So is it time to switch off the licence to bill?

Published on 30/03/2004 01:00

FOR 80 years the BBC has been funded by a tax on everyone who buys a television. In the dawn of the televisual age, this seemed eminently sensible. After all, everyone buying a television in 1926 did so because they wanted to watch the one channel available: the BBC.

But since the creation of ITV, this unusual form of funding has come under fire from those who maintain it is unfair to tax someone for something they do not use. Why should someone who watched only ITV pay for the BBC?

While even this was an argument that was fairly easy to ignore while there were only one, two or three rivals to the BBC, since the digital revolution and the consequent introduction of a myriad of channels available to all, it has become much harder to avoid. And with the licence fee set to rise by 5 to 121 from Thursday, it is becoming increasingly clear there is a mood for change.

Supporters of the licence fee argue that as a result of it being paid over the decades, the BBC has become arguably the most respected state television service in the world: dissidents living under dictatorial regimes the world over have long tuned in to the World Service to find out what is going on. On top of that, Aunty Beeb, as it has become affectionately known, has also become an icon of British culture and society both at home and abroad. It even became the subject of an ode by Mike Myers’ character Austin Powers, who sang of BBC channels from one through to seven as "BBC heaven".

Yet the recent row between the BBC and the Government over weapons of mass destruction, dodgy dossiers and dodgy reporting that culminated in the Hutton Inquiry has done little for relations with the Labour Party or for the BBC’s reputation as an unbiased port of call for news reporting.

So has it now become time for the licence fee to be scrapped to let the BBC play on the same field as the commercial channels, and give the viewing public the opportunity to subscribe to its channels in the same way they do with Sky? And as one Labour MP has said, only 30 per cent of the population watch BBC channels, so why should two-thirds of the population pay for something they don’t use?

Already Culture Secretary Tessa Jowell has spoken of a "radical and wide-ranging review" of the BBC’s charter, which expires in 2006, and David Elstein - who has worked for the BBC, ITV, Channel 4, as head of programmes for Sky Television and chief executive of Channel 5, and was once described as being "popularly supposed to be the cleverest man in broadcasting" by BBC Online news - says it is the right time to scrap the licence fee. Earlier this month, a report by the Elstein-chaired Broadcasting Policy Group (BPG) commissioned by the Conservatives proposed radical change to the Corporation. It suggests the BBC should be split into a broadcasting company and a programme maker, while the licence fee should be scrapped with the Beeb becoming a pay-TV channel. A new body would then be created to distribute government money to any public service broadcaster.

But Elstein insists these suggestions do not make him anti-BBC and are simply ways of dealing with the inevitable consequences of the digital world. "Once every home has a digital connection, it’s inconceivable that we’ll carry on with a compulsory licence system," he says. "All you have to do with non-payers is switch off their signal like you do with people who don’t pay their gas and electricity. It’s unimaginable you’d still threaten to fine people 1000 for not paying the licence fee.

"You don’t need millions of court summonses and detector vans. In 1922, you paid the licence fee because the BBC was all there was. Now you have households whose viewing of the BBC is below 20 per cent, yet all the money they spend on television goes to the BBC. And being a flat fee, it hurts the poorest most."

Turning off the BBC when people do not pay would, of course, turn the BBC into a subscription channel. And many see this as a danger to a national institution that, despite its faults, should be preserved. But Elstein believes the Corporation would be in a better position to compete against channels such as Sky if things changed.

"We [the BPG] did think BBC television could be funded by subscription and should be," he says. "I would have thought the big problem with the BBC would be it might have too much money. There’s no question that BBC entertainment is very popular, so people would sign up for it."

He admits that fewer people would subscribe to the BBC after the compulsory licence fee was scrapped and that as a result the price paid by consumers would rise, but adds: "It will still be quite cheap by pay-TV standards."

