The Howard Journal Vol26 No 1. Feb 87 ISSN 0265-5527

The Television Licence: Prosecution and Poor Households'

DAVID WALL and JONATHAN BRADSHAW David Wal l is Research Fellow and Jonathan Bradrhaw is Professor of Social Policy and Director of the Social Policy Research Unit,

Department of Social Policy, University of York

Abstract: The B.B.C. is facing aJiscal crisis - its revenue will no longer increase without further rises in the licence fee. The government is reluctant to raise the licence fee for political reasons and because of anxieo over its impact on low income households. There is evidence of growing resistance towards paving the licence fee. One of the major reasons suggested for Ron- payment is that poor households simpb cannot a&ord to pay the lump sum required.

The Peacock Committee are considering other methods of raising revenue for thc B.B.C. The Public Accounts Committee have called for more efficient detection methods and higher penalties. But these solutions will cost money and hurt poor households most. One way of avoiding prosecuting poor evaders and ensuring that the licence is paid, is to introduce a system of licence- direct similar to that pioneered by the fuel boards.

Between 1980 and 1985 the number of people prosecuted under the Wireless Telegraphy Act of 1949 for not being in possession of a current television licence more than doubled from 49,150 to 110,042.* During those five years detection methods and prosecution practices did not change markedly and neither was there a real increase in the licence fee. We can therefore assume one of two things, either there has been a dramatic increase in general criminality, which there has not, or that another factor is involved - such as an increase in the inability of some households to pay the licence fee.

In this article we look at current methods for detecting evaders, prosecution procedures and evasion practices, before addressing ourselves to the problem the poor consumer poses for the B.B.C.

Detection Methods and Prosecution Procedures

Television licence evaders are detected by a combination of bureaucratic and physical methods. Approximately 90% of evaders who reach the courts are identified by the National Television Licence Records Office (NTVLRO) where a computer is used to identify and contact households without a valid- television licence. When no satisfactory reply is received to NTVLRO enquiries and it appears that a household is operating a television set without a licence, the Local Television Licence Enquiry Office (LTVLEO) is informed. The LTVLEOs police the television

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licence and are responsible for detecting, and bringing private prosecu- tions against evaders.

The remainder of evaders are discovered by LTVLEOs acting on information supplied by members of the public, follow-ups, or from detector vans. Contrary to popular belief the detector vans identify less than 2Y03 of evaders.

In 1982/83 over a million visits by LTVLEOs were requested by the NTVLRO. The procedure is that an official of the LTVLEO visits the address. If no one is at home an enquiry letter is left and if no reply is received a further visit is made three weeks after the first. This cycle is repeated until the householder is contacted or a satisfactory reply is received. When contact is made the householder is asked whether he has and uses a television and whether he has a licence. If he admits to watching television and no licence is produced then he is cautioned that he may be prosecuted. We understand that all who admit to watching television without a licence are prosecuted except the elderly who are given a further chance to obtain a licence. In some cases, if the householder appears genuinely to have overlooked the licence and offers to pay the licence fee on the spot, he may not be prosecuted.

Lidstone, et al. (1980) suggest that considerable discretion is given to LTVLEO staff as to whether they pursue prosecutions. The emphasis is upon maximising compliance and revenue collection, thus evaders are given a number of opportunities to avoid prosecution. The number of prosecutions has varied over time; for example, the introduction of the

FIGURE 1 Television Licence Evasion Convictions Secured

.E 60 v) C 0

, -J

,--/--

year ending

(Source: figures obtained from Home Office Statistics Branch)

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dealer notification system in 1967 led to an increase in prosecutions and Mawby (1979) suggests, that in 1967, licence inspectors in Shefield began to prosecute when no licence was found on the first visit instead of only prosecuting when no licence had been obtained by a subsequent visit. This was a cause of a sharp increase in the number of prosecutions.

Figure 1 represents the annual number of successful prosecutions since 1960.

Throughout the 1970s the number of convictions fluctuated annually between 50 and 60,000 but since 1979 there has been a particularly sharp increase in convictions which is difficult to explain either in terms of movements in the real level of the licence fee or the numbers having a television. In fact it can be seen from Figure 2 that the real level of the licence fee fell between 1981 and 1985, a period when prosecutions were rising rapidly.

