Replacing the BBC licence fee

Robert Henderson

I have always had objections to the licence fee. It is a poll tax enforced by an extensive and expensive bureaucracy armed with extensive powers to harass the public. The practical consequences of the fee are the poor subsidising the rich and thousands of the poor, mostly women, brought before the courts each year for non-payment of the licence fee. The last is far from being a small matter because recently it has been revealed that an incredible ten per cent of court cases in the UK (

But whether or not you think the licence fee is the best solution to funding public service broadcasting (PSB), your opinion  will become academic in the foreseeable future  because the technology is moving on rapidly. TVs as we know them will  be on the way out by the time the BBC charter comes up for renewal in 2016, as computers (and conceivably something completely new) become the means to view what we now call television. (A tax on personal computers is currently being mooted. Take it from a retired Inland Revenue Officer, this  is administratively bonkers).

The alternatives to the licence fee fill defenders of PSB with horror, and in most instances, justifiably so. Voluntary subscriptions could never provide the necessary finance and advertising would corrupt programming because of the need to draw audiences.

But there is one means of funding which could preserve the status quo – direct funding by the taxpayer. I have never understood the objection in principle to this. If direct funding could be cut off or reduced at any time by a Government, so can the licence fee. In principle, Parliament could pass a Bill tomorrow overturning the BBC’s current charter. More realistically, a future Government could simply decide to destroy or at least severely emasculate the BBC through legislative action.

Can anyone honestly say that the World Service (WS), which is (and always has been) directly funded by the taxpayer, has been the creature of any government? Has any government seriously reduced WS funding because it did not do what the government wanted? I think most people would give a pretty firm no to both questions. The BBC domestic service is in fact already receiving substantial direct payments from the taxpayer in the shape of  payments of around œ400 pa to compensate the BBC for the licence fee exemptions made for the over-75s. Has that made any noticeable difference in the relationship between the BBC and the Government?

Direct funding could be guaranteed on the same basis as the licence fee, a ten-year charter with a guarantee that direct funding would last for the period of the charter. Ideally, the funding would be linked to some objective criteria such as a proportion of the total UK broadcasting spend and adjusted annually according to whatever the total UK spend was for the past year. This would both guard against politicians interfering during the period of the charter and  provide less opportunity for the private side of the industry to complain about unfair competition because the proportion of the overall UK spend would remain static. That would remove the private sector fear that the BBC’s seemingly remorseless expansion will have limits. The BBC could strengthen their position further in that respect if they eschewed any active commercial activity beyond selling programmes which they have made in-house or funded directly from an independent production company.

Direct funding would also improve the relationship between the BBC and the public. All experience shows that direct payment by the individual is what causes friction. Hence, the Council Tax causes more friction than paying income tax, VAT etc from which central government pays the majority of local council spending. Hide the expenditure in general taxation and complaints usually die. Even the most  belligerent member of the “Why should I pay the licence fee when I don’t watch the BBC” brigade would find it difficult to rally under a “Why should I pay my taxes to directly fund the BBC” banner.

In the end PSB is reliant on what politicians do. But  there are several good reasons why they would not willingly damage the BBC. To begin with politicians are human beings (just)  and many have an affection for the Corporation. A substantial hard-core are committed to PSB in principle. Others see it as a prestigious British institution which deserves to be preserved for that reason. There are also the base political reasons. The first is obvious: dismantling or seriously damaging an organisation as large and influential as the BBC would be a risky business for any government, which would risk being caught in pincer movement of journalistic wrath and public resentment at the loss of a unique service (the BBC is one of those institutions which will not be truly appreciated until it ism not there).

The second base reason is wonderfully self-serving and simple. The continued existence of the BBC is convenient for politicians, because it provides them with political coverage and opportunities which no private broadcaster can offer. This advantage may grow as privately financed  broadcasting becomes increasingly fragmented in the future. Politicians need large audiences. Broadcasts with small and diminishing audiences is not what they want. If the BBC  continues to exist in something like its present size and importance, a large audience can be guaranteed.

In an ideal world, the public would have such elevated tastes that PSB would not be necessary because only the best programmes would be broadcast as the market acted to select them. However, the world being far from perfect, PSB funded by the taxpayer offers the best hope for broadcasting which is not driven solely or largely by the meretricious hand of demand.

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