Over 75s licence fee row: blame the government, not the BBC

The government’s own mean-spirited and industrially short-sighted decision left the Corporation no choice but to cut the over 75s licence fee, writes Raymond Snoddy

There is one man responsible more than any other for the increasingly bitter row engulfing the BBC’s decision to withdraw most free licence fees for the over 75s.

He is a newspaper editor, not quite a national newspaper editor but the near equivalent, responsible for a newspaper that distributes nearly 1 million copies a day in London – the Evening Standard.

As Chancellor of the Exchequer George Osborne pushed, over many years, to have the free licence fees for the elderly, introduced by the Labour Prime Minister Tony Blair in 2000, removed from public spending and returned to the BBC.

Accept the poison pill bequeathed by Osborne and the BBC will have to cut £750 million a year from its budgets, a sum that would rise to £1 billion by 2030 in an ageing population.

A budget cut of more than one fifth at a time when more money is needed, not less, if the BBC is going to fulfil a realistic role as a national public service broadcaster in the face of the rise of the likes of Netflix and the dominant social media.

It would almost certainly mean the closure of BBC 2 and BBC 4, the national radio stations of Scotland, Wales and Northern Ireland and most local stations. And that might only be the beginning to make the sums add up.

Thousands of jobs would go in one of the industries where the UK is internationally competitive and admired.

This would really be an odd thing to happen in a country that will soon be a post-car and post-steel manufacturing economy.

First time round in 2010 Osborne tried to bounce the BBC into taking on free licences for the over 75s and only backed down in the face of implicit resignation threats from chairman of the BBC Sir Michael Lyons and the then director-general Mark Thompson.

Osborne blinked in all-night negotiations but the Corporation ended up picking up the tab for the World Service, the Monitoring Service, most of the Welsh Fourth Channel and a £40 million contribution to then Culture Secretary Jeremy Hunt’s disastrous pet project – local television.

Next time round in 2015 the BBC was told in a phone call – which came without warning from Hunt successor John Whittingdale – that the BBC was required to take on the new licence fee burden – no ifs, no buts, no negotiations.

It was only when the BBC threatened an immediate announcement on the closure of BBC 2 and BBC 4 and a large part of its radio output that the Government entered negotiations.

They produced something the BBC dearly wanted and needed, the unfreezing of the licence and the return to a link with inflation. The cost of the free licence would be phased in from 2018 and the BBC would have full responsibility from 2020.

Despite some senior members of the BBC Trust believing it was “unconstitutional” for the Government to outsource an arm of social security, the compromise deal was accepted, under duress.

This may have been a mistake and there were no threats of resignations, although the main reason was the fear that they might have simply been accepted.

Lord Hall, the BBC director-general, declared it a “good deal” for the BBC. It was hardly that. The best that can be said is that it might have been the best that could have been realised in the prevailing political circumstances.

It represented yet another in a series of egregious Government interferences with the finances of the BBC away from its primary purpose: the BBC was also forced to pay for the national transition to digital.

Then there is the small matter of the last Conservative Manifesto which said that free licence fees for the over 75s would be protected for the life of this Parliament, which runs out officially in 2022.

There was also the Machiavellian twist that in the end the licence fee decision was not formally imposed on the BBC – instead the Corporation was given the “freedom” to decide whether or not to retain the free licences.

This ensured that almost whatever the BBC decided it would suffer the ordure – of the sort that is now being poured on its head by the Conservative-supporting national newspapers.

It is important to emphasise the history of this issue to remember the extent to which this mess the BBC is facing has been manufactured by government, and incompetent government at that.

It would be funny, if it were not so sad, to read the right-wing press, led as usual by the Daily Mail, fulminating about the actions of the “bloated” BBC when the Government they slavishly support is the true villain.

To repeat the essential truth – the Government should be supporting an important national institution such as the BBC which trains thousands of people who might actually retain jobs going into a post-Brexit future, rather than trying to undermine it at every turn.

Consultants PwC found that the BBC was actually one of the most efficient public sector organisations with overheads of around 7 per cent.

At least George Osborne – through an Evening Standard editorial – is consistent.

He – it – believes there is no rational argument for subsidising one undifferentiated age group compared with another – in this case involving an effective transfer of funds from younger viewers, some of whom rarely watch BBC programmes, to over 75 heavy users of the BBC.

Not many people want to suddenly start paying for something that for 20 years has been free and some might refuse to pay and start clogging up the courts. Many, probably most, can afford to pay 50p a day for the BBC services they use and will resist being whipped up into a lather by the likes of the Daily Mail and The Sun.

George – the Evening Standard – believes that the BBC has made the right decision to continue to offer free licence fees only to the 900,000 or so who receive pension support. An unintended consequence may be that this new charge will encourage more older people to sign up for their entitlement.

The Evening Standard believes the decision is necessary to maintain a strong BBC – something it says it wants.

Of course the BBC presents many easy targets – Gary Lineker’s £1.7 million for presenting Match of the Day is one of the more obvious.

Even if all the salaries of “overpaid” presenters were halved overnight – and the BBC has to operate in a free marketplace for talent – it would hardly amount to a fraction of 1 per cent of the hit to the BBC’s finances from this ill-judged Government policy.

There are more ironies and hypocrisies in the Conservative leadership battle than you could shake a stick at.

One of the funniest is the hopefuls who want to be our next Prime Minister queuing up to condemn the BBC for its over 75s decision when most have been part of the Government that effectively imposed the decision on the Corporation.

Pensioners who feel aggrieved about the decision have a clear course of action that will become available within the next six weeks.

They can complain to the new Prime Minister, who will have the ability to overturn the wretched, mean-spirited and industrially short-sighted political decision that the lucky person will have inherited, with another much larger bed of nails.