FIGURE 2 Licence Fee: Prices, Earnings and Benefits 1968-1985

6 I retail prices index colour licence fee

b&w b&w licence fee

0

2 ii 1 base = 1968 = 0

O ' 197; 1972' 1974' 1976' 1978 1986 1982' 1984'

(Source: figures obtained from abstracts of statistics from the D.H.S.S.)

The total number of licences has not been increasing rapidly since 1970 and the increase in the number of colour licences has, if anything, slowed down since 1979. So the rise in prosecutions is either the result of changes in detection methods, of which there is no evidence, or due to some other factor such as an increasing inability to pay the licence fee caused by unemployment. If this rate of increase is sustained there should be about 175,000 prosecutions per year by the end of the decade and 250,000 by the end of the century.

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The Dark Figure of Evasion

Determining the financial cost of non-payment is impossible but an estimate can be made. From the General Household Survey it is estimated that 20.3 million households in this country have a television set. The number of current television licences is 18.7 million therefore, we can assume that I .6 million households (8%), do not have a licence. Of the 1.6 million households with no licence 110,000 will be successfully prosecuted this year. Therefore the total number of evaders may be in the region of 1.5 million. However it is very probable that this figure will contain a large number of people in transit, people who have died and others who have legitimate reasons for non-payment and the true figure will be lower.

In order to estimate the amount of revenue foregone by the B.B.C. through non-payment of the licence fees, assumptions have to be made of the ratio of black and white sets to colour. The national ratio of 17~83 is likely to underestimate the losses because evaders are more likely to be deterred from paying the colour licence. Softley (1984) carried out a study into the sentencing of television licence evaders in inner city and suburban courts. Overall, out of 150 convictions, 83% used a colour set without a licence, 2% used a colour set with a monochrome licence and 15% a monochrome set without a licence. Iffrom this we assume that about 85% of evaders have colour televisions and 15% monochrome then about 578 million per year is lost through the evasion of the current licence fee. In March 1984 the Home Ofice estimated that 565 million a year at the old licence fee of 246 was being lost in evasion (B.B.C. 1984). They also estimated at that time that if the increase in evasion continued it was possible that the number of evaders could reach two million by 1989 and the loss of revenue could increase to over S80 million a year. Under the new licence fee that figure could now be over €100 million, even if the increase in fees did not in turn lead to a further increase in the number of evaders.

Anti-Evasion Measures Versus Evasion Practices

One response to the threat posed to the licence fee system by a rising tide of evasion is to improve enforcement and anti-evasion measures and one way that the licensing authorities have tried to do this is by using advertising campaigns. An evaluation study of these campaigns by Andrew Irving Associates (Central Office of Information 1985), con- cluded that while advertising can be helpful in keeping current licence holders on the straight and narrow, encourage new householders to get a licence and act to remind the forgetful, it will have limited impact on long- term wilful evaders and those that genuinely cannot afford the licence fee:

The poor, who are often also wilful, need not only to be convinced that evasion is not a worthwhile risk but also need to be offered a more reasonable, and feasible means of payment. (p. xvi)

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The Irving study was based on a sample of 44 respondent interviews in a variety of extended group discussions and in-depth interviews with evaders in London and Leeds. It concluded that evaders:

. . . were not simply a deviant downmarket segment of the population. Most evaders were generally law abiding and only a minority confessed to other illegal activities. Thus is would be misleading to see licence evasion as indicative of a more general criminality.

More generally, there was evidence to suggest that mobility, a change of address, had often provided opportune circumstances for subsequent evasion. There was also a tendency for flat dwellers to feel relatively immune from detection. (p. vi)

Irving found that people tended to evade for four main reasons. First they simply forgot to pay the licence fee; second they assumed coverage by their parents’ licence; third they deliberately calculated the probability of detection and its associated risks. Fourth they were unable to pay the fee:

for the poor, those living on the breadline who were typically not well organised financially, evasion was often unavoidable. Other commitments (food, rent, gas and electricity etc.) had to be met first. (p. vi)

Irving found strong indications that unemployment and financial hardship were key factors in prompting evasion. The less well-off were geared to weekly, rather than monthly budgeting and were poorly organised financially.

