BBC TV licence could be scrapped as 5 new proposals put forward – cheapest is £11 a month
Experts warn that the broadcaster could lose 21% of its licence-fee payers over the next decade.
BBC should ‘decriminalise not having a TV licence’ says MP
The BBC TV licence could eventually be scrapped under proposals put forward for different ways of funding the broadcaster. A report by the Social Market Foundation (SMF) has set out a series of options as the Government reviews the BBC’s Royal Charter, which expires at the end of 2027. Among the biggest proposals is replacing the current £180-a-year licence fee with a compulsory charge linked to household broadband bills.
Under the SMF’s suggested “Home Internet Levy”, households with fixed broadband would pay around £11 a month, equivalent to £132 a year. The levy would replace the TV licence rather than being charged on top of it, meaning households currently paying the full fee would save £48 a year. However, under the proposal, people who have broadband but do not currently require a TV licence could face a new charge even if they never watch BBC programmes.
A new report has set out a series of options as the Government reviews the BBC’s Royal Charter (Image: Getty)
The SMF has warned that the broadcaster could lose 21% of its licence-fee payers over the next decade, potentially creating an annual funding shortfall of £800million in today’s money.
Another proposal would retain the existing licence fee but introduce a separate “News and Culture Levy” on broadband bills.
This would cost £2.30 a month, or £27.60 annually, taking the overall yearly cost for somebody paying the full £180 licence fee to £207.60.
The extra money would be intended to compensate for the expected decline in licence-fee income.
Other proposals look at ways of reducing the cost for households on certain benefits.
People receiving Universal Credit and some Pension Credit claimants could receive a 25% discount, cutting their annual licence fee from £180 to £135 and saving £45.
The SMF estimates the concession would cost £270million a year, which it suggests could be funded by the Government or through the proposed smaller levy.
BBC’s Royal Charter expires at the end of 2027 (Image: Getty)
Another option would extend free TV licences to all Pension Credit recipients, saving eligible households the full £180 annual fee. The think-tank estimates that would cost around £78million each year.
The SMF also considered more fundamental alternatives, including funding the BBC through general taxation or introducing a subscription model.
Funding through taxation could mean wealthier households contributing more and lower-income households paying less, although the report raises concerns about the potential implications for the BBC’s independence from government.
A subscription system would allow people who do not use the BBC to pay nothing. However, the SMF warns that it would not generate enough money to maintain existing services and estimates that between 41% and 63% of BBC programmes could disappear without public funding.
Advertising is another possibility discussed in the report, but the SMF argues this could harm commercial broadcasters while failing to raise enough money.
A TV licence is currently required to watch or record live television or use BBC iPlayer, while people who only watch on-demand programmes through other services may not need one.
No decision has been made on the future of the licence fee, and the Government has not announced plans for the SMF’s broadband levy. Its Charter Review has said it is not considering replacing the licence fee with a new household tax or funding the BBC through general taxation.
The five proposals for the TV licence in short
1. Replace the TV licence with an £11-a-month broadband levy
The SMF proposes replacing the £180 annual licence fee with a “Home Internet Levy” of around £11 a month on households with fixed broadband, costing £132 a year.
2. Keep the licence fee and add a £2.30-a-month levy
A “News and Culture Levy” of £2.30 a month could be added to broadband bills alongside the existing licence fee, taking the combined annual cost for a full licence payer to £207.60.
3. Give some benefit claimants a 25% discount
People receiving Universal Credit and some Pension Credit claimants could receive a 25% reduction, cutting the annual licence fee from £180 to £135.
4. Give all Pension Credit recipients a free TV licence
Free TV licences could be extended to all Pension Credit recipients, meaning eligible households would save the full £180 annual cost.
5. Replace the current system with another funding model
The SMF also examined alternatives including general taxation or a subscription system, although the Government’s Charter Review says it is not considering replacing the licence fee with general taxation or a new household tax.
