With permisison, Mr. Speaker, I should like to make a statement about B.B.C. finance.
As the House knows, after the Report of the Pilkington Committee, the previous Government asked the B.B.C. to undertake a major expansion of their services. It was invited to launch B.B.C. 2, to develop self-contained television services for Scotland and Wales, to extend the hours of sound broadcasting, to undertake more adult education programmes and to make a start with colour television.
In its first White Paper on the Pilkington Report, the previous Government said, Cmnd. 1770, paragraph 59:
The proposals … will mean increased B.B.C. expenditure. The Government accepts its responsibility to see that the B.B.C. can secure sufficient income to finance adequate services.
This undertaking was not fulfilled.
Last October, on taking office, I received from the B.B.C. an estimate for the five years ending March, 1969, which revealed that if the licence was not increased the cumulative deficit would rise to £125 million during that period. It asked for a combined licence of £6 and a sound only licence of £1 5s. which would just be sufficient to meet this expenditure during that period.
Faced with this mounting deficit, the Government have decided that the whole question of broadcasting finance requires further study and I shall be asking the B.B.C. to co-operate in this review.
Meanwhile, I shall not authorise any increase in the hours of broadcasting, whether by the B.B.C. or Independent Television. The date for the introduction of colour television cannot in any case be fixed until the implications of the Vienna Conference have been fully considered.
In the meantime, we cannot allow public service broadcasting to be destroyed for lack of finance and I shall, therefore, be laying before Parliament shortly after the Easter Recess proposals to increase the licence fees from the 1st August, 1965, to £5 for the combined sound and television licence and £1 5s. for the sound licence.
I shall also be introducing, on the same date, special cards which will be obtainable at any Post Office, on which people can affix National Savings Stamps over the year to the number required to exchange their card for a licence.
The review will be completed as soon as possible. It must be seen as a part of the wider review of broadcasting policy which the Government are undertaking, which includes the development of educational broadcasting, the allocation of the fourth channel and local broadcasting.
Is the right hon. Gentleman aware that the whole House will be grateful that he has made a formal announcement of the facts which all hon. Members have been reading about over the past few hours? The figures which he has set out we shall, of course, have to study.
Is the right hon. Gentleman satisfied that the 'Corporation is using its borrowing powers to the full? Is he satisfied that this is the only way to raise income? Is he satisfied that this organisation is conducted with the best economy and that there is a competitive spirit in sales and purchasing?
While most hon. Members will welcome the system of spreading payment for this increased licence, which certainly would be a great help to many people, does the right hon. Gentleman appreciate the concern which undoubtedly will be felt at yet another increase in prices, especially by some people who are not very happy at the B B.C.'s current attitude to some of its national responsibilities?
I have no doubt that hon. and right hon. Members will study the figures, but the B.B.C. presented the identical figures time and again to the party opposite when it was in power and hon. Members opposite did nothing whatever about that. There is nothing new about the figures. The previous Government asked the B.B.C. to undertake these jobs and then denied the Corporation the money. This is another example of their total failure to cost their so-called five-year programme.
I have studied as closely as hon. Members opposite the speculation in the Press. All the newspapers came out with totally different stories. The Daily Telegraph said that Ministers were tight-lipped about the matter and the obvious assumption was a £6 licence, so I do not think that there is anything in that.
The B.B.C. has borrowing powers, but, unlike a commercial undertaking, borrowing money does not bring in a greater return. For the B.B.C. borrowing can only mean borrowing to spend. Increased investment does not bring it more money as it does for commercial firms. The only source of revenue it has is the licence fee.
I am certain that my right hon. Friend will appreciate the terrible blow that this will be to pensioners and others. The premature comment from hon. Members opposite is completely out of place. [HON. MEMBERS: "Question."] I come back to my right hon. Friend. I am sure that he will appreciate the terrible effect that this will have on the listening hours and pleasure which old people get from broadcasting as a whole. Would my right hon. Friend undertake to have a look at joining this new scheme of payment by stamps or weekly contributions through the Post Office, after consulting his right hon. Friend the Minister of Pensions and National Insurance, to a possible scheme which could be devised to help pensioners, infirm and handicapped people—[HON. MEMBERS: "Too long."]—over this problem of getting a licence?
As my hon. Friend will realise, the possibility of special relief for pensioners was very much in my mind. I have examined it carefully, but it simply is not practicable to do it—[HON. MEMBERS: "Why?"]—for the reason that many pensioners live with their children. The possibility of isolating the particular group concerned poses problems of a social service kind which the Post Office is not able to undertake. One must keep this question in proportion. A person who rents a television set pays many shillings a week, but for each viewer the increase is ¼d. a day.