It was argued:

. . . that for anti-evasion advertising to be effective it must be supported by a detection system which not only works but is seen to be working. (p. vi)

This calls for more rigorous investigation and prosecution: the line taken by the Committee of the Public Accounts (House of Commons 1985):

We note that in 1974-75 an objective was established of restricting evasion to a hard core ofjust over a million licence defaulters; but that objective seems to have gone by default and become no longer something to be seriously pursued. We suggest that consideration should be given to re-establishing such a minimum target. Once achieved it should be further reduced since everyone who does not pay his licence cheats those who do. (para. 11)

But there are problems in this strategy. Cost is one problem. The cost of enforcement and anti-evasion

measures was estimated in 1982183 to be about 2.26% of the licence fee. The Home Office told the Public Accounts Committee in July 1985 that the cost of enforcement was now about 4% of total licence fees collected. Most evaders are identified ‘bureaucratically’ through the NTVLRO computer, a more rigorous and less bureaucratic method of surveillance would involve both an increase in manpower and cost. l he re must come a point where the cost of enforcement outweighs the additional revenue obtained from the extra effort. The Public Accounts Committee were

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anxious about this and pressed the Homc Office to produce cstimates of thc cost-cffectivcncss of various cnforccmcnt measures.

As well as improving the effectiveness of enforcement, the penaltics imposed on defaulters could be increased. There is evidence that in many cascs courts impose only a low fine despite much higher penalties statutorily laid down. ‘l‘hc Public Accounts Committee reported that:

in in of

1983 fines imposed on those without colour TV licences averaged only f53 and nearly 32 per cent of cases were below the level of the licence fee; fines in respect hlack and white licence evasion average E27 and in 17 per cent of cases were

below the f15 fee. . . In some extreme cases defaulters were simply admonished and not fined at all or were fined virtually nothing. (House of Commons 1985, para. 18)

However there is a conflict between fixing penalties at a level which is an effective deterrent, and one which is not unduly harsh in individual cases and which offenders have some hope of paying. Heavy fines would, and do, inevitably fall heaviest on those least able to pay. We have seen that the anti-evasion measures provide considerable opportunities for evaders to avoid prosecution and obtain a licence. There is evidence that the least well off are the least able to respond to these opportunities and most likely to be prosecuted.

Softley (1984) found in both his court observations and examinations of 1983 court records that 39% and 42% respectively, of those convicted, gave financial difficulties as their reason for not having a licence. The majority (over 60%) of defendants were female and 28% (of all defendants) were single parents. This is an indication that single-parent families are likely to be particularly vulnerable to prosecution since official Post Office policy is that the man, as head of the household, should be prosecuted rather than the woman (Mawby 1979). Softley’s findings reflect those of Mawby. Mawby (1979) found that a large minority of prosecutions involved women suggesting that households without a male head, the traditional breadwinner, may be common evaders.

In summary of our arguments so far, people evade paying the licence fee for a variety of reasons of which an inability to pay is one. Whilst prosecution procedures are primarily designed to bring the wilful evader to account, the slowness of detection measures and the prosecution process allows some people, notably those who consciously avoid paying until they feel they can no longer get away with it, to avoid prosecution. I t is evident that a substantial proportion of those prosecuted are poor houscholds who were, at the time of being charged, unable to pay the licence fee. Any attempt to increase the deterrent effect of prosecutions by introducing fixed penalties, currently under review by the Home Ofice, will have to take into account the poor consumer.

Clearly, the poor consumer poses a problem for both the Home and Post Offices when they respectively administer and collect the broadcast licence fee for the B.B.C.

in the final part of this article we look a t how some lessons may be learned from the experience of the fuel industries when they were faced

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with a similar problem regarding the disconnection of the fuel supply for non-payers.

