My Lords, it is vital that any impact on the BBC’s income is well considered before any potential changes to licence fee enforcement come into effect. For this reason, Amendment 78A seeks reassurance that any proposed changes to licence fee enforcement should not take effect before 1 April 2017.
The BBC’s current licence fee settlement is due to expire at the end of March 2017. Having an agreed licence fee settlement has meant that the BBC has been able to plan its long-term budget and programming. Clearly, any prior reduction to this income will impact services and content for all licence fee payers. The reality is that a change in the way that the licence fee is collected may affect the BBC’s income and, without sufficient time to respond to such change, the BBC could be forced into drastic action such as the loss of key programmes or service closures.
If, for example, non-payment of the TV licence becomes solely a civil matter, collection will become harder to enforce and of course evasion will be likely to rise. Utility bill evasion is currently around 10%; if licence fee evasion went up accordingly, it would cost the BBC about £200 million a year. To put that into context, it is similar to the amount that the BBC spends on programming for CBBC, CBeebies and BBC Four put together. The importance of this amendment—which, as noble Lords can see, has cross-party support—is about getting the timing right and ensuring stability for the BBC and licence fee payers to ensure that it continues.
As the Committee has already heard from the noble Lord, Lord Stevenson of Balmacara, on 21 October the DCMS launched a review into TV licence fee enforcement, independently led on behalf of the Government by David Perry QC and expected to conclude in June 2015. The BBC has said that it looks forward to engaging with the review. Once it has concluded, its recommendations can be considered as part of the charter and licence fee negotiations. This fits with the timing, as the Government have said that they will start to review the BBC charter next year, ahead of its expiry at the end of 2016 and that of the licence fee settlement in 2017. Ensuring that no changes take place before 1 April 2017 will give all parties a chance to think carefully before taking decisions that could have a huge impact on the future of public service broadcasting in this country. Only when the licence fee penalties are considered in the round can the impact be properly measured and assessed.
It is worth remembering that the BBC was given a commitment by the Government when the 2010 licence fee settlement was signed. They agreed to provide,
“a full financial settlement to the end of the year 2016-17. No new financial requirements or fresh obligations of any kind will be placed on the BBC and/or licence fee revenues in this period”.—[Official Report, 7/11/11; col. 4.]
The amendment ensures that the Government can fulfil this commitment.
As we know, the BBC is independent of government and accountable to the licence fee payer. It is therefore right that any changes to the BBC—a British institution cherished and trusted by audiences—should not be made without the public having had their say. The
most effective way of giving the public the chance to contribute their views and decide what kind of BBC they want is to look at the impacts and consequences of the decriminalisation review in line with charter renewal.
Before we think about any possible changes to the licence fee, including enforcement, it is worth noting the popularity of the current system. More than half the public support the licence fee as the BBC’s funding mechanism, regardless of the individual’s age or socioeconomic group or whether they are in a Freeview, Sky or Virgin household. This compares to 17% for subscription and 26% for advertising, and has risen significantly in the past decade.
It should also be noted that 96% of the adult population use BBC services each week and it is therefore right that we take the time to ensure that the funding mechanism is efficient, appropriate and proportionate in the best interests of all licence fee payers. It is also right that any licence fee enforcement is fair to those who are paying for its services. One of the benefits of the current system is the universality it provides in regard to payment and services offered.
The BBC currently costs the licence fee payer 40p a day—rather less than a cup of tea or coffee—and it is able to maximise its revenues by having low evasion rates. We should therefore be wary of any changes that would mean evasion rates rise, as the BBC cannot turn off the TV signal to evaders and those paying their licence fee will obviously suffer from a decease in funding for programme-making. Again, we need to take time to ensure that all possible changes are carefully considered in conjunction with all aspects of the BBC’s remit.
I also point your Lordships to a report produced by the Constitution Committee. The committee expressed concerns in its report that Clauses 59 and 60 were not included in the draft Bill and were not scrutinised by the Joint Committee on the draft Bill. The report says:
“It seems illogical that Parliament should be invited to legislate for a review and at the same time for a possible outcome of that review. If it is decided in due course to change the sanctions regime in respect of TV licence violations, the better course would be to introduce a bill at that point, rather than legislating now by means of a Henry VIII clause”.
I echo the concerns raised by the committee, chaired by the noble Lord, Lord Lang, and ask that careful scrutiny be applied to any change made to the current system and that the impacts and consequences be fully considered.
In summary, the BBC is a national institution valued by audiences and admired the world over. It brings huge respect for its contributions to this country. Its independence from government and budgeted funding need to be safeguarded. As the Government’s review concludes in June 2015, assurances need to be put in place to make certain that any potential changes are considered in the round with the charter review and licence fee settlement. I beg to move.