The Government’s play book to abolish the licence fee

Published on the 10 March 2021 on Jamie's Blog

The British Broadcasting Corporation is a British institution of worldwide renown, through it’s world service it’s become a well-respected and trustworthy source of news the world over. Its historical and cultural importance would be difficult to overstate, and yet regretfully Her Majesty’s Government is seeking to undermine and reduce this great institution - using circumstances of their own making as a reason for doing so.

It was intended to be announced as part of the Budget 2015, though was leaked to the media ahead of time, that the Government would be withdrawing funding for providing free television licences to households with over-75s and that in future, responsibility for the policy would be shifted to the BBC itself. As it was a Conservative Manifesto pledge to keep free television licences for over-75s, these changes were scheduled to take place in the next Parliament and were set to begin in 2020.

The BBC ran a consultation to decide how to proceed with licence fees for older people in preparation, noting the following:

  • Running such a scheme would cost £745 million a year by 2021/22, equivalent then to around 18% of their spend on services.
  • It was estimated this would rise to over £1 billion by the end of the current decade.

Their predictions should they have chosen to run such a scheme from their own pockets make for damning reading:

  • ‘The impact of copying would require unprecedented closures of services, including BBC Two, BBC Four, the BBC News Channel, the BBC Scotland channel, Radio 5live and 5live Sports Extra, and a number of local radio stations’
  • Ironically the closures would affect older people who use the BBC the most.

Without reiterating all of their arguments, I would like to draw attention to one paragraph that I’ll return to shortly - specifically the last sentence.

The acute financial pressures on the BBC are growing in a very competitive, global marketplace where costs in key areas are rising much faster than general inflation. The Board believes this is going to be a significant factor in judgements about the level of the licence fee when it next comes up for review in 2021/22.

The BBC’s consultation concluded that they would not take on the cost of funding television licences for over-75s. However, they would cover the cost for those over-75 and on pension credits — targeting the poorest of that group. They estimated this would cost around £250 million a year, around 6% of their budget.

The BBC concluded that it was their position that it was ‘a matter for Government whether, in the light of the BBC Board’s decision, Government would now wish to pay the additional costs to ensure that all over 75s could continue to receive a free TV licence’.

This decision caused a short-lived wave of political outrage, protests at both the BBC and the Government, and criticism from Her Majesty’s Opposition. Famously, the Prime Minister said that the BBC ‘should cough up’. Labour’s Deputy Leader called for the Government to stop ‘passing the buck’.

Fast forward to January 2022, and the Culture Secretary has declared that the next announcement about the licence fee would be the last. Citing ‘the days of the elderly being threatened with prison sentences and bailiffs knocking on doors’ as one of the motivations behind this.

Her Majesty’s Government manufactured a false flag operation to blame the removal of funded television licences for over-75s onto the BBC, an action with a very predicable set of outcomes, and then used this outcome as pretext to abolish the television licence all together…

Returning to that fateful statement the BBC made, they were certainly correct that it would be ‘significant’ in the next (now current) review — though it’s not the level so much as the existence thereof that it’s a factor in.

The thought of a post-licence fee BBC isn’t a pleasant one — but there are still lots of unknowns at this point in time. However, the thought of advertisements, cuts to radio and television services, a greater move to digital (subscription services) seem ever-so likely.