households.
The review should cover the impact on the BBC’s finances. Without that information, we will not know the full impact of evasion. Estimates suggest that a 1% increase in non-payment might lead to a £35 million loss to the BBC. It has said:
“If Licence Fee evasion were to double to around 10%, the BBC would have an estimated…£200 million less per annum for content and services—equivalent to the combined budget of BBC4 and our two children’s channels, CBeebies and CBBC, for example. Due to low rates of evasion at present, an additional £6.7m was available to spend on BBC content in 2012/13.”
Obviously, if evasion went up, such investment would no longer be possible.
The review needs to look at the impact of new technology and the possibility of ending the BBC’s universal offer. Currently, the BBC cannot switch off the signal, so what would happen if it could?
7.30 pm
The review also needs to look at alternative sanctions. Should those be a mixture of criminal and civil penalties? Licence fee evasion currently attracts a level 3 penalty, which is in line with other criminal offences, such as using a vehicle untaxed or without insurance. The maximum fine for non-payment is £1,000, although magistrates take account of a person’s income and employment status. The average fine levied last year was about £170, and it was significantly lower for the unemployed. In contrast, civil penalties tend to be fixed at a single level for all affected.
I am sure the Minister knows that under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the Government intend to raise maximum fine limits across category 1 to category 5 offences. Increasing maximum fines is the Government’s decision. However, the magistrates court sentencing guidelines will consider that when they are finally being tweaked.
The Government amendments are relevant to this particular point. We are content with Government amendments 14, 20 and 22, but I would be grateful if the Solicitor-General could give the House an explanation of Government amendment 15. Why are the Government unwilling to set the penalties on this occasion? Are they thinking of establishing a new quango, or would it be an extra duty that he would give to Ofcom?
The review also needs to look at the cost of collection now and at any alternatives. Obviously, we do not want the costs of collection to rise. Similarly, it is important to look at the costs to the courts now, and again, we would not want those costs to rise if we changed the system.
My understanding is that although licence fee evasion cases make up around 10% of magistrates court criminal cases, the vast majority are heard uncontested and in bulk, with an average presentation time of three minutes. They account for less than 0.3% of court time, so I hope very much that this is not a major plank of the Government’s policy justification.
We also think it would be a good idea to look at other relevant experiences to see whether that would improve the quality of forecasting the effects of changing the system, such as the DVLA, subscription channels, utilities and the council tax. We understand that the DVLA has had to write off around one third of all unpaid fines for non-renewal of vehicle tax, as it is too hard to collect. Of the two-thirds they pursue, less than half are paid. That does not augur well for the BBC licence fee.
Currently, the BBC cannot stop people who do not pay the licence fee using its services, so it is more vulnerable to payment evasion than its competitors, such as Virgin and Sky, which can disconnect non-payers, or the utilities, which can install prepayment meters. Furthermore, around 10% of households have missed or made only partial payments on a utility bill. If licence fee evasion were to increase to that level, it would result in a reduction of around £200 million to the BBC’s revenue. We also think it would be helpful for the Government to look at any international experience. All those are factors that we would want to see in the terms of reference for a good review.
Amendment 63 is even more important. We need to look at the BBC’s finances in the round. The royal charter review is the opportunity for a complete assessment of the role and strategy of the BBC. Changing financing without reference to strategy and role risks producing an unsustainable position. We do not want to see a salami-slicing of the BBC’s position or the insidious undermining of this great national institution, which, if I may say, Mr Deputy Speaker, seems to be the intent of some of the Minister’s more right-wing colleagues, who are not even sitting in the Chamber today, even though they initiated the whole debate. The impact on other broadcasters matters as well. The royal charter review is an opportunity for them and the public to engage fully with the issues.
The mix we have of large and small broadcasters, public service and commercial, has produced the best television in the world. It is a credit to our country, a huge economic success, and a powerhouse of creativity. It is also a delicate balance and not a trinket to be played with. That is why any change to the licence fee must be properly considered at the time of the royal charter review.