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Rebel MPs threaten to block BBC licence-fee deal for over-75s

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28 November 2016

MPs, including key Conservatives, will move to block a measure on Monday that burdens the BBC with the responsibility for funding the welfare benefit of free TV licences for the over-75s.

In a secret deal with the then chancellor George Osborne, Lord Hall, the BBC's director general, agreed to take on the funding of the over-75s licences in return for an inflation-linked licence fee rise, the closure of the iPlayer loophole and an end to paying for broadband. But this will in no way offset the cost, equivalent to 20 per cent of the corporation's revenue from the fee.

The deal will cost the BBC £1.3bn over five years, then £750m each year thereafter. From 2020, the BBC will have the power to change the level of concession, the qualifying age (although this cannot be lower than 65) or to end the perk altogether. The welfare benefit, introduced by Gordon Brown in 2001, is currently administered by the Department for Work and Pensions.

An amendment to the Digital Economy Bill, which reaches report stage in the House of Commons today  (Monday 28 November) would over-turn the deal and enshrine in statute the responsibility of the government to set the entitlement for the concessions and cover the cost of the benefit.

Adding his name to the amendment, former chairman of the Public Accounts Committee, Sir Edward Leigh MP said:

"I don't think it fair that the BBC pays this cost. It should be means tested as many over-75s can afford to pay for their licence-fees. If there is a cost, it should not be down to the BBC to pay, it should be for the taxpayer to pick up the bill. The BBC is not a welfare organisation, it a programme-making organisation. It is not fair to expect them to pick up this huge cost."

Other Conservative signatories include Andrew Rosindell and Sir Peter Bottomley. The Labour Party backed amendment also carries support from the LibDems, Scottish National Party and Green Party. Peers are preparing their own amendments to defend the BBC's independence and revenue, if the government does not make concessions in the Commons.

In a Lords' debate on the draft BBC Royal Charter earlier this month, former BBC director general, Lord Birt, warned the cost of the over 75s would lead to a "massive reduction of programming". Former head of the BBC Trust, Lord Patten, added his condemnation of the deal.

The BBC is already planning job cuts to regional TV, local radio and BBC News. Earlier this year Tony Hall said: "The overall result is that, by 2022, the BBC will need to make savings of £800 million a year. That's 23 per cent - and in some parts of the BBC, it will be more."

Michelle Stanistreet,  NUJ general secretary, said:

"The public response to the consultation on the future of the BBC was one of the largest ever, but the game was lost before it had even begun by the BBC agreeing to a deal with George Osborne to fund the licence fees of the over-75s. This was a disaster; since the 2007 charter there have already been £1.5bn cuts. The BBC should be content to make current affairs programmes, high-class dramas, family entertainment, cover sports, put on the Proms and create series such as Planet Earth and not be left with the invidious decision of administering a welfare benefit for pensioners. A cut of 20 per cent of the budget will have a serious effect on it being able to fulfil a quality service and jobs will be lost."

Providing free licence fees for the over 75s will cost £750m. This is almost seven times the cost of all 39 BBC Local Radio stations in England (£115.1m); more than eight times the budget for BBC Radio 4 (£90.2m); 15 times the cost of BBC4 (£48.7)  and nearly eight times the budget for CBBC and CBeebies combined (£97m) (These are annual figures taken from the service licence agreements issued by the BBC Trust for 2016/17)

Tags: , bbc, digital economy bill, licence fee, charter renewal, amendment, love it or lose it