Why the BBC isn't to blame for the TV licence fee cuts

At first sight, the crisis sparked by the BBC’s decision to restrict free television licences for over-75s seems like a spectacular own goal by the corporation.

After all, older people tend to watch more television than younger people and are more likely to favour free-to-air television channels like the BBC’s, so why would the corporation want to alienate its core audience or impoverish pensioners?

In recent days, the decision has seen huge public resistance, with an online petition heading towards half a million signatures and widespread criticism from well-known BBC faces such as Ben Fogle, Michael Palin and Jeremy Paxman.

Criticising the BBC has also become a rallying point for candidates in the Conservative Party leadership race and has also spawned a boycotting campaign by The Sun. Perhaps predictably, the paper advised readers to watch Sky instead, despite the need for a subscription that is much more expensive than the BBC licence fee.

But should these protests really be directed against the BBC?

The announcement should really have come as no surprise because the BBC is itself a victim here. Behind this decision lies a catalogue of irresponsible decisions by the UK government and startling hypocrisy among Tory politicians.

The BBC is the nation’s most-trusted news provider, committed to impartiality and fact-checking at a time when unreliable sources and fake news abounds.

It has been described as ‘Britain’s most important cultural institution’, which sounds like a huge claim until you try to think of other candidates for the title. It is easily the nation’s most popular broadcaster, committed to serving the public – majorities as well as minorities – and the national interest rather than shareholders and advertisers.

At a time when Britain seems less unified than ever, the BBC still brings people together.

It is easy to imagine that a free TV licence for over-75s is an ancient right rooted in the era of black-and-white television, two channels and Hancock’s Half Hour. In fact, the idea is less than 20 years old, and was introduced in 1999 by Gordon Brown when he was chancellor of the exchequer. Crucially, Brown accompanied it with a government pledge to make up for the shortfall in BBC revenue from treasury coffers.

In other words, free over-75s licences were introduced as a government-funded welfare measure at a time when the real value of the state pension was considerably lower than it is today.

This approach changed dramatically within weeks of the election of David Cameron’s coalition government in 2010, when it launched a raid on the BBC. George Osborne informed the corporation that the BBC would henceforth have to fund the over-75s concession.

The justification was the government’s newly introduced austerity policy and the desire to cut the work and pensions budget.

But important points of principle were at stake: not only was the 2010 cut proposed without warning – neither Parliament nor the public were consulted – but it would mean that an arm of government welfare policy was to be funded from the licence fee rather than from taxation. The effect would have been devastating for BBC and its ability to serve the public.

In the end, a rebellion by Liberal Democrats and a threat of mass resignations by BBC Trust members forced Osborne to think again.

Although it rightly attracts criticism at times, the BBC is very good at many things and remarkably good value for money at 42p per household per day.

Negotiations took place in a single night and under enormous government pressure the BBC agreed to a licence fee freeze, to take over funding for the BBC World Service from the foreign office and other costly concessions.

This was still a disastrous outcome for the BBC, but at least it had bought time to mitigate the worst effects of a licence fee freeze. Over the next few years, to cut costs ruthlessly they closed BBC Three as a broadcast channel.

The BBC was assured by the Treasury that over-75s licences would not be attacked again. Yet in 2015, the new Conservative government did just that, again with no prior consultation.

Already one of the most efficient public sector organisations, the BBC warned that this time it would be forced to make wholesale cuts to services. BBC Two, BBC Four, all BBC local radio services and radio news for Scotland, Wales and Northern Ireland would have to close almost immediately.

These were no idle threats – funding free licences for over-75s would cost the BBC nearly £1billion, one fifth of its total revenue. Alarmed at the likely public backlash against the loss of so many beloved BBC services, the treasury again changed tack. It would soften the financial blow for the BBC by ending the licence fee freeze and closing the loophole, which allowed viewers to watch iPlayer services without a TV licence.

Furthermore, it would reduce the Department of Work and Pensions’ contribution to the cost of free licences gradually over five years – but the BBC would still have to fund this cost in full by 2020. What’s more, the BBC itself would be given control of the policy of free licences for over-75s. The Treasury knew exactly what this latter change would mean; unable to afford the full cost of the policy, the BBC would eventually be forced to cut it.

And that is where we are today, with licence-fee-payers up in arms, Conservative politicians crying crocodile tears over the consequences from their own decisions and everybody bashing the BBC.

Although it rightly attracts criticism at times, the BBC is very good at many things and remarkably good value for money at 42p per household per day.

It does not exist to fund government welfare policy, nor to be used as a scapegoat by an unpopular government to deflect the blame for a public spending cut.

Outsourcing welfare spending in this way is an extraordinary dereliction of the government’s own duty – which should be a source of shame.

In light of this, how hypocritical is it for senior Conservative figures to line up to kick a corporation they have set up to fail, while rivals try to cash in?

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