The Fuel Industries’ Experience of Non-Payment As a result of anxieties over rising numbers of disconnections, the fuel industries were persuaded in 1976 to enter into a Code of Practice governing the payment of fuel bills, debt follow-up and disconnection procedures. The Code was rewritten in 1978 and revised again in 1980 and 1983 and its operation is still causing anxieties among consumer bodies. The Code sets out methods of easy payment for those with financial problems. The Code attempts to avoid disconnection of certain ‘hardship categories’ by offering a repayment plan or a pre-payment meter geared to collect the debt (Bradshaw and Harris 1983).

It would be wrong to over-emphasise the similarities between the television licence and fuel debts. The television licence is much cheaper than fuel, taking only a very small percentage of total household expenditure. There are probably a greater variety of reasons for non- payment of the television licence than for non-payment of fuel bills. The only reason for not paying a fuel bill at all must be extreme financial pressure. Fuel boards know who their debtors are whereas the television licencing authorities do not until they are detected. Fuel is an essential component in a hausehold budget whereas television, although no doubt an extremely important contributor to the quality of life, is not essential.

Nevertheless there are similarities between fuel boards and the television licencing authorities. Both fuel bills and the licence fee call for lumpy expenditures which present a substantial call on low weekly or even monthly income; failure to pay either results in sanctions. I t is believed by both the fuel boards and the licensing authorities, that debtors include those who can pay but avoid it and sanctions are designed primarily for this group. We know from research on fuel (Berthoud 1981) that most of the 90,000 electricity consumers who are disconnected are those who cannot pay but would if they could. While the licencing authorities at present view prosecutions as a necessary means of deterring evaders and are considering improving the deterrant with a fixed penalty, the fuel boards have through the Code of Practice been required to make efforts to identify and discriminate between the poor and those who could, but do not pay.

The Case for a Code of Practice for Dealing with Television Licence Evaders

If present penalties merely increase the burdens on the poor then perhaps it would be worth considering introducing an intermediary procedure between detection and prosecution similar to that in the Code of Practice. It could be restricted to categories of evaders facing prima facie hardship. Thus for example, evading households containing people in receipt of

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supplementary benefit or housing benefit, when detected could be offered a repayment plan which includes provision for the payment of the present licence as well as payment for the next licence.

The licensing authority would have to estimate how long the household has evaded paying a licence and recoup the arrears. If the evasion has lasted for more than say six months, then in order to enable reasonable payments of arrears and include the future licence in the repayment plan, the payment of arrears would have to be limited. There would obviously be little incentive to enter a repayment plan if the cost in terms of repaying arrears was much more than the penalty that would be imposed by the courts. In order for a scheme such as this to be operated the licensing authorities would have to reconcile themselves to permitting certain limited categories of consumer to pay for their licence arrears retrospectively. One incentive for them doing this is that the repayment scheme will ensure that the next licence will be paid in advance.

Clearly there are some difficulties with this scheme of repayments which need to be thought through. The scheme would require the householder to make regular payments at a post office or to the NTVLRO. This could be handled through the existing regular payments scheme arrangements. What happens if payments are not paid on time? If arrears are still outstanding the householder could then be prosecuted. But if sufficient regular payments have been made to pay off arrears the licensing authorities would not have the power to prosecute.

A solution to some of the problems surrounding the operation of a licence direct scheme emerges from the proposal in the 1985 White Paper on the Refom of Social Security to introduce a Social Fund (D.H.S.S. 1986). The government intend to replace supplementary benefit with a simplified system of income support. The single payment element of supplementary benefit is to be taken over by a cash limited, discretionary Social Fund.

A significant element of the Social Fund will be to make loans for those intermittent expenditures which claimants find difficulty in budgeting for. It is proposed that assessment for the Social Fund would not be intrusive or detailed but simple and straightforward and depend on whether it is reasonable to meet the need and practical to recover the debt. Loans will be recovered by regular deductions from income support, retirement pension, invalidity benefit and unemployment benefit. When a person returns to work or ceases to receive benefit, he will be expected to continue repayments as planned.

