The Government is not considering general taxation as a replacement for the TV licence fee, Lisa Nandy indicated.
The Culture Secretary told BBC Breakfast that the licence fee was “not only insufficient, it’s raising insufficient money to support the BBC, but it also is deeply regressive”.
She said ministers were considering a “whole range of alternatives” but added, “We haven’t committed to any of them.”
Ms Nandy told the BBC: “I think the one that has been speculated about is general taxation. That’s not something that we are considering, not least because we want to make sure that we protect the BBC from the sort of political interference that we saw under the last government.”
She acknowledged that a subscription model was among the options which were left after ruling out general taxation, but added: “It also leaves a whole range of options which the Culture, Media and Sport Select Committee has been exploring over recent years.
“In other countries in Europe, they find different ways of raising money. In France, for example, they have a levy on cinemas. I’m not committing to any of these things at this stage.”
The TV licence fee, currently £169.50 a year, will rise to £174.50 in April 2025. The funds generated by the fee support the creation of BBC programmes and services, and those who watch any live TV or stream BBC iPlayer must pay the annual cost.
In 2023, the BBC‘s total income from the licence fee was £3.74billion, making up approximately 65% of the BBC‘s total income.
The BBC says it earns the rest of its income from commercial and other activities, including grants, royalties and rental income.
In return for the licence fee money, the BBC is obligated to deliver public service broadcasting. However, it has faced longstanding criticism.
Firstly, the licence fee was first introduced in 1946 when the BBC was the only broadcaster in the UK.
Today, however, it faces competition from advertising-funded TV channels, online content, and streaming platforms like YouTube and Netflix.
Critics also argue that the flat-rate payment is unfair, requiring households with the lowest incomes to pay the same amount as the wealthiest.
Over the years, several petitions have been launched by campaigners who describe the system as “outdated” and “unwanted” and claim it can “push people into debt.”
Households that fail to pay the licence fee receive an enforcement letter from TV Licensing, the organisation responsible for collecting the payment. The letter warns that failure to pay may result in a fine.
In the UK mainland, those found streaming a programme live without a licence could face a fine of up to £1,000. In Guernsey, the fine could be as much as £2,000, and in Jersey, up to £500.
However, the BBC argues that the licence fee allows it to “remain independent and distanced from Government initiatives, campaigners, charities and their agendas, no matter how apparently worthy the cause or how much their message appears to be accepted or uncontroversial”.
Viewers can also enjoy advert-free TV as the licence fee income means the broadcaster doesn’t have to rely on third-party commercial advertising to raise revenue.
The BBC has been under increasing financial pressure and last year revealed a raft of planned changes, including the axing of in-depth interview show Hardtalk, as it looks at reducing more than 100 news roles.
It has projected its total deficit will increase to £492million for the 2024/25 financial year.
The Government said it will review the BBC‘s Royal Charter, which will include a public consultation, to consider funding options to support the broadcaster’s long-term future. However, the TV licence’s existence is still guaranteed until December 31, 2027.
