A simple and popular cut for the BBC licence fee

May 20, 2009 1:01 PM

Today, the Commons will vote on the level of the BBC licence fee. The Government seems to be planning to approve yet another increase, whilst the Tories are proposing a freeze. A freeze would of course be better than another rise, but in actual fact a cut is perfectly possible.


Leaving aside the larger issues of organisational waste and so on, which must be dealt with in order to produce larger reductions, there is a £6 slice of the licence fee which could be got rid of with no problem at all: the digital switchover levy.


This was added in 2007 to raise the BBC a total of £800m over 5 years that would be spent on the hardware changes involved in moving to digital TV broadcasting and the public awareness advertising to make sure everyone knew about it and got their telly set up in time.


In Parliament back in 2007, Tessa Jowell in her capacity as Culture, Media and Sport Minister made very clear that this was going to be a temporary levy:



'In particular the licence fee settlement will fund the £600m scheme we are putting in place to help elderly and disabled people make the switch and as part of our comittment to the universal broadcasting ensure that no-one is left behind. [...] The BBC will also pay for the £200m public communications campaign being run by Digital UK to ensure people are prepared properly and informed properly for switchover. These sums will be ring fenced within the settlement and will not form part of the BBC's baseline at the end of this settlement [2012]. We have also made clear that carrying out these responsibilities will not impact on the BBC's core budgets and services.' (Oral Statement on Licence Fee by the Secretary of State 18 January 2007)


So it was always intended that the extra charge for digital switchover would be temporary. Even better, the switchover is estimated to cost £250m less than was anticipated, so there is a surplus sitting around.


That means that surplus could be used to give licence fee payers a £3 reduction in the licence fee now to last until 2012, at which point the switchover will be complete and the whole £6 levy will be abolished. This might seem like small change to BBC directors on six-figure salaries, but it would be a meaningful and welcome reduction for millions of people. A 2% cut instead of the Government's 2% rise would not just leave money in people's pockets, and on ths High Street where it is sorely needed, but it would send the message that the BBC is actually doing its bit to help lighten the load on people.


What's more, this wouldn't come at any cost to the BBC's actual budget - as Tessa said, it is a totally separate fund.


The Tories are on the right track proposing a freeze in the licence fee, but they have an opportunity - and indeed a responsibility - to go further. Indeed, public opinion would support that. OfCom have done their own market research (with taxpayers' money, natch) that discovered that of all the different options of what to do with the levy, by far the most popular was to scrap it and reduce the licence fee:



Bizarrely - and dishonestly - they tried to conceal this result in their official report last year. While the above chart was buried in their source material, the report claimed that the levy should be continued and just spent elsewhere, saying:



"our research indicates that using such a funding source after 2012 would be supported by audiences"


Despite the fact that their research clearly showed the opposite. Compare the above chart of their research findings with the chart that was eventually published in their final report to back up the assertion that the public would just love to keep paying that extra £6:



They have deleted the option of reducing the cost of the licence fee entirely - despite it being the most popular choice!


In the world of media quangos, it must be easy to forget that the people who pay for the BBC are not all living lives of privilege. When OfCom saw that the public overwhelmingly want the licence fee reduced they should have resolved to pursue that aim. Instead, presumably out of greed, they tried to hide the truth and instead claim the money for themselves.


Parliament must over-rule them. A freeze would be good, but we were promised a cut - and a cut we should be given.

Today, the Commons will vote on the level of the BBC licence fee. The Government seems to be planning to approve yet another increase, whilst the Tories are proposing a freeze. A freeze would of course be better than another rise, but in actual fact a cut is perfectly possible.


Leaving aside the larger issues of organisational waste and so on, which must be dealt with in order to produce larger reductions, there is a £6 slice of the licence fee which could be got rid of with no problem at all: the digital switchover levy.


This was added in 2007 to raise the BBC a total of £800m over 5 years that would be spent on the hardware changes involved in moving to digital TV broadcasting and the public awareness advertising to make sure everyone knew about it and got their telly set up in time.


In Parliament back in 2007, Tessa Jowell in her capacity as Culture, Media and Sport Minister made very clear that this was going to be a temporary levy:



'In particular the licence fee settlement will fund the £600m scheme we are putting in place to help elderly and disabled people make the switch and as part of our comittment to the universal broadcasting ensure that no-one is left behind. [...] The BBC will also pay for the £200m public communications campaign being run by Digital UK to ensure people are prepared properly and informed properly for switchover. These sums will be ring fenced within the settlement and will not form part of the BBC's baseline at the end of this settlement [2012]. We have also made clear that carrying out these responsibilities will not impact on the BBC's core budgets and services.' (Oral Statement on Licence Fee by the Secretary of State 18 January 2007)


So it was always intended that the extra charge for digital switchover would be temporary. Even better, the switchover is estimated to cost £250m less than was anticipated, so there is a surplus sitting around.


That means that surplus could be used to give licence fee payers a £3 reduction in the licence fee now to last until 2012, at which point the switchover will be complete and the whole £6 levy will be abolished. This might seem like small change to BBC directors on six-figure salaries, but it would be a meaningful and welcome reduction for millions of people. A 2% cut instead of the Government's 2% rise would not just leave money in people's pockets, and on ths High Street where it is sorely needed, but it would send the message that the BBC is actually doing its bit to help lighten the load on people.


What's more, this wouldn't come at any cost to the BBC's actual budget - as Tessa said, it is a totally separate fund.


The Tories are on the right track proposing a freeze in the licence fee, but they have an opportunity - and indeed a responsibility - to go further. Indeed, public opinion would support that. OfCom have done their own market research (with taxpayers' money, natch) that discovered that of all the different options of what to do with the levy, by far the most popular was to scrap it and reduce the licence fee:



Bizarrely - and dishonestly - they tried to conceal this result in their official report last year. While the above chart was buried in their source material, the report claimed that the levy should be continued and just spent elsewhere, saying:



"our research indicates that using such a funding source after 2012 would be supported by audiences"


Despite the fact that their research clearly showed the opposite. Compare the above chart of their research findings with the chart that was eventually published in their final report to back up the assertion that the public would just love to keep paying that extra £6:



They have deleted the option of reducing the cost of the licence fee entirely - despite it being the most popular choice!


In the world of media quangos, it must be easy to forget that the people who pay for the BBC are not all living lives of privilege. When OfCom saw that the public overwhelmingly want the licence fee reduced they should have resolved to pursue that aim. Instead, presumably out of greed, they tried to hide the truth and instead claim the money for themselves.


Parliament must over-rule them. A freeze would be good, but we were promised a cut - and a cut we should be given.

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