Handing out public money to any channel through an independent body would also insulate the BBC - which Elstein believes would receive a "substantial amount" of the available cash - from political pressure. "If you’ve got public money going into broadcasting through a central distributing mechanism, it becomes much harder for politicians to put pressure on actual broadcasters," he says. "Although the licence fee has never been reduced, there has been the silent threat it will not be increased in a timely fashion or not increased at all unless the BBC behaves. Our recommendations would substantially improve the position of the BBC." Despite the BPG being commissioned by the Conservatives, when the report was published it was given a "cool reception" by the Tory Party. Shadow culture secretary Julie Kirkbride has only said the BPG’s recommendations were "extremely well thought through" but require "some time to digest", and Michael Howard has to decide whether he wants to include the scrapping of the licence fee in his next election manifesto. It seems that in the aftermath of the row between the BBC and the Government, the Conservatives - who had several run-ins with the BBC during their time in office - have adopted a friendlier approach to the Corporation.

But Elstein suggests this may not last forever and is a stance based largely on political expediency. "In the short term of course the Tories are friendlier to the BBC because the BBC is seen as hostile to Labour, or was seen to be hostile to Labour," he says.

Leading media commentator Roy Greenslade agrees the rumblings from within Government are simply designed to test the water - trying to find out what the public thinks and how strong the opposition to the abolition of the licence fee might be - and that major change is not imminent. But he says: "I think the licence fee is clearly under political attack."

Unlike Elstein, Greenslade believes the end of the licence fee would effectively finish the BBC as a major force in UK broadcasting. "I just don’t see how you can fund an organisation of the BBC’s size and range unless you tax people," he says.

The BBC - which, he says, commands "fantastic respect" across the world - would go into a downward spiral of fewer viewers, less funding for programmes, a decline in standards, a resulting decline in viewer numbers and so on. "If people don’t subscribe to it then the BBC will be just another channel or group of channels. The whole BBC organisation would founder if that was the case," he says.

Privatising the BBC would also force it to chase ratings and pressure executives to scrap programmes such as Panorama in favour of populist shows in the style of Footballers’ Wives, he says. "The only reason to run anything in the private sector is to make a profit. A BBC run purely for profit would have to go for entertainment programmes to ensure it got good ratings.

"As ITV has done, it would gradually whittle away at its public service remit. There’s no World in Action and so on anymore as a result of ITV going for ratings."

The BBC would tend to agree with Greenslade rather than Elstein, who was a candidate for director-general in 1999. A spokeswoman says: "The licence fee enables us to provide licence-payers with eight television channels, ten national radio stations, a network of local radio and television stations - including BBC Scotland, BBC Radio Scotland and BBC Radio Nan Gaidheal, online and interactive services.

"It is through the unique way in which the BBC is funded that we can deliver programmes and services that meet so many different needs." However, the Department of Culture, Media and Sport insists on a strictly neutral stance. "At present, we’re in listening mode, we’re listening to what people have to say about the BBC," says a spokeswoman.

But others who patrol the corridors of power in Westminster have only recently become so discreet. It would be hard to find a more implacable opponent to the BBC than Labour MP and former journalist Gerald Kaufman, who unfortunately for "Auntie" chairs the Culture, Media and Sport Select Committee which later this year will carry out an inquiry into the charter review.

Kaufman has been quoted as saying that the BBC is "just another broadcaster, and a shoddy one at that". He also tabled a House of Commons motion which demanded "resignations and dismissals at every level" of the BBC over the Dr David Kelly affair long before Lord Hutton delivered his damning report that saw director-general Greg Dyke fall on his sword.

AND, in another indication of his feelings, he said: "The proportion of viewers watching the BBC is less than 30 per cent, and I don’t see why the two-thirds who don’t watch their channels should pay for those who do."

Kaufman has become surprisingly polite about the channel of late, but probably because of the need to avoid the appearance of prejudging his committee’s inquiry. "We’ve not even started the inquiry. It’s a bit early to say what the conclusion on that inquiry should be," he says.

"I’ve said what I’ve said. If you find what I’ve said [previously] you’re at liberty to quote that, but what the committee decides will be an entirely different matter."

While Kaufman or Elstein are unlikely to have their way with the BBC just yet, it seems increasingly likely that the Corporation will lose its fight to hang on to the licence fee over the next few years. The only remaining question is whether Elstein or anyone else can come up with an effective survival strategy.