Lord Michael Grader told BBC Breakfast host Charlie Stayt he believes the BBC are “blameless” and knew they could never afford to cover the cost of the licence fee for all over-75s and need help from government. He added if the BBC made further cuts to fund the licence fee, it would no longer be worth it.
Host Charlie asked: “You will remember the corporation had agreed to fund the scheme as part of its new charter agreement but now says it can’t afford it. It was paid for by the government, now a group of MPs says both sides need to get together and sort it out.
“Let’s speak to someone who knows this business inside out, its former BBC Chairman Lord Grade. Thank you for your time this morning Lord Grade.
“Given me your thoughts first of all, this is a group of MPs who have analysed very closely the original deal and where we are now and they said we need to bang heads together, something has to come out of it, what do you make of what they’ve said.”
“I agree with it. I think that the deal that was imposed on the BBC was all done in a great hurry and I think when the realisation of the implications of it have dawned… I have great sympathy for all pensioners, including myself, there should be a free licence fee for the over 75s continued,” Lord Grade responded.
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“The BBC cannot afford to pay for it, they’ve done sterling work trying to find the £250 million to contribute to the £750million. I think the BBC are blameless in all of this.”
Charlie replied: “Well, I think it’s interesting you say this, use the word the agreement was imposed on them, they agreed, it was an agreement.”
“There is a great misunderstanding over conversations between the government and the BBC over charter renewal and licence fee,” Lord Grade explained.
“The government has all the cards, the BBC has no cards at all and the settlement is imposed. The government will try to get the BBC to accept what they are going to impose but really the BBC has no leverage in that negotiation.
“It’s not a negotiation, it’s a discussion and at the end of it, the government will impose what they want to impose.”
Later in the interview, Lord Grade said the BBC was given the choice to “decide themselves how much they would be prepared to spend to pay those concessions”.
However, he added: “I don’t believe there is any guarantee by the BBC they would continue to spend £750million every year
“The BBC couldn’t have agreed that because they would have known then they couldn’t afford to without devastating the BBC’s output.”