House of Commons Library

Free TV licences for the over-75s

Published Friday, November 1, 2019

This Library Briefing Paper looks at the future of free TV licences for the over-75s

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TV licences for the over-75s have been free since November 2000. The concession is received by around 4.55 million households. In 2021/22, the cost is expected to be £745 million.

In July 2015, a funding deal was agreed between the Government and the BBC. A key element of the deal was that the BBC would take over the funding of free licences for the over-75s.

Responsibility for the cost of the concession transfers to the BBC in June 2020. The legislative basis for this is section 89 of the Digital Economy Act 2017.

BBC consultation

A BBC consultation on the future of the licence fee for older people ran from 20 November 2018 to 12 February 2019. This sought views on three options:

  • copying the existing scheme for the over-75s;
  • restoring the universal licence fee that existed in the past, meaning no concession;
  • reforming the scheme – through, for example, discounting the cost of a licence fee for older people; raising the age from 75 to 80; or introducing means-testing.

BBC decision (June 2019)

On 10 June 2019, the BBC announced that the current scheme will end.

From 1 June 2020, a free TV licence will only be available to a household with someone aged over-75 who receives pension credit. According to the BBC, over 1.5 million households could get a free TV licence under the new scheme. The cost to the BBC will be up to £250 million by 2021/22. The BBC said that its decision had been guided by three principles:

  • fairness - the potential impact on older age groups and the potential impact on all licence fee payers, across all generations.
  • financial impact - the cost of any concession to the BBC, and the possible effect this might have on programmes and services.
  • feasibility - being able to implement any new concession simply and effectively.

The BBC’s decision document, an Equality Impact Assessment, and some of the consultation responses are available online.

Reaction

The BBC’s decision has been controversial. During a Commons debate on 11 June 2019, Tom Watson, Labour’s Deputy Leader and Shadow Secretary of State, noted the 2017 Conservative Manifesto commitment to maintain free TV licences “for the duration of this parliament”. He said that older people had been “betrayed”. In response, Jeremy Wright, the then Secretary of State, said that the 2017 Act meant that the BBC had responsibility for what to do about the concession. He also said that the BBC “can and should do more to support older people”.

An Age UK petition demanding that the Government take back responsibility for funding free licences for everyone aged over-75 received over 634,000 signatures.

However, the Intergenerational Foundation has said there is “simply no reason why retired judges, lawyers, bankers and doctors should receive a free TV licence when younger generations are struggling financially."

Digital, Culture, Media and Sport Committee report (October 2019)

An October 2019 report from the Digital, Culture, Media and Sport Committee criticised the process leading to the BBC’s funding settlement in 2015.

The report also concluded, among other things, that:

  • the BBC had met its obligations under the 2017 Act;
  • funding free licences for all of the over-75s was not a sustainable option for the BBC alone;
  • there was a lack of clarity for those affected by the BBC’s decision.

 

 

 

Commons Briefing papers SN04955

Author: John Woodhouse

Topic: Broadcasting

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