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Will Treasury return to pensioners' free TV licences plan?

Michael Crick | 13:04 UK time, Tuesday, 16 November 2010

Did BBC episode suggest some free OAP TV licences could be axed?

The full fascinating story has yet to be told of what happened between 15-19 October, when the BBC's future was effectively decided (and arguably secured) for the next seven years.

The Corporation and its allies furiously tried to stop George Osborne taking a big chunk of licence fee income to help fund other government departments.

In the end the BBC agreed to fund the World Service in future, instead of its budget coming from the Foreign Office. But for much of the five days before the Comprehensive Spending Review (CSR), starting around Friday 15 October, the chancellor wanted to make the BBC fund the cost of free TV licences for the over 75s.

That idea was resisted by the Department for Culture, Media and Sport ministers Jeremy Hunt and Ed Vaizey, and also by several Liberal Democrats, including Nick Clegg, the Justice minister Lord (Tom) McNally, and the Liberal Democrats' culture spokesman Don Foster.

They all argued that it would be wrong to divert BBC income to fund a government social programme. Nonetheless, over that five day period the plan was on, then off, then on again, and finally defeated on the morning before the CSR announcement.

The pensioners' free TV licence funding would have been hugely costly to the BBC - around 550 million pounds, around twice the cost of the eventual World Service funding.

But at one point the Treasury came up with an interesting compromise which would have halved the cost to the BBC. They suggested that free TV licences should be withdrawn from people over 75 who have a younger adult living with them, on the grounds it's unfair that younger adults should simply benefit when otherwise they would buy a licence.

This, apparently, applies to about half of all current beneficiaries of free licences.

In the end, George Osborne was persuaded to drop the free TV licences plan - but only at the last moment.

But the idea of withdrawing them from over-75s who live with younger adults? That's dropped, too, for now. But don't be surprised if the Treasury returns to the plan at a later date.



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