The government’s aspirations for the Social Fund to be a flexible, non- intrusive ‘social bank’ to help claimants with lumpy purchases hold out the prospect of its becoming a means of paying the licence fee for over four million of the poorest households in Britain. If a claimant needs to take out a television licence he can ask the Social Fund for a loan. A cheque could be sent by the D.H.S.S. direct to Bristol or given to the claimant to forward. Deductions from benefit of L1.12 per week can then be made by the D.H.S.S. before paying benefit.

If the Social Fund could be employed to enable recipients of income

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support to pay their licence without having to find .a lump sum it could make a major impact on the difficulties faced by the poorest householders.

Conclusion

The B.B.C.’s revenue will no longer increase without increases in the licence fee. But the government is reluctant to increase the licence fee for political reasons because of anxiety about its impact on low-income households. Although the licence fee has not increased in real terms, finding the licence in a lump sum does present a substantial call on the weekly budget of low-income households. There is evidence in the increase in prosecutions of a growing resistance and difficulty in paying the licence fee. One response to this is to increase penalties for evasion. This might help to deter those who could pay but do not. I t would also hit poor households though this could be avoided if an arrangement similar to the Code of Practice on the payment of fuel bills were introduced.

Whatever the burdens presented by the existing licence fee, if it begins to increase in real terms and at a faster rate than benefits or earnings then low-income householders will find it more dificult to pay. Exempting certain categories of household would relieve this problem but because poverty is so prevalent in our society any effective and equitable system of exemptions would have to include very large number of households. Therefore in order to sustain the B.B.C.’s revenue either the licence /of those not exempted would have to rise sharply or the B.B.C. would \need to receive a subsidy from exchequer revenue. Neither is likely to happen in the present climate.

The alternative strategy is to make it easier for low-income households to avoid the need to find the licence fee all at once out of current income. Various improvements to the easy payment scheme could be made. On balance the Social Fund holds out the best hope of providing a scheme that enables households receiving income support to pay their licence fee in easy stages.

The B.B.C. (1985) said in their second submission to the Peacock Committee:

The B.B.C. would still welcome any proposal which would reduce the anxieties aroused by the present system, so long as i t did not threaten the essential purpose which the licence fee itself sustains and protects. (para. 5.8)

The Social Fund could become a means of paying the licence fee for over four million of the poorest households in Britain.

Notes ’ This article arises out of a study commissioned by the B.B.C. on the impact of

the television licence fee on poor households to inform their evidence to the Peacock Committee. Copies of Poor Households and the Television Licence Fee by J. Bradshaw and D. Wall (Working Paper 272) are available from the Secretary, Social Policy Research Unit, Home Farm, University of York, Heslington YO1 5DD.

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* ’’ Statistics provided by rhe Home Office Statistical Branch. These figures are based on those supplied by Mawby (1979). Mawby’s figures originate from a sample of prosecution files he looked at from 1971-73. They are now dated but do provide a guideline.

References

B.B.C. (1984) ‘Collecting the licence fee’, London: B.B.C. (unpublished). B.B.C. (1985) Second Submission to the Peacock Committee, London: B.B.C. Berthoud, R. (1981) Fuel Debts and Hardship: Review of the Electricity and Gas

Bradshaw, J. and Harris, T. (Eds.) (1983) Energy and Social Policy, London:

Central Office of Information ( 1985) ‘TV licence anti-evasion campaign’

D.H.S.S. (1985) ReJorm of Social Security, Cmnd. 9691. House of Commons (1985) Control of Broadcasting Receiving Licence Revenue: The

Industries’ Code of Practice, London: Policy Studies Institute.

Routledge and Kegan Paul.

(prepared by Andrew Irving Associates Ltd.), London: (2.0.1.

Report of the Committee of Public Accounts, Home Off;ce, H.C. Paper 401, London: H.M.S.O.

Lidstone, K., et al. (1980) Prosecution by Private Individuals and Non-Police Agencies (Royal Commission on Criminal Procedure, Evidence Study No. lo), London: H.M.S.O.

Mawby, R. I. (1979) ‘Policing by the Post Office’, British Journal of Criminology, 18, 242-53.

Softley, P. (1984) ‘TV licence evasion’, Home OfJce Research Bulletin IS, 8-1 1.

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