Time to scrap the licence fee

May 03, 2016 1:19 PM

There was a great deal of media speculation over the weekend about the BBC’s competitive scheduling. While it now seems to be off the cards, the rumour was that prime BBC shows may be moved in order to avoid clashes with rival shows on other channels.

Given the privileged position the BBC, proposals of this sort may seem sensible, but they are addressing the symptom of the problem and not the cause. The licence fee all but guarantees the corporation close to £4 billion of income, giving it a massive advantage over those media outlets that exist on a commercial basis while remaining a regressive and outdated tax. The forthcoming Government White Paper on the BBC should address these problems and ensure that politicians don’t feel the need to meddle in TV schedules.

The current, 1940s-designed, system made sense when there was only one channel available to viewers, but it is woefully inadequate for the modern era. There are now more ways for broadcasters to reach their audiences than ever before and, crucially, more ways for them to make money from doing so. Advertising has a relatively long history, Sky (for example) has combined this with a subscription fee and websites like Netflix have taken this a step further by not running adverts at all. The crucial point being that there are ways for broadcasters to be commercially successful and yet, the BBC has retained its privileged position as the recipient of the TV tax.

Broadcasting pluralism has greatly benefitted the consumer and the non-traditional channels (BBC Three and Four are included as such in this chart) have rapidly grown in popularity lending further weight to the argument against the licence fee.


Such competition is great for the consumer, but the BBC’s capture over the licence fee creates unfair competition over readers for local newspapers and audience for commercial radio stations.

Technologically, the licence fee has become obsolete as it is not paid by those who only use catch-up services on tablets or computers, meaning you can watch BBC programmes without having to pay. And televisions now have many other uses besides watching broadcast channels and so it seems anachronistic to force payment on these people.

Besides, non-payment of the licence fee is reported to account for one in ten court cases which must come at significant cost to taxpayers.

So, what should happen?

A subscription model would be a strong candidate to replace the licence fee. Modern technology could allow BBC channels to be blocked in households which do not subscribe. And, as argued by the Institute of Economic Affairs, it would set the BBC free to pursue commercial opportunities across the world.  

A recent study for the BBC found that many households who were initially sceptical of or opposed to the licence fee would change their mind if they were denied access to the BBC for just nine days. To many this vindicated the continued existence of the licence fee, but instead it clearly demonstrates that many people would be willing to subscribe to the BBC’s services if it were on a voluntary basis.

If consumers consider the BBC to provide good value for money (a claim that licence fee defenders tend to make) there is no reason to assume people wouldn’t subscribe and support its work. But it is hugely important that this becomes a choice not a demand.

This would let consumers purchase the services they want rather than subjecting them to a regressive tax, would free the BBC of problems political influence and eradicate many of the unfair advantages that the BBC has over other media outlets. 

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