Time to overhaul the licence fee

Published on 12/01/2004 00:00

FOR the first time since the late 80s the BBC is under substantial attack. While the Hutton inquiry has done much to focus the minds of some parliamentarians on the Corporation, the real threat comes from the long-term changes in the UK’s broadcasting landscape.

Debate around the BBC’s long-term future is about to reach fever pitch as the Government prepares to set out the BBC’s role over the next decade. The current debate is likely to be even more frenzied than usual, with both sides pointing to the seismic shifts in British broadcasting since 1990 to justify their case.

The pace of change has been spectacular. In 1990, the vast majority of us could only choose from two BBC channels, ITV and Channel 4. By the end of 2003, more than 50 per cent of homes had multi-channel television providing, in some cases, more than 200 channels.

As the audience for multi-channel television expands, the traditional broadcasters are feeling the pinch. In 1990, 47 per cent of the audience watched BBC1 and BBC2. By 2003, the combined share of both channels had declined to only 35.6 per cent of the audience. By the time the next BBC Charter is due to expire in 2016 we can be certain that every home in the UK will have access to far more channels than today so that decline looks set to continue.

Sceptics point to the increasing choice provided by digital broadcasting and the BBC’s declining share of the audience and ask three questions.

First, why should people be forced to pay for television they don’t watch?

Second, if the role of public service broadcasting is to educate, inform and entertain, why in a world with the Discovery Channel and the History Channel is there a need for a tax-funded BBC to make educational programming?

Finally, the BBC is accused of "dumbing down" in a desperate attempt to hold on to its declining audience. In essence, the critics ask, in a world of television plenty what’s the point of the BBC?

On the other hand, the BBC argues that far from an expensive luxury the BBC represents excellent value-for-money. The corporation argues that apart from Hollywood movies and Premiership football, most of the programmes on these new channels are United States imports and endless repeats.

THEY point to the fact that for the dubious privilege of being able to watch Bid-Up.tv or Turner Classic Movies, BSkyB’s seven million subscribers pay an average of 366 a year, approximately three times the licence fee.

Finally, the BBC argues that whilst its audience share is in decline the audience for a single edition of the 10 O’Clock News is ten times the size of the most popular programme on pay TV.

The BBC also maintains that with advertising revenue in long-term decline, ITV, Channel 4 and Five are going to find it increasingly difficult to invest significant amounts in high-quality content, leaving the BBC as the last bulwark against the tide of Americana on our screens. These debates are likely to run and run. However, they serve to obscure crucial questions around how we should pay for public service broadcasting.

Unlike other public services, such as health or education, the BBC is funded by a poll tax; everyone has to pay the same amount regardless of whether they are a millionaire with ten televisions in Surrey or a single mother in Leith. Kim Allen’s excellent research at the Institute for Public Policy Research highlights the problem.

For the poorest households, the licence fee is almost 11 times more of their annual income than for the richest households. The characteristics of low-income households tend to compound the problem. Low-income households are more likely to be composed of single parents, lone tenants, pensioners and the economically inactive.

Even the weekly payment scheme designed to make payment of the licence fee easier for low-income households has failed to be a significant help for low earners. For income-related benefit recipients (of which there are around four million), the weekly fee remains a large proportion of their welfare payment - 5.26 per cent of the average annual income support payment for those under 60.

The difficulties in paying the licence fee are compounded by the penalties enforced for non-payment. Non- payment of the licence fee is a criminal offence. Though the number of individuals imprisoned is falling, people are still jailed for non-payment of the licence fee.

In 1993, the Magistrates Association passed a resolution calling for non-payment of the licence fee to be decriminalised like any other debt, arguing that licence fee evaders are predominantly female, out of work and with children. Crucially, they argued that the cost of enforcement of non-payment far outweighs the lost revenue.

There is a clear case for extending concessions beyond the current free TV licence for the over-75s, if only to reduce the burden on the taxpayer of enforcement of non-payment. Just as with the current concessions, the Department for Work and Pensions should make up the shortfall to the BBC.

FOR example, if the 837,000 single parents receiving social security benefits entered a concession scheme in which TV licences were half price, the incentive to evade would be decreased. At 58, the BBC would still receive a potential 97 million - half would be covered by the licence fee payer, whilst half would be reimbursed through the benefits system. This 48.5m is much smaller that the 146m already spent on enforcement by the BBC alone.

The BBC is a public service and, just like any other public service, needs to be well-funded to do its job properly. Unfortunately there is a real danger that any discussion of the impact of the licence fee on the poorest in society will be ignored because discussion in this area is usually led by those who have the most to gain from weakening the BBC.

It is time for those who support public service broadcasting to grasp the licence fee nettle and argue for a progressive approach to funding.

Jamie Cowling is a research fellow at the Institute for Public Policy Research