A move by the BBC to restrict free TV licences to over 75s on pension credits has ignited a fierce debate about their value and cost to the elderly, with much of the backlash directed at the broadcaster.
The corporation has come under fire, with Good Morning Britain presenter Piers Morgan laying into the BBC, saying “they should be forced to do a U-turn and cave on this”.
Meanwhile, campaigners and charities worry that the move could worsen rates of isolation among old people who rely on the BBC services across TV and radio, to help them cope with loneliness.
While the broadcaster has taken some flak, the story is more complex given the move comes out of a government decision to offload the financial burden of the scheme – currently £745 million – onto the BBC.
The corporation is not entirely to blame, and has defended its cost-cutting decision as the fairest possible outcome, while the National Union of Journalists has called the move a “a wrongheaded act of sabotage” by the government.
What Is The TV Licence Fee And What Does It Cover?
The licence fee pays for the creation of BBC programmes and services, and offsets the cost of not featuring advertisers on its channels and platforms.
Paid weekly, monthly, quarterly or annually, it allows services to be free at the point of use.
Currently, around 5 million people do not pay for the licence, but that is set to change.
Who Is Responsible For Charging The Licence Fee?
Since 2000, households with someone over 75 have been eligible for a free TV licence, thanks to a blanket policy first implemented by Tony Blair’s Labour government. It has since been under government responsibility.
But from June 2020, the BBC will be responsible for implementing the fee, currently £154.50 for a standard licence, or £52 for black and white TV sets.
The shift comes out of the charter agreement which came into effect in 2017.
Why Has The Licence Fee Been Restricted?
Under the Conservatives in 2015, ministers announced that an agreement had been reached between government and the BBC, and the broadcaster would shoulder the cost.
Once the fee comes under the responsibility of the BBC, the policy will be restricted to over 75s who are on pension credits, and the policy is set to benefit 1.5 million people.
The broadcaster weighed up several options for covering the huge cost of the free scheme, including copying it directly, restoring a universal licence fee, discounting it, or raising the age threshold from 75 to 80.
The BBC says that the restriction was “not an easy decision” to make, but that it shields the broadcaster from making “damaging” cuts to programming and its services.
It has allowed it to save around £500 million.
Director-General Tony Hall said: “I believe we have reached the fairest judgement after weighing up all the different arguments. It would not be right simply to abolish all free licences.
“Equally it would not be right to maintain it in perpetuity given the very profound impact that would have on many BBC services.”
How Much Will This Cost The BBC?
The broadcaster will be pumping some £250 million annually into the scheme – which, although a significant sum, is a drastic reduction on the £745 million which would have been spent, had the BBC copied the government’s current policy.
That would have been around a fifth of the entire BBC budget, and exceeds the amount it spends on all its radio services.
Estimates show that the costs could balloon to £1 billion by 2030 without reform.
But costs for the new scheme will still have to be covered using funds diverted from other BBC programmes and services.
BBC chairman David Clementi said: “Linking a free licence for over 75s to Pension Credit was the leading reform option. It protects the poorest over 75s, while protecting the services that they, and all audiences, love.
“It is the fairest and best outcome. It is one we can implement and endorse. This is an outcome that is the fairest possible in difficult circumstances.”
How Many Pensioners Will Lose Out?
Some 3.7 million over 75s will now have to pay. However, the move has not been without backlash, with a number of pensioners speaking out.
Salford residents Thomas Pevitt, 77, and his wife Alice, 78, who is registered blind, will pay for their TV licence when the new scheme comes into effect.
Pevitt, who is a retired joiner, told the Press Association: “At the moment, we don’t pay because we’re both over 75. We don’t receive pension credit.
“It will impact. Well, I think the working classes have been hit by this government left, right and centre… Austerity only affects the working classes, it doesn’t affect the rich in any way, shape or form.”
Who Else Has Reacted To The Move?
It is fair to say that the announcement has been polarising.
Labour leader Jeremy Corbyn tweeted: “Pensioners are being failed by the Conservatives. Their 2017 manifesto promised to keep TV licences free for the over-75s - they must not go back on their word now.”
Labour deputy leader Tom Watson branded the burden placed on pensioners an “outrage” and activists for the elderly warned that the move will directly affect the “sick and disabled”.
The shadow culture secretary added: “You cannot means test for social isolation. You cannot means test for loneliness.”
Meanwhile, rival broadcaster ITV has seen its flagship Good Morning Britain show launch a campaign to reinstate free TV licences for all over-75s, which has been back by former work and pensions secretary Esther McVey.
The Tory leadership hopeful said she is “ashamed” of the BBC over its decision, while Scottish Conservative leader Ruth Davidson told the show: “If GMB are going to mount a campaign on this, then sign me up as the first person to back it because television is the window to the world for people that can’t go there themselves, including people who are elderly.
“It’s not just a friend when you’re lonely, it’s not just intellectual stimulation, it’s also a way to reach out and see things”
- Ruth Davidson
“It’s not just a friend when you’re lonely, it’s not just intellectual stimulation, it’s also a way to reach out and see things and, like Susanna (Reid), if I was asked to pay a few pounds more to help make sure that free TV licences are maintained for people over the age of 75, I would willingly pay it.”
Michelle Stanistreet, NUJ general secretary, said the move leaves the BBC in the “unpalatable position” of choosing which pensioners should receive a free licence, in addition to taking on the “massive” cost.
She said: “The NUJ and many other groups argued that this consultation was a window of opportunity for the BBC to take a step back and refuse to facilitate a divisive policy that will wreak significant financial harm on the corporation.”
She added: “Journalists and programme makers have borne the brunt of cuts at the BBC for many years and have simply had enough of the BBC being victim to political grandstanding.”
AgeUK has launched a petition demanding the government take back responsibility of the fee.
But, Aren’t Pensioners Financially Better Off Than Younger Generations?
Yes, but that doesn’t mean all over 75s are financially stable and can afford to pay the fee.
Institute for Fiscal Studies earlier this year showing that over the past 20 years, over 75s now enjoy faster income growth and earn more on average than working-age families and households under the age of 35.
Paul Johnson, director at the IFS, said in February: “When free TV licences for the over 75s were introduced in 2000 incomes of the over 75s were much lower, and poverty rates higher, than for younger groups.
“Today the over 75s have average incomes above those of working age families with children, and poverty rates well below those of under 75s.
“It’s hard to believe this would be the group prioritised for spending £750 million on free TV licences if we were making the decision from scratch today”.
However media analyst Claire Enders told industry conference Voice Of The Listener & Viewer in May: “One third of people who could get pension credit do not get it and we think this would fall particularly hard on women who are living alone.
“They would be the people who are the least likely because they are the least likely to apply for pension credit.”