Liberal Democrats and Labour unite to defeat Jeremy Hunt's bid for one year freeze in licence fee

Yesterday in the Commons the Conservatives proposed that the licence fee be frozen for the coming year.  Here are three highlights from Shadow Culture Secretary Jeremy Hunt's opening of the debate:

The BBC, like Parliament, needs to be more accountable for its use of public money: "Why have we called this debate over a £3 increase in the licence fee? We have done so partly because of the MP expenses issue that has engulfed the House over the past two weeks. It has shown that the public are justifiably angry about the misuse of their money, whether in small sums or large, which has reminded the House to respect the taxpayers who pay our salaries. The same surely applies to all publicly funded organisations, including the BBC. We have called for the debate also partly because the economic situation has changed beyond recognition since January 2007, when the current licence fee settlement was made. With 2.2 million people unemployed and many people facing dire personal financial circumstances, it is surely right to ask whether an increase that may have seemed reasonable in 2007 is still justified. We should also put the rise in context.

Labour has allowed a 56% increase in the licence fee (twice the rate of inflation): "In 1997, the licence fee was £91.50. Since then, it has increased by 56 per cent.—almost double the retail prices index rate of inflation. When the BBC’s commercial rivals are struggling, sometimes for their very existence, licence fee payers have been treating the BBC incredibly generously."

Other broadcasters' income is falling: "Yesterday, RPI inflation fell to minus 1.2 per cent., the steepest fall since 1948. That means that programme inflation, the cost of buying and commissioning programmes, is also falling, and with Channel 4’s revenues down 18 per cent. and ITV’s revenues down 19 per cent. in the first part of this year, there is less competition to buy and commission programmes. The traditional parity between licence fee revenue and the revenue that goes to commercial broadcasters funded by advertising has been lost. Last year, there was a broad equivalence between the two sums of money, but this year it is expected that licence fee revenue will amount to £500 million more than the entire sum received by all the commercial broadcasters funded by advertising put together... It is completely false to say that there is a choice between competition and quality. It is because British public service broadcasting is the most competitive in the world that many people think that it is of the highest quality in the world. In order for that to continue, there must be a sensible balance between the revenue that commercial broadcasters are able to raise and what the BBC gets, and many will ask whether that is possible if there is a £1 billion gap between state-funded broadcasters and the rest."

Towards the end of the debate the Culture Secretary Andy Burnham accused Jeremy Hunt of "BBC-bashing":

"To conclude, let us be clear what today’s debate is about. It is about posturing and getting easy and cheap headlines for the Conservative party. It is traditional BBC bashing—yes, it may have been done with a light touch, a smile and no tie, but it is BBC bashing none the less."

Jeremy Hunt was quick to interject:

"The Secretary of State described our motion as an ill-conceived Tory attack, so can he tell me why early-day motion 1047, which asks for a freeze in the licence fee, was signed by more hon. Members from his own party than by Conservative Members?"

Mr Burnham did not have a good answer to that one!

The Liberal Democrats joined with Labour to defeat the Tory motion by 334 votes to 156.

On CentreRight yesterday Matthew Elliott of The TaxPayers' Alliance proposed a cut in the licence fee.

Tim Montgomerie