The Postmaster-General said that he will not authorise any increase in the hours of broadcasting, but does that apply to sound radio? I understand that ours is one of the few countries which does not have sound broadcasting for 24 hours a day. As to television, is he aware that there is now a great difference in many parts of the country? Some do not receive B.B.C. 2, and some have very poor reception of B.B.C. 1. Is there not a case for some diminution in the fee for those who do not receive a full service?
Will the proposal in relation to National Savings stamps help people who are hard put to it to find the fee, as they are unlikely to be savers? Has he taken this into account in the scheme?
There will be no increase in the hours of broadcasting until the review is completed. The reason for this is obvious. For every additional hour of broadcasting, extra money is expended. This is something which can and should, in our opinion, stand as it is until the review is completed. B.B.C. sound hours have increased recently, and, therefore, at least some of the night listeners—early in the morning and very late at night—have now got music when they did not get it before.
We have considered the question of making regional variations in the licence fee, but it simply is not practicable to do anything about it. For this reason, that the people in the regions who do not yet receive B.B.C.2 are, by their licences, financing the arrival of B.B.C.2. This has always been the principle that the B.B.C. has adopted. Outlying areas are very much more costly to cover with transmitters than urban areas. I think that I am right in saying that the most recent areas the B.B.C. is planning to cover cost about £10 a viewer in transmitter costs alone. So there is already a big urban subsidy to rural areas.
Thirdly, it is not possible to have a licence fee related to reception, otherwise all sorts of anomalies are opened up in individual cases.
The system of savings stamps is not perfect, but it will meet one of the major objections to any increase in the licence fees that people are asked to find a substantial sum of money at one time. I think that this scheme will make a contribution to easing that problem.
Does not my right hon. Friend think that a review of the whole of the B.B.C. finances was called for before making this announcement, so that we could have known precisely where we were? Does not my right hon. Friend think that a completely disproportionate amount of B.B.C. finances has been devoted to the Metropolis and that there has been a considerable neglect of the provinces up to now, irrespective of B.B.C.2? From this point of view, does not my right hon. Friend think that the review is long overdue?
I appreciate what my hon. Friend says. With the deficit running at the rate of over £1 million a month, or £40,000 a day, I do not think that it would be practicable to postpone any action until the review has been completed. In fact, the Pilkington Committee considered the B.B.C.'s expenditure and its handling of its own expenditure and said that it was satisfied that effective cost accounting took place in the B.B.C. I do not think that in a big organisation like this administrative savings, however great they might be, would be anything like sufficient to offset the increased expenditure brought about by more hours and greater coverage.
As to regional development, the B.B.C. needs this money, not because of cost inflation, but because it has been asked, with the good will of both sides of the House, to undertake a major expansion into the regions and into Scotland and Wales. For these reasons, I do not foresee the possibility of a greater cut-back.
Is the Postmaster-General aware that the net result of this announcement is that viewers will have to pay more money at once and get nothing extra in return, with the likelihood, of an even greater charge to follow? The net result of that is that there will be no encouragement for people to buy new sets and replace existing sets. The industry which is making sets had hoped that the second channel on B.B.C. T.V. would help it with its sales. This has not happened.
Would the Postmaster-General add to his announcement that, to give some inducement to the viewer for the extra money that he is being asked to pay, he will consider giving a second channel to commercial T.V. and that he will consider extending sound broadcasting to local townships? In this way the viewer would be getting something more for the extra money he is being asked to pay and the Postmaster-General would be encouraging the manufacture of new sets.
With great respect to the hon. Gentleman, who, I know, has a great interest in this matter, it is simply not true to say that viewers are getting nothing for this. What they will get is a rapid expansion of B.B.C.2–50 per cent. coverage this year and 70 per cent. coverage next year. What has happened here, as in many other cases, is that the party opposite made the promises and left us to meet the bill.
If, under pressure from the Opposition, my right hon. Friend is looking for some more money to provide for television and sound broadcasting, would he have another look at the fat profits being made by Independent Television, which, apparently, are being siphoned off into all kinds of enterprises up and down the country which have nothing to do with broadcasting?
If my hon. Friend reads my statement he will see that it covers broadcasting finance. One of the things we are now considering is the financing of a rapid expansion of broadcasting into new fields, including the fourth channel.