Labour slams BBC licence fee deal

Shadow culture secretary Ivan Lewis has called for a parliamentary inquiry into the BBC licence fee settlement that was hastily agreed with the government last week.

In parliamentary questions on Monday, Lewis accused culture secretary Jeremy Hunt of putting his political ambitions ahead of the good of the BBC by securing the "dodgy deal" that will see the licence fee frozen for six years.

Lewis said that the last-minute negotiations "rode roughshod over the independence of the BBC, crushed any serious prospect of reform, and involved no consultation".

The MP has written to John Whittingdale, who chairs the Commons culture, media and sport select committee, calling on him to urgently investigate the deal.

The settlement, which will see the licence fee frozen at £142.50 until 2017, also involves the BBC taking on financing duties for the BBC World Service, BBC Monitoring and Welsh-language broadcaster S4C.

During Commons question time, Lewis asked Hunt: "Is this not another example of you doing a dodgy deal for the chancellor in order to further your own political ambitions, instead of providing responsible leadership on an issue of crucial importance to the future of this country?"

However, the culture secretary claimed that the licence fee settlement is "acceptable to the BBC and very popular with the public".

"I'm delighted to talk to you about the BBC, because the new licence fee settlement was announced last Wednesday and the opposition [Labour] has been absolutely deafening in the silence of its response," Hunt responded.

"It hasn't been able to work out what to do because we have a settlement that's acceptable to the BBC and very popular with the public."

He added: "And let me tell you the difference between what happened when your party negotiated the licence fee and when we did.

"When your party did it, it took two years, it cost £3m, and it ended up with an above-inflation rise. We have done it took two weeks, it cost nothing, and we have got a freeze for six years."

The BBC's licence fee settlement represents a 16% cut in real terms to its annual £3.6bn budget. The extra commitments will cost the BBC an additional £340m annually by 2015.

In order to meet these extra costs, the corporation has already said that it will seek to make operational savings of around £140m a year for four years.