Peers say that the licence fee is outdated – and leading Tories call for it to be scrapped. But the alternatives are worse
Last week, the cross-party House of Lords communications and digital committee warned that the BBC needed a “bold new vision” to prevent it from stagnating. Peers were right to say that public funding for the BBC remains necessary, and also that it needs to adapt to meet the changing demands of audiences – particularly younger ones. In Britbox, the BBC has its own Netflix-style subscription service for TV dramas. But this would not work for the whole of Auntie. The report admitted that the licence fee has benefits. It was a worry that peers thought a shake-up was inevitable because the current funding model’s drawbacks are “becoming more salient”. One reason for this is that leading Conservative politicians delight in bashing the BBC.
The committee says the licence fee, which provides roughly two-thirds of the BBC’s £5bn annual income, is outdated because it is levied on television sets. This view is not strictly true. Viewers pay if they view licensable content and the BBC can identify people using its service online. The licence fee is also a widely adopted model. Of the 56 markets that make up the European Broadcasting Union area, 20 rely mainly on a licence fee. The BBC’s funding model is protected until 2027 – after the next general election. However, both the current chancellor, Nadhim Zahawi, and his predecessor Rishi Sunak – who might become prime minister – think that the licence fee could be gone. The committee has been helpful to their cause by suggesting other ways of funding the BBC.
